Sunday, January 10, 2016

Jim Rickards on Fox Business

This is a fairly brief interview on Fox Business, but Jim does make several points very quickly in this one. Below is a brief summary of some of the key points:

- China is trying to manage 3 different agendas (open capital account, pegged exchange rate and independent monetary policy), but will find that impossible to achieve

- China is trying to keep massive capital from leaving the country (have already lost $1 Trillion)

- The result will be that China allows the Yuan to devalue much more 

- The US will not like this, but China won't care because it's their least bad option among several bad options

- Yes China is using market manipulation, but the US Fed does too

- The US dollar is likely to remain strong for awhile during all this


We will keep an eye on this market situation here of course since we know that at any time a major crisis could arise due to the interconnected nature of the system and the massive derivative positions we know are out there. Jim said recently that he does NOT think this market drop is the start of the major financial crisis he is predicting will eventually happen. But, of course, none of us can know for sure and every time we get a big market drop we have to stay alert obviously. George Soros agrees.

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