Saturday, July 7, 2018

Jim Rickards: The Global Monetary Reset is Already Underway?

Jim Rickards has released a new article (featured here on Goldcore) that is now available in the public domain. In this article he suggests that the global monetary reset (GMR) that so many people have watched for is actually already underway now.  Of course we also watch for that here on this blog so this article gets our attention.

He supports this surprising observation by taking a deep dive into the world of cross rates between currencies including the exchange rate between gold and SDR's. Jim states that only recently has he thought about the significance of the exchange rate between gold and the SDR so this is a new take on things.

Below are a few excerpts from the article followed by a quote from Jim Rickards that he provided for readers here regarding the information in his new article.


This may be the most important commentary I’ve ever written. Here’s why.

"For years, financial analysts have discussed what’s called the Global Monetary Reset, or GMR. Expectations of a GMR stem from the fact that monetary policies around the world are unstable and unsustainable.

There is no anchor to the system. There is no limit on money printing. There is no limit on debt creation.

Such a system grows exponentially based on the false belief that governments can spend as much as they want and central banks will pick up the tab or bail out the system as needed.

Politicians love the system because they can buy votes from their citizens. Central bankers love the system because of the power and prestige it brings them. Citizens love the system because they get handouts, bailouts, pumped-up asset values and other goodies seemingly for free."

What’s not to like?

The problem, of course, is that the system is unstable and unsustainable.  . . . ."

. . . . . .

"What if I told you the GMR already happened and no one noticed?"


My added comments: Before I decided to feature this article, I reached out to Jim Rickards to make sure he was OK with featuring it on a public forum since this article first appeared in a newsletter to his paid subscribers. Jim gave permission to feature it and also provided an additional quote to include with this article for readers here:

"The evidence for a new gold standard pegged at SDR900 = one ounce of gold is compelling. However, this standard is new and informal and bears watching.  Further research is needed before reaching definitive conclusions. This standard itself could be abandoned by the sponsors if it proves unworkable in the future."  ---  Jim Rickards (7-3-2018)

The article is a pretty detailed deep dive into currency exchange rates that ends up pointing out that there is some evidence that gold has now been "pegged" to the SDR as follows:

"In short, world money has now been pegged to gold at a rate of SDR900 = 1 ounce of gold. It’s a new gold standard using the IMF’s world money."

Readers here will want to read this article to see how Jim supports this conclusion, keeping in mind the quote he provided us just above. This is a new take on things that Jim says only recently came to his attention based on some research he received from a source in Switzerland. 

If this pans out, it is a situation we will need to follow over time since Jim believes this could be a "clear short-run signal that China is betting on the SDR and gold, not the yuan or the dollar." 

Added notes: Jim mentions in the article that he will delve deeper into all this in a new book to be release this October. The title is -- Aftermath   (see info on that book here)

Jim has also released two new articles on what he sees as a building new crisis related to the US dollar and emerging markets.

Additional added notes 7-8-18: This article by Jim has stirred up more reader interest than anything I have seen for some time (pro and con). There is clearly a lot of interest in the possibility that some kind of peg may in place between the SDR and gold and that China could be involved in that process. 

I have also heard from a variety of experts on other issues mentioned in Jim's original article. For example, one expert pointed out to me that for the IMF to issue trillions of new SDRs, an 85% vote of the IMF members would be required (with the US holding the veto power of a 16.52% vote). So we need to keep that point in mind. Another expert wondered how the SDR/gold peg is able to be maintained over a long period of time. Another reader forwarded me a link to this article which looks at Jim's article and asks if China may be pegging their own currency (the yuan) to gold?  

My view on all this reaction is that it is a good thing. Most people have never heard of an SDR or know anything at all about it. Yet, understanding it better is something I believe is important. Articles like this one from Jim attract interest from the average person like myself to learn more which is a good thing. I'll add that Jim Rickards has probably raised more awareness that the SDR exists and prompted more curiosity about it than anyone else who talks about these issues because he reaches such a large audience. I first learned about the SDR from his articles and interviews; as well as how to research it to learn more about it. He also answers any questions I may have by email without asking for anything in return. All that is much appreciated here.

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