Wednesday, March 4, 2015

Jim Rickards: Why the US is Letting China Accumulate Gold

This new article from Jim Rickards is somewhat of a repeat of his earlier article called 'The Fix is In' which we covered here earlier. In this article though, he goes on record to say that the financial system is so unstable that it will be in a crisis condition before China can complete the process of buying its gold. Below are a few quotes. Also below, a couple of links to other articles on China. China is clearly a big key to what will happen in the future.

"Today, the US has about 8,000 tons. We haven’t sold a significant amount of gold since 1980. We dumped a lot of gold in the late 1970s to suppress the price, but none after that."

. . . . . 

"Right now, China officially does not have enough gold to have a “seat at the table” with other world leaders. Think of global politics as a game of Texas Hold’em."

. . . . 

"Gold serves as political chips on the world’s financial stage. It doesn’t mean that you automatically have a gold standard, but that the gold you have will give you a voice among major national players sitting at the table."
. . . . 
"When you have this reset, and when everyone sits down around the table, China’s the second largest economy in the world. They have to be on the bus."
. . . . 
"I’ve described some catastrophic scenarios where the world switches to SDRs or goes to a gold scenario, but at least for the time being, the US would like to maintain a dollar standard. Meanwhile, China feels extremely vulnerable to the dollar.  If we devalue the dollar, that’s an enormous loss to them.
That’s why, behind the scenes, the U.S. needs to keep China happy.  One way to do that is to let China get the gold.  That way, China feels comfortable."
. . . . .
"The evidence is there. China is saying, in effect,  “We’re not comfortable holding all these dollars unless we can have gold.  But if we are transparent about the gold acquisition, the price will go up too quickly.  So we need the western powers to keep the lid on the price and help us get the gold, until we reach a hedged position.  At that point, maybe we’ll still have a stable dollar.”
"The point is that is that there is so much instability in the system with derivatives and leverage that we’re not going to get from here to there.  We’re not going to have a happy ending.  The system’s going to collapse before we get from here to there. At that point, it’s going to be a mad scramble to get gold."
My added comments: 
The last paragraph is the most significant one in this new article for readers here to consider. This is a direct forecast that the system will be in a crisis before China can finish buying the gold it wants to have for a monetary reset at some date in the future. Below is a UK Telegraph article that suggests the start of such a crisis could be happening in China even now.
A couple of other China related articles of interest:
This article suggests that China might be hiding much more gold reserves than the public knows about. Of course, 30,000 tons would be much more than Jim Rickards talks about. If China already has that much gold, they are already prepared for whatever happens with the monetary system and their reserves would dwarf US gold reserves.
This Telegraph article implies China needs to have its gold bought soon because the next big crisis is already underway there and picking up steam. (Jim Rickards does agree that China could be a trigger for the next global crisis). This is a mainstream UK publication basically saying the makings of the next big global crisis are underway right now and Europe will have its hands full to stave it off. Here is the concluding statement from this UK Telegraph article:
"The second credit crisis is already unfolding in China and the latest round of European money will struggle to halt the contagion in credit markets."

Added note: Jim Rickards latest interview on CNBC on Oil and Russia

No comments:

Post a Comment