Thursday, September 21, 2017

Jim Rickards: War With North Korea is the Likely Scenario

This may be one of the most important articles ever published on this blog. As always, time will tell us the answer. Jim Rickards has now gone on record in a public interview with a forecast suggesting not only that war with North Korea is the most likely scenario ahead of us, but also that this event may well be the "snowflake that triggers the avalanche" Jim has talked about for many years now. 

Jim has been very kind to reply to email questions that I may ask him. In this case, because this prediction (and its possible ramifications) is so serious, I reached out to him for some direct input. Jim has given permission to publish his email comments here. Below I have pasted in our email exchanges over time so you can get a feel of how Jim responds to events and how he will also update and modify his analysis over time as new information becomes available. After that I will add a few comments.
First email exchange on 8-8-17 on North Korea:

my email on 8-8-17:

1- your best guess at the % chance the US goes to war with N. Korea (up to and including the use of tactical nuclear weapons)

2- your best guess as to the timing if you think the odds are high in regards to question #1 - before year end 2017?

Asking this just for personal info if you have time.

thank you,


Jim's reply on 8-8-17:

"90% chance of war.
Time frame: November 2017 to February 2018"

James Rickards

Later, Jim did this interview with the Daily Mail while in England and also posted this important note in his Twitter feed stating this was the first time in 10 years that he had put forward an actual event and time frame that may well lead to the major crisis he has been predicting for some time. Jim later posted this on his Twitter feed and then a little later posted this.

Because this analysis and forecast is so sobering, I held off featuring it here until I could reach out to Jim one more time to get his latest take. I did that very recently and, as always, Jim kindly replied and provided his best updated analysis along with permission to publish it here. Here are those email comments:

Jim on 9-20-17:

"My analysis on North Korea hasn't changed since I gave the Daily Mail interview, and Trump's UN speech Tuesday confirms my view."

All the best,

and later on 9-20-17 he provided this updated analysis when I asked permission to publish his earlier comments made in August posted above:

"The odds apply to the entire time frame, not any particular month.

I'd probably lower the odds to 85% (still high, but off slightly) due to complications arising from South Korea. We need them to help us go to war, but they are more in an appeasement camp right now. That may take time to work out either in the sense of bringing them around or going ahead without them. And I'd move the timeline out one month. November seems early from where we sit."

James Rickards
My added comments: I struggled internally as to whether to publish this article or not. Obviously, the topic is very serious and will become even more serious if Jim's current analysis does play out like he expects. I have had enough contact with Jim to believe that he as much as anyone hopes this forecast will not pan out and war can be avoided. But I believe he sincerely feels this is the most accurate analysis he can give based on the information available at this time. 

Readers should understand that Jim has a strong track record of accurate predictions on major events. He correctly predicted the Brexit vote, the Trump election result, and also provided me an incredibly accurate forecast on what the US dollar would do this year back in March which I did publish here to put on the record. In addition, Jim has very solid and credible contacts which just add to his ability to forecast these kinds of events. When I added it all up, I felt I must publish this information as a kind of reader alert since the goal of this blog is to watch for events that can lead to major monetary system change. Jim says this could be such an event and I respect his judgement in that regard. 

I feel sure Jim hopes he will miss this one and I certainly do as well. But not to alert readers on something this important when the information is available would be a failure on my part to do what I have told readers here I would do. Namely, to watch for anything that could lead to major changes in the present system that could impact our daily lives. This is clearly such an event. I hope readers will follow the news on this closely and think about what to do if the worst case scenario (a war involving the use of nuclear weapons) did happen to unfold.

Added notes: In this recent interview Jim goes into some more detail on the comments posted above, but does not change his overall analysis. His comments in the interview both confirm the above and provide a bit more detail.

This news breaks tonight  (9-21-17) on North Korea and CNBC runs this on 9-22-17.

9-23-17 - Trump issues direct threat  - war of words continues to escalate

9-25-17 - North Korea says US "declared war" on NK

9-26-17 - Janet Yellen confirms Jims prediction that the Fed was tightening into weakness 

In this recent interview (skip to the 14 minute mark to the start of the interview), Jim covers some interesing history related to the so called petro dollar system that shows the kind of contacts he hasworked with over the years and also near the end talks a bit about why he thinks the US will deal with North Korea in a different way this time.


  1. If we do go to war and it triggers a monetary crisis, what is his prediction on US bonds, foreign bonds, and precious metals?

  2. I did not ask him that directly, but based on what he says all the time I believe he would continue to recommend people own some gold (and or silver), hold some cash, and reduce exposure to equities and bonds. Jim has written other articles lately indicating he thinks the dollar could start to lose reserve status by next year so obviously he thinks the US dollar is headed much lower. I think he is basically just continuing to recommend pretty much what he has all along in terms of preparing for a major crisis that could end the US dollar as global reserve currency.

  3. I got the following comments below from a reader who offered this as a comment on this article:

    I just read your latest post, and what follows you may either just treat as our usual email exchange, or post as a comment if you prefer. It doesn’t matter to me either way.

    After reading, I listened to the Daily Mail interview, and paid particular attention to what Rickards interpreted as Treasury Secretary Mnuchin’s statement regarding China’s “compliance with the U.N. agreed sanctions (or perhaps our stronger? sanctions), whereby we would retaliate for non compliance by either “suspending conversion” of U.S. Treasury assets, as well as freezing China out of the dollar payments system. (which, by the way, is why China devised CIPS) and which is the reason Russia and China are cooperating in de-dollarization.

    How should we react to this Mnuchin threat? In my view, this is the same essential threat that was the subject of Robert Pringle’s article in The Money Trap, “Mervyn King’s Alarmist Warning”, about which I alerted you back when it was published. King, in an interview with the World Gold Council, indicated that in an extreme crisis with China, the U.S. could freeze the convertibility of U.S. treasuries (or even nullify them) as well as freezing all Chinese owned assets within the U.S. jurisdiction (companies owned by China or Chinese controlled corporations)

    Left unsaid, (and here is where I have strong doubts about how we should interpret the Mnuchin threat) is that, knowing that such an action would effectively nullify worldwide trust in the U.S. dollar as a reliable reserve asset, (after all, one only accumulates assets so that they can be deployed when needed), if the threat were to be carried out, it would inevitably lead to the end of the dollar reserve system, upon which our military, more than any other sector, depends for its spending ability. (Furthermore, I think top military leaders understand this.)

    I have long held a simple belief with regard to U.S. deficits; The poor cannot pay. The rich and the Multi National Corps.refuse to pay. The shrinking middle class can no longer pay, so revenue shortfalls must be funded with debt, which has UNTIL NOW been absorbed by the rest of the world. If ROW (rest of the world) refuses, only the Fed is left as a buyer.

    Some will say, “well, the world really has no choice but to go along, as the dollar is so embedded in the world economy” We shall see.

  4. If the dollar loses its value, what about the dollar under my mattress.? Will it be worthless ?