In a new interview, Jim Rickards offers his take on what kind of impact the war might have on the monetary system. You can watch it here.
My added comments: In this interview I see a couple of nuances worth pointing out. First, Jim addresses the question of whether the world at large is engaged in "de-dollarization" as many analysts and economists are saying. Jim sees that a bit differently. While he agrees that central banks are buying gold and boosting gold reserves in general versus dollar denominated reserves, he does not agree that a broad "dump the US dollar" movement is taking place around the world. He believes that much of the selling of US bonds that goes on is being done not with an intent to "de-dollarize", but rather to raise cash to meeting pressing economic needs of those selling the bonds. His point is that you cannot spend bonds and have to convert them to cash if you need cash to spend immediately.
Secondly, he makes a distinction between inflation caused by an increase in the money supply (M2) that many say is happening and inflation caused by higher energy costs due to supply and demand not being in balance (which then permeates through the economy raising prices). Jim does not believe an increase in the M2 money supply alone causes inflation. He believes it must be accompanied by an increase in the velocity of money (it's turnover rate in the real economy) to create that kind of inflation. He says that is not happening because the money being created by the Fed is just going to the big banks inside the Fed system who turn around and deposit the funds back at the Fed to earn interest on it. He does not believe that causes inflation because the money never enters the real economy. It just creates a revenue stream for the big banks supporting their financial position.
Those two nuances are important to note because they are an alternative view to the idea that a global intentional "de-dollarization" movement is happening around the world and that a Fed increase in the M2 money supply automatically causes inflation in the economy. Jim's view does not support the idea that any fundamental change to the fiat US dollar based system is on the near horizon. But he does see gold continuing to rise as ongoing efforts to maintain the debt based system stay in place which of course requires ongoing creation of new fiat money by the Fed whether it enters the real economy or not.
