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Your blogs (1) Create your blog now You are not an author on any blogs yet, create one now to start posting! Can't find your blog? - The View from our Whitehouse - 50015 pageviews - 313 posts, last published on Oct 8, 2014         Here are the Top Ten Countries that readers here come from:   Entry Pageviews United States 31402 Canada 2704 United Kingdom 1800 Australia 1054 Turkey 904 France 903 Sweden 823 Hong Kong 796 Germany 685 Malaysia 563

Rickards on Bloomberg TV and an Interview with Reuters

Here is the interview done on 10-6-14 on Bloomberg TV. Some good questions and Jim Rickards makes it clear he does not think any recent positive news on the labor market is sustainable. He still feels we are in depresssion, the Fed will not raise interest rates next year, and may go back into another QE program.

In other related Rickards news, 

he is speaking Thursday morning to the Chicago Council on Global Affairs. 

He will speak in Nashville (along with former Congressman Ron Paul) at a conference on October 18th.

Here is an interview he just did with Reuters.

Here is an interview with Kitco on 10-7-14.

Yes, he gets around :)

New Update from Bo Polny on His Gold Price Forecast

With gold and silver having dropped quite a bit (and fallen pretty far below his earlier summer low price), Bo Polny issues a new public update on his site. In case you are wondering, he is unchanged in his view that gold is about to make a major move higher into late 2014.  Here is the link. 

In an effort to objectively report it should be noted that Mr. Polny earlier called a summer low price at around $1240 for gold so he clearly missed that short term prediction. However, in later updates he explains his reasoning as to why that does not change his big picture forecast for gold. 

This is obviously a very gutsy call in light of how the market is performing lately so we tip out hat to Mr. Polny for being very clear in his position and standing by it. Most people in his business don't put this much on the line in a very public way like this so he clearly is sincere in his belief that he will be proven correct. His credibility will obviously take a hit if he misses this prediction by a large margin.

This will be pretty easy to track. He states in this update that gold will not break below $1180 so that is a very clear line in the sand. He also even provides a short term prediction that gold and silver will rally the rest of this week into Friday.

Either he will be right or wrong on his big picture forecast and it should be obvious by year end of 2014. We don't know what will happen, but we will follow it here for readers so they can see how it turns out.

For what its worth, I did see another analyst the other day who mentioned that $1160 is the final make or break price for gold to stay in its long term multi-year uptrend. So you can watch for those price levels ($1160-$1180) as probably pretty important to the near term direction for the price of gold. Here is a CNBC article suggesting $1180 is critical for the short term. If gold breaks below $1160, we may be seeing clear evidence that a deflation event is underway. If oil also breaks lower I would really feel like we are seeing a deflation event underway. The Fed would be quite concerned with that I would guess.

Added note: Want to read two directly opposite views of what the price of gold will do?

Here is one view.

Here is the other.

Former Fed Official Andrew Huszar - Latest Interviews

This past week former Fed official (in fact the man who directed the QE1 policy for the US Fed) did two new interviews with King World News. We always link to interviews that Mr. Huszar does because he is one of those rare inside sources (like Jim Rickards) who is willing to discuss the issues we cover here in public. Also, Mr. Huszar has a stellar resume and credentials as a financial system expert.

King World News does allow anyone to copy and paste quotes from their interviews, but does allow direct links to the interviews. So here are the links to the two recent interviews with Mr. Huszar with my brief summary of each just below the link.

Interview Link #1 

In this interview Mr. Huszar talks about he thinks no real progress has been made in solving the fundamental problems that caused the 2008 global financial crisis. He also says he does not think the Fed can solve another crisis (something Jim Rickards also says) and is concerned about what will happen when the next crisis does arrive.

Interview Link #2

In this interview Mr. Huszar predicts eventual weakness in the US dollar and US Treasuries as a result of the Fed's QE programs even though it has not happened yet. He says the trouble could begin at any time, but might still be a few years away too. No one can know the timing, but he believes it will happen.

We will also be running an article soon about similar concerns from another highly respected banking insider (Nomi Prins) who is a former Goldman Sachs banker.

When we talk here about providing credible alternative views to the mainstream view, we are talking about people like Jim Rickards, Andrew Huszar, and Nomi Prins. People with extensive experience inside the system and also extensive connections. Most people like this are not willing to go on the record with comments so those that do are valuable sources of information that we link to here. This way readers can compare their views and predictions with the mainstream view over time which we think is useful approach to the complicated issues we try to follow here.

We should add that if someone misses a prediction or forecast, it does not make them a "bad person" in our view. We appreciate anyone who is willing to stick their neck out and make forecasts in an effort to help people make decisions for the future. But the fact is that some forecasts will be right and some will be wrong. No one will get every forecast right of course. And we believe most who make forecasts are very sincere in their belief in them.

But over time a pattern emerges if you take time to follow it which we are trying to do here for readers. Over time, if a source gets many forecasts correct, obviously you will tend to lend more credibility to their views and analysis.

Also, if you get a broad spectrum of respected analysts all issuing the same type of warnings, you should take that very seriously. We have provided that broad array in all the links on the right hand side of this blog if you take time to look at them. A broad spectrum including the IMF, the G20, the Bank of International Settlements (BIS), various Central Banks (the ECB, the USD Fed, etc), former Central Bankers (Greenspan and Volcker, etc), former international banking executives and insiders like those mentioned above are all linked here issuing warnings about the future stability of the existing monetary system and things to watch out for. It's all here if you take the time to look for it.

IMF Reacts to Argentina Debt Default with Reform Proposals

We have followed the debt default situation in Argentina on this blog. We noted that while this seems to be just a problem for Argentina, much more is at stake. We noted that all the major global financial institutions were following that case and expressing concerns about it setting a precedent in other sovereign debt problem nations.

Tonight the IMF releases a new report stating that the IMF Executive Board is supporting some major reforms to sovereign bond contracts to try and avoid the problems now in progress in Argentina. Here is a link to the article.

Below is an interesting Q&A from this article which we will follow with a comment.

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"IMF Survey: Isn't there an outstanding stock of bonds that will not be affected by these reforms? Don't they still pose a risk to the system? And what can the Fund do about them?

As the paper highlights, there is a significant volume of outstanding stock that does not contain the new clauses, and which will not mature for some time. We have explored whether or not sovereign issuers and market participants would be willing to accelerate the turnover of the existing stock through liability management exercises—essentially exchanging their existing bonds for new bonds that don’t have these problematic provisions. Right now, the appetite for liability management is somewhat limited, but that may change if, in fact, the Argentine litigation begins to have a broader impact on the system.

We will continue to monitor this situation both in terms of the dangers presented with respect to the outstanding stock and in light of additional steps that may need to be taken."

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My added comment: One of the main objectives of this blog is to try and reach out to the average person (like myself) and encourage him or her to take these issues and potential problems seriously. 

This new IMF article once again illustrates that we are not alone is identifying the very high sovereign debt ratios around the world as one of these problems to take seriously. The IMF says point blank in this article there is a threat from this debt to the system. They are taking it quite seriously. They are proposing major contract changes to try and avoid a messy legal battle when sovereign debt does go bad.

They again express concern that the situation in Argentina could have "a broader impact on the system."  They state that there are a lot of bonds sitting out there around the world that do not have this proposed contract language in them and that "right now, the appetite for liability management is somewhat limited."

They also note in the article that they have no power to enforce these bond contract changes, but are hoping their support for them will influence those writing the bond contracts. All they can do right now  is "monitor the situation."

While reading this article please keep in mind that all this sovereign debt that the IMF is concerned about also has trillions and trillions of interest rate related derivatives tied to it. Supposedly all these trillions and trillions of interest rate derivatives are somehow hedged against each other. But no one really knows for sure if that is true or not. Many derivative contracts are not transparent to the public so only the parties involved in them know the true risks involved. And if one counterparty cannot pay, it can set off a chain reaction in the system.

What that means is that if there is a major sovereign debt crisis or default anywhere in the world, it could trigger a chain reaction in related derivatives contracts reaching into the trillions of dollars. Now we see both why the IMF is concerned about this topic and why the average person should be too. 

Update 10-7-14: Today the IMF once again announces that global GDP will fall short of their earlier forecast and that deflation is still a big concern.

Nomi Prins: Former Goldman Sachs Banker says there is no real Recovery

Former Goldman Sachs banker Nomi Prins recently did this interview with former CNN reporter Greg Hunter. Here is some background info on Nomi Prins. The interview covers a number of topics but her statements about the lack of recovery in the US caught our attention. Quotes from the interview are just below.

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"On the so-called recovery, Prins contends, “We are not even stable enough as it is.  We haven’t created enough jobs for the population growth since the crisis in 2008, regardless of what the percentage numbers say, and most of us know that.  What the market has been growing on is zero percent interest rates for the past six years.  It’s the same thing in Europe. . . . The central banks are not going to be raising rates because they can’t.  The only thing keeping any semblance of economic positivity for corporations, individuals and markets is the fact that money has no cost. . . . The reality is the jobs aren’t there.  This is artificial.  The money isn’t funneling into the average citizens in any of these countries, and that creates instability.  Which is, again, why all these gateway areas are so important. . . . There is a lot at stake here globally.”

Reports: Russia Behind Cyber Attack on JP Morgan

This story hits the wires today. I reference this artcile because this is another direct prediction/warning that Jim Rickards made earlier this year. He stated clearly that Russia was capable of cyber attacks on the US financial system and that they might use such attacks in response to sanctions.

Rickards went on to explain that he believes that Russia may have been behind one of the so called "flash crash" events that happened in the US stock market. He said no official explanation for why that happened was ever given.

We can also infer that Rickards has sources inside the US intelligence agencies that may have briefed him on this at some point.

There are so many issues that could impact stablility in the financial system happening it is somewhat overwhelming just trying to keep up with them. And yet, so far things still seem relatively calm (at least in the US). But here is just a partial list of things going on that could impact the sytem at any time and with little or no warning in many cases:

-sanctions against Russia, Iran, etc. (and the rebound impact on Europe)

-all the geo political hot spots (Ukraine, Middle East, now Hong Kong and China, etc)

-the still enormous sovereign debt that has not been resolved (including in the US)

-the gigantic derivatives market all over the world that could get triggered in a chain reaction

-recent threats by Russia to abandon the US dollar completely and the SWIFT system

-the BRICS threats to leave the US dollar based system

-worldwide epidemics like ebola or other diseases that become widespread and cause fear 

-rising nationalist movements in Europe, the US, and the UK (talk of secession, etc)

-possible financial asset bubbles building per warnings from the IMF, BIS, and the G20

-the slowdown in global GDP - threat of deflation in the Eurozone, falling GDP in China

See what I mean. It is kind of a surreal world we live in. All of the above are ongoing issues and threats. Any of them could quickly escalate in a way that could impact global financial stability. But even with all this, things seem fairly calm for now. The US reported stronger labor numbers. The stock market is near all time highs. Some areas of the country seem to have a decent recovery going (while others seem to be lagging). There is no panic or major crisis happening right now.

All of this just illustrates why we say it is impossible for anyone to predict the future with certainty. We certainly make no such claim here. What we are trying to do here is track all of the above as best we can so readers will get a heads up if any of these things start to impact stability. And if things remain stable, we want readers to know that as well. 

In the interconnected world we now live in, staying informed is probably the most important thing a person can do. We will try our best here to help with that as best we can. We do thank readers here who share information with us as anything that helps provide better understanding is valued here. We hope readers here find the blog helpful and will feel comfortable recommending it to their friends.

 

As this Blog Approaches 50,000 page views . . . .

First we say thank you to so many readers who visit here from all over the world. You are always welcome here and we will try to provide the best information we can find for readers. We try to contrast the mainstream view of things with credible alternative views using links readers can verify on their own. We continue to believe we will see major change in the global monetary system over time with the main question being how and when it happens. (Fast in a crisis or slowly over time in a controlled manner). 

We never imagined this blog would attract this kind of readership, but it causes us to take very seriously the task of trying to provide helpful information.

While we are waiting to see what happens, we can have some fun with numbers. With nearly 50,000 page views here, you might wonder how those numbers break down by country. The stats feature here on blogspot shows me that so I will post the numbers below just for fun. Don't worry, no personal information is captured by blogspot or shown to me. Just the generic type information shown below. I pasted it directly as it appears to me.

Interestingly, most readers here use Microsoft Windows, but those people split between several popular internet browsers. Firefox is the most popular one, not Internet Explorer.

Other nations not in the Top 10, but with a lot of visitors, are Russia, China, Switzerland, Netherlands, Italy, New Zealand, Indonesia, the Ukraine, and the United Arab Emirates.

Top Ten Countries Visiting: (the other 8,000 or so come from over 30 other nations) 

Entry	Pageviews
United States	30629
Canada	2614
United Kingdom	1720
Australia	1035
Turkey	904
Sweden	816
France	807
Hong Kong	772
Germany	652
Malaysia	568

Top Six Operating Systems Used by Readers

Entry	Pageviews
Windows	29268 (60%)
Macintosh	6298 (12%)
iPhone	3645 (7%)
Android	3310 (6%)
iPad	3149 (6%)
Linux	2000 (4%)

Top Five Browsers Used by Readers:

Entry	Pageviews
Firefox	14014 (28%)
Chrome	10868 (22%)
Internet Explorer	10802 (22%)
Safari	9443 (19%)
Mobile Safari	1612 (3

Alan Greenspan in Foreign Affairs: Why China is buying Gold

Earlier on this blog we wrote this article about how Central Banks love gold despite the public perception that they don't like gold and think it is a useless relic in the modern financial world. That article proved conclusively that Central Banks view gold as a very important global reserve asset that is a hedge against loss of confidence in fiat currency. Just in case that article did not convince you, Alan Greenspan leaves no doubt about it in this article he wrote for Foreign Affairs.  Below are some quotes from his Foreign Affairs article.

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"If China were to convert a relatively modest part of its $4 trillion foreign exchange reserves into gold, the country’s currency could take on unexpected strength in today’s international financial system. It would be a gamble, of course, for China to use part of its reserves to buy enough gold bullion to displace the United States from its position as the world’s largest holder of monetary gold. (As of spring 2014, U.S. holdings amounted to $328 billion.) But the penalty for being wrong, in terms of lost interest and the cost of storage, would be modest. For the rest of the world, gold prices would certainly rise, but only during the period of accumulation. They would likely fall back once China reached its goal. "

"The broader issue -- a return to the gold standard in any form -- is nowhere on anybody’s horizon. It has few supporters in today’s virtually universal embrace of fiat currencies and floating exchange rates. Yet gold has special properties that no other currency, with the possible exception of silver, can claim. For more than two millennia, gold has had virtually unquestioned acceptance as payment. It has never required the credit guarantee of a third party. No questions are raised when gold or direct claims to gold are offered in payment of an obligation; it was the only form of payment, for example, that exporters to Germany would accept as World War II was drawing to a close. Today, the acceptance of fiat money -- currency not backed by an asset of intrinsic value -- rests on the credit guarantee of sovereign nations endowed with effective taxing power, a guarantee that in crisis conditions has not always matched the universal acceptability of gold."

"If the dollar or any other fiat currency were universally acceptable at all times, central banks would see no need to hold any gold. The fact that they do indicates that such currencies are not a universal substitute. Of the 30 advanced countries that report to the International Monetary Fund, only four hold no gold as part of their reserve balances. Indeed, at market prices, the gold held by the central banks of developed economies was worth $762 billion as of December 31, 2013, comprising 10.3 percent of their overall reserve balances. (The IMF held an additional $117 billion.) If, in the words of the British economist John Maynard Keynes, gold were a “barbarous relic,” central banks around the world would not have so much of an asset whose rate of return, including storage costs, is negative."

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My added comment: Just to make sure you caught what Greenspan said, here it is again. 

"If the dollar or any other fiat currency were universally acceptable at all times, central banks would see no need to hold any gold. The fact that they do indicates that such currencies are not a universal substitute."

"If, in the words of the British economist John Maynard Keynes, gold were a “barbarous relic,” central banks around the world would not have so much of an asset whose rate of return, including storage costs, is negative."

This is almost exactly what we said in our earlier article linked above about Central Banks and gold. Those inside the system understand completely that gold is the "collateral of last resort" that trumps everything else in a crisis. While they have no interest in a return to a full gold standard (where currency can be exchanged for actual gold), they hold massive gold reserves and would no doubt use them to back the currency one way or another if it was needed to maintain the financial system. All they have to do is simply revalue the gold much higher to do that. It's been done before.

Right now gold (and many commodities) are in a downtrend. What we have to watch is to see if this means we are heading into a deflation event. If that happens, gold and other hard assets will probably go lower in price. If the deflation becomes too severe, the monetary authorities are likely to respond one way or another to fight that. That is when gold could see a sharp reversal upwards in price. It's all unpredictable, but gold is still a key collateral asset in the system regardless. If you don't believe me, ask Alan Greenspan. That is why we follow it here.

Trouble in Euroland -Deflation Lurking?

This article in the UK-Telegraph suggests there is trouble in Euroland. Ambrose-Evans Pritchard says that the rise of an anti EU political party in Germany may complicate any plans the ECB has to startup a QE type program. Some quotes below and then a comment.

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 "Standard & Poor’s has issued an extraordinary credit alert on the eurozone, one that deserves close attention."

"It warns that the rise of Germany's AfD anti-euro party calls into question the euro bail-out machinery and queries the pitch for any form of QE, stimulus that has already been pocketed and spent in advance by the markets."

"S&P also warned that a forthcoming judgment by the European Court on the ECB’s backstop plan for Italy and Spain (OMT) might queer the pitch yet further."


"The German Verfassungsgericht has already ruled that the OMT “manifestly violates” the EU Treaties and is probably “Ultra Vires”, meaning that the Bundesbank may not legally take part. The European Court can hardly ignore this if it values its own survival. (Just to clarify, the German court does not defer to the ECJ as a superior court. It reserves the sovereign right to strike down anything the EU institutions do, pointedly reminding overzealous officials that the member countries are the “Masters of the Treaties”, and not the other way round)."

"David Marsh from the monetary forum OMFIF – and author of books on both the Bundesbank and the euro – says there cannot be any serious QE in these circumstances. “QE is just not on the table. It is a red herring,” he said."


"I agree entirely with S&P’s analysis, and I also note a stark divergence in market perceptions between German experts (or those who read German and follow Germany closely) and the Anglo-Saxon/global fraternity. Americans in particular seem to view the ECB as the counterpart of the Federal Reserve, responding to normal economic signals. It is nothing of the kind. The ECB is a political animal. It cannot stray far from German political consent, or at least it cannot do so safely.
It is already clear that Germany will drag its feet on the ECB’s plans for private bond purchases (ABS, RMBS, covered bonds) for months. Berlin/Frankfurt will seek to ensure that it does not add up to much – at least until Germany itself gets into trouble."

"We are back to the core problem that bedevilled the eurozone through its three near-death experiences – May 2012, November 2011, and July 2012 – which is how far the German body politic is willing to go to shore up monetary union when push comes to shove."

"This issue has never been resolved. At each stage Germany has agreed to do just enough to keep EMU going, always at the twelfth hour, without ever going far enough to put the currency union on a workable footing (Very difficult in my view, though that won’t stop EU leaders persisting until victims take matters into their own hands)."
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My added comment: So will we get a QE style asset purchase program out of the ECB or not? This article suggests it won't happen. If it doesn't happen, does the Eurozone free fall into a full scale deflation? This is why all this requires constant monitoring. It is impossible to project whether a major deflation event might be coming or a major inflation event (due to official response trying to stave off the deflation event). What is very clear is that the seeming calm we have now (where the forces of deflation and inflation seem to have offset each other) is not likely to last much longer. We probably get a much clearer picture by early 2015.

Rickards on Hong Kong Protests

Jim Rickards does a brief interview today on Fox Business about the Hong Kong protests. 

You can view it by clicking here.

Update 10-4-14: Latest on this. Things are still very tense.

Update 10-5-14: Latest on this. Students may be willing to start talks. Looks like tensions are decreasing.

Christine Lagarde: Global Economy Weaker than Expected

Here we go. Once again the IMF has to admit the global economy is weaker than they forecasted just six months ago. Below we will paste this full news blurb and then add a comment. Here is the full text of her speech.

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"The global economy is weaker than was envisioned six months ago, IMF Managing Director Christine Lagarde said on Thursday.

Lagarde, in remarks prepared for delivery at an event in Washington, said the IMF would reduce its outlook for potential growth. She added that only a modest pickup in global growth is expected in 2015.

"There are some serious clouds on (the) horizon," she said in her remarks.
Lagarde, a former French finance minister, warned it was possible that financial excesses were starting to build up in the system. She also cited the economic risks of the situations in Ukraine, the Middle East and West Africa."
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My added comment: This is starting to have the feel of trying to manage public expectations ahead of time. Score one here for Jim Rickards who predicted this forecast would be revised downward.

In the past two months we have warnings from the BIS, the IMF, the G20 and other prestigous organizations about the global economy. Now we have Ms. Lagarde coming out to admit the forecast just six months ago was too rosy and that "it is possible that financial excesses are starting to build up in the system."

We have oil, gold, and silver prices sharply falling. We have the ECB trying to crank up a QE style program in Europe to try and stave off deflation. We have reports that growth in China is starting to drop off. Russia and the west still tied up in sanctions which will hurt growth.

And now we have the Fed indicating it will remove the benchmarks it has been using as a guide to when interest rates will rise (another Rickards prediction). This article suggests the Fed does not want to be forced into raising rates too soon.

All these are warning signs. It is abundantly clear that there is a great deal of official concern about deflation overwhelming the system.  What we have to watch is to see if there will be another massive response to try and stave off deflation (more massive money creation) or if the forces of deflation speed up and overwhelm the efforts to stave it off.

Jim Rickards: Banks May Close in the next Crisis

Jim Rickards does new media interviews on a regular basis every week so it is not too hard to follow him and see if he offers anything new. In this new interview released on Saturday September 27th, he does add some comments I had not seen before. He suggests that when the next financial crisis happens (something he predicts) that he believes that the authorities may "close things down" instead of printing more new money.

Here are some quotes from the interview linked above:

"(Jim) Rickards attended Forex World Istanbul and delivered a presentation on currency wars at the event on Friday. I found the opportunity to ask a couple of questions to Jim following his book signing event. I am sharing this short interview and Rickards’ exclusive comments here."


"-What about the role of BIS, in today’s picture and can it have a future role like you described for the IMF?

-I think in terms of a central bank of the world that is really the IMF. The BIS is very important for two reasons. Number one: They are the primary intermedia for manipulating the gold market. That is not a mystery… BIS is manipulating the gold market. They are the intermedia between the central banks and commercial banks and other central banks (of the world). They have been doing that… That’s why they were created in 1930s and they have been doing it ever since. (Number two): … It is also a very important meeting place for the central bankers. One of my partners was David Mullins Jr. He was the vice chairmen of the Federal Reserve in early 90s under Alan Greenspan. He said that Greenspan did not like the (program) and stood off and David would go to the BIS place. You know it is a clubhouse. Only central bankers are allowed ... So it is a great place to change information.

Very interestingly BIS about a month ago issued a warning of systemic risk. They said that the system is getting dangerously close to collapse. A few weeks later the IMF issued a similar one. And then last week G-20 finance ministers meeting at Australia issued a warning. What was the last time you saw the three most powerful multilateral financial bodies BIS, IMF and G-20 issued warnings. I have never seen it before. They are telling you it is going to collapse. They see what I see and they are warning you. People would ignore it but when it happens they would be able to say we have told you. I think I have never seen anything like this. I have been in international finance since 1974 and I have never seen a situation like this…

I think the BIS is very important but I don’t see it is the world’s central bank I really think that role has been left to the IMF."

"-Last question Jim, you are telling us in your books that there would be a financial panic... Can you describe us what kind of events could happen during this financial panic? What are your expectations?

I think this financial panic would be different than the last one. The reason is that in all of the financial panics since 1971 the solution was to print money provide liquidity. But prior to 1971 historically the solution was to shut the doors. To close the stock exchange, close the banks, close funds so you can not get your money. That’s what Nixon did in 1971 he closed the gold door so you can’t get your gold. Since then 1987 stock market crash,1994 Mexico crisis, 1998 Russia LTCM dot com, 2007 mortgage crisis, 2008 panic; in all these crises the solution was to print more money.

 

My expectation is that next time money printing is not gonna work because they can’t print more, they have already printed a lot. So they gonna have to go to the old solution. We are already seeing this. For example, the SEC passed a rule last month saying that money market funds can suspend redemptions. This is the law. Now if you talk to the US investors who have money market funds they think it is cash. They think they can call the broker today and money is in the bank tomorrow. They gonna find it is not cash. It has actually closed the door. That’s gonna be a shock. So the financial panic itself will be as always a shock.... But the remedy is not gonna be printing more money. They could print SDRs but that is a little experimental. But, maybe in this case, they have to start closing things down. Which in the distant past that was always what they did."

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My added comment: So here Jim not only re-confirms his prediction that another crisis is coming (and cites the BIS, IMF, and G20 as having warned it is coming), he goes on to say that during this crisis we can expect banks to close and access to money market funds (viewed by most people as cash) to be restricted. This is the first time I have seen him comment on this. Of course, if he ends up being right, we are going to see major changes in the monetary system and they will happen very quickly if it comes under crisis conditions like he suggests here.

I will reiterate that his views on this directly contradict the mainstream view of the future as presented by most mainstream financial media (like Bloomberg and CNBC). They do not suggest any kind of crisis like this will happen. And while the IMF and BIS and G20 have issued warnings, they continue to state that they believe the risks can be managed and over time mitigated. They do not forecast a crisis like Jim Rickards is predicting.

We will follow it here for as long as it takes to find out if Jim Rickards will be right or not. We will probably have a good idea by early in 2015, but it could be beyond that time frame too. Whatever time frame it is, we will follow it here for readers.

Update on Argentina Debt Default - It's Still Pretty Messy

Bloomberg runs this update on the ongoing drama related to the refusal of Argentina to obey a decision from a US Judge on its bonds. The Judge rules the country in contempt of court.

This is the case being closely watched by many global financial institutions since it may set precedent for future sovereign debt default situations. This one is still a big mess and no signs of it being resolved any time soon.

Argentina is trying to basically bypass the US court ruling while the judge in the case is blocking the ability of Argentina to pay its bondholders. 

Some global institutions are concerned that this case will make it harder to quickly resolve any sovereign debt crisis that might emerge in the future as bondholders may not be as quick to accept a big loss. The case is also not helping the image of the US in the eyes of some other nations who feel the US is overstepping its bounds to impose US law on other countries (this same kind of thing happened recently in Europe).

Keep all that in mind as the battle for IMF reforms continues to play out. There is a growing feeling that the US is using its position in the world (and its ability to create endless reserve currency US dollars) to coerce other nations into doing whatever it wants. Russia just made a speech at the UN aimed directly at the US in this regard. As the world appears to drift further apart, all of this ill will is not likely to help out global GDP very much.

So even though this case only involves a portion of old debt from Argentina, there are a lot of undercurrents being watched to see how it ends up.

Update 10-1-14: This story takes a strange twist. President of Argentina suggests the US may be trying to have her assassinated.

Update 10-2-14: And now the Head of the Central Bank of Argentina resigns.