Jim Rickards

James Rickards: ‘Fed Will Have To Go Dovish’ And Bonds, Gold Will Rally

Back on December 27, James (Jim) Rickards, an American lawyer, economist, investment banker, and best-selling author appeared on CNBC TV’s Squawk Box (Asia) and made this prediction about Trump’s first term in the Oval Office:

I definitely see a stock market correction, perhaps a disorderly one… I’m not sure the Fed is ready to cut rates yet. But I expect it will raise rates in March. I think that’s on track. But beyond that, we’re going to go into a recession or the stock market is going to have a very severe correction. Either one of those will cause the Fed to back-pedal.

On January 12, James Rickards elaborated on this forecast on The Daily Reckoning website. He informed readers of “Be Prepared for a Violent Fed Reversal”:

My short-term expectation is the Fed will raise rates in March. My intermediate-term expectation is that the market is going to be disappointed with the stimulus, the Fed tightening is going to be at the wrong time, the stock market’s going to “fall out of bed,” the economy’s going to slow down, and the Fed will have to go dovish.

At that point you’re going to see rallies in bonds, rallies in gold, and a decline in the stock market…

(Editor’s note: Bold added for emphasis)

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)

Source:

Rickards, James. “Be Prepared for a Violent Fed Reversal.” The Daily Reckoning. 12 Jan. 2017. (https://dailyreckoning.com/be-prepared-violent-fed-reversal/). 23 Jan. 2017.

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Tuesday, January 24th, 2017 Bonds, Crash Prophets, Federal Reserve, Interest Rates, Investing, Monetary Policy, Precious Metals, Recession, Stimulus, Stocks Comments Off on James Rickards: ‘Fed Will Have To Go Dovish’ And Bonds, Gold Will Rally

Jim Rickards: ‘We’re Going To Go Into A Recession Or The Stock Market Is Going To Have A Very Severe Correction’

Marc Faber isn’t the only “crash prophet” who realizes the financial environment U.S. President-elect Donald Trump could inherit is significantly different than what Ronald Reagan encountered in 1981. Back on December 5 I blogged about James (Jim) Rickards, an American lawyer, economist, investment banker, and best-selling author, who was on RTÉ Radio 1 (Ireland) the prior week informing listeners of the following:

Less regulation, lower taxes, and a lot more infrastructure spending. This was Ronald Reagan’s playbook. This is what Ronald Reagan did in 1981 with a lot of success. But there are big differences, reasons to believe Trump will not be as successful. Namely because when Reagan came in, the U.S. debt-to-GDP ratio- the amount of debt relative to our economy- was 35 percent. Today it’s almost 105 percent. Reagan had inflation of 20 percent. Trump has it close to zero. In other words, Reagan had a lot of tailwinds– inflation had to come down, interest rates had to come down, he had fiscal space to run up the debt. Trump has headwinds

(Editor’s note: Bold added for emphasis)

Last Tuesday, Rickards appeared on CNBC TV’s Squawk Box (Asia) and made this prediction about Trump’s first term in the Oval Office:

I definitely see a stock market correction, perhaps a disorderly one Martin. I’m not sure the Fed is ready to cut rates yet. But I expect it will raise rates in March. I think that’s on track. But beyond that, we’re going to go into a recession or the stock market is going to have a very severe correction. Either one of those will cause the Fed to back-pedal.

(Editor’s note: Bold added for emphasis)

CNBC anchor Martin Soong asked his guest, “What is it going to take to cause these two outcomes- what’s the trigger going to be?” Rickards replied:

First of all, it’s already happening. There’s basically a head-long collision coming between perception and reality. So what’s the perception? The market’s rising on the Trump reflation trade. So, Trump wants to cut taxes. Steve Bannon’s talking to his advisors about a trillion dollars of infrastructure spending, cutting regulations. So all these things are viewed to be highly stimulative. So that’s why the market’s going up… But with the Fed, they’re thinking of two things. Number one, they believe in the Phillips Curve… With unemployment at 4.6 percent and that kind of stimulus coming, they know monetary policy acts with a lag- they want to get out ahead of inflation. So they’re on track to raise rates. By the way, they want to raise them anyway independent of this because they’ve got to raise them so they can cut them in the next recession. So the Fed’s on track to raise. The market expects stimulus. But here’s the point. The stimulus is not going to come. Congress has already said tax cuts have to be revenue neutral- that’s going to take away the stimulative effect. They’re going to balk at more spending. We have $20 trillion of debt. A 104 percent debt-to-GDP ratio. So we’re not going to get this trillion dollars of spending. And we’re in the eighth year of an expansion Martin. Keynesian stimulus- if it works at all, it works at the beginning of an expansion or in a recession. Not after 8 years. You don’t get much bang for the buck.


“Fed to reverse course by year-end: Expert”
CNBC Video

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)

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Tuesday, January 3rd, 2017 Crash Prophets, Debt Crisis, Employment, Federal Reserve, GDP, Government, Inflation, Infrastructure, Interest Rates, Investing, Monetary Policy, Recession, Spending, Stimulus, Stocks, Taxes Comments Off on Jim Rickards: ‘We’re Going To Go Into A Recession Or The Stock Market Is Going To Have A Very Severe Correction’

Jim Rickards: Donald Trump Has Ronald Reagan’s Financial Playbook, But Faces ‘Headwinds’

Marc Faber. Peter Schiff. Now Jim Rickards. Three “crash prophets” who aren’t convinced U.S. President-elect Donald Trump can magically solve America’s economic ills. Rickards, an American lawyer, economist, investment banker, and best-selling author, was on the RTÉ Radio 1 (Ireland) show Today with Sean O’Rourke last Wednesday talking about his new book when he informed listeners of the following:

Less regulation, lower taxes, and a lot more infrastructure spending. This was Ronald Reagan’s playbook. This is what Ronald Reagan did in 1981 with a lot of success. But there are big differences, reasons to believe Trump will not be as successful. Namely because when Reagan came in, the U.S. debt-to-GDP ratio- the amount of debt relative to our economy- was 35 percent. Today it’s almost 105 percent. Reagan had inflation of 20 percent. Trump has it close to zero. In other words, Reagan had a lot of tailwinds– inflation had to come down, interest rates had to come down, he had fiscal space to run up the debt. Trump has headwinds

(Editor’s note: Bold added for emphasis)

The editor of the financial newsletter Jim Rickards’ Strategic Intelligence believes the next economic crisis (2018?) will be worse than the 2008 edition. When asked by O’Rourke what people with a “smaller or medium-size financial nest-egg” might do to prepare for it, Rickards advised:

For savers and investors at any level, modest or wealthier, put 10 percent of your investible assets in physical gold or silver. For smaller amounts, silver might do well…

He added some cash is good too.

You can listen to the entire interview (a little over 13 minutes) on the RTÉ Radio 1 (Ireland) website here.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)

Rickards’ new book…

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Monday, December 5th, 2016 Commodities, Crash Prophets, Currencies, Debt Crisis, Fiscal Policy, GDP, Government, Inflation, Infrastructure, Interest Rates, Investing, Precious Metals, Spending, Taxes Comments Off on Jim Rickards: Donald Trump Has Ronald Reagan’s Financial Playbook, But Faces ‘Headwinds’

Jim Rickards Suspects China Behind Gold Price Manipulation As It Buys Metal To Hedge Against Dollar Devaluation

Euro Pacific Capital CEO and Global Strategist Peter Schiff just got done interviewing Jim Rickards, an American lawyer, economist, investment banker, and best-selling author. Rickards, who released The Death of Money: The Coming Collapse of the International Monetary System, this spring, spoke with Schiff about the global gold markets. What he had to say about China and its steady accumulation of physical gold (reserves now totaling close to 4,000 tons, Rickards speculates) was extremely interesting. Some might say shocking. From the exchange:

Now there’s been a lot of speculation the reason they’re doing this is they want to launch a gold-backed yuan currency to defeat the dollar. That’s not going to happen. That’s not even close. The reason is that the yuan’s not ready to be a reserve currency because they don’t have investable assets. There’s no rule of law. There’s no mature bond market in China. But what they are doing, is creating a very simple hedge position… So you’ve got $4 trillion of paper reserves, most of them U.S. dollars. You can’t dump them. If you’re going to try and sell a fraction… the Treasury market’s big- it’s not that big. If they try and do something more aggressive, the President of the United States can actually stop them just by freezing their accounts. So what you do is buy up a pile of gold. So now, the Chinese want a stable dollar. They would love a stable dollar. But if the U.S. tries to devalue the dollar, tries to cheapen the dollar through inflation- remember, every 10 percent of dollar inflation is a $300 billion wealth transfer from China to the United States. So if you cheapen the dollar with inflation, they lose money on the paper, but they make money on the gold. So they’re building a hedge position. They’re not done yet.

I’ve heard it claimed before that China is accumulating gold to back the renminbi. But Rickards says this isn’t the case. Even more eye-opening than the dollar hedge theory was something he said later on in the interview:

The gold manipulation, by the way, is so blatant at this point, if I were the manipulator I’d be embarrassed… The question is, who’s doing it? And people like to point a finger at the Fed and maybe through the BIS- they have a hand in it. But my number one suspect is China for the reason you mentioned, Peter. If you’re out to buy 3,000 tons, you don’t want the price to be high yet. Maybe later you do. But for now you want the price to be low.


“Interview: Jim Rickards & Peter Schiff Discuss Global Gold Markets [Full Discussion]”
YouTube Video

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Wednesday, August 13th, 2014 Asia, Bonds, Commodities, Crash Prophets, Currencies, Federal Reserve, Inflation, Monetary Policy, Precious Metals Comments Off on Jim Rickards Suspects China Behind Gold Price Manipulation As It Buys Metal To Hedge Against Dollar Devaluation

Texas To Build Its Own Fort Knox?

“We’re trying to figure out the right amount of gold to have here in Texas. We don’t want just the certificates. We want our gold. And if you’re the state of Texas, you should be able to get your gold.”

-Texas State Representative Giovanni Capriglione (R-Southlake), who is carrying a bill to establish the Texas Bullion Depository, a state-based facility in which gold bullion belonging to the State of Texas and its citizens would be stored, on Forth Worth Star-Telegram website, March 21, 2013

Ever since I got back from Dallas, Texas, late Thursday night, people in Chicago have been asking me what I thought about the place since it was my first time in the “Lone Star State.”

“Buzzing” was how I described it. A vibe I hadn’t felt around these parts since the nineties (I was awake enough to see through the housing bubble-induced artificiality of the mid-2000s).

And the intensity of the buzz appears to have grown the last few days with news coming out of the former independent republic that a state-based and protected Texas Bullion Depository- a Texas “Fort Knox,” so to speak- may be in the works. From Aman Batheja and Emily Ramshaw on the website of the Forth Worth Star-Telegram on Thursday:

Call it the Rick Perry gold rush: The governor wants to bring the state’s gold reserves back from a New York vault to Texas.

And he may have legislative support to do it. Freshman Rep. Giovanni Capriglione, R-Southlake, is carrying a bill that would establish the Texas Bullion Depository, a secure state-based bank to house $1 billion worth of gold bars owned by the University of Texas Investment Management Company, or UTIMCO, and currently stored by the Federal Reserve…

Capriglione said the bill is not about putting Texas on its own gold standard. Rather, a depository would give the state a reputation as being more financially secure in the event of a national or international financial crisis.

And bolster the perception of stability as the state continues efforts to attract business from other parts of the country.

On Thursday, Lauren Lyster of the Yahoo! Finance show The Daily Ticker discussed the proposed Texas Bullion Depository with Jim Rickards, senior managing director of Tangent Capital Partners. It was a good exchange, which you can watch in its entirety (less than 5 minutes) on the Yahoo! Finance website here.

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Batheja, Aman and Ramshaw, Emily. “Tarrant lawmaker seeks to create Texas Bullion Depository.” Forth Worth Star-Telegram. 21 Mar. 2013. (http://www.star-telegram.com/2013/03/21/4720491/tarrant-lawmaker-seeks-to-create.html). 23 Mar. 2013.

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Saturday, March 23rd, 2013 Commodities, Federal Reserve, Government, Precious Metals Comments Off on Texas To Build Its Own Fort Knox?
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