Jim Rickards: America's "Plan B"

[metalman]

Re: Jim Rickards: America's "Plan B"

why argue with knowitall anons... arrived here 10 years after the fact... with all the 'answers'?

what's next?

more... more... more...

[c1ue]

Re: Jim Rickards: America's "Plan B"

More examples of Rickards' gold bug-ism:

"Gold will go to $5000/ounce, and the US can repay the $1T owed to China."

Well, even at $5000/ounce - that $1T is equivalent to 6857 tons of gold - which is most of what the US holds even according to Rickards.

Throw in the debt owed to Japan and the other major holders of US Treasuries - and you have the same situation with gold as we already have: the US is insolvent. Except now the US cannot print money to cover the difference.

Rickards then plays a scene from a '70s era movie - this one demonizing the Arabs as the 'bad foreigners' of that decade (like the 'bad Japan' of the 80s and 'bad China' of the 2000s).

In the Q & A, Rickard's does a much better job until he starts focusing on the Fed's acceptance of MBS crap as collateral.

While this is true, the crap collateral was merely one symptom of the fix.

The bigger symptom was clearly the FASB ruling which effectively allowed all the TBTF banks to lie about their entire asset (or lack thereof) quality.

Rickards does make a good point about why there haven't been indictments yet - his view is that indictments would itself cause a financial institution to fail and that is the reason why there haven't been any.

This may be true, but then again it is impossible to tell from the outside if it is this reason or just sheer criminal racketeering, incompetence (deliberate or otherwise), or what not.

Rickards then starts talking some odd talk: that China sent 'secret agents' out to buy 500 tons of gold in 5 years.

Yet he then talks about how China produces 300 tons of gold per year.

If China produces so much gold internally, why would they need secret agents to buy a total of 500 tons over 5 years?

He then talks about China needing 7000 tons in the near future - again in his view he literally equates gold with nukes, tanks, or missiles.

[cobben]

Re: Jim Rickards: America's "Plan B"

"why argue with . . ."

What I find interesting in Rickards is his suggestion that the US should confiscate foreign owned gold held in the US.
Now how does that differ from the explicit US policy of reserving the right of killing anyone they don't like, even US citizens, anywhere in the world?
Oh, yes - he hasn't yet suggested that the US should confiscate foreign owned gold held in other countries . . .

Of course, the US doesn't have to actually physically confiscate the gold, just exercise full control over it, which could be done in any number of obfuscated diplomatically convoluted manners.

[Raz]

Re: Jim Rickards: America's "Plan B"

"why argue with . . ."

What I find interesting in Rickards is his suggestion that the US should confiscate foreign owned gold held in the US.
Now how does that differ from the explicit US policy of reserving the right of killing anyone they don't like, even US citizens, anywhere in the world?
Oh, yes - he hasn't yet suggested that the US should confiscate foreign owned gold held in other countries . . .

Of course, the US doesn't have to actually physically confiscate the gold, just exercise full control over it, which could be done in any number of obfuscated diplomatically convoluted manners.

You must have heard a different presentation than the one I listened to. I heard Rickards explain how the President has such "authority" under legislation passed in 1977.
I did not hear him "suggest" such action as a "solution" to our Bonar.

Explaining a possible or likely scenario does not mean that one suggests it or views it as an honorable and equitable path of action.

[jk]

Re: Jim Rickards: America's "Plan B"

when/if the time comes, i seriously doubt anyone in the u.s. gov't will be worrying about what's "honorable"? why start then?

[Raz]

Re: Jim Rickards: America's "Plan B"

No disrespect to you, Raz, for posting Rickards. There is nothing wrong with what he's saying, but it's not exactly news. The reason my article The Next Bubble made the cover or Harper's in February 2008 is that it was the first time anyone with a background in finance had come right out and said that asset bubbles result from government corruption, that both parties engaged in it, that the regulators were captured, and there will be hell to pay. I went on to explain that a massive recession was coming, warning that it was going to be so severe that New Deal style stimulus projects would be undertaken. It was the original article of this type. My first point is, that it is far easier to write in detail about events years after the fact than years before. My second point is, a I explain to our endearing cow, is that expertise on the topic of gold does in fact count for something, and developing expertise takes time and dedication. I don't know how long Rickards has been at it but I'd guess from what he says that he hasn't been studying the topic for long. Buying gold is no proof of expertise, but it has been exceedingly easy to be bold about gold since 2008 compared to, say, 2001. I am determined to constantly move forward and commit myself to exploring new terrain in search of even better truths. Truth, to my way of thinking, is not a goal but is a perpetual process, sought after but never achieved.

I have great respect for you, EJ, and I've learned more from you than from a dozen Jim Rickards. Nor do I have intellectual property to defend, property that it took decades of study and hard work to produce as others plagiarize it and present it as their own "ideas". I'm sure that it's more than infuriating for you at times.

I'm not now nor ever will be half the fundamentalist that you are; I'm more of a technician when it comes to markets since I decided many, many years ago that I could (a) satisfy myself upon being right [eventually], or (b) concentrate on making money in the very close present. With gold, however, you seem to have managed both! It's a difference of emphasis though I will admit that yours is ultimately more valuable.

If truth is a perpetual process (to your way of thinking) then it is usually helpful to consider the informed opinions of other very intelligent people. They may well irritate us yet it's possible that in some area they just might inform us.
No single human being has thought of everything.

Rickards is a very smart guy. I also happen to like him for his personality and speaking style,
and I really couldn't care less if it irks "Metalman".
Having said that I'm glad to know that you don't consider Rickards to be a "know nothing" -
- even if he doesn't completely "understand the game".

And a Merry Christmas to you and your household.

[Raz]

Re: Jim Rickards: America's "Plan B"

when/if the time comes, i seriously doubt anyone in the u.s. gov't will be worrying about what's "honorable"? why start then?

Correct - but that's quite different than attributing the idea, motive and plan to Rickards.

[Sharky]

Re: Jim Rickards: America's "Plan B"

I was still pushing my K&E mahogany slide rule and the tables in my Chemical Rubber handbook (the 50th edition, the final one in the small format) back then. I didn't graduate to the Friden desk calculator (better for adding, slide rule still better for multiplying) in my college's psych department until 1967.

I had the 51st edition of the CRC handbook (large format). I won mine in a contest and then spent many months absorbed in it; my friends thought I was crazy. Of course, I almost burned my parent's house down a few times (literally) with chemistry "experiments," so they were probably right.

Do you remember the HP-35 calculator? It came out around the same time, IIRC. Bonus points if you also remember where the "35" came from.

[thriftyandboringinohio]

Re: Jim Rickards: America's "Plan B"

Oooh, I was a young geek in high school in the mid 1970's, and an HP 35 calculator was the coolest thing in the whole world to me.
It cost the equivalent of about $1,500 today ($395 back then)
By the time I got into engineering school in the 1980's I was using the advanced programmable Sharp calculators, but the alpha geeks in EE were still using RPN HP's

It's the "35" because it had 35 keys.

[vinoveri]

Re: Jim Rickards: America's "Plan B"

when/if the time comes, i seriously doubt anyone in the u.s. gov't will be worrying about what's "honorable"? why start then?

AND ... if and when the time comes for an "international" gold backed currency system (fractional or otherwise), what makes anyone think that private ownership of gold bullion will continue to be sanctioned or gold allowed to be traded in the retail markets. TPTB are not going to let the gold bugs (or other wise folks who have been accumulating gold) to win financially (even though they were right all along). It's going to be tricky to time when to sell. An unforeseen government proclamation on one Sunday afternoon may render a lot of this moot (e.g., "private gold ownership is hereby prohibited; all gold must be surrendered and sold to the gov via the banks at the market price as of EOD the previous friday";... then a couple of months later the $ is pegged to gold at 2-10x the original market price - history rhyming as the 1930's confiscation and devaluation occurs, but this time hitting the gold holders disproportionally vs the general population).

[rabot10]

Re: Jim Rickards: America's "Plan B"

Post deleted.

[we_are_toast]

Re: Jim Rickards: America's "Plan B"

Governments have succeeded for long periods at convincing the citizens that the government can be trusted to not impose a usurious inflation tax, that by prudent fiscal and monetary management the wages of their labor is safe. But, try as they might, they cannot escape the fact that governments cannot and will never trust each other. They know better. That is the reason why the international gold standard existed.

...

Looking at gold starting in 1995 and noting that 25% of all of history's gold production sat lamented in the vaults of more than 100 central banks, I determined that gold is either a monetary anachronismor something else, and the something else I decided it was, is this: when it comes to relations among sovereign states, as in a poker game among associates but not true friends, trust the other players, but always cut the deck.

Gold is what's always left in the global monetary deck after the cards are cut. After the cards are dealt again, after the next to-the-brink crisis, gold will still be there. The only questions are: where, when, and how much?

I'm a bit puzzled about this. If the governments were all in on the importance of gold, why did so many of them sell so much for almost 20 years, and many of them near the bottom? Surely they could see the bubble economics practiced by Greenspan, and surely they could see the dramatic rise in private and public debt throughout the world?

[jk]

Re: Jim Rickards: America's "Plan B"

I'm a bit puzzled about this. If the governments were all in on the importance of gold, why did so many of them sell so much for almost 20 years, and many of them near the bottom? Surely they could see the bubble economics practiced by Greenspan, and surely they could see the dramatic rise in private and public debt throughout the world?

a quick google search of "gordon brown sells gold" comes up with some testimony that some big banks were dangerously short gold and were bailed out by brown's [un]timely sale. besides, oil was at [iirc] about $10/barrel, and considering greenspan's policies, etc, required a much longer time horizon than exists for central bankers, let alone politicians.

[mliu_01]

Re: Jim Rickards: America's "Plan B"

Not to mention his lame answer about why those crooks should be in jail by now.
He must be think we are idiots.

I am a little disappointed at his presentation.
So the US still have all they gold they said they have? Why Ron Paul want to audit the gold? is Ron an idiot?

[Milton Kuo]

Re: Jim Rickards: America's "Plan B"

So the US still have all they gold they said they have? Why Ron Paul want to audit the gold? is Ron an idiot?

In my opinion, it's highly likely that the U.S. has all of the gold it claims to have, perhaps even more. Nixon shut the gold window for good reason. As for Ron Paul, he's a modern day Don Quixote.