Jim Rickards on Bitcoin, Gold, and Fed Printing Money, QE

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FULL TRANSCRIPT: http://fmtblog.com/?p=10062

PARTIAL TRANSCRIPT:
FutureMoneyTrends.com: Greetings and thank you for joining us at FutureMoneyTrends.com. I’m here at the Casey Summit with Jim Rickards. He’s the author of Currency Wars. He has a new book coming out as well. What is it called?

James Rickards: It’s called The Death of Money: The Coming Collapse of the International Monetary System. It’ll be out in April; April 8th is the publication date. I finished writing it about a month ago and we’re in editing.

It’s a funny thing, Dan. We live in a world of what I call instant digital gratification, whether it’s YouTube or Twitter, everybody wants to put everything out there immediately, but a book is still an old-fashioned process.

It takes a year to write it and edit it and bind it, so it’ll be out in April and I’ll be talking more about it between now and then.

FutureMoneyTrends.com: It should be very interesting because I’m sure some of your analysis will have either been proven right or proven wrong in the book, am I right?

James Rickards: Well, that’s right, I mean it is forward-looking, so I say a lot of things in the book that I will be looking over in the years ahead, but sure. It’s something coming out in six months, it’ll be a good test to see how things play out. We’ll see if they play out as expected. That’s exactly right.

FutureMoneyTrends.com: I’ve always wondered in the dollar crisis scenario if right on the cusp of the market just melting down and going crazy that Obama and whatever Fed chairman of that time, say, next to him and they’re instituting a gold standard.

Do you think it’s possible that they, right before a major crisis is about to happen, they come in and switch the currency?

James Rickards: I don’t think so. I think there are several scenarios: one is that we get to a gold standard by design.

In other words, people look at the system and they say that it really is not sustainable, it really is based on confidence, but we’re in the process of eroding confidence. There is no exit from quantitative easing. We should say there’s no good exit. You can back away from it, but then you’ll implode the economy in a deflationary crash.

Or you can keep going and eventually cause a loss of confidence in the dollar and then have a hyper-inflationary crash, so you got a crash either way. One looks like the Great Depression, one looks like the late ’70s but worse. Those are the only two paths, but there’s no other path. There’s no way we can just sort of taper, reduce it, finesse it, try to get growth on a self-sustaining path.

The reason for that is we’re in a depression. And depressions are structural problems; they require structural solutions. You cannot use a liquidity solution for a structural problem. You need a structural solution.

So there’s nothing the Fed can do to solve the depression or to change the structural problems in the U.S. economy. I mean, they’re assuming, they’re saying, “We’re gonna print money until unemployment gets to 6 and a half percent.” Who says there’s any relationship between printing money and unemployment? There’s no necessary relationship there. One’s monetary, one’s structural, so you need to do other things. So therefore they’re gonna keep going, but they think they’re right.

I may be a critic and I may be able to point out why they’re wrong, why their models are wrong and why this says “No Good Exit,” but they think they’re right and they’re gonna keep going and kinda drive the bus over the cliff.

Now, at that point, when the crisis emerges, they may have to go to a gold standard. They don’t want to, but they may have to, to restore confidence. But I’m very doubtful that they’ll do it as a matter of choice and say, “Look, we need to do this, let’s just do it now, let’s be honest, let’s be transparent, let’s be thoughtful.” You could do that but I think that’s very unlikely.

FutureMoneyTrends.com: So in 20 years from now, do you think the world will look back and it will be the 2008 to whatever is going to be depression?

James Rickards: Yes!

FutureMoneyTrends.com: Because nobody would ever say that it’s a depression now, I mean you’re saying it is and your analysis; by the way, anybody who missed your speech, it’s unfortunate because every word out of your mouth is backed by so much data and charts and statistics so, ultimately you think people will look back at this time and everyone will acknowledge that it’s a depression?

James Rickards: Oh, certainly. I mean, first of all I’d say it started in 2007. 2008 was the panic and it was an emergency liquidity response to that, but the roots of this really go back to 2007. That’s when the sub-prime crisis erupted, that’s when the Bear Stearns hedge funds melted down. That’s when the Fed first started in to cut the discount rate and respond a little bit

Jim Rickards on Bitcoin, Gold, and Fed Printing Money, QE

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