James Rickards: China Planning to Displace Dollar
Our friend Valentin Schmid over at the Epoch Times sat down with Jim Rickards to chat about China’s roll in the gold market. Jim also refutes the notion that China is moving toward becoming the world reserve currency, but does say that “The international monetary system based on paper currencies is fragile and likely to collapse, and when the system needs to be reformed, the people with the largest voice at the table will be the people with the most gold.”
Click here to read the full interview.
We will also be bringing on Valentin later today to get his input on the Chinese gold situation.
Not sure that they stumble Professor. In fact, I would say that they do not stumble!
The stumbling refers to how our politicians deal with things!
These are interviews with Jim Rickards for anyone interested. They are on the “physical gold fund” site.
Seems things are progressing pretty much as he said they would in “Currency Wars”.
I wonder what Turkey and Argentina think of displaceing the american dollar?
Funny, Canada just devalued about 10% and the Canadians are happy about it.
They like to think they are so much more educated than americans.
Feb. 11, 2014 Interview with Jim Rickards on bail-ins, market closures, and a detailed look at Yellen, the Fed playbook, and what to look for ahead in terms of QE. He also covers equities and gold views for 2014.
Mr Rickards seems to find time for interviews, interesting to have him on a panel discussion with Bob Doc and Rick.
Jan. 14, 2014 Interview with Jim Rickards on Gold during massive deflation, gold is positioned for a huge technical rally, tapering into weakness, the new FED Chairwomans twin pillars of Optimal Control Theory and Communications Policy, the FED’s intended role versus what it does now, the incredible leverage employed on the FED’s balance sheet, and how most financial models today are completely wrong.
Dec. 23, 2013 Interview with Jim Rickards, Advisor to Physical Gold Fund on Switzerland visit, Tapering, negative interest rates impact on gold, Jim’s observations on Physical Gold Fund’s vaulting arrangements, and the gold physical float situation.
Mr Rickards seems to find time for interviews, interesting to have him on a panel discussion with Bob Doc and Rick.
That idea kinda got burried.
CFS, gotta be aware of wording J Rickards uses, I havnt read this particular interview yet, but he may be saying “displace” instead of “replace”.
Jim is probably one of the most intelligent people on the planet. I will say no more.
Correct B, they want a third party currency controlled by the joint members of the IMF of which they will have a near parity position with the US thus allowing them to leverage influence globally without having to kow-tow to US dollar hegemony.
Displace, replace……there’s a difference only in the quantity be held internationally, in my mind; thinking in terms as a medium for international trade.
Obviously China is not expecting American’s to use Yuan inside the USA.
Then, again, that may happen one day, at the rate the US is going down hill.
Yes it might, Professor
Remember when we were beginning to see Yen in the shops? And they were all saying that Japan would soon overtake the US and we would be eating rice and Sushi and doing little daily exercise routines at work to get all that great Japanese work ethic instilled in the workers? And then the Japanese weent on a buying spree of US assets that caused everyone indigestion because they seemed to not care the price as long as they could buy up all the best properties?………and then poof, just like that it was over……just like China is set to do. Poof! Thank God we are not too closely tied to their economy.
I certainly remember all the high end golf courses that they purchased. In fact at our Club we have two tracks. One of these used to be a very posh and highly rated club that was owned by the Japanese. They don’t own it anymore! And how about Pebble Beach?
Exactly Al. And there was that beautiful Japanese owned course on the road towards Squamish too. Right beside the old copper mine at Britannia (I love that place!). We used to go hunting for artifacts up there many years ago with the wife and all our dogs. Wander through the old mine workings and then head for lunch at the golf course. Food was terrific an service excellent .The place was dead as a morgue though. I have not seen it in maybe 15 years now though.
Apparently Belgium is buying up chinas stake in us treasuries.
We will see how long China keeps up the pressure. They know they will starve the US economy of blood and air if they do nothing more than stop buying. Belgiums entrance is just a short term fix that cannot go on for long. Maybe someone else steps in next time. But the pressure is now on. This is economic warfare that could force policy decisions in a direction they did not plan on going this early. The real buyer of last resort would ordinarily be Saudi or the other Arab countries but they are feeling pretty alienated due to the Syria crisis. Big power play happening in the background with Russia pressuring on one front and now China on the other.
Jim has this right. I agree with his assessment which, unlike so many others I read, actually does make good sense based upon what we know. So sure, gold is leverage and the SDR is the prize. China is not alone in wanting it either so we should expect it to feature more prominantly in the coming years. At this time, very few people even know what the hell SDR’s are but that will change.
Hi Bird
I think I might have mentioned the other day that SDRs might be the next “move”.
I follow Mr Rickards as close as I can without useing “twitter”.
I really enjoyed his book.
I think this goldmarket is pretty straight foward, Mr Turk I agree with, a % every month.
Maybe I agree with him because a german fellow explained that to me when I was a kid.
Mike Maloney has info on history and the story is entertaining . I find anyway.
Mr.Still, excellent work as to how we got where we are and the effects of it.
I would think you might agree with Mr.Still as you tend to find other things than golds are money.
Mr Rickards, a great handle on whats happening now and what should be the results, what we can expect.
So far, he has been logicaly accurate. I expect the same in the future.
I find trading the market challenging, but as long as we have a core position we intend just to “be right and sit tight” with as they say, bulls have the excellent benifit of making errors look minisquel.
Agree Rickards is a great thinker. He seems to have a good knack for judging what is really happeing behind the scenes without slipping into the crazy talk others engage in.
Let’s see, “serial drama revues”?
Bird, I feel that Jim’s most important comment to focus on is the fact China does not want to replace our reserve currency, the dollar with the yaun. They want to replace the dollar as the reserve currency with SDR’s. I find that to be extremely interesting. And it does make sense. Another comment is that people should look at trade currency different then the reserve currency.
Yes Richard. That is in fact almost exactly what I wrote some days back. Al had mentioned he and Cory might so a segment on it but Rickards commentary is timely and sensible. It confirms my own beliefs which are based on the facts as we know them. The Chinese do not want to be the reserve at this stage. They are not ready. It is in their interests to dethrone the dollar while seizing greater control over the global financial system without full participation or responsibility. Kind of like having your cake and eating it too.
Jim makes the point. China is seeking an alternative currency to the dollar. Once they convert our 400 oz bars to one kilo bars for Chinese consumption, their will be no return of this gold to the USA. When the banksters commited to the 1971 declaration by Richard Nixon that the dollar would stand alone as fiat, our days as a democracy were numbered and the dollar as the reserve currency days were numbered. I for one feel that the slate needs to be wiped cl;ean and all of this deciet and lying has to stop for the betterment of the the US and the world.
Then it would seem prudent to at this stage enage Americans and Westerners to acquire more gold and thus deprive Asia of what it desires. We should appreciate though that if the domestic gold is in fact gone or leased out then a confiscation would be necessary to balance the deficit in an emergency
400 ounce bars compared to 32.15 ounce bars (1 kilo bar). China’s population is about 1.37 billion people compared to about 0.35 billion in US and the West has in past used 400 ounce bars held almost exclusively by Big Banks and Central Banks whereas China and most of their trade agreement partners are using 32.15 ounce bars. Even Sud Afrika is now moving towards kilo bars instead of the big central bank bars.
Western bankers do not consider gold as money, but at the same time they don’t explain what money is to them. Perhaps “money” to them is a “barbarous relic” alongside gold and they want everyone else to use Credit and Debt instead of money. China, India and most of the World including a growing population in the west see credit and debt as an illusion to money. Westerners are becoming increasingly miserable today with only sad memories of being happy yesterday when they borrowed all that credit.
Suffice to say
Gold is the money of Kings
Silver is the money of commerce
Debt is the money of slaves.
History has proven you right Clay!
You failed to mention chickens, Clay!
IMF explains why Debt is Good. No sane person could make this stuff up, so what does that say about western bankers?
And think these morons get paid for this……………..
Don’t you ask yourself how credit might be expanded next? I mean, since housing loans, lines of credit, student loans have all been exploited what must be coming next? Small business lending perhaps? Loans to municipalities to upgrade infrastructure adn renew cities? Lending for transit, solar installations, high speed trains, desalination plants, military expansion……..we know the money will be targetted to something. But what? And more interestingly, how would it be done to expand credit for the widest swath of the population so the benefits would be maximized and reach the largest number of people at once.
Serious question. Anybody have any thoughts on what may be in the works (on the assumption that we will see another round of credit expansion (debt accumulation) in the economy. How about loans that allow people to boost their retirement plans. Kind of credit with the benefit of savings……..is there anything left that can provide the necessary bang for the bucks
Yeh Bird, that is an interesting subject!
How small can a fractional reserve based monetary and government system get and still maintain some sort of economic civility? Ukraine, Argentina, Bangkok and dozens of more nations will each on their own decide.
The fractional reserve system has worked in the past, but only with some kind of governance to both limits of credit and quality of equity. Twenty some years ago the US tinkered with governance over limit of credit with the expansion of derivative instruments into everything and anything. Such dangerous credit expansion boomed and then corrected several times and during each correction the governance relaxed requirements on quality.
There are no sectors left to expand credit into nor any busted assets left to mark at fantasy because when the cycle starts waking people up, first slowly and then all at once, it will be obvious to all that Humpty Dumpty can not be put back together again.
If there are no sectors left then we really are screwed. Maybe that is why all the efforts are on reflating housing and the stock markets for the moment. We need original thinking now though. I imagine we may see an infrastructure renewal build coming again. Sewage systems, rail, environmental projects, bridge reconstruction, parks, water diversions, solar, gas pipelines, roadways and even new dams. I am talking about grand scale projects that encompass the entire country and put millions of people back to work. Also I refer to projects that entice the private sector to invest and take part thus sharing the burden. It is the progress at the margins that makes the difference in mood. But we should also expect more toll roads and bridges….expect hikes in utility charges including water, electricity and gas etcetera and also anticipate that the improvements will stimulate economic expansion until this slow cycle ends.
If you led the Fed, Clay, just ask yourself what kind of assets you might prefer to carry on the books. I mean, if you were having to consider helicopter drops to reinforce the Treasury would you prefer owning dubious assets that are depressed from circumstances of a past crisis or would it not be preferred to put new dams, new roads, new electrical grids and water pipelines on the books. I mean stuff with good economic value that the private sector will happily snap up in the future as the economy begins to grow. Stuff that generates income, improves living standards and can be turned into public companies at a later date? And who says the Fed cannot do it if the treasury asks for the funds? The key is to turn the public itself into the lender which is where pensions come in and the idea is to blunt the effects of dependancy on foreigners.
If I led the Fed, I would first admit that the existing model is broken and does not work. Of course doing such a thing might blow the functionality of the Fed to smithereens because of the years of increased fallacies. So like Jim Rickard if I led it would be predicated on a major change in fiscal makeup of the Senate, House, Executive and Judicial branches of Government. It is impossible to do any of the things like new roads, electric grids, power and water systems and even cleaning up Fukushima or at least stop its contamination through monetary efforts alone, it will require a completely new congress, senate, president and supreme court.
But I also know that big things start from small beginnings, so if any small beginning can be done, I am all for it.
Of course, China is planning to replace the US Dollar.
The question is not if, but when. The Chinese actually plan ahead and not just stumble from one crisis to the next.