Jim Rickards: We’re Heading for War with North Korea

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[Ed. Note: Jim Rickards’ latest New York Times bestseller, The Road to Ruin: The Global Elites’ Secret Plan for the Next Financial Crisis, is out now. Learn how to get your free copy – HERE. This vital book transcends rhetoric from the Federal Reserve’s quantitative tightening program to prepare you for what you should be watching now.]

Speaking with Bloomberg’s Betty Liu on gold, the geopolitical threat of North Korea and what to expect from the Federal Reserve financial expert Jim Rickards provided what his outlook shows for the months ahead.

The Bloomberg host began by asking Rickards why, with no current inflationary problems seen by most investors, he believed that gold was due for a major boom. The Strategic Intelligence editor started, “The reason in the first half [of the year] about 7.8% against enormous headwinds. The Fed has raised rates in December, March and again in June. [Now] we’re seeing disinflation, a slowing economy, a declining labor force. Everything looks like a recession and yet gold went up almost 8% in that environment. As we go forward, the Fed will always be the last to know.”

Jim Rickards is the editor of Strategic Intelligence and is the New York Times best-selling author of The Road to Ruin. Rickards’ worked on Wall Street for decades and has advised the U.S intelligence community on international finance, trade and financial warfare.

Speaking on the Fed the macro financial analyst summed that, “They’ll figure this out around August or September, but they’re going to have to reverse course – assuming they will not raise rates in July. There is no scheduled meeting in August and I don’t expect them to raise rates in September or November – we’ll see about December.”

Rickards’ continued to make the case for gold saying, “They’re going to have to do their ninth flip-flop since 2013. When they do, they’ll be easing through forward guidance – they’re not going to cut rates yet unless we do go into recession. That easing of forward guidance message, which has not been priced into the market, is going to be an enormous tailwind for gold. That’s one factor for gold.”

“The other factor facing gold is a geopolitical one. We’re heading for war with North Korea. That’s pretty obvious at this point. The market is not quite prepared. The U.S National Security Advisor General, H.R McMaster along with the Secretary of Defense, General Mattis have both given very clear indications on this. They’ve dispatched two carrier task force groups.”

“In April, while at Mar A Lago, President Trump and President Xi met. [While there] President Trump asked for President Xi’s help with North Korea noting that he would lay off calling China a currency manipulator. It seemed as though President Xi indicated he needed time and may have been given 100 days from that meeting to deal with North Korea.”

It is worth noting that following Rickards’ statement on Bloomberg, he was met with skepticism on his bold claim for North Korean conflict. However, only hours after the interview North Korea fired an intercontinental ballistic missile (ICBM). What that means is that the rocket that was tested had a range of at least 3,400 miles. The US then responded with its own show of military force on the Korean peninsula while working jointly with South Korean military forces.

When asked by another Bloomberg Daybreak: Asia host why investors should own gold over the long term the Strategic Intelligence editor pressed back. “The long term case is even stronger than the short term. The long term case [I expect] gold will be at $10,000 or higher in nominal terms. When you say that gold is up or down, what you’re really doing is privileging the dollar.”

“Gold, the dollar, euro and bitcoin are all money. None of these things are investments or commodities – they’re money.  So you can trade one for the other – dollars for gold, etc. All that is happening is an expression for liquidity preference and a value preference for a certain kind of money.”

Find the like to the full Bloomberg interview with Jim Rickards here.

Thanks for reading,
Craig Wilson, @craig_wilson7
for the Daily Reckoning

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