Rickards: Scaramucci’s Chinese Operation May Have Pushed Him Out

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Jim Rickards joined CNBC Asia-Pacific to discuss the latest moves from the White House and what they mean for Wall Street and geopolitics. Rickards’ is the editor of Strategic Intelligence and as a former advisor to various intelligence outlets on international finance, he leveled experienced understanding on the latest situation.

Recently dismissed White House communications director Anthony Scaramucci was let go after the incoming Chief of Staff John F. Kelly was appointed. The move to let go of Scaramucci, the former hedge fund founder and co-manager, was believed to be in part because of his significant blemishes in the media. However, the hedge fund managers dealings with China may have also played a significant role.

When asked about the mounting reasons, beyond Scaramucci’s New Yorker rant, as to why he was let go from the White House Rickards detailed, “Well, the view is that there are three major reasons for the motive. One is the tirade – it was so vulgar that if someone asked me to repeat it I said that I won’t. The other thing was the chain of command. The third thing, which I believe was on the horizon, was that Scaramucci sold his hedge fund company to the Chinese.”

Jim Rickards is an economist and New York Times best-selling author of The Road to Ruin and the editor of Strategic Intelligence. Rickards’ worked for 35 years in capital markets and has extensive experience on Wall Street.

Detailing why the issue between Skybridge and HNA Group, owner of Chinese carrier Hainan Airlines, was such a big concern the economist noted that, “For many years I worked with the intelligence community on the Committee on Foreign Investment in the United States (CFIUS). There we looked at what happens when a foreign company buys a U.S company and would review the operation for national security reasons. For years I told the intelligence community, in a lead role on this particular matter, that they should not allow the Chinese to buy U.S hedge funds or U.S investment banks – at least not in a controlling position. The reason is that they would be plugged into the global financial system. The creates a huge source of information and allows for a huge capacity to disrupt global financial markets in the instance of war.”

“My recommendation for this instance would’ve been to turn this deal down and see what they actually do. The decision was still pending and in some ways that was going to just be an albatross to the administration.”

“In some ways the White House is now relieved to get rid of Scaramucci because no matter what happens in that deal, and my expectation is that it will be turned down, that burden will now not be on the White House. This is a good move by the White House to see him go.”

When asked about the potential deal between Scaramucci’s Skybridge and the Chinese firm HNA Rickards’ responded, “The deal would’ve come back to haunt the White House in the future. The deal is still under CFIUS review but has not been rendered with a decision. As a former member of CFIUS we always warned not to let foreign adversaries like China to get plugged into the U.S financial system.”

“When I was involved this deal would not have gone through. It is certainly an embarrassment and I am not sure why Scaramucci believed that such a deal would just sail through. The move does have important national security implications.”

Find the full interview with Jim Rickards on CNBC here.

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

The post Rickards: Scaramucci’s Chinese Operation May Have Pushed Him Out appeared first on Daily Reckoning.

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