Jim Rickards: Extremely High Risk of US Dollar Collapse

pmbug

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I've been listening to (and reading) Jim Rickards thoughts for over a year now. He is very connected and sharp as a tack. If you haven't seen it, I highly recommend watching this presentation he gave to folks who work in the Pentagon on economics and national security (it's in 9 parts and you can click the thumbnail for the next part after the part you are watching ends):


You can find a "Cliffs notes" of it here:

https://outerdnn.outer.jhuapl.edu/videos/120710/RickardsNotes2010.pdf

Some other required Rickards reading can be found here:

http://news.goldseek.com/GoldSeek/1296849600.php

My favorite exchange from that interview:
...
HRN: Bernanke has been in the media, saying that inflation will stimulate the U.S. economy and help create jobs without causing prices to go up.

Jim Rickards: It’s propaganda. I had a discussion with former Fed governor, no reason to mention the name, who is a very well known economist, and what he said was that behind closed doors the Federal Open Market Committee spends about 10% of their time on policy and 90% of their time on communication. They very quickly arrive at what they’re going to do and then spend the vast majority of their time thinking about messaging and wordsmithing. Well, there’s a name for that. It’s called propaganda.
...
His latest interview at KWN is sobering:
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So the Fed (is engaged) in all of these monetary exertions, mind games, it’s manipulation. They are not trying to communicate with you honestly. They are trying to communicate with you in such a way that they manipulate your expectations into doing something that may or may not be in your best interest.

By the way, the more the Fed does this the more we get to a point where confidence in the dollar may collapse. It could happen very suddenly...The stage will have been set. It’s like my metaphor of the avalanche and the snowflake. The avalanche is waiting to happen, but it takes a certain snowflake to trigger the whole collapse of the mountainside.

What we have now is an unstable mountainside and the snowflakes are coming down and it’s probably a matter of time. We are running the risk of a dollar collapse with a much higher probability than anyone should be comfortable with. So this just increases the case for gold in my view.”
...
More: http://kingworldnews.com/kingworldn...xtremely_High_Risk_of_US_Dollar_Collapse.html

Link to audio of interview: http://www.kingworldnews.com/kingwo...im_Rickards_files/Jim Rickards 10:23:2011.mp3
 

pmbug

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Ray Dalio, head of the world's biggest (macro) hedge fund, Bridgewater Associates, agrees with Rickards with regards to the Fed's impotence:
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RAY DALIO: ...
We can`t solve the problem easily because we still have too much debt. But we can move forward in being able to make the best of it. We can spread it out, we can keep orderly we have a situation now in which we have a very severe situation, not only because we have a deleveraging going on, but we have a situation in which monetary policy cannot work the way it worked in the past, that fiscal policy will not be stimulative.

CHARLIE ROSE: Some people say that they describe that as there are no more tools in the tool kit.

RAY DALIO: There are no more tools in the tool kit.
...
More: http://www.zerohedge.com/news/ray-d...ranscript-head-worlds-biggest#comment-1803699
 

DSAbug

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Get a close on the dollar index below 76 and we are likely at 74.50 in short order. The amount of short interest right now in the Euro/USD FX trade is supposedly pretty high so that kind of move might have legs to it.

Here is a good site to track the dollar if you are watching levels. http://www.fxstreet.com/rates-charts/usdollar-index/
 

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Thanks for the link Derek. I had to laugh though when I read: "Trend Index: Strongly Bullish" when considering the info posted above.
 

pmbug

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Hour long video produced in August (but I've just now seen it):


8 minute segment from the movie:

 
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