posted on Feb, 7 2013 @ 01:44 AM
The world currency system is riding down the road to catastrophe, says James Rickards, senior managing director of Tangent Capital Partners.
The world already has entered a currency war that began in 2010 on the heels of the Federal Reserve’s massive easing program, he tells Wall Street
Journal Digital Network. Since then, plenty of nations have joined in, including Brazil, Switzerland and Japan, says Rickards, author of “Currency
Wars: The Making of the Next Global Crises.”
“All major central banks are easing,” he says. “Eventually so much money will be printed that this will lead to inflation. The endgame
is collapse of the international monetary system — sometime sooner than later.”
In both the United States and Japan, the central banks are trying to “import inflation” to get their economies going, rather than trying to boost
exports, through a weaker currency, Rickards says. “They’re scared to death of deflation. They’ve cut rates, and the last resort is to cheapen
When the international monetary system collapses, major financial powers will convene to plan the aftermath, he says. When that happens, each
nation must have enough gold relative to its gross domestic product.
“China needs to get to 4,000 to 5,000 tons to look the United States in the eye and be an equal country,” Rickards notes.
The global economy can muddle through this year, but major problems begin in 2014, he maintains.
“The biggest risk is the rapid collapse of confidence in paper money. They can’t just keep printing. Then gold really comes to fore, whether
it’s a gold standard or … gold as a reference price.”
So what do ATS members think of this ominous and dramatic forecast on the global monetary system?
A few points he notes to support his call are the emerging currency wars, endless money printing from central banks around the world, gold
acquisitions and repatriation by various countries as indications that central banks and governments are losing confidence in paper money.
It's not like the world is seeing much in the way of any meaningful economic growth despite all these monetary and stimulus measures in place, and
have been since the GFC. There also seems to be some bubbles forming in parts of the world and inflation concerns returning to China.