War drums will hasten dollar’s collapse, says currency expert

Anyone who frequents these forums has likely heard of James Rickards and where he stands on these kinds of issues. In this article, Rickards is saying that war drums on Syria is likely to accelerate the collapse of the US dollar and it will be replaced by some other currency backed by gold. Rickards also suggests that any military action on Syria will likely mean the Fed postpones the winding down of QE, though no indication of whether he thinks the Fed will resume with the 'tightening' or otherwise....

War drums will hasten dollar’s collapse, says currency expert

Mr Rickards, author of Currency Wars and MD of Tangent Capital, was the keynote speaker at the Sanlam Africa Cup of Investment in Cape Town this week. He expects gold to rocket as high as $7,000/oz in the next five years as the dollar-based global economy collapses and is replaced by a more viable, gold-based currency.

“Gold is not an investment, it is not a commodity. Essentially, gold is money,” said Mr Rickards.

While this sounds like great news for South African gold miners, Mr Rickards said the country would not benefit unless the South African Reserve Bank increased its gold reserves.

A lawyer by training, Mr Rickards was involved in the sequestration of Long Term Capital Management, an asset manager that collapsed in the late 1990s and shook people’s belief in the market.

“The dollar-based global financial system is unstable. I see it collapsing in the next three to five years.

“It will either be replaced by a new gold standard, or a new currency like the special drawing rights of the International Monetary Fund or a combination of the two.

“The US Federal Reserve takes confidence in the dollar for granted, and we know something as fragile as confidence can vanish very rapidly.”

Mr Rickards said the war drums beating over Syria would hasten the dollar’s fall. The implications for South Africa are tremendous — not only is it a large gold producer, but it also has one of the largest gold reserves in the world.

With the gold price moving in the opposite direction to the dollar, any sudden and steep fall in the value of the dollar would inevitably lead to an increase in the gold dollar price.

According to Mr Rickards, this is not as unthinkable as it seems. The world came to the brink of a similar collapse in 1978. From 1977 to 1981, the value of the dollar was halved.

In 2010, the US embarked on a policy of cheapening the dollar. That has had ripple effects on the world ever since.

According to Mr Rickards, September 18 will be a crucial date in the history of the world, as that is when the US Federal Reserve will announce whether it will stop printing its currency faster than the Zimbabwe Reserve Bank did at the height of the hyper-inflation era.

Although the markets seem to have priced in a slowdown in the rate of money printing by the Fed on this date, Mr Rickards said he was sceptical it would actually happen.

As far as he was concerned, the “imminent” military strike in Syria by the US and its allies would make the US central bank reluctant to start tightening money supply.

“If you look at Fed policy during the Second World War and the Vietnam War, it was very accommodating. I’d be surprised if the Fed started tightening during a shooting war with Syria,” he said.

Well we all know history repeats itself.
And so do the guys selling precious metals: Buy Buy Buy

And on those lines....when in History has war hurt the US Dollar?
Quite the opposite in fact.
But change happens...not in the last 5 years so to speak... but it could.

Originally posted by Xcouncil=wisdom
And on those lines....when in History has war hurt the US Dollar?
Quite the opposite in fact.

Couple thoughts counter to that logic:
1. The nation always enters a recession following a war. Considering the economy right now is arguably still in the midst of a depression/recession (certainly main street is, at least), it wouldn't take much to strike a death blow. The standard post-conflict downturn could be that death blow.

2. The nation is flat broke right now. The resources to fight a war aren't present, meaning any outbreak of war would be fought economically half-assed by the leadership. That's a great way to both lose a war and put enough additional stress on an already stressed economy to cause it to break.

3. The real keystone is the US Dollar's position as the world reserve currency. Piss off the wrong people (Russia, China, much of the Middle East) and fight a war the nation cannot afford the bill for and watch how, immediately upon America waving the white flag, the dollar loses it's special status. That status is the only thing keeping America afloat right now. We manufacture nothing and ridiculousness such as fast food workers striking for $15 an hour demonstrates how the nation has absolutely no chance in a global competitive market in absence of their reserve currency status. If unskilled Americans aren't willing to flip burgers for $7 an hour, does anyone really think we can out-bid Korea and get citizens to assemble widgets for 12 hours a day at a couple bucks an hour? Add into the equation complete asshattery like mandatory employer health care spending and employment taxes and it is easy to see how, when that last tenuous strand of fibers keeping the US in the global market snaps, the dollar's fair competition will be with companies like Charmin and Scott's Toilet Tissue instead of the Yuan and Ruble.

reply to post by burdman30ott6


1. I guess it depends on how involved we become.
2. See point #1

3. YES YES YES I agree with everything after your second sentence of pt #3

The war won't be the downfall of the US dollar, the people of America will be.
Investing in metals that are extremely overpriced at the reqauest of those selling it doesn't seem like the way to go

UNLESS:
1. Your rent/mortgage is paid, with 3 months plus expenses put away.
2. Your vehicle is paid off (if you don't rely on public transportation-if you do, does your bicycle's tires got air in em)
3. Your bug out bag is ready to go, and the emergency perishibles have been recently restocked.
4. whatever else I missed

Now, invest in something that will retain its value and can be used in emergency.
That still may not be gold or silver for most people.
More water, more food, tools, a motorcycle...these things may be a much better use of their 'extra' $

reply to post by surrealist


No it won't happen. Because there's no bond market denominated in gold. The US dollar and other similar currencies will be around for a long time.

reply to post by surrealist


Personally i think Rickards and over 98% of the other financial-USD collapse proponents are skewed in their logic


the delayed Syrian operation for regime change has been changed... for a new battlefield tactic that involves leaving the present Syria---- along with every other North African, Eur-Asian nation in the Middle East sphere or in the Central Asia sphere in severe danger of being over-run by the unleashed & barbaric Jihadists/AQ/al Nusra militant Muslims...
rather than the USA war machine as the engine of their demise when the red-laser light eventually shines on them



The longevity of the USD is being indefinitely extended by the new Øbama shrewd scheme of arming & financing the many factions of militant-Jihadist-Islamists with scads of USDs

So by Intimidation of being attacked by well financed but barbaric Muslim militant factions IF that nation does not completely rely on USD trade & commerce and do business with all the USA paid militants flush with USDs... then that nation is subject to an insurrection or 'Arab Spring' overthrow.


The USA still has a petro-dollar exclusive contract with thwe Saudi monarchy
the USA has constructed a defacto War-USD with the dozen or more rebel-militant-factions of the MuslimBrotherhood-AQ/al Nusra-Jihadists-Wahabbists...
and this war class of Muslims will be able to demand that their USDs be worth a lot more than what the devalued forex dollar is redeemable for...

in fact countries that refuse to accept these USD...as China and Russia seem to be preparing to do--- then those nations will be themselves targeted by the USA mercenaries of chaos & destruction...
the Jihadists are not going to be denied the spoils of their payments...

hence the USD now has a two decade or more extension of life...
and not a swift demise that these economists intellectually reason will unfold...


Intimidation by AQ-Jihadists and multiple militant Muslim groups will force the USD to new higher valuation instead of devaluation by printing Trillions.... the USD is now protected by a diverse and multi-million strong Militant Islam who will protect their own monetary prosperity and arms acquisitions


this scheme by Øbama has outdone the neo-con/zionist plans for regime changes in a progressive step-by-step order with a dark-cloud covering 1/3 of the planet all at once..

more bang-for the buck by Øbama,,,huh?

Very interesting post St Udio!

surrealist
Very interesting post St Udio!

thanks...






i have put on my 20-20 glasses instead of just going with the popular outlooks on the collapsing USD or the Gold+Silver+PM prices that are counter to the prevailing reality of physical lack-of-availability...
....................... ~ It just does not make sense ~



ergo... we must look deeper at the subject...in this case the logic for the demise of the USD

I say that the new policies of allying with and funding- supporting all the militant-Muslim-Jihadists is designed to create even greater demand for more US Dollars to be put in circulation...

And as a result of an increased volume of Dollars...
there will be a resulting Velocity of US Dollars being exchanged for more weapons/arms and more monies (USDs) being sent home to the AQ-militant Muslims-Jihadists' fighters families to enjoy a better standard-of-living...


all-in-all... the USA through the 0bama plan of spending Trillions per year on Islamic Jihadists as a mercenary fighting force... will keep the USD on the top-of-the-heap among world currencies despite the QEs and other homeland stuff that theoretically should be destroying the USDs valuation among all the worlds monies



this is a very shrewd scheme- tactic
& should prop up the 'Dollar' for another generation as a viable alternative to Gold & PM
which is being hoarded by Russia-China-and all the other BRICS nations (to their short term dismay)



by the time the USD again begins to fray.... well then the USA will be dealing with new issues with Iran (as a Theocracy and with Saudi as a Monarchy state) in the meanwhile the civilized G-20 will be intimidated by the paid for militant-Muslims with the USA as ally & benefactor...and the USD will remain supreme...but for different reasons than the USA being the technological giant & militaary juggernaut It is....
having Militant-Muslims as your regime changer and maintaining a massive 'smart drone' program to decimate any Mujahadeen independence will keep the USA & the USD at the forefront for another 15-20 years


wee ain't collapsing any time soon fellow citizens


related thoughts on the Topic~by this poster:
reply to post by St Udio