Beware the Money Illusion Coming to Destroy Your Wealth

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A money illusion sounds like something a prestidigitator performs by pulling $100 bills from a hat shown to be empty moments before. In fact, money illusion is a longstanding concept in economics that has enormous significance for you if you�re a saver, investor or entrepreneur.

Money illusion is a trick, but it is not one performed on stage. It is a ruse performed by central banks that can distort the economy and destroy your wealth.

�that people prefer a raise over a pay cut while ignoring inflation is the essence of money illusion.

The money illusion is a tendency of individuals to confuse real and nominal prices. It boils down to the fact that people ignore inflation when deciding if they are better off. Examples are everywhere.

Assume you are a building engineer working for a property management company making $100,000 per year. You get a 2% raise, so now you are making $102,000 per year. Most people would say they are better off after the raise. But if inflation is 3%, the $102,000 salary is worth only $98,940 in purchasing power relative to where you started.

You got a $2,000 raise in nominal terms but you suffered a $1,060 pay cut in real terms. Most people would say you�re better off because of the raise, but you�re actually worse off because you�ve lost purchasing power. The difference between your perception and reality is money illusion.

The impact of money illusion is not limited to wages and prices. It can apply to any cash flow including dividends and interest. It can apply to the asset prices of stocks and bonds. Any nominal increase has to be adjusted for inflation in order to see past the money illusion.

The concept of money illusion as a subject of economic study and policy is not new. Irving Fisher, one of the most famous economists of the 20th century, wrote a book called The Money Illusion in 1928. The idea of money illusion can be traced back to Richard Cantillon�sEssay on Economic Theory of 1730, although Cantillon did not use that exact phrase.

Economists argue that money illusion does not exist. Instead, they say, you make decisions based upon �rational expectations.� That means once you perceive inflation or expect it in future, you will discount the value of your money and invest or spend it according to its expected intrinsic value.

In effect, inflation is a hidden tax used to transfer wealth from savers to debtors�

Like much of modern economics, this view works better in the classroom than in the real world. Experiments by behaviorists show that people think a 2% cut in wages with no change in the price level is �unfair.� Meanwhile, they think a 2% raise with 4% inflation is �fair.�

In fact, the two outcomes are economically identical in terms of purchasing power. The fact, however, that people prefer a raise over a pay cut while ignoring inflation is the essence of money illusion.

The importance of money illusion goes far beyond academics and social science experiments. Central bankers use money illusion to transfer wealth from you � a saver and investor � to debtors. They do this when the economy isn�t growing because there�s too much debt. Central bankers try to use inflation to reduce the real value of the debt to give debtors some relief in the hope that they might spend more and help the economy get moving again.

Of course, this form of relief comes at the expense of savers and investors like you who see the value of your assets decline. Again a simple example makes the point.

Assume a debtor bought a $250,000 home in 2007 with a $50,000 down payment and a $200,000 mortgage with a low teaser rate. Today, the home is worth $190,000, a 24% decline in value, but the mortgage is still $200,000 because the teaser rate did not provide for amortization.

This homeowner is �underwater� � the value of his home is worth less than the mortgage he�s paying � and he�s slashed his spending in response. In this scenario, assume there is another individual, a saver, with no mortgage and $100,000 in the bank who receives no interest under the Fed�s zero interest rate policy.

Suppose a politician came along who proposed that the government confiscate $15,000 from the saver to be handed to the debtor to pay down his mortgage. Now the saver has only $85,000 in the bank, but the debtor has a $190,000 house with a $185,000 mortgage, bringing the debtor�s home above water and a giving him a brighter outlook.

The saver is worse off and the debtor is better off, each because of the $15,000 transfer payment. Americans would consider this kind of confiscation to be grossly unfair, and the politician would be run out of town on a rail.

Now assume the same scenario, except this time, the Federal Reserve engineers 3% inflation for five years, for a total of 15% inflation. The saver still has $100,000 in the bank, but it is worth only $85,000 in purchasing power due to inflation.

- Source, Jim Rickards via Daily Reckoning

Greenspan Has Traditional Been Gold Positive

If you look at Greenspan�s record, before he became Chairman of the Federal Reserve he said many positive things about gold. Since leaving the chairmanship, he�s said positive things about gold on numerous occasions � for instance at the Council on Foreign Relations this week. He has a history of looking on gold favorably but during the entire 20 years that he was Chairman of the Federal Reserve, he never had a good thing to say about gold. I think it says more about the constraints on central bankers; in other words, central bankers can�t tell the truth or what they really think because the market impact would be too great. I think that Greenspan is reverting to saying things today that he was saying 40 years ago but could not say when he was Chairman of the Fed.

- Source, Jim Rickards via Proactive Investor

The Goal of Currency Wars is Inflation

I expect a collapse in the value of currencies relative to real goods, real assets and real services. This will happen to all currencies, not just the dollar. I don�t expect a word where people lose confidence in the dollar and the euro does really well. On a relative basis, I�ve been bullish on the euro for some time. In the endgame, however, if people lose confidence in the dollar this will be inflationary in all countries around the word and I don�t think that any currency will be able to withstand it. When I say �the death of money� what I really mean is the loss of confidence in the purchasing power of money. That�s very likely to be a global phenomenon not confined to any particular country.

Currency wars are part of the picture because the way you fight a currency war is by cheapening the currency, cutting rates and quantitative easing. We saw that recently with the announcement of more quantitative easing from Japan, which took the markets by surprise and caused the Japanese Yen to fall by over 2 percent in a single morning. That is a huge move in the currency markets.

Another big factor in currency wars is the question of paying sovereign debts. It�s the sovereign deficits that are really the problem and the question is how to deal with them. One way to deal with them is through inflation, which, of course, is the goal in a currency war. The problem is that not everybody can devalue against everybody else all at once. You have to take turns. So it goes back and forth and back and forth. That�s what happened in the 1920�s and 1930�s and it�s happening again today.

- Source, Jim Rickards via Proactive Investors

Catastrophic Outcomes May Come Faster Than Expected

CIA Expert Warns Of A Disaster That Would Make The Great Depression Seem Harmless

The Misery Index combines the true inflation rate with the true unemployment rate.

Why don�t you hear about this in the mainstream news? It is because the Federal Reserve has repeatedly changed how the Misery Index is calculated.

Rickards believes that the way the Misery Index is being calculated is being used to hide the true state of the economy.

He said:

�Today you rarely hear the government talk about the Misery Index with the public. The reason is they may not want you to know the truth. And the truth is, the Misery Index has reached more dangerous levels than we saw prior to the Great Depression. This is a signal of a complex system that�s about to collapse.�

Rickards specifically pinpointed how he thought the crash will come about:

�I expect the first phase will appear as a nearly instantaneous 70% stock market crash. From the outside, nobody will see it coming. Once it becomes clear that it�s not a flash crash � it�s a systemic meltdown in the economy itself, that�s when the gravity of the situation will sink in. And there will be no digging out from it. $100 trillion is a conservative estimate for the damage. A lot can happen over 25-years as our country struggles to recover from this.�

There you have it. A CIA economic expert reveals how he thinks a 25 year depression is about to hit America. Jim Rickards can�t be dismissed as a crackpot. So what do you think will happen to the country�s economic situation over the next 25 years?

- Source, WJ

The Currency War Goes On

I think this is one long �currency war�. We are now getting into more of a battle, more of a confrontation. The US dollar is the only strong currency that cannot last: the US cannot have a strong currency, because we are desperate for inflation. We have done all thequantitative easing, we have raised the zero, we have issued further guidance, we have done a twist, and we have done three versions of QE. We have done everything possible. The only thing left is to try to cheapen the currency and in fact the dollar is getting stronger. The Fed might not have minded a stronger dollar. Six months ago it did look like the economy was getting stronger. We saw strong second quarter GDP. So it was a little bit of a good day. And Europe was desperate for the help: they were stepping into recession. Japan`s economy collapsed in the second quarter. So you could see the feds saying �ok�we will have a stronger dollar and give Europe and Japan a break�. But that is over. Now the US is becoming a loser and we are the ones who need to take a break. The only way to get it is a cheaper dollar. I would look for that in the months ahead.

- Source, Jim Rickards via Russia Today

The Coming Stock Market Crash and The Death of Money

Is the end of the American Empire on the way? What will be the outcome if the dollar meets its death bed. Jim Rickards discusses gold, currency wars and the interest rates. He has some stark warnings.

Four Horsemen of the Dollar Apocalypse Jim Rickards

Jim Rickards on Currency Wars and Mosler on Saudi Oil Price Cuts

Even as the unemployment rate drops, foreclosures dwindle, and the economy slowly recovers from the Great Recession, financial insecurity is on the rise in American urban areas according to a study conducted by the Corporation for Enterprise Development. Nearly half of all households in major cities don�t have enough money saved to cover essential expenses in an emergency. Erin weighs in.

Then, Erin sits down with Warren Mosler, president of Valance Incorporated, to discuss the many issues surrounding the US economy, the Fed, and employment. Of particular note are Mosler�s views on the recent price cut in Saudi crude prices and the negative impact it could have on production of shale oil in tight oil formations in the US.

After the break, Erin talks to frequent Boom Bust guest Jim Rickards to get a hold on currency wars � specifically regarding the Euro. He argues that the currency wars wax and wane but they are always there. Right now the currency wars are back in the spotlight.

And in The Big Deal, Erin and Edward Harrison discuss Alibaba�s record-breaking IPO. Do big IPOs outperform the market? No, they underperform if you look at the historical record.

- Source, Russia Today

Six Major Flaws in the Fed�s Economic Model

The U.S. dollar is the dominant global reserve currency. All markets, including stocks, bonds, commodities, and foreign exchange are affected by the value of the dollar.

The value of the dollar, in effect, its �price� is determined by interest rates. When the Federal Reserve manipulates interest rates, it is manipulating, and therefore distorting, every market in the world.

The Fed may have some legitimate role as an emergency lender of last resort and as a force to use liquidity to maintain price stability. But, the lender of last resort function has morphed into an all-purpose bailout facility, and the liquidity function has morphed into massive manipulation of interest rates.

The original sin with regard to Fed powers was the Humphrey-Hawkins Full Employment Act of 1978 signed by President Carter. This created the �dual mandate� which allowed the Fed to consider employment as well as price stability in setting policy. The dual mandate allows the Fed to manage the U.S. jobs market and, by extension, the economy as a whole, instead of confining itself to straightforward liquidity operations.

Janet Yellen, the Fed chairwoman, is a strong advocate of the dual mandate and has emphasized employment targets in the setting of Fed policy. Through the dual mandate and her embrace of it, and using the dollar�s unique role as leverage, she is a de facto central planner for the world.

Like all central planners, she will fail. Yellen�s greatest deficiency is that she does not use practical rules. Instead she uses esoteric economic models that do not correspond to reality. This approach is highlighted in two Yellen speeches. In June 2012 she described her �optimal control� model and in April 2013 she described her model of �communications policy.�

The theory of optimal control says that conventional monetary rules, such as the Taylor Rule or a commodity price standard, should be abandoned in current conditions in favor of a policy that will keep rates lower, longer than otherwise. Yellen favors use of communications policy to let individuals and markets know the Fed�s intentions under optimal control.

The idea is that over time, individuals will �get the message� and begin to make borrowing, investment and spending decisions based on the promise of lower rates. This will then lead to increased aggregate demand, higher employment and stronger economic growth. At that point, the Fed can begin to withdraw policy support in order to prevent an outbreak of inflation.

The flaws in Yellen�s models are numerous. Here are a few:


1) Under Yellen�s own model, saying she will keep rates �lower, longer� is designed to improve the economy sooner than alternative policies. But if the economy improves sooner under her policy, she will raise rates sooner. So, the entire approach is a lie. Somehow people are supposed to play along with Yellen�s low rate promise even though they intuitively understand that if things get better the promise will be rescinded. This produces confusion.

2) People are not automatons who mindlessly do what Yellen wants. In the face of the embedded contradictions of Yellen�s model, people prefer to hoard cash, stay on the sidelines and not get suckered by the bait-and-switch promise of optimal control theory. The resulting lack of investment and consumption is what is really hurting the economy. Economists call this �regime uncertainty� and it was a leading cause of the length, if not the origin, of the Great Depression of 1929-1941.

3) In order to make money under the Fed�s zero interest rate policy, banks are engaging in hidden off-balance sheet transactions, including asset swaps, which substantially increase systemic risk. In an asset swap, a bank with weak collateral will �swap� that for good collateral with an institutional investor in a transaction that will be reversed at some point. The bank then takes the good collateral and uses it for margin in another swap with another bank. In effect, a two-party deal has been turned into a three-party deal with greater risk and credit exposure all around.

4) Yellen�s zero interest rate policy constitutes massive theft from savers. Applying a normalized interest rate of about 2% to the entire savings pool in the U.S. banking system compared to the actual rate of zero, reveals a $400 billion per year wealth transfer from savers to the banks from the zero rates. This has continued for five years, so the cumulative subsidy to the banking system at the expense of everyday Americans is now over $2 trillion. This hurts investment, penalizes savers and forces retirees into inappropriate risk investments such as the stock market. Yellen supports this bank subsidy and theft from savers.

5) The Fed is now insolvent. By buying highly volatile long-term Treasury notes instead of safe short-term treasury bills, the Fed has wiped out its capital on a mark-to-market basis. Of course, the Fed carries these notes on its balance sheet �at cost� and does not mark to market, but if they did they would be broke. This fact will be more difficult to hide as interest rates are allowed to rise. The insolvency of the Fed will become a major political issue in the years ahead and may necessitate a financial bail-out of the Fed by taxpayers. Yellen is a leading advocate of the policies that have resulted in the Fed�s insolvency.

6) Market participants and policymakers rely on market prices to make decisions about economic policy. What happens when the price signals upon which policymakers rely are themselves distorted by prior policy manipulation? First you distort the price signal by market manipulation, then you rely on the �price� to guide your policy going forward. This is the blind leading the blind.

The Fed is trying to tip the psychology of the consumer toward spending through its communication policy and low rates. This is extremely difficult to do in the short run. But once you change the psychology, it is extremely difficult to change it back again.

If the Fed succeeds in raising inflationary expectations, those expectations may quickly get out of control as they did in the 1970�s. This means that instead of inflation leveling off at 3%, inflation may quickly jump to 7% or higher. The Fed believes they can dial-down the thermostat if this happens, but they will discover that the psychology is not easy to reverse and inflation will run out of control.

The solution is for Congress to repeal the dual mandate and return the Fed to its original purpose as lender of last resort and short-term liquidity provider. Central planning failed for Stalin and Mao Zedong and it will fail for Janet Yellen too.

Regards,

Jim Rickards
for The Daily Reckoning

What is driving China's growing wealth gap?

Most of the income inequality in China can be explained by corruption and elitism. In the 1980s and 1990s, under the leadership of Deng Xiaoping, China reformed its system of state-owned enterprises (SOES). Some of these SOES were closed, some were privatized, and some remained SOES, but were designated as national champions in their respective industries and allowed to thrive free of normal competition.

In each case, stock in the privatized companies or senior management roles in the new national champions was given to loyal Communist Party cadres and to so-called "princelings" who were the sons and daughters of leading officials or survivors of the Long March days of Mao Zedong in the 1930s. During the export and investment led boom that followed, these enterprises made enormous profits which went principally to the owners and senior managers and not to the workers.

This boom has continued beyond the bounds of normal expansion through China's over-investment in infrastructure, much of which is wasted. In effect, China is misallocating national wealth in favor of the SOES and private companies favored by government, which enriches a few at the expense of the nation as a whole.

How unequal has the current Chinese economic system become in comparison to capitalist systems in countries such as the United States?

Income inequality is a global problem. It has always existed in traditional oligarchical systems such as those in South America. It was less prevalent in North America and Europe and former Commonwealth nations that had a strong rule of law and offered good economic opportunities to those people who did not necessarily start out from a privileged position.

It was also not much of a problem in Communist nations such as Russia and China because there was relatively little wealth to begin with. Elites may have lived better but they were constrained by the relative poverty of their countries. Since the new age of globalization began in 1989, China and Russia have become much richer, which increases the opportunities for cronyism and theft by elites.

The situation in the US is exacerbated by bank and auto bailouts, other forms of government favoritism, and an opaque and complex tax system. The causes of income inequality in China, Russia and the US are different but the result is the same. China has greater income inequality than the US, but both countries are approaching the point where income inequality is so extreme that it threatens to cause social disorder.

The ruling Communist Party aims to preserve social stability to avoid any challenge to its grasp on power. How big of a concern is this widening wealth gap to China's Communist Party?

Income inequality should be deeply disturbing to the Communist Party leadership because it has historically been a source of social instability in China. The demonstrations and massacre in Tiananmen Square in 1989 were in part attributable to increasing inflation, which is a form of income inequality because it is most damaging to those with fewer investment options to hedge against inflation.

However, the Chinese elites are themselves the main beneficiaries of income inequality in the short run. Capital flight from China is accelerating, which is a sign that at least some elites have adopted a "take the money and run" attitude and no longer care about continued Communist Party dominance provided they can extract enormous wealth from the country before the social disorder become more pronounced. The widening wealth gap is troubling, but it is not clear whether there is much political will to stop it.

- Source, DW

Fireplace of financial instability is stacked with wood

Jim Rickards talks with Paul Buitink about the crisis and his presentation for 20 September in Rotterdam.

The World's Most Important Financial Battle Is Coming to a Head

Dr. Steve Sjuggerud

"The world is witnessing a climactic battle between deflation and inflation," Jim Rickards writes in his excellent new book The Death of Money.

"It is just a matter of time" before this battle comes to a head.

At some point, the U.S. economy will experience "an earthquake in the form of either a deeper depression [from deflation] or higher inflation, as one force rapidly and unexpected overwhelms the other."

Which one will win? And what are the potential outcomes? Rickards goes over each of those in his book...

Inflation is the easy one to understand...

For the most part, the government creates this one... by "printing" trillions of dollars.

Deflation is less easy to understand...

For starters, we "have no living memory of it." The last episode of persistent deflation was in the Great Depression. Rickards calls deflation "the Federal Reserve's worst nightmare." For one, deflation "increases the value of government debt, making it harder to repay."

Because of fear of deflation, the Fed can't stop its money printing. If it did stop, "deflation would quickly dominate the economy, with disastrous consequences for the national debt, government revenue, and the banking system."

Which will win � inflation or deflation?

Rickards explains that "the most likely path of Federal Reserve policy in the years ahead is the continuation of massive money printing to fend off deflation." The Fed assumes it can later deal with inflation that it might create.

I agree with him. Governments have proven for centuries that � while they might be pretty bad at most things � one thing they're pretty good at is creating inflation through printing money.

The easy conclusion is that inflation will win... but many times, the easy conclusion isn't necessarily the right one.

In his book, Rickards builds a strong case for how deflation could win as well.

Whether inflation or deflation wins this battle, Rickards makes a strong case for a higher gold price.

If inflation wins, then it will take more paper dollars to buy an ounce of gold. And if deflation wins, then the price of gold will move higher to break that deflation...

- Source, The Daily Wealth

Stock Market Reality Check

James Rickards

Listening to mainstream market commentary on television and reading the financial press leaves one with the impression that the economic recovery is gaining strength and that stock market indices, at or near all-time highs, will go higher still.

The litany of market happy talk is impressive. The unemployment rate has dropped to 6.1%, down about 4 percentage points from its peak, and is expected to go lower in the months ahead. The economy created about 230,000 jobs per month in the first half of 2014, which brings the increase in jobs to nine million since the economic recovery began in mid-2009. Interest rates remain low, which supports high asset valuations in stocks and housing. Inflation is tame and expectations about future inflation are well anchored. To hear the stock market bulls tell the story, all is right with the world.

But all is not right. In fact, the fundamentals of the U.S. economy are in awful condition and are getting worse. Almost everything about the happy talk story is superficial, and falls apart under scrutiny. There is an alternative narrative of bad news that is seldom discussed on mainstream business channels but is well known to analysts. When these adverse trends are taken into account one conclusion in inescapable. The stock market and economic fundamentals are on a collision course. One or the other will have to swerve. Either the economy will have to improve rapidly and unexpectedly and reverse its fundamental weakness, or inflated stock values are heading for a precipitous fall. The evidence suggests that the latter is more likely.

The first weak link in the happy talk chain is the nature of job creation. For example, it was reported than 288,000 jobs were created in June. But full-time jobs declined by 523,000 while part time jobs increased by about 800,000. The widely reported increase in net jobs masked a disastrous loss of full-time jobs offset by a huge increase in part-time jobs. The part-time jobs offer fewer hours, lower pay and few benefits. They may be better than no job at all, but they are not the kind of jobs that will support discretionary consumer spending on which the economy relies for growth.

This trend in part-time jobs is not new. There are 7.5 million people working part-time on an involuntary basis compared to about 4.4 million doing so in 2007. This rise in part-time jobs is expected to continue because it is driven in part by Obamacare, which does not require coverage for part-time workers. Employers are aware of this and simply cut full-time jobs and replace them with part-timers to reduce insurance costs.

Nor is there any comfort in the declining unemployment rate. Much of the decline is attributable not to job creation but rather to the decline in the number of people looking for work. Once people stop looking for a job, they are no longer technically �unemployed� and the unemployment rate drops even though no job has been found. As columnist Mort Zuckerman said, �You might as well say that the unemployment rate would be zero if everyone stopped looking for work.� Only 62.8% of Americans participate in the work force today � the lowest level since 1978.

The news gets worse. Not only is labor force participation low, and full-time employment collapsing, but the productivity of those working is now in decline. This decline in productivity is another drag on growth. The reason for it is even more disturbing. Productivity is declining because capital expenditure has slowed. Businesses are keeping up with demand by employing part-time workers instead of investing in the plant and equipment needed to make full-time workers more productive.

Not surprisingly, this triple-whammy of declining full-time jobs, declining productivity and slowing capital investment means that real wages are stagnant. If workers can�t make more, they can�t spend more without borrowing. Borrowing is more difficult because home equity has not recovered from the 2007 housing crash and lending standards are the most stringent in years. Companies won�t invest in equipment if consumers can�t spend.

The result is a death spiral of lower consumption, lower investment, declining productivity, stagnant wages, and underemployment all feeding on each other and making the overall economy weaker. This is the real reason for the shocking 2.9 percent decline in first quarter GDP. It was not the result of �cold weather,� which by the way happens every winter.

There are other signs of ill health in labor markets. In a dynamic labor market, net job gains reflect large numbers of new jobs and lost jobs as employees confidently quit their jobs in the expectation of finding new ones. But evidence reported by Goldman Sachs and James Pethokoukis of the American Enterprise Institute shows that job turnover has declined sharply as employees are extremely reluctant to quit their jobs in an uncertain environment. This tends to lock-out the unemployed who lose job entry opportunities and to weaken wage growth as employees lose leverage to demand raises.

Labor force participation is unlikely to rise significantly partly because of generous benefits that provide an adequate lifestyle for those out of the labor force. The U.S. has over 50 million on food stamps, 11 million on disability, and millions more on extended unemployment benefits. Prospective loss of these benefits creates a high hurdle to motivate a return to the workforce.

The news from abroad is no better. China is slowing precipitously and may be on the brink of a credit collapse. European growth is near zero and even the mighty German economy, the locomotive of Europe, is slowing partly because of weaker demand from Ukraine, Russia and China.

Against this backdrop, mainstream voices are beginning to call U.S. financial markets a bubble. The New York Times recently featured a front page story with the title, Welcome to the Everything Boom, or Maybe the Everything Bubble. The conservative Bank for International Settlements in Switzerland recently warned that stock markets had become �euphoric.� Even Janet Yellen of the Federal Reserve, the institution with the worst record for spotting asset bubbles, said that valuations of some securities �appear stretched.�

So, the conundrum is complete. Stock indices march to all-time highs while economic fundamentals fall apart. The two will be reconciled either with a spectacular turnaround in growth or a spectacular collapse in stock prices. The problem is that a turnaround in growth can only come from structural reform, not money printing. Structural reform is the job of the White House and Congress, not the Federal Reserve. Since the White House and Congress are barely speaking, no help should be expected from that direction. Therefore a stock market collapse is almost inevitable and is probably coming soon.

- Source, James Rickards via Darien Times

Monetary Solutions Can't Solve Structural Problems

The global debt markets have mushroomed to an estimated $100 trillion dollars! According to the latest statistics.

Jim Rickards Talks Financial Warfare

Economist and author Jim Rickards, discuss reserve currencies, BRIC nations, and the IMF in the context of financial warfare.

- Source, Russia Today

BRICS Development Bank A Significant Step Away From The Dollar

Jim Rickards appears on CNBC where he discusses the gradual move away from the use of the US dollar by countries such as China and Russia.

Fireplace of Financial Instability is Stacked With Wood, Spark is Matter of Time

Jim Rickards talks with Paul Buitink about the crisis and his presentation for 20 September in Rotterdam at the event.

The Significance of a BRICS Development Bank

Jim Rickards, Senior Managing Director at Tangent Capital, explains how the new bank differs from the World Bank and the International Monetary Fund.

- Source, CNBC

Jim Rickards talks Financial Warfare & Eric Schneiderman targets Barclays

New York Attorney General Eric Schneiderman accused Barclays of allegedly telling its customers that it would protect them from high frequency traders, while actually doing the exact opposite and accommodating them. Erin takes a look.

Then Erin brings you part two of her interview with economist and author Jim Rickards. They discuss reserve currencies, BRIC nations, and the IMF in the context of financial warfare. After the break, Erin brings you the best of week. Catherine Austin Fitts, Divya Narendra, Cullen Roche, Marshall Auerback, and Marc Chandler all weigh in.

- Source, Russia Today