They May Have to Go to a Gold Standard

People are going to have to pay attention to that. And either the Chinese are dopes, which they�re not, or people will start to get gold, which they will.

But if there�s a run on paper currencies (which is entirely possible) and there�s borderline hyperinflation (which is entirely possible), they may have to go to a gold standard� Not because they want to, but because they find it necessary to calm the markets.

- Jim Rickards via Wall Street Pit:

http://wallstreetpit.com/100623-your-personal-gold-standard/

Are the Chinese Stupid? NO!

Central banks don�t want to go to a gold standard. But if gold is a barbarous relic, if gold has no role in the monetary system, if gold is a �stupid� investment, then why do the Chinese have 5,000 tonnes? Are they stupid?

If some scenarios play out, you are going to see the price of gold go up� a lot. And it may go up a lot in a very short period of time. It�s not going to go up 10% per year for seven years and the price doubles. It�s going to chug along sideways, maybe in an upward trend, with a lot of volatility. It will have a kind of a slow grind upward� and then a spike� and then another spike� and then a super-spike. The whole thing could happen in a matter of 90 days, six months at the most.

- Source, Jim Rickards via Wall Street Pit:

http://wallstreetpit.com/100623-your-personal-gold-standard/

The Economy is Fundamentally Weak

�The last time, in 2008 when the crisis started, the Fed�s balance sheet was $800 billion. Today, the Fed�s balance sheet is $3.3 trillion and increasing at $1 trillion a year.� Rickards contends, �You�re going to have a banking crisis worse than the last one because the banking system is bigger without the resources because the Fed is tapped out.� As far as the Fed ending the money printing, Rickards predicts, �My view is they won�t. 

The economy is fundamentally weak. We have 50 million on food stamps, 24 million unemployed and 11 million on disability, and all these numbers are going up.� When the subject of gold confiscation came up, Rickards said, �I just don�t think it will happen because the government will find it will be very hard to enforce.�

- James Rickards via a recent USA Watchdog interview, see the full interview here:

http://usawatchdog.com/everything-wrong-in-2008-is-worse-today-james-rickards/

Everything is Worse

�The problem in 2008 was too-big-to-fail banks. Well, those banks are now bigger. Their derivative books are bigger. In other words, everything that was wrong in 2008 is worse today.�

- Jim Rickards via a recent USA Watchdog interview:

http://usawatchdog.com/everything-wrong-in-2008-is-worse-today-james-rickards/

FED Money Printing Won't Stop

According to investment banker James Rickards, rumors of the Federal Reserve ending the money printing propping up the markets is not going to end anytime soon. Rickards predicts, "My view is they won't. The economy is fundamentally weak. We have 50 million on food stamps, 24 million unemployed and 11 million on disability, and all these numbers are going up." When the subject of gold confiscation came up, Rickards said, "I just don't think it will happen because the government will find it will be very hard to enforce."

- Source, USA Watchdog:

http://usawatchdog.com/everything-wrong-in-2008-is-worse-today-james-rickards/

Now is a Great Time to Buy Gold

Rickards also said that now a great time to buy gold. He recommends investors put 10 to 20 percent of their portfolio in gold.

"Gold is going down. The dollar is getting stronger, which is the opposite of what the Fed wants," he told CNBC. "The Fed wants a weaker dollar, negative real rates ... and more inflation. And that's good for gold."

Federal Reserve Chairman Ben Bernanke rattled markets by announcing that the Fed might start winding down its stimulus later this year and end it completely in mid-2014 if the economy improves as it expects. Markets settled down last week after Bernanke said a highly accommodated monetary policy will be needed for an extended time.

Most Fed members want to start trimming the bond purchases in September, but tapering that month is "not a done deal," Eric Green, global head of rates and foreign-exchange research at TD Securities, told Bloomberg. "Most of them want to see more evidence the job market is improving. The only way for the job market to improve is if growth shifts higher from the pace of the first half."

"Many members indicated that further improvement in the outlook for the labor market would be required before it would be appropriate to slow the pace of asset purchases,� according to FOMC minutes from the June meeting.

- Source, Money News:

http://www.moneynews.com/FinanceNews/Rickards-Fed-taper-September/2013/07/15/id/515057

Gold's Short Term Outlook

The long term outlook for gold remains positive. Shorter term, however, increased volatility is likely. Both higher and lower prices are in the cards. It all depends on policy makers, in particular the US Fed. Between August and September there are two FOMC meetings with a press conference: September and December. Suppose the Fed would �taper� their bond purchases they will not announce it in December because it will be right before the new Chairman will take over. September is the most likely month to announce it.

So the September FOMC meeting will be an important one. Basically there are two possible outcomes. Tightening monetary policy is the first one. Doing so in a weak economy will have deflationary consequences. It will lead to higher interest rates and lower precious metals prices. Accommodative monetary policy, by contrast, would be bullish for gold and will lead to higher prices going to the end of the year.

- Source, Gold Silver Worlds:

http://www.opednews.com/Quicklink/Jim-Rickards-Most-Likely-by-Taki-Tsaklanos-130727-101.html