More James Rickards on SDR’s
April 16, 2014
![More James Rickards on SDR’s Zijlstra_sdr_note_back_lowres1-e1350059532437](http://philosophyofmetrics.files.wordpress.com/2014/04/zijlstra_sdr_note_back_lowres1-e1350059532437.jpg?w=474&h=281)
For all those who suspect that the BRICS Bank will supersede or work parallel with the IMF, there is some important information in this interview with James Rickards. As Mr. Rickards states, the IMF is the only one with a clean balance sheet. It’s my contention that the BRICS Bank itself will in fact issue SDR bonds, as will the World Bank and all central banks. – JC
Chris Martenson: As you look forward the next three years what do you see coming? Are you predicting or seeing that this game changes to a new phase, The Death of Money? Is that coming in the next three year window? Or do you use this playing out over a longer timeframe?
Jim Rickards: No, I think three years is about right. I mean, it’s not necessarily going to be tomorrow. It could be tomorrow, by the way, the system is unstable enough. But it doesn’t mean we are going to get that catalyst tomorrow. But this is not a ten year forecast. I mean, I do not think we are going to make it ten years. I think three to five years is about the right timeframe, maybe shorter.
But the reason for that, again, it is scientifically based in terms of the scale of the system. And by the way, go back and look at these crises. They come particularly fast. Memories are very short. I think we are all fighting with what I call the 2-second attention span.
On October 19, 1987 the stock market lost 22% of its value in one day. Today, that would be a 3,200 point drop in one day. In 1994 we had the Mexican Peso crisis. In 1998, the Long Term Capital Management crisis. And I was involved in that, by the way. I was the general council of Long Term Capital Management. I negotiated that bailout and I know how close the world came to complete economic collapse. In other words, every stock and bond market in the world would have been closed on September 29, 1998 if we had not finished that bailout the day before. That is how close we came. Just because it did not happen, people kind of forgot about it and think it was a small event. But trust me, I was there. That was a very near catastrophe. In 2000 we had the dot-com collapse, NASDAQ dropped eighty percent. 2007 the housing market collapsed. 2008 the Lehman Brothers panic.
So these things keep happening; but here is the problem, Chris: the Fed has printed almost four trillion dollars to put out the fire from 2008. What is going to happen if we have a liquidity crisis next month or next year? They are at the limit of their balance sheet. They are already insolvent on a mark-to-market basis. And again, that is not guesswork. I actually was told that by a member of the Federal Open Market Committee. They are leveraged 80-to-1. They cannot do more. They cannot print another four or eight trillion. They are at the limit of confidence. They are not at the legal limit, by the way. Legally they can do it but they are at the limit of what people will really trust, or before the Congress would intervene.
So the next crisis is going to be bigger than the Fed. It is like they build a five foot sea wall and here comes a forty foot tsunami. There is only one clean balance sheet left in the world and that is the IMF. So the only way you are only going to reliquify the world in the next liquidity crisis is by the IMF printing their world money, these Special Drawing Rights or SDRs, and that is going to be the end of the dollar as a global reserve currency. Because if the IMF is going to print SDRs to reliquify the world they are going to need permission from China and Russia and other members of the IMF. The US has a big voice at the IMF but we do not control it. And so that really is going to be the end of the dollar right there. We may still have dollars — in fact we will — but it will be a local currency like the Mexican peso or Turkish lira. It will just be walking around money. But it will not be used for the important things in the international monetary system. This you can actually see coming. You can see these developments coming.
Chris Martenson: It has always been my perception that the IMF is a little bit of a US-centric organization, if not a lot. You think China would really go along with that?
Jim Rickards: I think China would favor it because the alternative is perpetuation of dollar hegemony. It would almost be to say that, no matter what the United States does, no matter how much we print, what deficits we run, what trade deficits we run, no matter how reckless we are, we can always print our way out of it. And there is a limit to that. So China would actually like to see SDRs. There is a lot of talk about; China making their currency a global reserve currency, being one. That is not even close. They are very, very far away from that. They do not want that because they would have to open their capital account. They would lose control. But they would not mind seeing the SDR as a global reserve currency. They just do not want the dollar. But they are stuck with dollars for the time being but the next panic when the IMF has to use SDRs to reliquefy the world; I think China is going to have a big voice in that. You can say it is US-centric but the problem with the US is that the Treasury and the White House want a weak dollar.
I mean, what good does it do you when your own country wants to trash the currency? What happened to the strong dollar policy? It’s over now and we’re in the currency wars. That is going to lead to a collapse and ultimately we are going to see either gold or the SDRs the new store of value on a worldwide basis.
http://philosophyofmetrics.com/2014/04/16/more-james-rickards-on-sdrs/
April 16, 2014
![More James Rickards on SDR’s Zijlstra_sdr_note_back_lowres1-e1350059532437](http://philosophyofmetrics.files.wordpress.com/2014/04/zijlstra_sdr_note_back_lowres1-e1350059532437.jpg?w=474&h=281)
For all those who suspect that the BRICS Bank will supersede or work parallel with the IMF, there is some important information in this interview with James Rickards. As Mr. Rickards states, the IMF is the only one with a clean balance sheet. It’s my contention that the BRICS Bank itself will in fact issue SDR bonds, as will the World Bank and all central banks. – JC
Chris Martenson: As you look forward the next three years what do you see coming? Are you predicting or seeing that this game changes to a new phase, The Death of Money? Is that coming in the next three year window? Or do you use this playing out over a longer timeframe?
Jim Rickards: No, I think three years is about right. I mean, it’s not necessarily going to be tomorrow. It could be tomorrow, by the way, the system is unstable enough. But it doesn’t mean we are going to get that catalyst tomorrow. But this is not a ten year forecast. I mean, I do not think we are going to make it ten years. I think three to five years is about the right timeframe, maybe shorter.
But the reason for that, again, it is scientifically based in terms of the scale of the system. And by the way, go back and look at these crises. They come particularly fast. Memories are very short. I think we are all fighting with what I call the 2-second attention span.
On October 19, 1987 the stock market lost 22% of its value in one day. Today, that would be a 3,200 point drop in one day. In 1994 we had the Mexican Peso crisis. In 1998, the Long Term Capital Management crisis. And I was involved in that, by the way. I was the general council of Long Term Capital Management. I negotiated that bailout and I know how close the world came to complete economic collapse. In other words, every stock and bond market in the world would have been closed on September 29, 1998 if we had not finished that bailout the day before. That is how close we came. Just because it did not happen, people kind of forgot about it and think it was a small event. But trust me, I was there. That was a very near catastrophe. In 2000 we had the dot-com collapse, NASDAQ dropped eighty percent. 2007 the housing market collapsed. 2008 the Lehman Brothers panic.
So these things keep happening; but here is the problem, Chris: the Fed has printed almost four trillion dollars to put out the fire from 2008. What is going to happen if we have a liquidity crisis next month or next year? They are at the limit of their balance sheet. They are already insolvent on a mark-to-market basis. And again, that is not guesswork. I actually was told that by a member of the Federal Open Market Committee. They are leveraged 80-to-1. They cannot do more. They cannot print another four or eight trillion. They are at the limit of confidence. They are not at the legal limit, by the way. Legally they can do it but they are at the limit of what people will really trust, or before the Congress would intervene.
So the next crisis is going to be bigger than the Fed. It is like they build a five foot sea wall and here comes a forty foot tsunami. There is only one clean balance sheet left in the world and that is the IMF. So the only way you are only going to reliquify the world in the next liquidity crisis is by the IMF printing their world money, these Special Drawing Rights or SDRs, and that is going to be the end of the dollar as a global reserve currency. Because if the IMF is going to print SDRs to reliquify the world they are going to need permission from China and Russia and other members of the IMF. The US has a big voice at the IMF but we do not control it. And so that really is going to be the end of the dollar right there. We may still have dollars — in fact we will — but it will be a local currency like the Mexican peso or Turkish lira. It will just be walking around money. But it will not be used for the important things in the international monetary system. This you can actually see coming. You can see these developments coming.
Chris Martenson: It has always been my perception that the IMF is a little bit of a US-centric organization, if not a lot. You think China would really go along with that?
Jim Rickards: I think China would favor it because the alternative is perpetuation of dollar hegemony. It would almost be to say that, no matter what the United States does, no matter how much we print, what deficits we run, what trade deficits we run, no matter how reckless we are, we can always print our way out of it. And there is a limit to that. So China would actually like to see SDRs. There is a lot of talk about; China making their currency a global reserve currency, being one. That is not even close. They are very, very far away from that. They do not want that because they would have to open their capital account. They would lose control. But they would not mind seeing the SDR as a global reserve currency. They just do not want the dollar. But they are stuck with dollars for the time being but the next panic when the IMF has to use SDRs to reliquefy the world; I think China is going to have a big voice in that. You can say it is US-centric but the problem with the US is that the Treasury and the White House want a weak dollar.
I mean, what good does it do you when your own country wants to trash the currency? What happened to the strong dollar policy? It’s over now and we’re in the currency wars. That is going to lead to a collapse and ultimately we are going to see either gold or the SDRs the new store of value on a worldwide basis.
http://philosophyofmetrics.com/2014/04/16/more-james-rickards-on-sdrs/
» utube 7/25/24 MM&C Iraq Dinar Update - IQD Revaluation-Key Indicators - Deposit Insurance -Arbitra
» utube 7/23/24 MM&C Iraq Dinar-Prime Minister Advisors-Saleh-Al-Nusairi-Facts bringng facts-Reforms
» MMK&C 7/21/24 Government Advisor: Adopting auditing of foreign transfers contributes
» MM&C 7/21/24 Proposed measures to address the rise of the dollar
» Iraq ranks high in income inequality among citizens
» Within months.. Al-Imar: The amount of loans disbursed amounted to about 750 billion dinars
» Parliamentary Integrity confirms the start of opening the files of former officials
» Iraq and the German Development Bank sign an amendment to the loan agreement to finance a number of
» Regional oil...between export ban and smuggling suspicions
» Economist: Faw Port is an important step towards sustainable economic development and a major gatewa
» Parliamentary Investment "Mocks" Solution to Housing Crisis in Complexes: "Joke" and Government Must
» Multi-million dollar agreement to support Iraqi agriculture
» From Chaos to Law.. The Crowd Breathes with the First Reading of “Service and Retirement”
» Oil Minister inaugurates first phase of associated water injection project in Rumaila field
» Water Resources: The reality of desertification in Iraq is better than before
» Disappearance of 50,000 Pakistani tourists in Iraq.. Government position: We will start the investig
» Iraq reveals the value of its agricultural exports: 400 thousand tons in 6 months
» Electricity directs the rapid implementation of the solar power plant project in Khanaqin
» Worth $20 billion.. Iraq is second in trade exchanges with Iran
» (56) megawatt card.. Opening of the gas power plant in Majnoon field
» Parliamentary Committee: Amending this law will address many problems
» Iraq and the German Development Bank (KFW) sign an amendment to the loan agreement to finance a numb
» Finance discusses regulating the work of government banks with international auditing firm Ernst & Y
» The Prime Minister receives the approval of the coalition of companies that won the investment oppor
» US Ambassador: We helped Iraq with $3.6 billion in the displaced file
» In two stages.. The Minister of Oil inaugurates the associated water injection project in the Rumail
» Who manipulated the budget settings? Adding 15 trillion dinars for the benefit of the people or for
» Statement of the Iraqi Communist Workers’ Party on the “Personal Status Law Amendment” Project
» The American arm has become short.. Iraq will eradicate the “SDF” from Syria
» The idea of the “Sunni region” is maturing again.. The insistence of Western politicians collides
» Iraq takes its share of negative development and faces “electronic blackmail”
» Education in Iraq: Between the lack of schools and the delay in providing supplies
» Economist lays out solutions to get rid of the dollar’s dominance: moving towards a currency baske
» The Presidency of the Republic issues a special pardon for a bank manager accused of embezzlement
» The Ministry of Agriculture reveals the volume of its exported products in numbers
» Transport reveals its latest steps towards lifting the European ban on Iraqi Airways
» "Doors are closed" in Parliament.. Will political pressures result in the election of a new presiden
» Prime Minister's Advisor: Kirkuk government formation will be decided within 20 days
» US dollar exchange rate stability in Baghdad
» Reconstruction: New applications for Housing Fund loans will be opened when liquidity is available
» The US Federal Reserve adopts a new strategy towards Iraq.. The dollar is threatened with rising to
» First government comment on the leakage of 50 thousand Pakistanis in Iraq
» Parliamentary Integrity Committee announces keeping the session hosting the Minister of Water Resour
» Parliamentarian reveals the reason for the recent talk about the Sunni region
» Secrets of the Coordination Framework meeting with the Sunni forces.. Three proposals to resolve the
» Iraqis' spending on tourism is equivalent to the electricity budget.. What is the number of traveler
» "Two Papers of the Tashah in Parliament"... Warnings against implicating the legislative institution
» Turkish Minister reveals details about the security corridor in Iraq and the development road projec
» Does it stipulate the marriage of minors? What does the paragraph amending the Personal Status Law i
» One of the motives of the "salary scale".. Iraq is ranked 87th globally in "income inequality"
» "Vigilant Guardian"... Harmonious Supervisory Cooperation to Guarantee Citizens' Deposits in Iraqi B
» Saleh: The Central Bank's dollar reserves are solid and the GDP rate is very optimistic
» Economist accuses political parties of controlling the exchange rate on the black market
» Minister calls for establishing centers for Turkish commercial agencies inside Iraq
» 98% increase in foreign remittance sales at the Central Bank of Iraq auction
» Important meeting between Al-Sudani and the "Arabs of Kirkuk" to decide on the formation of the prov
» Housing projects in the Kurdistan Region are expensive internally and suitable externally
» Slight decline in the "green paper" in Baghdad stock exchanges
» OPEC: Iraq, Russia to compensate for surplus oil production
» Economist: The Iraqi banking sector has achieved significant growth
» Does integrity interfere with the work of institutions when they conduct investigations into suspici
» Parliamentary Finance: The Central Bank agrees to increase the capital of the Real Estate Bank to ex
» The region lags behind "electronic systems".. Transactions are still paper-based and the authenticit
» Media Authority: We are working on strategic agreements with global companies to bridge cybersecurit
» Al-Sudani stresses the importance of completing the formation of the Kirkuk government and reaching
» The region lags behind "electronic systems".. Transactions are still paper-based and the authenticit
» Iraq prepares to sign strategic agreements with global companies to bridge the digital divide in the
» Exporting (10) million liters of black oil daily.. Oil: Karbala has become an oil port that supplies
» Used as a gift and used for fraud.. The Central Bank warns against the circulation of commemorative
» Judge Faeq Zidane: International cooperation is important in the field of combating terrorism
» Al-Abbasi: Framing the relationship with Washington according to the Iraqi constitution
» Within 6 months.. The European ban on the green bird will be resolved
» Thwarting the smuggling of 21 million liters of petroleum derivatives
» Record
» Production of 24 thousand electric cars annually
» The second phase of the campaign (restricting weapons to the state) begins
» Inclusion of social protection beneficiaries in internal contracts
» The Prime Minister directs the rapid completion of Baghdad entrance projects
» Minister of Labor announces launch of health insurance service for social protection beneficiaries
» Via "Baghdad Today" .. Oil Minister announces increasing social benefits to 10 million dollars
» Joint Statement by the Iraqi and US Ministries of Defense
» Al-Sudani meets with a delegation from the American engineering consulting company KBR
» Kurdistan procrastinates to obtain the "lion's share".. Discontent over the delay in localizing empl
» Withdrawal is "Out of Reach"... Analysis of the Joint Iraqi-American Statement
» Al-Sudani stresses the importance of completing the formation of the Kirkuk government and reaching
» "Black Money" Fuels Investment Stock Exchange.. Countries That Prospered with Looted Iraqi Money
» Central Bank warns against circulation of $1 million commemorative notes
» Planning for “Al-Zawraa”: The five-year plan targets different sectors and does not include traditio
» “Unfair and deepens sectarianism”.. Why did the amendment to the Personal Status Law spark anger in
» Launching an electronic application for Iraqi retirees
» The crowd responds to Halbousi: A person convicted of forgery is not qualified to appoint himself as
» Al-Fayadh: We appreciate the Iraqi Parliament’s progress with the first reading of the service and r
» Nassif: The political process needs Al-Sadr and Al-Maliki to “rule” it
» Al-Mandlawi winks at Al-Halbousi: We reject insulting those who presented thousands of martyrs
» adhere to the rules of the Islamic religion and needs to be reformulated (tweet)
» Sarwa Abdul Wahid: The rivalry between Baghdad and Erbil is just "clacks"
» Parliamentary Finance: The Central Bank of Iraq’s measures to change the exchange rate did not achie
» Al-Sudani meets with Kirkuk Arabs to decide on the provincial government