Jim Rickards: If They Pull This Plug Right Now, There Will be a Reckoning Upon Us
“The problem now is if you pull the plug, it will be chaos,” warns Jim Richards, New York Times bestselling author. In an exclusive interview with Daniela Cambone, Richards explains that the Democratic Party waited too long and believed President Joe Biden was okay despite occasional gaffes. “This is a guy who doesn’t know who he is. By the way, who’s thinking about national security? Who’s thinking about the United States of America? All they’re thinking about is keeping power,” he says.
Richards also states that the U.S. is caught in a financial war, with the U.S. dollar being threatened by BRICS nations and their new currency. Even though the U.S. dollar will remain the world’s reserve currency, the BRICS currency could become a successful trading currency. “That’s how confidence is lost in the United States, slowly at first and then suddenly. So we’re not at the ‘suddenly’ stage yet, but we’re getting really close.” Watch the powerful interview to learn more about Richards’ thoughts.
CHAPTERS:
00:00 Ray Dalio’s comments on Dem/Rep parties
10:49 Nationalists v.s. socialists
16:48 Republican Party is the Nationalist Party
19:30 Biden replacement
28:08 De-dollization
36:13 What brings down the debt?
41:41 Gold
TRANSCRIPT FROM VIDEO:
00:00
There’s a much bigger show, a much bigger development going on. And it goes by the name of the neoliberal consensus. These are the globalists and it’s not left versus right. It’s globalist versus nationalist. That’s a much better way to understand what’s going on in the world. And if you’re an investor, to understand where you should place your bets. See, Trump never drained the swamp because he couldn’t find the swamp. He didn’t understand what the swamp was. If Biden were not the president.
00:28
some family member would have gone to court to appoint a guardian. He can’t write a check or sign a contract, let alone an executive order. If you pull the plug now, it will be chaos.
00:44
Hi everyone, Daniela Cambone here from ITM Trading. I hope everyone’s enjoying our summer videos. We’re about to actually officially kick off our summer series with so many exclusive interviews. In fact, I’m about to head off to the Rick Rule show down in Boca Raton, Florida, where I’m gonna have some incredible interviews. But before I start packing my bags, I just wanted to take a second here to remind you and urge you if you have not to book a free.
01:12
strategy session with one of my colleagues over at ITM Trading. One of the reasons I came to ITM is because I’m fully aligned with their philosophy that education comes first. So if you are new to precious metals or maybe you already own precious metals as a wealth preservation, but would like more information, then I urge you to book a Calendly appointment. It’s free. It’s great. It’s educational, informative.
01:42
And like I always say, it’s actually even a lot of fun. You can find the link below in the video. So like I said, do that and then let me know how it went. You could shoot me a comment. Check out today’s video. Hi, Daniela Cambone here for the Daniela Cambone show on ITM Trading. Joining me back today, bestselling author Jim Rickards. You know him from Currency Wars, Sold Out, and his latest Money GPT. Jim, always good to be with you.
02:13
Thank you, Danielle. It’s great to be with you. Yeah. I’m happy I caught you before we’re both packing our bags, writing to Rick rule show next week in Boca. Yeah. That’s where the great conferences every year. Yep. Absolutely. Yep. But, uh, look, no shortage of news. What do you think I’m going to start with Jim? Well, obviously we’re going to talk about, uh, the flop of that debate, but I want to bring up, uh, billionaire investor, Ray Dalio founder of hedge fund firm, Bridgewater’s.
02:42
Warning post-debate, Jim. He says if Biden drops out of the presidential race after last week’s debate performance, a clash between extremists on the right and left may be in store in America. He laid out the clash in what he acknowledged were stark terms saying, while it is now clear that the red team Republican side will consist of players from the hard right, we will soon find out if the blue team, the Democrats, but will be from the soft left or the hard left.
03:13
Your take on on Dalio’s comments here before we get your your perception of the debate. Yeah, there is a big split even, you know, something you might describe as at least a political version of a civil war inside the Democratic Party. We see it almost every day and I think Ray correctly described there’s no center of the Democratic Party. That’s long gone. Those people I know, I know some very moderate
03:40
loyal Democrats people like Doug Sosnick Doug shown and others there they’re just very reasonable smart people but they’ve been you know They’ve been run out of the party or working around the edges even though they’re both extremely Smart talented and it’s pretty much the the far left the you know, the AOC’s the progressives Hakeem Jeffries and others and let’s call it the the everyday left who are still pretty radical, but
04:07
maybe slightly more practical. So he’s right about that. But it’s getting worse than that. And just, you know, the French Revolution is always a classic example. So the revolutionaries overthrew the, you know, King Louis XVI and Marie Antoinette, got rid of them, et cetera. But then, once they set up the guillotine and started chopping people’s heads off, they started chopping each other’s heads off. In other words, the Jacobins were more radical than the…
04:35
original revolutionaries and Rosebierre, you know, killed thousands of people in the guillotine, then they chopped his head off and those they just keep going until something intervenes. And in that case, it was Napoleon. But I thought it was interesting. The other day, just a couple days ago was what they call Pride Month or whatever. And they had a they had a pride parade in New York City last Sunday. And so that’s pretty
05:05
radical, pretty left wing, not everybody, I’m not painting with a broad box, but it’s just the case. But the parade was attacked and disrupted by the Hamas supporters, by the terrorist supporters. So here you had, like, who’s more extreme left? The Pride Brigade at their extreme versus the Hamas terrorist supporters. But none of them were.
05:32
or on the right, let’s put it that way. They were attacking each other. That is the history of a lot of revolutionary movements. I mean, it happened with the Bolsheviks and the Mensheviks during the Russian Revolution. But I guess where I would disagree with Ray, that’s happening anyway. But to suggest that you need Biden to hold it all together, and if you get rid of Biden, you’re going to open the door to this conflict, I would say the conflict is already there.
06:01
Biden’s not holding anything together. Biden can’t hold himself together. So to anchor anything on Biden, I mean, I would say that the biggest surprise to me post debate, so the debate was a week ago, Thursday, and, you know, Biden, you know, failed miserably. And of course, ever since then, we’ve been reading all this commentary. Oh, you know, Biden is non coherent, he couldn’t, he couldn’t.
06:28
He lost his train of thought. He was babbling. He was saying things that made no sense. And, you know, the Democrats were shocked. We can’t believe it. How did this happen? I’m like, are you kidding me? This has been obvious for four years. Um, and I said years ago that, uh, dementia, I’m not a doctor just to be clear, but you know, it doesn’t mean we can’t, uh, know a little bit about it. Uh, some of us have firsthand experiences, by the way, dementia is a progressive disease, it only gets worse. It doesn’t get better and there is no cure. So if you have it at all.
06:58
Over the course of time, it will get worse. You’ll you know, it doesn’t have to be full blown Alzheimer’s where you don’t even know, like recognize your family members. But the idea that you are not rooted in reality, you make up stories, you know, etc. Your logic isn’t really there. That’s what happens. And that was apparent four years ago. It was clear in the 2020 basement strategy. Why do you think they kept Joe Biden in the basement? So to to get to today to 2024?
07:27
And said, gee, I’m shocked the guy so far going like, where have you been for the last four years? Having said that the Democrats fell victim to their own, uh, well, when you lie and produce propaganda, so this whole Biden thing has been a big cover up. He’s, he’s been going for a while. The whole Scranton Joe, six pack Joe, Amtrak Joe, it was always a facade. I mean, he’s kind of a mean spirited, nasty, uh, not very bright, you know, kind of a white, white collar, white collar criminal or worse.
07:56
from Delaware, that’s who he is. But he’s been losing his mind. But the Democrats bought their own propaganda. They were putting out so much propaganda through mainstream media, MSNBC, CNN, other channels, squashing the internet, using Facebook as a form of censorship, Twitter, before Elon Musk bought it, et cetera. They actually drank their own Kool-Aid and sort of convinced themselves that Biden was okay when he’s never been okay.
08:25
I mean, if you want to read the most revealing comments, get some of these off the record comments from foreign leaders, foreign heads of state at the G7 summit, which was in mid-June, at the Normandy, the D-Day commemoration, which was in early June. They’re shocked and appalled at what they see. So it’s been there all along, but all of a sudden the Democrats got a wake up call. Oh, gee, the guy’s really not all there. But the point of that is the idea that he’s
08:54
The center of anything, the idea that he’s holding it together is nonsense. It’s a facade. It’s already fallen apart. The one, one last thing, Danielle, um, I use a lot of different, I use a lot of different indicators and sources and my own analysis, uh, and my own models. And one of the most reliable ones I use is that hedge fund mavens are the worst political analysts you can find whatever, find out what they’re doing. I’m serious. Find out what they’re doing and do the opposite. So.
09:22
You know, Ray, I’ve met Ray Dalio and Greenwich, you know, nice guy does a lot of good charitable work. But you know, Ray Dalio, Paul Singer, Bill Ackman, you know, I think you know, the list, take any one of them find out what they’re supporting. And that’s pretty much a loser. And then, you know, go as a contrary indicator is great. You know, these guys were all in on Nikki Haley. I mean, you know, and many, many other examples, but they’re hedge fund mavens are one of the best
09:51
contrary indicator. Oh, Ken Griffin, if we have to mention him, hedge fund mavens are one of the best contrary indicators of what’s actually going on that you can find. Well, just one more point on Dalia. And then I want to just get back to some comments surrounding Biden. You know, he in the same opinion piece, I mean, he kind of stated the obvious saying that markets prefer capitalists. So at this time, investors from all over the world, they’re asking themselves, one, where can they be most confident that these cash flows will be best? And two, where are these capital’s values most strongly held and protected?
10:21
I want to get Jim Rickards take on that, even though again, I think it’s stating the obvious that the markets obviously prefer capitalists, but where do you think most value will be held now? Well, I think Dalia is a little bit, maybe more than a little bit behind the zeitgeist. So when you set it up, and one of the greatest dangers in any analytical method or just conversation, whatever is what I call the…
10:50
the false dichotomy set up like A versus B, black versus white, you know, up versus down frame and then you’re actually missing all the things that don’t fit into those categories. So when Ray Dalio says he prefers capitalism, that’s and that investors around the world are asking themselves, who’s, you know, kind of favorable to capitalism, he’s setting up a dichotomy between capitalism and something else, probably socialism, communism, etc. But I would say that’s having a two factor.
11:19
frame is completely inadequate for the moment we’re in. So what’s happening, and I’m gonna talk about this at the Rural Conference, there’s a much bigger show, a much bigger development going on, and it goes by the name of the neoliberal consensus. But the neoliberal consensus is not, you know, it’s not Ronald Reagan, it’s not post-World War II. This goes back to the beginning of
11:47
you know, literally by Mises and, and Friedrich Hayek or kind of the, the avatars, the biggest brains in that movement, but there are many, many others. But what does that neoliberal consensus, how does it play out? These are the globalists. And it’s not left versus right. It’s globalist versus nationalist. That’s a much better way to understand what’s going on in the world. And if you’re an investor, to understand where you should place your bets.
12:17
What was the nirvana of the globalists? It was the period from 1870 to 1914. We really did have a gold standard. It wasn’t a Bretton Woods gold standard. It was just, countries said, hey, my currency is worth a certain amount of gold. And if you, I’ll buy the gold of that price, or if you want to buy my gold, that’s fine. But commerce worldwide was based on a lot of countries, starting with the British Empire, but including the United States, although the US came along later.
12:45
Peru, Spain, India, which was a colony at the time. All around the world, countries pegged their currencies to gold and through a simple transit of law, they were pegged to each other, so fixed exchange rates. But we had some version of free trade, free capital flows, and free exchange of currencies. So that was the globalist nirvana.
13:14
It all blew up in World War I. As soon as World War I came along, so the other thing they wanted was free movement of labor, which means open borders. So the globalists, and I would put Hayek and Mises in this category, don’t really care about democracy. They don’t particularly care about human rights. What they do care about is free capital, free trade, and free movement of labor.
13:40
to and they’re obsessed with price discovery because they view that world has the best price discovery. Price discovery is a form of information and you can allocate capital rationally and make investment decisions. I get all that but the problem is you ignore things like human organ transplants, human organ harvesting without anesthetic of political prisoners in China.
14:05
That somehow doesn’t fit in. They’re globalist who want to overlook that because they have these other ideals. So beginning after World War I with the League of Nations and that one, Americans don’t really learn the League of Nations because the US didn’t join. Okay. But we were kind of like ancillary members, but the League of Nations really pushed this to a great extent. It blew up again during the Great Depression and World War II. So now coming out of World War II, what did we have? We had Bretton Woods. So we’re kind of back to.
14:34
a gold standard back to open capital flows, which took a while to develop. And above all, free trade in the general agreement, Tariff and Trade, which turned into the World Trade Organization, and China was admitted in the year 2000. So this was the globalist agenda. They didn’t care that China was communist. They didn’t care about things like that. Now there’s now a massive reaction to that. What’s going on with Marine Le Pen in France?
15:04
the European Parliament elections, the here comes Najib Faraj with his own party in the UK. They’re gonna throw out Rishi Sunak. They’re gonna throw out Macron. They’re gonna throw out Biden. Putin is in a very solid position. What do Orban and Viktor Orban in Hungary, what do they all have in common? They’re at nationalist, they’re not globalists. So there are still gonna be winners and losers, but if Dalio is thinking of capitalist versus socialist,
15:32
I would say wrong frame, wrong century. You have to think today of nationalist versus globalist. Don’t think of capitalist versus socialist, think of nationalist versus globalist. That’s the right way to think about where the opportunities lie, and the nationalists are winning. Do you think the Republican Party is aware of that?
15:58
The Republican Party is the Nationalist Party. The globalists in the Republican Party, the Reiner’s are being run off the road one by one. It takes time. Mitch McConnell’s stepping aside at the end of this year. Nikki Haley is toast. The Bushes are, you know, played an important role, but they’re yesterday’s news. One by one, the globalists are being run out of the Republican Party and they’re being replaced by
16:27
nationalists. So that’s, that’s very far along, it’s going to be, it’s going to be ingrained after the election, Trump will win. And I look, I know I voted for Trump in 2016, I voted for him in 2020. I actually voted for him this year in the New Hampshire primary. So I have a pretty good track record of voting for Trump, but I am a fierce critic of Trump, because of the way he bungled the transition in 2016.
16:57
That was like a once in a century opportunity. See Trump never drained the swamp because he couldn’t find the swamp. He didn’t understand what the swamp was. The swamp is the deep state, but there’s actually a book is called the plum book. It’s a list of every federal job where the president has power of appointment. You know, some require Senate confirmation, but many do not. Trump, Trump said, well, I’m not going to worry about appointments. Cause if I don’t like you, you’re fired. That may work in New York real estate. It does not work in Washington, DC. He hired a bunch of, you know,
17:26
People, I think of Christopher Wray, head of the FBI as a neo-fascist. I think I’m right about that. Donald Trump appointed Christopher Wray. So if you’re Donald Trump, don’t whine to me about, you know, the FBI is all over you. Well, you appointed the director, you picked Christopher Wray. So why don’t you get some better advice? Why don’t you get some better appointees? That’s the bad news. The good news is they are. I think Trump has learned his lesson, you know, 70…
17:54
Eight-year-old guy doesn’t change the spots very easily, but I think he learned that that was a wasted opportunity. He knows this will be his last term. They’ve got two things going on. Heritage Foundation Project 2025. It’s called Mandate for Leadership 2025. Peter Navarro is coming out with a book where he kind of lays out this. There’s the Plum Book itself. There are resources out there, but if you want to see what Trump’s going to do.
18:22
in the second term, check those resources. And you can see this is gonna be a radical change. And it’s gonna, so to short answer your question, Daniela is that the Republican Party is the nationalist party and the globalists are being run out of the room. Interesting, Jim. And he’s nowhere in your league of being a political analyst. But I thought Dave Portnoy, and again, I bring this up because it amassed over 3 million views. I thought he had an interesting take.
18:52
And again, baseless, this is just his theory, but he’s a social media entrepreneur, superstar. And he said that Biden was just set up by the dams. They knew he would fail. How could it, to your point, how can they have seen his deterioration these past four or five years? And that the real plan is just to usher in a Gavin Newsom, which he says would just be absolute catastrophe for the country. So just before we move on from politics, just your two.
19:21
takes on does Biden get replaced now? And so if you think he does, who do you think fills his shoes? Yep, well, on the first question, I think the answer is no. Okay. Now, would it be a good idea to replace Biden? Yes. My concern about Biden is not like who wins or loses the election November 5th, that’s a big deal and we talked about it. My concern is that we don’t get into
19:50
annihilation of the human race between now and then. As you know, I’m pretty bold when it comes to promoting my own books, but I’ve been suggesting people read a book by Annie Jacobson called Nuclear War. Brand new, bestseller, easy to find. Read that book. You won’t sleep, but you’ll learn a lot about just how destructive and how dangerous…
20:15
nuclear war is we seem to have forgotten all those lessons. We knew them in the 50s and 60s and even in the 1970s. But after the end of the Cold War and the fall of the Soviet Union, all that knowledge was kind of lost. The nuclear weapons are still there. Read the book. You’ll see how. And she does a. Minute by minute scenario. It’s a nonfiction book, but she does this scenario of from launch to, you know, devastation of how a nuclear war would actually play out. I’ve been to
20:45
a lot of the locations she mentioned, I’ve been to strategic command in Omaha, Nebraska, I’ve been to some of the national laboratories. So and I’ve worked in the intelligence community. I have not done, I’ve not touched nearly as many bases as she has. But my point is, I’ve touched enough of them to know that she’s got this right. She, she did her homework. She talked to a lot of a lot of people, including
21:14
some 80 and almost 90 year olds who some of whom have died since she interviewed them, who were very active at Los Alamos and the 1950s nuclear tests who had classified information that they never gave up. And it’s almost like, hey, you know, 89, I’m dying soon, I got to get this off my chest. They told her stuff that’s been classified for 60 or 70 years. And she put it in the book, because she’s a writer, she’s allowed to do that. And it’s
21:42
It rings true, but you’ll really be kind of immersed in this. But here’s the bottom line, Danielle, when you, when you sort through everything, a launch, it wasn’t launched. Do we have it on the radar? Is it headed our way? Is it an intercontinental ballistic missile? Does it have a nuclear warhead? Who launched it? You know, shoot the anti-missiles, which don’t work by the way, but those, those shoot by the time you get through all of that and you, you’re the president, you have to decide, do I launch?
22:10
my missiles now because if you don’t maybe your missiles will get wiped out and you lose. Do I launch my missiles? That decision making window is about six minutes. Six minutes to decide the future of the human race. Now take what I just said, which again she documents it very well and it absolutely rings true, and put Joe Biden in that room. That’s like her book is scary enough.
22:36
But now you should just up the real that brings up a whole other question. I know we don’t have time to cover this. Does he really make that call? Is it really Biden? He can’t, he can’t. This whole idea that, you know, uh, I mean, what’s the democratic spin on the debate for foreign. Oh, he had a bad night. Yeah. But Obama started that like that. And I, oh, he had a bad night. I’ve had bad nights or whatever. Okay. Um, yeah, we have, we have bad days, good days, you know, sometimes we, we, uh, are a little more on top of our game than others.
23:05
But that’s not what we saw. We didn’t see a bad night. We saw a guy who doesn’t know where he is, who doesn’t know who he is. And now it’s coming out for the big fundraisers. They had a big fundraiser in the Hamptons the other day where he’s, I don’t know, $20 million or something like that. But the people in attendance, and this is the Ray Dalio crowd, these are the hedge fund billionaires and some others, they’re the ones who are going to these fundraisers. They were pulled. They said that he came in,
23:35
He read from a teleprompter. I’ve been to a lot of fundraisers. You don’t read from a teleprompter. You shake hands, you work the room, you go around and you say hi, you say hi to everybody, you get posed for pictures, whatever. That’s what you do. And yeah, make some prepared remarks, but you don’t read it from a teleprompter and walk out of the room. And that’s what they saw. Why are they clinging on to Biden then? Why do the Dems? Because- Why?
24:01
because they waited too long the time to do everything. By the way, I wrote about this last year. Um, and I said, here’s, you know, here’s where this is going. Um, they, they were not honest with themselves. They did. They were, they, as I said, they drank the uncool aid. I had to use cliches, but that’s a good one. Um, they, they bought into their own spin and thought that he was okay with the occasional gap. Remember the word gaff. These aren’t gaps. This is a guy who’s, who doesn’t know who he is. Um, but
24:30
They bought into that and they waited and waited and waited and waited and thought they could somehow get through this with version two of the basement strategy. By the way, who’s thinking about national security? Who’s thinking about the United States of America? All they’re thinking about is keeping power, even if you need an empty husk who should be in a nursing home or, you know, a living facility. And I said the other day, if Biden were not the president, some family member would have gone to court to appoint a guardian.
25:00
He can’t write a check or sign a contract, let alone an executive order. So they waited too long. The problem now is if you pull the plug now, it will be chaos. I mean, dollars right back. Someone had a good point. I don’t remember who said it, but I remember reading it thinking, oh, that makes a lot of sense that world leaders are watching, watch the debate, basically walk away thinking we could do anything with America from debate night to January 25. Correct.
25:31
Well, first of all, that’s right. And they probably all set their countdown clocks. Now, I expect Trump to win. We’ll have more time. Maybe hopefully we’ll do another interview before the election. But as, and I understand polls can change, I get all of that. But right now, Trump is on track, not just to win, but maybe an electoral college landslide. Meaning like, because that’s how we elect presidents. It’s not the popular vote. This could be 330 to like,
26:00
you know, whatever’s left for Biden, you know, low 200s or something. But this could be an electoral college landslide. It’s not just we all know, we all memorize the seven battleground states and Trump was ahead in seven out of seven. The poll, like Real Clear Politics and others, they’ve taken some of those states out of the battleground category because Trump’s so far ahead. They’re not, that’s not a battleground state. North Carolina, you know, you’re talking seven, eight point leads in some of these states, they’re not battlegrounds anymore.
26:31
Trump’s got them. But what they’re doing is they’re adding new states to the battleground list that no one expected Trump to win. Virginia, Minnesota. They’re even talking about New Jersey, New Mexico. So this could be a white belt. So let’s say that plays out, which I expect, and Trump is in. Okay, remember Trump’s the guy who went to the demilitarized zone in Korea and met with Kim Jong-un. Doesn’t mean Kim Jong-un’s a nice guy. He’s a monster.
27:00
But Trump at least took him seriously enough to go see him. Whereas Biden can’t go to our friends, like France and Germany, and hold his head up. He can’t talk. Want to move on now, Jim, let’s talk a topic that you and I have spoken about at length here, de-dollarization. I saw your comments, especially when there were a lot of.
27:25
mistaken articles regarding Saudi Arabia’s exit from the petro dollar and we’ll talk that. But I thought Trump’s recent comments were interesting and this is what I want to bring up to you. He was speaking at a Bitcoin conference during this where he said, the US is the big piggy bank, but our piggy bank is going to get smaller and smaller all the time because we’re losing power. We’re losing a lot of countries on the dollar. I mean, they’re going
27:55
And if we ever lose that, that’s the equivalent of losing a war. That would be unbelievable. The equivalent of losing a war basically in reference to if the U.S. were to lose its dollar, its reserve status, if the U.S. dollar were to lose its reserve status. Right. Thoughts on the fact that, at least he’s thinking about it.
28:17
Well, that’s right. And when he says it’s the equivalent of losing a war, I would, I agree with that, but I would go a step further and say, it is a war. We’re in a war. We are in a financial war right now. I know there’s a kinetic war in Ukraine, kinetic war in Gaza, you know, confrontations bordering on, you know, violence in the South China Sea. You know, the Houthis have closed the, effectively closed the Suez Canal. So we have enough shooting wars going on thanks to Biden.
28:46
and our failed foreign policy, but this is a financial war. Now, and I’ve talked to the treasury of the Pentagon and the Fed and the intelligence community about the 10, 15 years ago, we had these discussions, although not that anyone took it seriously when they should have. But a lot of what you’re hearing has come out of the St. Petersburg International Economic Forum in-
29:14
that was held in St. Petersburg at the beginning of June. And Putin was there, Sergey Lavrov was there. A couple of years ago, nobody showed up because Russia bad kind of thing. But now people realize that America is really the one prolonging the war in Ukraine, and Russia is doing what they have to do to kind of protect their national security. They don’t wanna be backed into a corner. But now it’s like, okay to go there. And there were delegates and…
29:43
delegations, attendees, experts, etc. from over 100 countries who were there. And that’s where a lot of the new the update on the BRICS currency was coming from. Now, the next BRICS summit, we talked last summer, we were talking, I was giving presentations on the BRICS summit meeting in South Africa last August. But there’s a rotating presidency, you host the BRICS summit, rotating basis this year, it’s Russia.
30:11
And they’re having this summit in October in Kazan in the Russian Federation. And what they’re going to do is admit a lot more new members. We have the list of applicants. I don’t know exactly which countries are going to join, but Turkey would be high on the list and some Malaysia and some other, maybe Saudi Arabia and some other important countries. But the point is this is the key to making the BRICS currency, whatever they call it, the unit or whatever.
30:41
a very successful trading currency and basically for trading, settling, balance of payments, et cetera, is to expand the membership in the group. So if you have two countries, let’s just take Russia and India, for example, and Russia sells oil to India, which they’re doing, and India pays in Indian rupees.
31:07
Okay, that works. You don’t need to go through SWIFT for that. You can use Russian bank accounts in Mumbai. But what’s Russia going to do with the rupees? Well, I think by a certain amount of like, you know, chicken curry or whatever, but there’s a limit on what you can do with the currency. So in a bilateral relationship where you agree to accept each other’s currencies, that can work. It’s not that difficult to do, but the problem is what do you do with the currencies? Who really
31:36
Honestly, who wants Chinese yuan? Who wants Indian rupees? Now, but if you expand the membership, it’s no longer two countries or four countries, but it’s 20 countries. And all of a sudden, you’re Russia and you sell oil to India, but India pays you in the BRICS currency, not Indian rupees, but in the new BRICS currency. But Russia can take the BRICS currency and spend it in China or buy aircraft from Brazil, buy manufactured goods from China, buy oil from Saudi Arabia.
32:05
Well, they don’t need the oil, but other manufacturers, as much Turkey as the case may be, once you expand the membership, now the currency is really useful. So it’s not just limited to whatever one country can sell you, it’s expanded to what 20 countries can sell you. Guess which monetary union has 20 members? Right. The Euro. So people who say this can’t be done, I’m like, hey, have you heard of the Euro? It can be done very successfully.
32:31
So the key is not cooking up some formula and gold standard exchange. Those are important issues. I’m not dismissing them, but I’m saying the real key is expanding the membership. That’s what they’re going to do in October. Good point. I’m so happy you said that, Jim, because, you know, obviously, as a journalist, I need to remain neutral and I want to invite people with differing voices, but I’m always scratching my head when I have folks so dismissive of the
33:00
Using the analogy, well, it’s like a group of family members at a table. How in the world are you ever going to get them to agree to a common currency? Whatever that looks like. But that’s such a good point. Look at the Euro. They got there. Right. Yeah, they did. And they, again, there’s a lot of technical work behind the scenes, but that work is going on by the way, the bricks started. I mean, I know it was a marketing gimmick by Goldman Sachs in 2000, but
33:27
as far as a serious political organization, really started in 2006. And so they’ve been around for 18 years and they have the new development bank in Shanghai. By the way, who’s the president of the new development bank? Dilma Rousseff, who’s the former president of Brazil. I mean, this thing is very well thought out. They have the contingent reserve arrangement, which is basically their own version of the IMF. So they’ve duplicated or replicated the Bretton Woods institutions on their own terms.
33:55
they’re soon going to have their own currency and it looks like we’ll have a gold reference. I’m not saying it’s a full-blown gold standard, but the value of the unit of currency will be based, I’ve seen some version, 40% based on weight of gold, not the dollar price of gold on a given day or on a particular day, but weight of gold, which is a different way of thinking about it. So that’s coming.
34:21
Now, that doesn’t make it a reserve currency. Reserve currency is different than a trading currency. But just the trading currency alone can be very, very successful. And it’s not the end of the dollar. It doesn’t mean, oh, here’s the BRICS currency. That’s the end of the dollar. That’s not how it works. It’s like someone new sits down at the table. It doesn’t mean the dollar goes away. It doesn’t mean that. But it means that all of a sudden it’s competing for its share of world trade
34:52
you know, maybe upwards of 20 countries, including countries that collectively are, you know, over 50% of global GDP using purchasing power parity measures. You know, half the population, more than half the population of the world, more than half the landmass, et cetera. This is not some ragtag group of so-called third world countries. This is more than half the world. Eventually does bring down the dollar. Jim, is it?
35:22
debt, which I feel we’re not talking enough about. And just to bring up some numbers here, we have two trillion in annual deficits and 100 trillion of baseline deficits projected into 2050. Obviously, we’re on an unsustainable trajectory here. So is that? And I know it’s a loaded question, and we probably need a whole other hour for it. But the road that leads us to the death of the dollar.
35:48
Yeah, it probably is that what it really is, Daniela is, is confidence, which is a behavioral state, it’s a mental state. And this is where I again, I’ve worn the Treasury of one the Pentagon, I’ve been, you know, all over Washington, on this. And I said, Look, here’s your problem. You’re taking confidence for granted. You’re assuming that people always have confidence in the dollar, therefore, it’s a hammer, you can go bang any nail you see.
36:15
You can use it as a weapon. You can sanction Russia. You can seize the assets of the Russian central bank. You can kick countries out of swift. You can impose secondary sanctions. Your secondary sanction is where, you know, you’re not the bad guy, but you’re trading with the bad guy, so now you’re a bad guy too, and I’m going to punish your banks and your payment system and limit the ability of third parties to deal with the second parties who are dealing with the guy I don’t like, which is Russia in this case, that I told the treasurer, I said you were
36:43
overusing the sanctions. They do work in limited conditions. They don’t work in all conditions. They definitely do not work when you overuse them because my question to them is how many times can you hit the punching bag before the punching bag walks out of the room? That’s what the bricks is all about. The bricks are like, no mas. We’re going to do our own thing. Now, you can’t do it overnight. It’s taken years already and it’s going to take some years more, but it’s well along the way.
37:12
But I’ve said the greatest enemy of the dollar is not Russia or China. It’s the United States Treasury and the Fed. They take it for granted. They overuse the sanctions. They try to use it as a bludgeon. And all that does, it forces people to walk away from the table. It’s like, hey, I’ve had enough, you know, enough sanctions, enough insults. Get me a new currency. So.
37:37
So that is the process by which the BRICS currency will gradually, not overnight, but gradually displace the US dollar as a trading currency, but not all at once. But you’re asking a deeper question, which is, does there come a time when the dollar loses its status as a reserve currency? You don’t even want US Treasuries because you don’t trust the US Treasury, either because they’re seizing assets or they’re going to go to hyperinflation. The seizing asset part is happening now. That happened at the
38:07
G7 summit in Puglia, Italy on June 13th, when they agreed to basically steal the interest on the frozen Russian assets and use it to pay principal interest on a $50 billion bond issue guaranteed by the United States of America, and they’re going to give the money to Ukraine. Time out. By the way, who’s the lender in that situation? I just said the United States of America, but it’s me and a lot of our listeners.
38:34
We were the ones who paid the taxes to make that all possible. So we’re lending the money to Ukraine, which most Americans don’t want, by the way. But if you have a $50 billion bond at 5% interest, that’s a pretty good estimate of what an interest rate would be if it’s backed by the US. That’s $2.5 million a year in interest, let’s say a five-year loan. So what’s that 10? It’s 12.5.
39:01
billion of interest on 50 billion of principal. So in five years, you need $62, $63 billion to pay back the principal and interest on the loan. Where are you going to get $63 billion? Well, the answer is the frozen Russian assets are $300 billion at 5% interest because assuming they’ve been rolled over that level into new treasury notes, that produces $15 billion a year in interest.
39:30
Again, over the same five years, that’s $75 billion. So we are stealing $75 billion of Russian interest to pay maybe $62.5 billion on the $50 billion loan. It’s still theft. I mean, I don’t care what you call it. Somehow they got this legal opinion that, oh, we’re not stealing the bonds. We’re just taking the interest. I’m sorry. If I own a bond and it pays interest, I own the interest. So to say that, oh, you’re just stealing the interest, you’d have to be as dumb as Janet Yellen.
39:59
think that works. And so that’s what they’re doing. But the rest of the world is watching Saudi Arabia, Taiwan, Japan, Korea. Everybody’s watching and they say, wait a second, if you’re stealing US Treasury securities in the form of interest from Russia, because you don’t like Russia, what if you don’t like me someday? What if you decide that I’m not doing something you want? And that’s the motivation for getting out of the dollar. So
40:27
So, you know, you know, the famous Hemingway quote from The Sun also rises where the two buddies are in Spain talking and other drinking and one guy said, how did you go bankrupt? And the answer was slowly at first and then suddenly. And that’s how confidence is lost in the United States slowly at first and then suddenly. So we’re not at the suddenly stage yet, but we’re getting Jim, just one final point here. I know I mentioned at the start, we’re heading to
40:57
Rich rules, fantastic show and Boca. Hopefully people watching can still make it and come join us. Obviously focused a lot on gold. And the last time you were on, there was a quote you had, you know, where you broke down how you could see gold going above, you know, whatever it was, the exact number 27, 28,000. And it resonated with so many people. And we see the banks, we see the forecast, everyone is quite bullish gold.
41:25
Why do you think there’s still some folks on the sidelines? Because the retail investor has not showed up yet. What do you think’s happening on the gold front? Just wanna get your take here.
41:37
Well, we’re now into a third generation of Americans who have not been taught anything about gold. I was fortunate. My years, I went to graduate school in international economics, School of Advanced International Studies in Washington, D.C. at the very tail end of Bretton Woods. Nixon closed the gold window in 1971, but the gold standard hung around for a while. They had the Washington.
42:05
agreement and then it took a while to fully demonetize gold. So that’s when I was studying this in 73 and 74. And when we looked at national balance sheets, national balance of payments statements, gold was a monetary asset. We had to study it. And so I was literally the last group of students who studied gold as a monetary asset. If you know anything about gold today, and you do and a lot of our listeners do, but if you know anything about gold today.
42:35
You either went to mining college or you were self taught. But the schools, the economics departments, you can go to Harvard, they won’t teach you anything about gold. They go to Colorado mining college, you’ll learn how to dig it up. But so people who understand gold are self taught because there is no educational system that teaches it. But that’s a relatively small group. People don’t have time for that. And so when you stop talking about it, we need to deny it exists. What I ask is, you know, and I…
43:05
I talked to Ben Bernanke about this. If gold is not a monetary asset, why does the United States have 8,000 tons, 8,000 metric tons? Why don’t you just have an auction and get the money? They don’t have a good answer for that. The answer is that it still has a monetary role. They just don’t want to talk about it. Now take what I just said and combine it with my discussion about confidence in the dollar. I’m not saying we’re going back to a gold standard right away, but here’s where the $27,000 comes in.
43:34
comes from. It’s not a forecast in the sense of, sit tight, it’ll hit $27,000. It’s an answer to a question. If you had to restore confidence in the dollar, and if you had to go to a gold standard to do that, which we might, what would the price of gold have to be to make that work? And it’s not complicated. I took M1. M1 is a pretty good definition of the money supply.
44:03
broader than M zero, but not as broad as M2. Take M1, ask yourself, how much backing do I need to support the dollar? You don’t need 100%. The Austrians bang the table and yell 100%. Historically, somewhere between 20 and 40% is enough to maintain confidence. How much gold do we have? 8,133 tons. So with those inputs, you say, okay, if I have 8,000 or so metric tons,
44:31
I need to support an M2 money supply or sorry, M1 money supply of X with 40% gold, what would the price per ounce have to be in order to make that work? And the answer is $27,000. It’s just, by the way, it keeps going up. I said the same thing six, seven years ago and I said $10,000 and said, Jim, did you change your mind? I said, no, they expanded the money supply. In other words, if you change one of the inputs, you’re going to get a different answer.
44:59
So the reason the answer is a lot higher today is because the money supply is a lot higher. But take the money supply, take 40% of that, take 8,000 tons, divide the gold by the dollars, and the price per ounce is about $27,000. If you come up with a lower price, I mean, well, you want them. That’s the math. That’s eighth grade math. Or my day was sixth grade math, but whatever. But if you pick a lower price, you say, well, that’s too high. We think it should be $5,000 an ounce.
45:30
You can do it, but that is highly, highly deflationary. You would have to shrink the money supply to make that work and it would be a new great depression. And that is a mistake that Churchill made in 1925. So to avoid the deflationary blunder, get it right, make it work. If you had to do it to restore confidence, the answer is $27,000 an ounce. So that’s why I look at the confidence side of the equation. I was like, how are we doing there? And the answer is horribly. The US is the great, the US…
45:59
is the greatest threat to the US dollar. And when you were speaking about Bernanke and how they never have a good answer as why they own gold, you know, that clip of Ron Paul challenging him just lives rent free in my head. It resurfaced on my feed the other day. Anyhow, Jim, I can’t wait to see you at Rick Ruhl’s show. It’s been too long that I’ve been in the same room with you. So I can’t wait to give you a big, big hug and chat with you there in person.
46:31
Good looking forward to it. It’s be a great crowd and Rick puts on a good show and it’s one of the larger conferences. It’s the networking that comes out of it. It’s fantastic. So I’ll see you in Boca. Good fun. Yeah. I’m going to go pack my bags after this interview. Jim Rickards, everyone. I always love speaking with you and thank you all for watching. We’ll have more great content coming your way. So be sure to stay tuned to the Daniela Cambone show and watch for our content and more interviews from Rick Rule’s show in Boca Raton. See you soon.
SOURCES:
https://www.fameex.com/en-US/news/crypto-trending-news-2023072501
https://www.amazon.com/Nuclear-War-Scenario-Annie-Jacobsen/dp/0593476093
https://www.youtube.com/watch?v=HQa_hhTO2Oc
https://youtube.com/watch?v=TRUBegcNsfk
https://www.youtube.com/watch?v=qPN2ahYC6W4
https://www.youtube.com/watch?v=wW0vz9ERQis
https://www.youtube.com/watch?v=LXLrZjuhKh4
https://www.youtube.com/watch?v=zzx_N1awHJg
https://www.youtube.com/watch?v=dlle1rrNOd0
