Posted on 19 October 2014 with 14 comments from readers
In what pretends to be a history looking back from the future ‘Currency Wars’ author and fund manager Jim Rickards argues that by 2020 all the gold of the G-20 nations will be confiscated and buried in a former nuclear bunker under a mountain in Switzerland to take it out of the global financial system.
This is the conclusion to the astonishing tour de force article that kicks off his new monthly newsletter ‘Rickards’ Strategic Intelligence’ for Agora Financial, publisher of highly successful financial newsletters like Chris Mayers’ ‘Capital & Crisis’. Has the normally sober and thoughful Mr. Rickards lost his marbles?
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I must confess to having my doubts on reading his first issue with one absurd conclusion leading to another and then to a totally unrealistic world gold confiscation scenario. How would that happen? The G-20 meetings struggle to agree on a final communique. How could they agree something like that?
Mr. Rickards does not stop there. In his world not only does money die and cease to exist but there is a sort of death of capitalism that Marx prescribed and Stalin tried to implement without notable success. There are no markets, bonds nor money by 2024 and equality rules.
Strangely the real survivors of this apocalypse to end all apocalypses are the investors who bought gold, fine art and land, and who cashed out of gold when Mr. Rickards’ newsletter told them. Somehow fine art and land still has a value in the future without money or markets, and illegal gold too. How would that work?
Indeed how seriously are we supposed to take Mr. Rickards’ vision of the future? His subsequent articles basically feed off its central insight and so you have to believe it is a scenario that he thinks not only has some weight but actually is very plausible. We preferred his ‘Currency Wars’ conclusion of a new dollar backed by gold in an economic reset.
Just too whacky
The next ArabianMoney monthly newsletter (subscribe here) will offer our detailed riposte. However, suffice to say we think Mr. Rickards is way off in his political if not economic analysis.
We note that governments would collapse and social unrest grow massively under such circumstances and that such coordinated central bank or G-20 responses would just not be politically possible. Nationalism not nationalization of assets would prevail.
Sadly chaos, anarchy, revolutions and wars are a more likely outcome, although we hope commonsense prevails and the world muddles through and yet another version of financial armageddon proves to be alarmist nonsense. However, within all these visionary tales there is usually more than a grain or truth, or a few grams of real gold.