When Gold Takes Off, There Won’t Be Enough to Go Around (Video)
Jim Rickards spoke with Daniela Cambone on Kitco News about what he thinks 2015 will hold for the price of gold and the United States dollar. Rickards reminds us that we’re in a long-term currency war that could continue for years. There’s a good chance that gold will be needed to bring back confidence in paper currencies.
Highlights from Rickards’ interview:
“We’re absolutely in a currency war… This is not a new currency war. This is the same currency war that started in 2010… We’re not only in a currency war, but when we are they can go on for 5, or 10, or 15, or even 20 years…
“We’ve created over 300,000 jobs per month a couple years ago. We had 4% GDP a couple years ago, at the end of 2011, early 2012. What happened in both cases, it faded… So let’s see if this is sustained… My speculation is that in the months ahead, some of these numbers will get weaker, some of the numbers will be revised downward. We’ll see that we haven’t really broken out of this low growth trend…
“The Fed has just finished tapering QE3, but it wasn’t the first taper. When QE1 was over, you can think of that as a 100% taper. When QE2 was over, you can think of that as a 100% taper. Now QE3 is over, we’ve had 100% taper. What we know is they failed. QE1 failed, they had to come back with QE2. QE2 failed, they had to come back with QE3…
“I think the real story is that the US economy is not as strong as the Fed believes, not as strong as most market participants believes. I see a lot of weakness. For now, yes, a strong dollar prevails. But by the middle of 2015 to late 2015, I think the US is going to be the one that needs the help. That probably comes at the expense of Europe. That’s why they’re so desperate to get QE in Europe… When people realize the Fed is not going to raise rates, that’s going to pull the rug out from under the dollar…
“You could see $1,000 gold on the way to $5,000 gold. My intermediate, to longer term target for gold is still in that $5,000 to $7,000 range. That has to do with the loss of confidence in paper money, and the possibility that you somehow have to use gold in some way – either a strict gold standard or some gold reference – in order to restore confidence in paper money. To do that in a non-deflationary way that does not repeat the mistakes of the 1920s and 1930s, you’d have to get to that $5,000 to $7,000 level…
“My concern for investors is that when [gold] really takes off, when it starts gapping up $200, $300 an ounce per week – All of a sudden a couple weeks go by and it’s up a couple thousand dollars, and people wake up and say, ‘Gee, I better gets some gold.’ You’re not going to be able to find it. I recommend getting it now while it is available, before it runs out…”