James Rickards: The Fed is Tapped Out & End Result is Ice-Nine for Gold
The Federal Reserve and IMF have both wrongly forecasted growth and inflation forecasts the for the last 8 years. The economists who run those organizations are not scientists, but dogmatists and ideologues who let preconceived notions and political preferences hinder their objective analysis. In his new book ‘The Road to Ruin: The Global Elites’ Secret Plan for the Next Financial Crisis’, New York Times bestselling author James Rickards shows some specific examples of how the scientific methods could work.
In 1998, James was the principal negotiator for the bailout of Long-Term Capital Management (LTCM) by the Federal Reserve Bank of New York. They were hours away from closing every stock exchange and bond market in the world if the bailout didn’t happen. The 2008 financial crisis brought a similar mass-closure threat and another liquidity-injection came to the rescue.
Within a few years, and as soon as tomorrow- provisions are in place for a financial crisis similar to Cyprus and Greece, but on a global scale. FED’s balance sheets are stretched, and they won’t be able to bailout the world. Jim likens this to ‘ice-nine’, which is a fictional material from Kurt Vonnegut’s novel Cat’s Cradle. It freezes water, and if put in a body of water, it could spread and freeze all water around the world.
James believes the coming financial ice-nine will lock down the system.. freezing bank accounts, and closing banks and stock exchanges among other things. This will buy time while the IMF works out how to print out and distribute the trillions in SDRs to reliquify the world- which may take 3-6 months or longer. Gold will also suffer as exchanges will halt, trading contracts will be terminated, and counter parties will lose out on price appreciation and access to physical gold.