Jim Rickards: You Must Own a Monster Box; N. Korea Close to Being Able to Destroy U.S.

Monday, January 29, 2018
By Paul Martin

GoldSeek.com
Monday, 29 January 2018

Mike Gleason: Jim, you’re a very well-traveled individual who has his finger on the pulse of what’s going on, not just here in the states, but around the world. I know you were just in Europe. Is complacency an issue all over the globe or is it just a Western World thing or an American thing? What are people thinking and doing in other parts of the world? I know that’s a pretty broad question, but just speak to complacency and what others are doing here to protect themselves for what may be coming.

Jim Rickards: Well, it’s definitely worse in the United States. I would say that if you go to China … I was in Beijing not long ago and the guy I was with said, “Hey, I want to show you something.” We drove around in almost like a sleazy neighborhood in Beijing, but we turn the corner and there’s this thing. It’s lit up like Time Square. It was a gold emporium – we were there pretty late at night, I don’t know if it was open 24 hours a day – but it was certainly open after normal business hours. It’s lit up like a football stadium and there’s all red carpets and inside they had these gold hostesses and they were wearing these long silk dresses and they were walking around with trays of bars and coins and jewelry and display cases everywhere. And they were doing a huge business, so gold is very much in demand in China, both for personal wealth and officially.

The thing you have to remember about China, they don’t have that many options. They run up huge trade surpluses. Individuals are making money, but they don’t have that many choices to invest in. They can’t invest in foreign stocks. They can’t take the money out of the country, at least not very easily the way we can. Like if Americans want to invest in emerging markets or Turkey or Europe or Japan, it’s easy to do. Whether it’s a good idea or not is a separate issue, but it’s not hard to do. But that’s not true in China. They’re pretty much confined to their own stock market and their own real estate market, both of which have behaved as bubbles and have collapsed from time to time. People look around, what else can I invest in? I think stocks are a bubble. I think real estate’s a bubble. I can’t invest overseas. I don’t want to leave my money in the bank. What can I do? Well, you can buy gold and they do. And the government’s buying gold as well.

By the way, Russia and China have both tripled their gold reserves in the last 10 years. If you use 2006, slightly over 10 years. If you use 2006 as a base line, Russia has gone from 600 tons to almost 2,000 tons. China, same thing, from 600 tons to almost 2,000 tons. Although, China no doubt has more … the 2,000-ton figure is the official number, but they actually have a lot more than that that they keep off the books. The country is officially buying it, but the people are buying it also. I see a lot of interest in Australia and we just spent 10 days in Australia very recently and I see the same interest in Europe. The people who don’t get it are Americans. I don’t know why. Maybe it’s because we have the dollar and the dollar’s the major global reserve currency. Maybe Americans don’t get out enough.

There’s a surprising statistic, only 16% of Americans even have passports, 16%. That’s the percentage who even have passports. Of those, most of them no doubt use them to go to the Caribbean, or Canada, or Mexico, or Bermuda. Maybe they take a trip to London or Paris once a year, Italy or something on a vacation. The number of Americans who have actually been to China or for that matter, Japan, Australia, or Africa, or anywhere else, is very, very few. Look, I don’t blame people if they haven’t been around, but you should understand that it’s a big world out there and there’s an enormous demand for gold, but I don’t see it in America. I think Americans will be the last to catch on.

One of my concerns and one of the things I tell people about is when this financial panic hits and the price of gold starts skyrocketing and, of course, you’ll wish you bought it sooner, but then people will say, “I want to get some.” They’ll actually find they can’t get it, that the dealers will be backordered. The mint will be back ordered. Maybe big hedge funds or institutions will be able to lay their hands on some, but you’ll actually find that it’s physically hard to get. So, that’s one more reason to buy it now independent of the price. I recommend it. I own it. I advise people to own it. I recommend physical gold. Gold mining shares, if they’re selective, they’re a leverage play on gold, but I do recommend physical gold and safe non-bank stores. Don’t put it in a bank, but there’re plenty of reliable insured, bonded, vault operators out there that you can rely on. But get it now while you can, the price is good and it’s available and if you wait, neither one of those things may be true.

Mike Gleason: That’s certainly the world we live in as a national dealer, we’ve seen many times where it has been difficult to come by and what we’ve seen in the past might be just a glimpse of what’s to come when it gets really crazy. You talked about some of those drivers that is going to help gold. Obviously, a potential global financial crisis would be a big one of those. Any other headwinds, war? What do you have to say about some of the other potential drivers for gold here?

Jim Rickards: Well, war with North Korea I think is on the horizon, sad to say. Right now, there’s a little bit of a détente going on. Obviously, it’s prompted by the Olympics, but North Korea and South Korea are talking to each other. That’s a good thing. They’re going to march together in the Olympics. That’s a good thing. The hotline is turned back on. I’m not saying those are bad things, those are all good things, but they’re not very meaningful because none of them can divert Kim Jong-un from his goal of having a large arsenal of inter-continental ballistic missiles tipped with hydrogen bombs that can basically destroy civilization in the United States. That’s his goal. He said so. He’s beaten every milestone.

Notice, if you went back two years and had classified intelligence community estimates of when will he have a hydrogen bomb, when will he have an ICBM? When will he be able to miniaturize? When will he improve his guidance systems? They were all saying 2021, 2022, 2023. Nobody thought he’d get most of the way there in 2017, here we are 2018. So, he’s exceeded expectations. He’s dangerously close to being able to destroy the United States. The President and others, and I’ve met with Mike Pompeo, Head of the CIA, General H.R. McMaster, the National Security Advisor and they just say categorically that Kim Jong-un will not be allowed to have these weapons. There’s no fuzziness. There’s no “we need to use containment” and détente and diplomacy and sanctions and all that stuff to keep him on his best behavior. No, that’s not what they say. They say, “He can’t have the weapons.” Kim Jong-un says, “I’m going to get the weapons.” Well, you’re on the path to war and there’s nothing about the Olympics détente that changes that.

I’d push back the timing a little bit, maybe from the spring to late summer, but before the end of this year, this is going to come to a head. You could be looking at … I think you likely will be looking at a shooting war with North Korea and I don’t have to tell listeners what that’s going to do to the price of gold, so one more reason to get it today.

Mike Gleason: Well, finally Jim, as we begin to close, any thoughts on what’s ahead for gold maybe more specifically throughout the course of the year, some of these headwinds and tailwinds that you’re talking about coming into play? Maybe comment on the cryptocurrencies. You touched on that briefly. I know have an opinion or two about that. Basically, talk about these anti-dollar investments and where you see things headed in those asset classes where you see the most value and so forth as we begin to wrap up.

Jim Rickards: Well, I like gold. I like silver. I talk about gold a lot and I write about it and I give presentations. Usually, the first question, is well, “Thank you Jim. What do you think about silver?” The answer is I love silver. I think silver has a place side by side with gold. There’s no way gold’s going to go to $3,000, $4,000 an ounce without silver chugging its way to $40, $50 an ounce. Silver’s dynamics are a little bit different than gold because there are some industrial applications, but there’s no question that it’s a monetary metal and it’s along for the ride. And I always recommend that people have a “monster box.” A monster box is 500 American Silver Eagles, fine pure silver that comes directly from the Mint. It’s in a nice Treasury green case. It’s sealed. It’s actually wrapped up with a compression strap that United States Mint on it.

The 500 coins at retailer commission will run you about $10,000, but everybody should have one. To me, it’s like battery and flashlights. Hurricane’s coming, you get your batteries, your flashlights, your water. Maybe you take a few other precautions. You ought to have a monster box of silver because the power grid goes down, which could happen for a lot of reasons and not just natural disasters. The ATMs are shut, and the credit cards don’t work and the debit cards don’t work and the cryptocurrencies don’t work. You walk in with five or six silver coins, you’ll be able to get groceries for your family. Believe me, that’ll be legal tender when the time comes, so I recommend that, gold and silver.

The Rest…HERE

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