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“Global Bubble ... Ends Very Badly” Warns 'Death Of Money' Rickards

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DAILY PRICE
Today’s AM fix was USD 1,303.75, EUR 953.73and GBP 777.85 per ounce.           

Yesterday’s AM fix was USD 1,300.25, EUR 948.33 and GBP 775.20 per ounce.


Gold rose $12.80 or 0.99% yesterday to $1,306.10/oz. Silver climbed $0.24 or 1.23% to $19.77/oz.



Francine Lacqua on Bloomberg Television’s “The Pulse”

Gold consolidated above the key $1,300/oz level as technical buying supported gold and tensions in Ukraine and geopolitical risk remained to the forefront of traders minds.

Spot gold in Singapore traded 0.3% lower to $1,301.60/oz prior to gold popping higher and eking out gains in London trading. Silver for immediate delivery fell marginally to $19.739 an ounce in London.

Platinum lost 0.2% to $1,478 an ounce, after reaching $1,486 yesterday, the highest since March 7. Palladium slipped 0.4% to $824.75 an ounce. It climbed to $829.25 yesterday, the highest in 2 and a half years, since August 2011, due to supply risk.

Palladium has surged 15% this year on concern supply may be disrupted from South Africa and Russia, the largest producers. As palladium has gone, we expect platinum, gold and silver to follow given their strong fundamentals.


Gold in U.S. Dollars - Daily, 2014 Year To Date (Thomson Reuters)

Russia, which has been threatened with more sanctions by western nations, is the largest supplier of palladium, with South Africa the next biggest. The African country is the top producer of platinum.

Workers at the biggest platinum mines in South Africa have been on strike since January 23. Lonmin Plc will keep its platinum mines open for a second day in an effort to break the strike. Many workers were prevented from reporting for duty yesterday.


Russian Foreign Minister Sergei Lavrov said Ukraine is sliding into a civil war increaing the risk of conflict between Russia and the West. Ukrainian leaders and their international allies blamed Russia for the violence and say Russia is behind the unrest in Ukraine’s easternmost regions. Russia says that the U.S. is supporting Ukrainian nationalist militants.


This morning, futures trading volume was 10% below the average for the past 100 days for this time of day, data compiled by Bloomberg showed. Smart money continues to accumulate on dips.


Hyperinflation Risk and “Global Bubble” ... “Ends Very Badly” - Rickards

James Rickards, author of best selling book, ‘Currency Wars’ and now ‘The Death of Money: The Coming Collapse of the International Monetary System’ has done another interesting interview, He joined Guy Johnson and Francine Lacqua on Bloomberg Television’s “The Pulse.”


Topics covered included the risk of the global bubble bursting, his admiration of the ECB’s Draghi, how Europe is moving in the right direction, the coming of a true Eurobond, how the “day of reckoning” is coming for China and the U.S. and the risk of financial warfare, deflation, hyperinflation and market collapse.


Interviewer (Francine Lacqua): Jim, you also have this new book out, right, saying "The Death of Money" and this basically argues that if a number of things come together, we could have financial warfare, deflation, hyperinflation, market collapse. And yet the markets are merrily going along.

Are we in a fictitious world?

Jim Rickards: I actually had breakfast with some of the leading private equity investors and CEOs this morning and, you know, privately they'll say, look, the bank  covenants are gone, cost of funds is very close to zero, they've got more leverage than they've ever had, the U.S. inner stock exchange has greater leverage than they've ever had, so it looks good but this is a bubble being supported by zero interest rates, high leverage.


We all know what happens, they will collapse sooner than later.

You know, stocks could actually be higher by the end of the year, based on, I expect, the Federal pause, the taper around the middle of the year. But in the long...this is a bubble. The problem is bubbles, they last longer than we think, but when they pop, it ends very badly. This is all being floated by zero interest rates and leverage.

Find out why Singapore is now one of the safest places in the world to store gold in our latest gold guide - The Essential Guide To Storing Gold In Singapore


Interviewer (Guy Johnson):
You buy bubbles. That's what Soros and everybody else says; initially, when you see a bubble, you buy it. So, give us your sense of the duration of this bubble. Yellen sounds very dovish still at the moment.


Jim Rickards: I agree completely, she is dovish; I think she'll be more dovish. As I say, I expect a pause in the taper later this year. But, look, this could run on well into 2015 but the problem is the scale of it.

In 2008, all we heard about was "too big to fail"; well, guess what, the five biggest banks in the U.S. today are bigger than they were in 2008. They have a larger percentage of the banking industry assets, their derivatives books are significantly bigger, you know, so the problem is that the whole thing is bigger, which means that...risk is an exponential function of scale; when you triple the system, you don't triple the risk, you increase it by a factor of ten or more and this is what we're up against, this is what we're facing.

Could start anywhere, could start in China.


Interviewer (Francine Lacqua):  And we haven't even touched on China, the house of cards?

Jim Rickards: Yes, and I have a whole chapter in the book, "The Death of Money", just on China. You know, the wealth management products are a Ponzi and that's not from me, the Chairman of the Bank of China said they're a Ponzi, so you've seen the Chinese banking officials saying the same thing.


The problem is the money's going into real estate so if you're a state-owned enterprise, and you produce steel or glass or any of the cement or any of the components for construction and you just wanna roll steel and build buildings…

I've been out there, I expect you have too, I've seen the ghost cities, I've seen them as far as the eye can see -- completely empty.

And people say, "Well, they'll fill up in the years ahead." No, they won't. I mean, that migration from the countryside to the cities is largely over, number one. Number two, it doesn't take into account obsolescence. You can't mothball a building; you have to occupy it and maintain it.

So, this is wasted investment. If you adjust the Chinese GDP for the amount that's wasted, it would already be lower ...

The full interview can be watched here


 

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Thu, 05/15/2014 - 18:33 | 4764353 shovelhead
shovelhead's picture

I think they're polishing up the PR campaign for the new chip implant before they can collapse the currencies.

How about calling it a "Love Bug"? Everyone loves love, right?

"Don't be caught empty handed without money in a crisis. Get your free 'Love Bug' and enjoy the safety and security of having access to goods and services any time you want."

Money bad, Love Bug good.

People with EBT cards just love the convenience of never having to deal with filthy, unsanitary money. Imagine how much better life will be if you never need a wallet.

Thu, 05/15/2014 - 18:01 | 4764224 Motorhead
Motorhead's picture

Guy Johnson is just a douche.  No wonder Maryam Nemazee left.

Thu, 05/15/2014 - 16:56 | 4764034 AdvancingTime
AdvancingTime's picture

We  are all interconnected for better or worse. A bad apple can spoil the whole basket. Welcome to the world our leaders have designed or allowed to form. Whether by design or merely as a byproduct of globalization we have weaved a web of financial transactions that circle the globe. Over the last several years as money was printed by the central Banks it was not contained in the countries where in was printed. This money flowed across borders influencing and distorting markets and prices across the world. Some people have been calling for a "world currency" for years. the saying "one should never let a good crisis go to waste" means that a meltdown with high levels of fear would present a perfect opportunity and catalyst to advance this agenda down the field. Remember many people with agendas have a lot to gain when a major shift in the currency markets takes place. More on this subject in the article below.

http://brucewilds.blogspot.com/2014/02/contagion-may-lead-to-new-world-c...

Thu, 05/15/2014 - 14:55 | 4763569 WhiteWolf
WhiteWolf's picture

Fist debt I stop paying is my mortgage.  I mean why pay it.. The banks have already gotten their bailout...why should I pay the Fucking mortgage. It will take at least2 years then I can get Obammy money. Fuck he banks.

Thu, 05/15/2014 - 17:00 | 4764046 AdvancingTime
AdvancingTime's picture

The timetable on which economic events unfold is often quite uneven and this supports the possibility of an inflation scenario. A key issue being one of timing. If the price of gas jumps to $8 a gallon overnight do you buy gas and not make your car payment or stop driving the twenty miles to work? Answer, it could be months before your car is repossessed so you buy gas.

It is important to remember that debts can go unpaid and promises be left unfilled. Is this possible and if so where would that leave us? Chaos and major disruption would result from such a scenario. As we have seen from the economic crisis of 2008 and following many other unsettling developments legal actions can continue to drag on for years. More in the article below.

http://brucewilds.blogspot.com/2014/04/inflation-seed-of-economic-chaos....

Thu, 05/15/2014 - 13:44 | 4763266 free_lunch
free_lunch's picture

NEW!!!    EUROMANIA  a must see documentary about how the corporations have killed democracy in Europe to let the banks and big corporations rule as dictators.

A filmmaker on a search to uncover the European Union: does Europe provide jobs and democracy, or is it a big business project? A personal and revealing documentary from the creators of the 2012 hit Panopticon. EUROMANIA shows what is happening to people and countries all over Europe.

Watch free on you tube: http://www.youtube.com/watch?v=hkCe43V3XFc&feature=youtu.be&t=37m44s

Thu, 05/15/2014 - 17:50 | 4764184 putaipan
putaipan's picture

and similarly off topic, new hudson article on the banksters' neolibcon attack on ukraine-

http://www.informationclearinghouse.info/article38495.htm

Thu, 05/15/2014 - 15:43 | 4763742 kurt
kurt's picture

Thanks

A Technocracy, A Democracy with No People, The Human Brain Project

I don't think the Europeans are scared enough. The attitude of Overlord that the EU takes is the model which best explains the disconnect between the citizens of the United States and its deviant government. Deviant Governance. Watch Out People!

Thu, 05/15/2014 - 13:43 | 4763262 dontgoforit
dontgoforit's picture

"You see this, Timmy," grandfather said as he held out a circa 2010 U.S. currency note for twenty dollars.

"Yes, what is it?" little Timmy questioned.

"Well, back in the old days people actually had to use these to 'buy' things."

"I don't understand, Grandfather.  We just wave our hand chip to do that.  Why would you need that piece of paper?  It is kind of neat looking though.  Who's picture is that?"

Thu, 05/15/2014 - 16:19 | 4763921 doctor10
doctor10's picture

The central banks' burdens were tolerable as long as energy was cheaper and more available to the next generation. That allowed the bubble to blow bigger every generation, and afforded carriage of the bankers demands.  This is the first generation for which the energy supply is less available, and profoundly more dear than for the previous. The consequent "load" of the central bank on society is unbearable and unresolvable with other than blood or judicial criminal resolution.

If I'm a banker, I'm looking for retirement ASAP-cause when she blows, and blow she will unless somebody gets a gallon of gas back to 2 bucks and oil at 50/bbl, its gonna be UGLY.

The best a banker can hope for then is a judge and jury.

Thu, 05/15/2014 - 15:19 | 4763653 kurt
kurt's picture

"Timmy, get back to pedalling or we won't have enough electricity to use the well pump."

 

Thu, 05/15/2014 - 13:39 | 4763243 dontgoforit
dontgoforit's picture

2020 - "I ain't got no money, honey.  And it wouldn't matter if I did - ain't worth nuthin'."

Thu, 05/15/2014 - 13:32 | 4763224 FieldingMellish
FieldingMellish's picture

$1293... once $1280 is broken... $1250... then $1180... then ..... $1080.... $980.... $700....

As long as the Comex operates, PMs don't stand a chance.

BTW, that hyperinflation wolf has been spotted too many times since 2001.

Thu, 05/15/2014 - 18:38 | 4764378 Seasmoke
Seasmoke's picture

How many stops until double digits. I love your $99 call.

Thu, 05/15/2014 - 16:14 | 4763895 Obama_4_Dictator
Obama_4_Dictator's picture

Trollin..trollin..trolling...keep those comments trollin...rawhide!

Thu, 05/15/2014 - 13:29 | 4763203 Oracle 911
Oracle 911's picture

In China the housing bubble is on verge of the burst. I'm shocked, really shocked.

Do I need the /sarc tag?

Thu, 05/15/2014 - 13:05 | 4763121 0b1knob
0b1knob's picture

Reports of Money's death are premature.  His career is on life support however.

https://en.wikipedia.org/wiki/Eddie_Money

 

Thu, 05/15/2014 - 13:21 | 4763186 Bollixed
Bollixed's picture

Always loved his "Two Tickets, Two Pair of Dice" song...

Thu, 05/15/2014 - 15:05 | 4763608 ParkAveFlasher
ParkAveFlasher's picture

Someone needs to do for Eddie Money what he did for Ronnie Spector.

Thu, 05/15/2014 - 13:06 | 4763110 kurt
kurt's picture

Nice plug for Singapore Gold storage right in the interview answer.

So, like, if I give you money you'll hold it for me in actual gold in Singapore? How do I get my gold or money during monetary collapse or war time? Do I hire a plane and meet you at your post office box? I suppose I could pay a mercenary to acompany me. I could hop aboard a tramp steamer out of Long Beach, perhaps. Then I could jump ship in Hong Kong and rent a rickshaw. Count me In!!!

Thu, 05/15/2014 - 17:09 | 4764077 AdvancingTime
AdvancingTime's picture

History is chucked full of distorted markets, debts unpaid, promises unfilled, and bubbles. These "interesting times" play havoc with the value of things and what they are worth. Like some of the cruel games children play you don't want to find yourself without a chair or holding the "hot potato" when the game ends. The article below takes a deep look into value and worth. http://brucewilds.blogspot.com/2014/05/value-and-worth-constantly-change...

Do NOT follow this link or you will be banned from the site!