Jim Rickards - Monetary System Will Go Gold Soon

According to expert Jim Richards, the Fed will not be able to recover if there is another global financial crisis and the United State will just move from one paper currency to another. When this happens, Richards predicts that gold prices will skyrocket to prices levels as high as $5,000, $6,000 or even $7,000.

September 14, 2011
Eric King

With gold and silver continuing to consolidate the recent gains, today King World News interviewed KWN Resident Expert Jim Rickards, Senior Managing Director at Tangent Capital Markets, to get his take his take on where gold is headed. When asked about what he is watching right now Rickards stated, “With the G20 coming up, Eric, I think they are going to dust off the SDR solution. The next time there is a major global financial crisis the Fed is not going to be able to bail out the world because they are out of bullets, but the IMF and the G20 will be able to print these SDR’s.”

Jim Rickards continues:

“At that point the game really is over. It will be very transparent that we’re just replacing one kind of paper money with another kind of paper money and that is going to accelerate the rush to gold.

As soon as people do the math, this is where you start to see these $5,000, $6,000, $7,000 an ounce price targets for gold. That’s coming sooner than people expect. Some time in the next couple of years we will see that radical transformation of the international monetary system into gold.

The thing is right now we are nowhere near bubble territory. If gold were $10,000 we’d be having a conversation about whether that was a bubble, but at the $1,800, $1,900 level that’s absolutely not the case. If you are going to ride this long-term trend at the very high levels that we are talking about, you are just going to have to bear this volatility

“My view is when I see the price of gold go down $100 I buy more. I say, ‘Here is a great buying opportunity.’ I have a substantial percentage of my investment portfolio in gold. I have other assets as well, I have land, fine art, cash and other things. It is worth noting that if institutions even went to 5% (of their assets) in gold, the price would go to the moon.

Even if you apply only .5% to the kinds of trillions of dollars of investable assets that we are talking about, as I say there is nowhere near enough gold at anywhere near these prices to satisfy that kind of demand.

That’s not a big shift. That’s not saying they are going to quadruple or quintuple their gold holdings, it just says they are going to maybe double it at most, and that would be an earthquake right there. And keep in mind that doesn’t even include the central bank buying and the retail buying.”

Eric King

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