EXCLUSIVE INTERVIEW – ‘Demise of the dollar coming’ – author James Rickards - See more at: www.fastmarkets.com/gold-news/72926-0-en#sthash.sDthOkQ3.dpuf
March 21, 2014 by Eddie van der Walt
London 21/03/2014 – The world economy may have passed the point of no return and is heading for a collapse resulting in the demise of “king dollar”, Jim Rickards, author of the best-selling Currency Wars and the soon-to-be-released Death of Money, told The Bullion Desk in an exclusive interview.
His latest book takes the bearish view that governments have failed to heed warning signs and that a shift in the global monetary system is therefore all but inevitable.
“The Death of Money is about the demise of the dollar,” Rickards writes in the introductory paragraph to his new book. “The dollar is the linchpin. If it fails, the entire system fails with it, since the dollar and the system are one and the same.”
Its collapse could result in a return to a quasi-gold standard, while investors could mitigate such risks by adding gold and other hard assets to their portfolio.
Rickards paints a bleak picture in his latest book, saying he has grown even more bearish since the last volume was published.
“Policy makers at the [US] Fed and the treasury avoided a sharp depression in 2009 but created a milder depression that continues today and will continue indefinitely,” he said in the book.
The dollar could come under attack from potential future superpowers such as China, empires such as Russia, regional currencies such as the euro and a potential global currency in the form of International Monetary Fund special drawing rights.
“To paraphrase Hemingway, confidence in the dollar is lost slowly at first, then quickly,” Rickards writes.
He gives short shrift to other economic centres, especially China.
“It is unclear whether the Chinese growth miracle will end with a bang or a whimper, but it will end nonetheless,” he says, suggesting that misinvestment and government control will hasten the demise.
Even if his more gloomy forecasts come to fruition, Rickards advises investors to put 10-20 percent of their assets in physical gold to protect their wealth.
“An allocation of more than 20 percent is not recommended, because gold is highly volatile and subject to manipulation and there are other investable assets that perform the same function,” he said, highlighting land, fine art, alternative investment funds and cash as potential stores of wealth.
Should the world financial system collapse, and nations move back onto a new quasi-gold standard – one of three likely outcomes he has identified – Rickards believes gold could climb as high as $9,000 per ounce.
