(cont) But trying to read between the lines, what Rickards may mean is not really a gold backing for the dollar (that merely being a cover story), but what amounts to a huge currency devaluation for all the world's currencies at once, achieved by repricing gold vrs those currencies. This will have the effect of drastically reducing the world's level of debt (or the value of that debt vrs gold), thus unclogging the world economy so it can grow again. The world's problem, as Rickard's puts it, it too much debt and not enough growth.
The relative values of the world's currencies to eachother would stay approx the same, but the value of their debt would be reduced vrs gold. This is the technique FDR used in the 1930s to help reverse the deflationary spiral - he repriced gold vrs the dollar, so in effect it was a large devaluation of the dollar. But this time it would presumably be a devaluation of all the world's currencies vrs gold, the goal being to reduce the world's debt burden and allow economic growth to resume again.
Rickards has explained how deflation is the most dire existential threat to the elite's financial system (racket), which being debt-based relies on a constantly increasing money supply/inflation since every new unit of currency requires interest, and the money to pay that interest doesn't exist unless it is also created. To the elites, an extended period of deflation absolutely cannot be tolerated - it would bring down their whole debt based financial system.
Rickards explains that the main way inflation is created is via the fractional reserve 'turnover' aspect (velocity), which requires people to spend and take out loans, and banks willing to lend. That's a key element of what's been missing, because as Paul Craig Roberts points out, aggregate demand by consumers has been stagnant/falling for years due to decades of offshoring of high paying jobs. So the US consumer has less to spend, and the recipients of the previously high paying jobs (in Asia) are paid diddly, so the world's aggregate demand keeps falling.
The multinational corporations pocket the difference as profits, which is great for them, but the world's consumers have less and less to spend and thus aggregate demand keeps falling. In a consumer driven economy, this ends in disaster. The elites don't care about us, but the resulting deflation jeapordizes their entire financial system. Rickards says they've tried everything to reverse the deflationary trend, but nothing has worked.
Meanwhile global government debt has gone to the moon, so the elites are apparently ready for the nuclear option of reducing the value of this crushing debt via repricing gold.
Rickards had a recent article on the gold revaluing topic (see next post), and also noted a recent visit by Treasury Secretary Mnuchin to Fort Knox (only the 2nd time in history this has happened). So something is definitely afoot, and Rickards keeps releasing tidbits of info, albeit with some spin which us commoners must try to decipher.
Bottom line, probably time to buy more gold..
AI
