Financial Warfare Expert Says “Dollar Will Be Reduced To A Local Currency” by Mike Gleason, Money Metals Exchange
Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.
Coming up you’ll hear the first of an exclusive two part interview with renowned economist and financial commentator Jim Rickards. Jim shares his incredible insider perspective on the state of the global monetary system, the state of our economy, and what it’s all likely going to mean for gold and silver in the days ahead. Don’t miss the first part of my two-part interview with Jim Rickards coming up in just a moment after this week’s market update.
Well, the bulls and bears in the gold market continue to do battle around the $1,200 level. Bears gained the upper hand early in the week, but the bulls came back strong on Wednesday, pushing prices back above $1,200 an ounce. As of this recording, gold trades at $1,204.50, good for a weekly gain of 0.4%.
Silver, meanwhile, is flirting with the $17 level for the second consecutive week. The silver market finished at $16.99 last Friday, then proceeded to sell off early this week. Silver prices currently come in at $16.81, down 1.1% on the week.
Turning to platinum and palladium, both metals exhibited weakness throughout most of March but are on the rebound this week. Platinum is up 1.5% to trade at $1,158 an ounce, while palladium shows a gain of just less than 1% to trade at $748. All US markets are closed today, Good Friday, but Money Metals Exchange is open for business and you can reach us by phone at 1-800-800-1865 and you can of course order online at any time, day or night, at MoneyMetals.com.
As the metals markets look for a catalyst to take them out of recent trading ranges, inflation indicators are starting to turn back up – albeit slowly. On Monday, the Core PCE Price Index came in 0.1% higher for a year-over-year reading of 1.4%. That’s still below the Fed’s 2% target, but housing, medical, and other costs are running well above 2%.
The big question is whether strength in the U.S. dollar versus foreign currencies will persist. The U.S. Dollar Index has seen some dramatic swings over the past few weeks. The dollar had threatened to break above 100 on the Index before getting sold down. This week the Dollar Index is little changed at 97.7 as the Obama administration’s controversial plan to lift sanctions on Iran takes center stage.
Geopolitical turmoil often drives capital into the perceived safety of the dollar. But that trade has gotten extremely crowded since the start of the year. Some investors seem to be confusing liquidity with value. Dollars are easy to get in and out of almost anywhere in the world, but that liquidity will also be an attribute of the dollar when it depreciates from an overvalued position. Gold is also highly liquid – it possesses universally recognized value and can be bought and sold virtually anywhere in the world. When the dollar loses value, it will be reflected in gold price gains over time – meaning years, not necessarily day to day or week to week.
In general, a declining dollar versus other currencies means higher prices for imported consumer products and raw materials. Which leads us to another big question concerning inflation: whether oil prices have bottomed. Falling oil prices have helped depress inflation gauges. But a few months of sustained gains in oil and other industrial commodities could translate into higher consumer costs across the board. Consumers will feel higher costs of living before they show up in government statistics.
Of course, one of the biggest costs of living in the United States is taxes. With the April 15th tax filing deadline approaching, now’s the time to make sure you’re claiming every possible tax break to which you are legally entitled. If you didn’t max out your IRA contributions for 2014, the good news is that you can still do so through the April 15th filing deadline, or later if you request an extension. Depending on your income and the type of IRA you select, you may be eligible for a tax deduction on your contribution.
For 2014, you can put up to $5,500 in an IRA – $6,500 if you are over age 50. Those same limits apply to IRA contributions for tax year 2015.
If you don’t yet have a precious metals IRA, we invite you to consider the advantages of diversifying your retirement accounts into the solidity of bullion. You can hold certain types of gold, silver, platinum, and palladium bullion products within an IRA. The ins and outs of opening a precious metals IRA are explained in the IRA section of our MoneyMetals.com website. There, you can download our IRA brochure and watch our 3-minute introduction video for a quick overview.
And now, without further delay, let’s get right to part one of our exclusive two part interview with Jim Rickards, who has lots to say on the state of the economy, the future of the US dollar and why it’s more important than ever to own gold as protection against what’s to come.
Mike Gleason: It is my great privilege now to be joined by Jim Rickards. Mr. Rickards is Chief Global Strategist at the West Shore Funds, Editor of Strategic Intelligence, a monthly newsletter, and Director of the James Rickards Project, an inquiry into the complex dynamics of geopolitics and global capital. He is the author of two bestselling books, most recently, the New York Times best seller, The Death of Money and before that, Currency Wars. He is a portfolio manager, lawyer, and renowned economist regularly appearing on CNBC, the BBC, Bloomberg, Fox News, and CNN, just to name a few.
Jim, it’s a real honor to have you on the Money Metals Podcast. We really appreciate you taking the time to talk with us today. Welcome.
Jim Rickards: Thank you Mike, it’s great to be with you.
Mike Gleason: You’ve just completed a new book called, The Big Drop: How to Grow Your Wealth During the Coming Collapse. I’ve been reading this over the past few days now, and it’s simply terrific. I urge everyone to check it out. There’s so much eye opening information in here. I want to start out by asking you about a chapter that I found particularly fascinating… the one titled, Today’s Currency and Financial Wars. In that section you wrote about the recent financial war we’ve been waging against Iran and the potential backlash that it may cause with