Jim Rickards: Safe Havens During the Financial Warfare Era

Jim Rickards joined up with Stephen Guilfoyle, also known as “Sarge” at The Street, to discuss his book The Death of Money and how investors can find a safe haven for their money in this modern era of financial warfare. The discussion hits at Rickards’ area of expertise as a currency wars analyst and covers what to expect from geopolitical interests in Russia, North Korea and beyond.

Jim Rickards highlights that he was recently giving a seminar to the U.S Army War College and remarks that what he informed them of was that “there has really been some economic aspect to warfare but it now completely non-kinetic. It can be decisive and when you combine financial warfare with the emerging cyber techniques you get into cyber financial warfare.”

Rickards Financial Warfare Final

“In one of the case studies I am analyzing is where Russia has invaded Crimea. We responded with economic sanctions. President Obama indicated that he was not going to war but would apply economic sanctions. However, Russian President Putin thinks of them as an act of war. When you degrade the capability of your adversary through economic means, that’s an act of war. They may respond in a “war-like” way.”

Jim Rickards is a currency wars expert who has advised various intelligence community outlets. Recently held a course on financial warfare by instructing a seminar for elite war fighters on the strategic track at the U.S Army War College. The bestselling author and economist spent decades working on Wall Street and knows first hand the complexity to the international financial system.

He went on to add history to back up such claim noting, “We put oil, natural gas and bank freezes on Japan in the summer of 1941 and Pearl Harbor happened in December. There’s a case where what started out as economic sanctions ended up as kinetic war – so don’t underestimate the response function of President Putin or President Xi of China to these economic sanctions.”

Financial Warfare and North Korea

When Sarge, a NYSE floor trade for over 30 years, then asked Rickards’ for his read on North Korea. Rickards’ pressed that, “North Korea has got the enrichment cycle, they’ve got highly enriched uranium and plutonium. They are working on reducing the size of these devices in order to weaponize it.  They’re currently working on missile technology. They’ve got the intermediate range with successful launches.”

“They’re working on the intercontinental ballistic missiles (ICBMs) which is capable of going into space and then back down. They’re about three years away from being able to fire a nuclear missile at Los Angeles that could potentially kill three to four million Americans and there is nothing that clearly shows they’re going to be deterred from that path – or that they wouldn’t pull the trigger. The United States is not going to allow that to happen. We’re going to be on a course of war with North Korea.”

“The question is, can we get the Chinese to put pressure on the North Koreans to stop? The Chinese have their own fears. If you place too much pressure on the North Koreans, it could open up the borders and cause over one million people to flood in and destabilize them. This is a very tough game. President Trump, Secretary Tillerson and General Mattis have made it very clear that we’re at the outer limit of what we’ll allow them to do.”

Rickards Gold Financial Warfare 3

When speaking on what options are left, Rickards urgently pressed, “We’re certainly using economic sanctions. We’re applying financial warfare – but we may need to go to kinetic warfare that includes bunker busters, and I would not rule out tactical nuclear weapons to also destroy this program.”

Financial Warfare and Safe Haven Investments

The natural question then was, what would the market on something like that be? Rickards warned, “No nuclear weapons have been used in warfare since Nagasaki and Hiroshima. This would be a big deal.  You would expect markets to sell-off on that.”

So where’s the safe haven if anywhere? Rickards notes, “I recommend a 10% of investable assets in an allocation of gold. That will perform well in every state of the world. It is not necessarily going to skyrocket in price. But, if things fall apart the way we’re talking about, it will. That’s your insurance on the rest. We need to face up to it.”

To catch the full interview with Jim Rickards covering financial warfare with The Street – CLICK HERE.

Thanks for reading,

Craig Wilson, @craig_wilson7
for the Daily Reckoning

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