As we wrap up the year and celebrate the festive season, we wanted to share some of our favorite moments from one of your favorite Wealthion interviews from 2024: Jim Rickards with James Connor. Enjoy!
All the best for a happy, healthy, and prosperous New Year!
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Original interview: https://youtu.be/0Okuu_ynEgk
Andrew Brill 0:00
Happy Holidays from all of us here at wealthion to all of you, I’m one of your hosts here at wealthion. Andrew brill, we took a look back at this year, and hope you enjoy these favorite guest moments from one of our best interviews of 2024
James Connor 0:18
let’s move on now. Look at Ukraine. Russia and Ukraine. War has been going on for two over two years now. It’s hard to believe, but how do you think this situation is resolved?
Jim Rickards 0:29
Well, it’s resolving faster than I expected. Ukraine is they’ve they’re about 500,000 dead Ukrainian soldiers. So I hope, hope Tony Blinken and Jake Sullivan and Victoria Nuland are happy with that, because they said they’d fight to the last Ukrainian, and they’re doing a pretty good job. About 500,000 dead. Ukraine’s military is in a complete state of collapse. They are if they’re fighting, they’re losing. Many of them are surrendering. There are mutinies. There are desertions. When they retreat to some orderly fighting retreat to a defensive position, it’s more like running for your life, and the Russians are annihilating them with drones and, you know, heavy, heavily armored helicopters, bombers, other, other weapon systems, minefields, etc. They’re now sending 70 year olds out. They’re sending 17 year olds out. When I say they, I mean the Ukrainians, they’ve instituted a draft. I haven’t been there, but I get a lot of pretty good intelligence. They say the streets of Kharkov, Kyiv Labov are empty because, you know, men, younger men, say between 17 and 30 are just are hiding or leaving the country or staying inside because they don’t want to be, you know, dragooned off the streets and sent to the front lines to say, if you get to the front lines, your life expectancy is about three hours. That’s how long it takes for the Russians to kill them. So they’re getting beyond desperate. The wonder weapons have all failed. We sent them HIMARS, precision guided utility as artillery, rather precision missiles that took the Russians almost no time to figure out how to jam the GPS so the missiles don’t know where to go. They just go off course. We sent them Patriot anti missile batteries, a billion dollars a piece. I think we sent about nine. The only problem is that those missiles that those anti missile batteries cannot shoot down, hypersonic missiles. The Russians have hypersonic missiles, so they’ve been blowing them up one at a time. There aren’t many left. They got challenger tanks from the UK, leopard tanks from Germany, Abrams tanks from the US, and also Bradley Fighting Vehicles from the US. They’ve all been left burning on the battlefield, completely ineffective. The armor is ineffective. So one by one, you know, the Storm Shadow missiles, most of them are shot down. They’re pretty much out of them. They’re out of 155 millimeter artillery shells, because the Russian economy is making like a million a month. They’re on a complete war footing. Western economies, the US is struggling, struggling to open one factory that might make 30,000 a month, or, sorry, 300,000 a month, except it’s not open. So they’re still trying to do that, and our own supplies have been depleted. This is not just a question of Ukraine losing it’s a question of Western arsenals being stripped. All these weapons are defective anyway, meaning they’re obsolete and don’t work against Russian offensive capabilities. But even allowing for that, we don’t have anything left. So everything and economic sanctions. I mean, I teach a course in financial warfare at the US Army War College. I told my class over two years ago was April 2022, right after the war began. I said, the sanctions will fail. Us. Sanctions on Russia will fail, but it will be worse than that. Not only will they fail, but they’ll boomerang and hurt the US economy more than it hurts Russia. I just looked at the data. I don’t have it all at my fingertips, but by every significant metric, unemployment, inflation, GDP growth, debt to GDP ratio, manufacturing, PMIs, etc. Russia, the Russian economy is greatly outperforming the US economy, and in particular the one that caught my Iowa debts, GDP ratio, Russia is 17% privately, debt free. The US is we mentioned, about 125% way, way past the point where the debt can create enough growth to even pay the debt. So So nice job. Johnny yellow, nice job. Wally ariyama, the Deputy Secretary of the Treasury. The sanctions have been a complete failure, but they keep upping the ending they keep the newest thing is to steal $300 billion of us, Treasury securities owned by Russia and. It’s a good way to sync the US government securities market, and it won’t work. They might try to do it. They’re going to try to do it at the reach consensus at the g7 summit meeting in Italy, which is coming up on june 13, so just about two weeks away, not clear what they’ll do. There’s some talk of floating a $50 billion bond issue backed by the Russian assets. It’s just a backdoor way of stealing them. It’s a structured solution to stealing the assets. Some talk about just using the interest, not the principal. That’s about six certainly, there’s assets earning about 3 billion a month, so it’s been two years, so there’s about 6 billion of interest, just a smaller theft, instead of a $300 billion theft, they’re all part of why the world is trying to de dollarize and get away from US Treasury securities. Now, it does not mean if they do it, and they’re trying to do it, and expect they will in some form. It does not mean the US Treasury market collapses the next day. I mean, you hear hysterical claims like that, that’s not going to happen, but at the margin, it diminishes confidence in those treasury securities. And if you felt that, and they do, you were say you’re a finance minister, head of central bank in a country that’s running a trade surplus and you’re getting dollars, and you have to decide what to do with the money, no different than your clients, how do you allocate your assets? Well, all of a sudden, you know US Treasury securities don’t look so good, because the US is in the business of stealing them. Do you like Japanese government bonds, German bones or Italian Government notes any better? I don’t think so. If you lose confidence in the US Treasury securities market, why do those other vassal states look better when it comes to their government bond markets? So you pretty quickly end up buying gold. You don’t have to be a gold bug, just you as an asset allocator. If you can’t trust the Western I just mentioned the four biggest government bond markets in world, Japan, Germany, in the US. If you can’t trust them and you want something liquid, you’re not going to buy real estate, not with your reserve position, you’re going to buy gold, and that’s part of what’s driving the price of gold higher. So again, despite two years of failure, the US and NATO seem to want to double down with stealing the Russian assets, and the other thing Putin will do, or two other things Putin will do. And by the thing that policymakers don’t understand about Putin, he doesn’t bluff. He actually thinks hard about what he says, what he’s going to say. He gets a lot of advice. If he says something, you can put it in stone, it’s going to do it. So he’s already said, if the West steals these Russian assets, and as I mentioned, they’re planning to do that, maybe in as early as about two weeks, he’s going to expropriate all the Western assets in Russia. And guess what? There are more Western assets in Russia than there are us. Treasury securities in the Russian reserve position, well over 300 billion massive oil infrastructure from BP and and shell other oil companies. You can still buy Coca Cola in in Moscow, if you happen to be there, you know, take the, take the Coca Cola business. A lot of US companies made a show we’re getting out of Russia, you know, the start of the war. But they they didn’t really and they might change some brands, close some outlets, but there are still massive investments. So Putin will just take all that, give it to Ross and after Gazprom or any of the other large Russian companies. But that’s not the most dangerous thing he can do, which I expect he will 200 billion out of the 300 billion of Russian US Treasury, Russian owned US Treasury securities that they’re planning to steal are in a place called Euroclear. Euroclear is the largest clearing settlement custody institution, Institute in Europe, comparable to our DTCC, not quite as large, but quite large, with over $40 trillion of assets in custody. They have offices around the world. They’re based in Belgium, but they have offices in Hong Kong, Dubai, rep office in Beijing, office in Singapore, etc, all Putin has to do. And Hong Kong is an interesting case because it’s, it’s under the thumb of the Chinese Communist but it still kind of walks and talks like a rule of law jurisdiction. They have lawyers and courts and all that good stuff. All Russia has to do is sue your clear in Hong Kong for wrongful conversion of its assets, get a judgment in its favor, run around the world, forcing the judgment by putting lien on other Euro clear assets have blood other class to settle the judgment. And you could throw a monkey wrench into the entire global monetary financial system that this is the kind so these, these idiots of the Treasury and the State Department and in NATO, they’re playing with fire, and they don’t, they don’t even understand, I mean, what? I just said was pretty clear. Happened to be a lawyer, so I understand this pretty well, but they wouldn’t have thought about
James Connor 10:04
it. It’s an election year, and it looks like another Trump Biden rematch at this time, but anything can change. And the RNC will be held in Milwaukee this year, in July, and Trump is undergoing an onslaught of legal attacks. Do you think he survives these legal attacks, and will he become the next Republican nominee?
Jim Rickards 10:23
Well, he will certainly be the nominee. He’s already got more than enough delegates to do that the and I expect to win the election. Also, it’s pretty clear in the polls he’s leading in national polls, which he’s never done before. I mean, even when he won in 2016 he did not lead in national polls. National polls are kind of irrelevant, because we don’t have national elections. We have state by state elections to elect electors to vote for the president. But if you boil that down to the seven battleground states, he’s leading in seven out of seven, he’s leading in the betting eyes by every measure, Trump’s ahead. And people say, well, Polls can change. That’s true. But wait, you know, you know, May, June is about when people lock in their choices. They’re not very open to persuasion. So I do think it’s a, it’s a pretty good forecast of what’s going to happen. So I would expect Trump to win, having said that he might not make it to Milwaukee because he might be in jail. We’re, you know, kind of awaiting the verdict and the album brag farce, but I don’t know what the verdict is going to be. I do. I’ve done a lot of litigation. I work with some of the finest litigators in the world. They all tell me the same thing, which is that nobody knows what a jury is going to do. Like that you can have you can spend millions, and they do and jury advice and jury selection research, and when they’re interviewing potential jurors, they they profile them, and they do background all, all in real time. I miss it’s quite a science. But having said that, every good litigator I’ve ever worked with, I’ve worked with quite a few, says You just never know what a jury is going to do, so I’m not going to forecast the outcome of the case. If he’s acquitted, that’s a big victory. Even a hung jury is a very meaningful victory. If he’s convicted, he might be in jail by July. So now, of course, the case will be appeal, will certainly be overturned on appeal, but that takes time so but just for viewers benefit, there is no prohibition. Well, there’s no you can be a convicted felon behind bars and still be elected president. There’s no disqualification or prohibition on a prisoner being elected president the United States. So I expect he will be. But it’s just a question of how far the Democrats want to take this unconstitutional, farcical lawfare campaign, but we’ll find out. Thanks
Andrew Brill 12:47
again for watching these favorite moments of 2024 and we hope we can continue to provide you with information that will help you invest wisely and be financially resilient. Wishing all of you a healthy, happy, safe and prosperous 2025.
