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GOLD: Review/Essay of THE NEW CASE FOR GOLD by James Rickards (2016).

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 GOLD: Review/Essay of
THE NEW CASE FOR GOLD
by James Rickards (2016)
© H. J. Spencer [08Nov.2020] 5,800 words (9 pages).

ABSTRACT
This review of Jim Rickards' recent book on gold that again repeats his ongoing advice that gold is always a
prudent asset to own to preserve one's long-term wealth in a volatile world. Here Rickards draws on his
deep knowledge of gold history, monetary theory and personal experience as an investor to argue (in
advance) for a coming, larger financial collapse (as in 2010). He also expects a huge panic buying of gold
when only the big players will be able to add real physical gold to their portfolio. He emphasizes how vital
that central banks set a stable, realistic price for their currencies versus gold: not each other. As an insider
at the highest levels of governments, he shares with the readers some of the behind the scenes financial
machinations that are too complex to surface on TV News.

AUTHOR'S BIOGRAPHY
Dr. James G. Rickards is an American lawyer, speaker, media commentator and author on matters of finance
and precious metals; he has been Senior Managing Director for the financial newsletter "Market Intelligence"
at the consulting firm Omnis, Inc. He graduated high school in Cape May, New Jersey in 1969. He then
graduated from Johns Hopkins University in 1973 with an honors B.A. degree. He continued his formal
education at the Paul H. Nitze School of Advanced International Studies in Washington, D.C. gaining an M.A.
in International Economics. He completed his graduate education at the University of Pennsylvania Law
School, gaining his Juris Doctor with a LL.M. in Taxation from the New York University School of Law.
Rickards worked on Wall Street for 35 years, until in 2010 he became General Counsel for the notorious, failed
hedge fund, Long-Term Capital Management.

On September 10 2009, Rickards testified before the U.S. House Science Subcommittee on Oversight about the
risks of financial modeling, Value-at-Risk (VaR) and the 2008 Financial Crisis.

Rickards has authored four other books:

"The Death of Money: the coming collapse of the international monetary system" (2014).
"The Big Drop: how to grow your wealth during the coming collapse" (2015).
"The Road to Ruin: the global elites' secret plan for the next financial crisis" (2016).
"Aftermath: seven secrets of wealth preservation in the coming chaos" (2019).

His 2014 book was a New York Times Best Seller. The 2016 book developed the ideas of Arvind Kumar that
the combination of negative interest rates and cashless currency was a plan to destroy the people's savings and
'Climate Change' was a plot by the Global Elites to advance a "New World Order" based on a new global
currency. He is an advisor on financial threats to the Department of Defense and to the U.S. Intelligence
Community.

REVIEWER'S WEBSITE
All of the reviewer's prior essays (referenced herein) may be found, freely available at:

https://jamescook.academia.edu/HerbSpencer
 2
1 PRELUDE - FOR and AGAINST GOLD.
This book begins with its best chapter: Rickard's summary for the principal arguments for and against gold.
1.1 THE CASE AGAINST GOLD
1.1.1 "GOLD IS A BARBAROUS RELIC" - KEYNES
Rickards boldly claims that John Maynard Keynes never made this claim but was misquoted: he was
criticising a purely executed Gold Standard after (mathematically inept) Winston Churchill, as Chancellor
of the Exchequer, insisting on Britain returning the U.K. to the Gold Standard at the prewar parity for
prestige reasons. This was too low in 1924 and caused massive deflation and depression, Keynes had
recommended a much higher price for gold.
1.1.2 "NOT ENOUGH GOLD TO SUPPORT TRADE"
Rickards points out that the amount of gold steadily climbs as more is mined. In 2014, there was about
170,000 metric tons of gold, with only about 35,000 metric tons of official gold held by central banks.
There is plenty IF the price is set correctly to avoid deflation. The critique implies "not enough at current
prices".
1.1.3 "GOLD CANOT GROW FAST ENOUGH TO SUPPORT GLOBAL TRADE"
This is a variant of the second criticism and confuses stocks of Total gold and Official gold that is owned
by a government to support a money supply that can be readily increased when printed money is used to
buy private gold on the open market. This is no different from printing money to bonds, as the Fed does on
a regular basis. Rickards quotes average annual growth rates from 2009 to 2014, when world population,
gold production and Global GDP all expanded at rates below 3%, while the Federal Reserve Monetary
Base grew at a massive 23%. Rickards notes that gold production does not support inflationary world
growth that most governments desire for several reasons, not least, paying of their own debts.
1.1.4 "GOLD CAUSED THE GREAT DEPRESSION"
Rickards references historical economic research by both Milton Friedman and Ben Bernanke that showed
that the Great Depression was caused by poor discretionary monetary policy by the U.S. Federal Reserve
between 1927 and 1931; it was then prolonged (according to Rickards) by experimental policy
interventions launched by presidents Herbert Hoover and Franklin Roosevelt that triggered a Capital Strike
by large corporations and wealthy individuals. Once again, the solution is to set an informed gold price
based on the economy and not on politics.
1.1.4 "GOLD HAS NO INTRINSIC VALUE"
Rickards' response is to remind us that the Intrinsic Value theory was first advanced by David Ricardo in
1811 and later adopted by Karl Marx. The idea is that the value of a good derives from the combination of
labour and capital going into its production but this (its Cost of Production) just sets a minimal selling
price. However, in 1871 the Austrian economist Carl Menger introduced the more useful idea of
Subjective Value as he launched what became known as Austrian Economics. Here, each individual
determines what is the value of each good to each individual based on that individual's needs and wants.
These values then drive the demand market. Since gold is mainly money then the gold price will vary
based on gold's utility to someone in want or need of money.
1.1.5 "GOLD HAS NO YIELD"
Rickard admits that this statement is true and welcomes it, as he believes that this is never the role of
money. It is only speculative assets that have yield to compensate for their intrinsic risk. Only international
currencies fluctuate against each other, reflecting their imbalances in cross-national trade.

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1.2 THE CASE FOR GOLD
Rickards begins this section by admitting that the arguments for gold are as "tired and unsubstantiated as
the arguments against it". hence, we must agree with the need for this book, with its new arguments.
1.2.1 "THERE IS NO GOLD IN FORT KNOX"
Rickards claims (without evidence or personal observations) that the bulk of the U.S. gold hoard is "safe
and sound" in Fort Knox, Kentucky and in West Point, New York, with much smaller amounts at the
Denver Mint and the Federal Reserve Bank of New York. This gold is often leased out (on paper) through
the Bank of International Settlements in Basel, Switzerland. This response illustrates that all faith in any
form of money is based on Belief and confidence. The USA resists sending its gold to other countries.
1.2.2 "THERE IS HAS BEEN NO AUDIT OF THE GOLD IN FORT KNOX"
Rickards' answer to this is that the U.S. Government has a powerful interest in down-playing gold's
importance. The Government wants its citizens to forget their gold even exists (while keeping more than
8,000 metric tons of it in deep storage). He notes that audits are reserved for important assets, not trivial
ones, so by refusing an audit the Government maintains the pretence that "gold is trivial". An audit would
pay respect to gold's value - the last thing that the Government wants.

Here, Rickards reminds the reader why he titled this book The NEW Case for Gold as he wants to put the
gold discussion in a 21st Century context, which he summarizes as gold's role in cyber-financial warfare,
gold's importance in economic sanctions on such nations as Iran and gold's future as a competitor to the
proposed new world money called Special drawing Rights (SDRs) to be issued by the International
Monetary Fund (IMF).
2 GOLD and THE FED
2.1 "IS THE FED BROKE?"
2.1.1 NET WORTH
Here Rickards plays a verbal game; he defines "broke" as insolvent: an excess of liabilities over assets,
leaving a negative net worth. In reality, this condition only becomes critical when the holders of one's
liabilities can demand repayment. Rickards relates his answers he got when he asked this question to the
Insiders: Federal Reserve Bank presidents, senior Fed staffers, and presidential candidates. The answer he
received were: 'no', 'yes', 'maybe' and 'it doesn't matter'. At the technical level in 2014, the Fed has assets of
about $4.49 trillion and total liabilities of about $4.45 trillion producing a net capital base of about $50
billion.
2.1.2 "MARK-TO-MARKET"
This is a Risk-Minimization strategy to value one's assets at the latest market price. Rickards shows why
the Fed does not use this method as most of the U.S. treasury Securities are bonds of varying duration (90
days to 10 years). Of the system's $2.3 trillion total, $1.48 trillion are held by the Federal Reserve Bank of
New York that is the major buyer of Treasury Debt. However, the Experts believe that Central Banks do
not need capital.
2.1.3 "OUR GOLD IS UNDER-VALUED"
The Fed's balance sheet lists on its first line "Gold Certificate Account". This is a reference back to 1934,
when gold certificates were issued by the U.S. Treasury to the Fed to overcome objections based on the
Fifth Amendment to the Constitution "... nor shall private property be taken for public use, without just
compensation." This related to the founding of the Fed in 1913, when its private owners (the banks in
each of the 12 districts) had to transfer their gold to their regional Reserve Banks. These certificates were
last marked-to-market in 1971 at a price of $42.22 per ounce for its 8,000 tons (260 million ounces) of
gold. At a market-price (in 2014) of $1,200 per ounce that gold would be worth about $315 billion: an
extra $300 billion in value. This would reduce the Fed's leverage from 114 / 1 down to a respectable 13 / 1.

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3 GOLD IS MONEY
3.1 "WHAT IS MONEY?"
This is not a trick question; few have any real understanding about money today. Most would point to
examples, such as the U.S. dollar, the Euro, the Pound, and Bitcoin. The issue is complicated because it
has always had three functions: medium of exchange, store of value and unit of account. Economists often
assume that only fiat currencies printed by central banks qualify.
3.2 "WHY GOLD?"
Rickards spends 15 pages answering this question. He relates the story of how a professor of chemistry (at
University College, London) replied to this question on the BBC World Service. He reviewed all the 92
elements in the Periodic Table that is presented today in an array 18 rows across and 9 columns high, with
the first two gases, hydrogen and helium as extra anomalies. He tells why most of these elements are not
suitable to be used as money. The ten elements on the right-hand side of the table are the noble gases at
room temperature (they would float away). Several elements, like mercury and bromine, are liquid at room
temperature, some (like arsenic) are poisonous. He rejects the 12 alkaline elements on the left-hand side of
the table, such as magnesium, calcium and sodium, because they either dissolve or explode on contact with
water. Many of the heaviest elements, like thorium, plutonium and uranium, are dangerously radioactive.
Several elements are unsuitable as money because of their special properties: iron rusts, like copper and
lead; aluminum is too flimsy for coins, while titanium was too difficult to smelt. This leaves eight possible
rare elements, like iridium, osmium, ruthenium, platinum, palladium, rhodium, silver and gold. Only silver
and gold are readily available in sufficient quantities to comprise a practical money supply; this has been
known for over 3,000 years around most of the globe. Both are scarce but are easily melted to turn into
coins, ingots and jewellery; silver tarnishes (with airborne sulphur) while gold is almost inert. Even
electronic ('digital') money is stored on silicon chips, that can be hacked (often invisibly); gold cannot be
erased.
3.3 "GOLD IS NOT A COMMODITY"
Gold has almost no industrial use, so it is not a commodity unlike silver, so its global quantity hardly ever
decreases.
3.4 "GOLD IS NOT PAPER"
There are many tradable paper products that refer to gold, including exchange-traded funds (ETFs): the best
known trades under the ticker symbol GLD. Buying this 'product' entitles the buyer to a share in a trust that
has a little gold in a vault in London by a consortium known as the London Bullion Market Association
(LBMA). Much of the authorized activity consists of arbitrage between the real gold market and the
market for GLD shares. These shares, like any other, could be impacted whenever the New York Sock
Exchange is closed as has occurred on several past occasions, including disease threats. Only physical gold
in nonbank custody is real gold, especially official gold coins, like the Canadian Maple Leaf.
3.5 "GOLD IS NOT DIGITAL"
Gold is a physical, not digital currency, so it provides better long-term insurance against the risks that all
digital currencies are exposed. Even the U.S. dollar is mostly a digital currency, especially now that credit
and debit cards have become almost universal. The largest securities market in the world is the U.S.
Treasury market but even this has not issued a physical paper certificate since the early 1980s; it is now all
digital like the interbank payments system. Actually governments hate paper cash because it is difficult to
track and control; moreover, a digital account can be locked down in seconds. Any cash transaction over
$10,000 must be reported to block drug dealing, terrorism or tax evasion (although this is readily avoided
by using Offshore Tax Havens that the governments tolerate (especially from the City of London). During
the Cyprus Crisis in 2013 and the Greek Crisis in 2015, their governments limited ATM withdrawals to
$300 a day.

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3.6 "THE END OF THE GOLD STANDARD"
The international monetary system actually collapsed three times in in the 20th century in 1914, 1939 and
1971 and almost collapsed in the financial crises of 1998 and 2008 and could happen again if confidence in
the U.S. dollar suddenly occurs. Whenever this happens, the world continues while countries meet together
to negotiate a "New Set of Rules", like in Genoa in 1922 and at Bretton Woods, NH in 1944. In 1971, the
U.S. suspended the convertibility of dollars for gold to block French demands. The dollar price of gold
went from $35 per ounce to $800 per ounce (I bought at $400/oz.). So, from 1870 to 1971, the international
monetary system used variations on the gold standard with interruptions for wars. In reality, gold never
went away at this level, which is why the United States holds more than 8,000 tons; both Germany and IMF
each keep about 3,000 tons each and England shipped its gold hoard to Canada in 1940 when Hitler
threatened to invade.

It is likely that China is the third largest holder of gold today but secrecy is paramount as it continues to
mine its own mineral and buys secretly whenever the price drops on physical delivery. Their official gold
reserves were reported on July 15, 2015 as 1,660 tons but Rickards suspects it is at least 4,000 tons.
Rickards suspects that China is building a negotiating position after the next collapse but I suspect that
China will attack the U.S. dollar by announcing a gold-backed Chinese international currency.
4 GOLD IS INSURANCE
4.1 A COMPLEX WORLD
Rickards is a new convert to Complexity Theory, whereas regular economists still see the world's economy
as in Equilibrium where all changes are small and easily managed. In a complex system there are many
non-linear feedback loops that produce completely unexpected outcomes. Worse, Rickards sees the U.S.
banks as never addressing the issues raised by the 2008 crisis with the biggest banks relying more and more
on huge bets known as 'derivatives'. He also reminds us of 1987, when the stock market fell 22 percent in
one day that is equivalent to the Dow Index dropping 4,000 points today. Since risks increase with scale,
Rickards believes that the Big Banks should be broken into many smaller companies while their executives
only focus on old-style "economies of scale". Historically, the U.S. financial sector contributed about 5%
of GDP, while by 2008 it had reached an astronomical 17% as it extracts wealth from other sectors of the
economy using inside information and government subsidies.
4.2 THE ROLE OF THE FEDERAL RESERVE
Rickards remarks that the Federal Reserve is one of the least understood major institutions in U.S. society.
The Federal Reserve was created in 1913 and is privately owned at the 12 regional centers in New York,
Boston, Philadelphia, San Francisco, Dallas and other cities. The entire system resides in the Board of
Governors, appointed by the president and confirmed by the Senate. The Fed operates through an Open-
Market system, based in New york, buying/selling Treasury securities from a network of banks called
'primary dealers'. The New York Fed sells short-term notes that moves interest rates upwards. When it
buys these notes, it creates the money to pay for them out of thin air; conversely, selling notes takes cash
from the primary dealer. The challenge is to control longer-term interest rates as dealers think of a ten-year
note as a series of ten one-year forward rates.
4.3 INTEREST RATES : NOMINAL and REAL
The heart of the problem is the real economy where prices can increase overall (called Inflation) or
decrease (known as Deflation). So, whenever any transaction involves interest, the rate being agreed to is
actually only a nominal rate. In actuality, long-term players react to real interest rates which are just the
nominal rate minus inflation or plus deflation. Gold players use the Real-rate of return to evaluate the true
opportunity cost of owning gold. The reality is that the Fed wants investors to borrow money to grow the
economy, so the Fed uses many tools to produce inflation.

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4.4 INFLATION and DEFLATION
4.4.1 INFLATION
Inflation is relatively easy to detect as most people soon notice that many prices are now higher than a few
weeks ago. Sophisticated speculators then start buying housing, gold and other inflation 'hedges'.
Inflation is facilitated by central bank policy through money printing.
4.4.2 DEFLATION
Deflation is much less intuitive since its deadly effects arose in the 1930s; few today have direct memories.
Rickards believes that deflation is driven by demographics (too many people), technology(displacing
labor), debt (especially credit cards) and deleveraging. The real value of debt goes up in deflation, so
governments (the largest debtors) find it harder to pay down as tax collections decrease. It also pays to
defer purchases that decreases demand in the short run, causing further price declines. The governments do
whatever to avoid it. In North America, deflation was the natural consequence of the debt binge that home
buyers and credit card shoppers went on between 2002 and 2007.
4.4.3 A DELICATE BALANCE
In fact, price indices have only changed about 1% per year (if one believes in government statisticians) as
the forces of inflation and deflation are pushing against each other, almost canceling each other out. So, in
addition to fighting deflation, the Federal Reserve must cause inflation to prevent the U.S. going broke. In
2014, the national debt was more than $18 trillion but does not have to be paid off in full (to the delight of
the debt holders); it is stable if the economy generates enough tax revenue to roll over the due debt and can
pay the interest. This only involves only 'nominal' growth which is real growth plus inflation. Real growth
is becoming harder but printing money is easy: only savers and retirees suffer. Rickards claims that the
dollar price of gold goes up in either scenario because it is real money. However, he believes that inflation
is going to win because the Fed's tolerance for deflation is so low as its consequences are so devastating.
The other giant negative for ordinary folk is that the cost of homes keeps climbing out of reach.
4.4.4 INSURANCE AGAINST INFLATION AND DEFLATION
Gold 'investors' were dismayed in 2014 because gold's dollar price declined, despite multiple financial and
geopolitical crises in Greece, Ukraine and Syria as well as a stock market crash in China. Rather than not
going upward, Rickards points out that it did not drop as much as other real assets, like oil that fell over
70% in the next 20 months. In a highly deflationary environment, the price of other commodities and
goods will probably fall faster than gold, so it important to observe the context, not simply the dollar price
of gold alone, so owners of gold will still preserve wealth when measured in real terms. Moreover, in such
times, the Fed can instantly create inflation by simply fixing the dollar price of gold at a much higher level
when all other prices will quickly adjust to this new higher gold price. This is what the United States did
in 1933 and what the United Kingdom did in 1931 when both countries devalued their currencies against
gold. In 1933, the U.S. government forced the price of gold from $20 to $35 per ounce. This caused price
increases in cotton, oil, steel, wheat and other commodities: an end to deadly deflation. It is always easier
to devalue a currency relative to gold rather than another nation's currency that can also be devalued. Gold
is the best form of insurance because it is one of the few asset classes that perform well in both inflation
and deflation.
5 GOLD IS CONSTANT
5.1 THE PRICE OF GOLD
Rickards recommends that it is better to view gold as the complement of dollars, so one should not say that
the price of gold went "up" or "down" - rather, it is the currencies are fluctuating with gold as a constant
unit of measure by thinking of "gold as money", thus, one needs to view one's gold holdings in absolute
terms: by weight - so many ounces of gold. Indeed, Rickards recommends that most people should aim for
a gold holding of about 10% of their liquid assets.

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5.2 PAPER and PHYSICAL GOLD MARKETS
There are two somewhat connected gold markets: one where traders must exchange real ounces of gold (the
Physical market) and the much larger (perhaps 100 times), Paper market that trades in paper contracts
where there is rarely real gold exchanged. This paper market consists of COMEX futures, exchange traded
funds (ETFs), gold swaps and leases; i.e. derivatives based on the prices of real gold. COMEX is a division
of the Chicago Mercantile Exchange; it is the largest market for futures and options trading of metals,
including gold. The leveraged paper system works quite well as long as price action is 'orderly' but this
might change quickly. The problem is that more buyers are insisting on physical delivery as are more
foreign central banks, such as Germany, Venezuela and, of course, China.

Large buyers of physical gold have to increasingly deal directly with gold refineries, where demand is so
high that there is a 2 month backlog. Major rivals to the U.S.A. (like China, Russia and Iran) are stock-
piling physical gold as quickly as they can while disguising many of their purchases through several
intermediaries. In 2015, China was estimated to hold 2,000 tons of gold, while Russia holds about 1,500
tons. Meanwhile both countries are actively mining and holding their own gold.
5.3 MANIPULATING THE PRICE OF GOLD
Rickards interprets any large drop in the gold price, in the absence of relevant news, as a manipulation of
the gold market. This actually happened in London in the 1960s and the U.S. / IMF gold dumping in the
late 1970s. He claims that manipulation really kicks in when gold is strong and threatens to shoot up, as in
2011 when gold's price approached $2,000 per ounce. This also happened in the 1970s after Nixon went
off the gold standard; that decade began with gold at $35 per ounce but by 1980, it had reached $800 per
ounce even though the U.S. / IMF dumped more than 1,700 tons of physical gold (about 5% of the world's
official gold holdings). The U.K. dumped 2/3 of the country's gold in 1999. This led to Paper
manipulations where 'friendly' banks placed a massive sell order just before market closing (on Friday)
scaring sellers to dramatically lower their bid price that gets reported as the 'price' of gold, discouraging
buyers and hurting sentiment. The gold in Fort Knox or at the Federal Reserve Bank of New York or
COMEX may be leased or leveraged. All these activities imply that more and more gold trading is resting
on less and less physical gold.

The LBMA banks [see $3.4] play the arbitrage game while more and more Hedge Funds play their own
game betting on short-time price moves. However, the two largest players who agree on suppressing gold
prices are the United States and China but for different reasons. China wants to buy gold at a lower cost
but the Fed wants a cheaper dollar so as to raise the cost of imports that helps in meeting inflation targets.
Now China owns several trillion dollars worth of U.S. Treasury notes and wants to sell them before their
value disappears. Rickards believes that China is not buying gold to launch a gold-backed currency; I
strongly disagree: it's in the interest of every rival of the U.S.A. to break America's monopoly as the world's
reserve currency.
6 GOLD IS RESILIENT
6.1 CYBER-FINANCIAL WARS
In 2014, Bloomberg Businessweek printed a story of their investigation into the event in August, 2013 when
the NASDAQ was shut down for half a day without any explanation at the time. NASDAQ had discovered a
computer virus in their system that was traced to Russian cyber hackers, sponsored by their government.
Rickards explains that the U.S. government did not retaliate against the Moscow exchange, so as to avoid a
cyber war as the Stock Market is much bigger and more important to the U.S.A. Since Rickards does not
see this threat disappearing, he sees this as another reason to own gold because it is not digital and cannot
be hacked or erased.

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6.2 ABANDONING THE DOLLAR
Rickards is convinced that the U.S. government has abandoned its policy of a sound dollar since 2010.
This decision was made at the G20 Leaders Summit held in September 2009 in Pittsburgh to avoid the
collapse of the U.S. economy by using a cheap dollar strategy. This can be traced back to the 1970s, when
the U.S. and Saudi Arabia made their 'Petro-Dollar Deal' whereby all the oil sold by the Saudis would have
to be paid for in U.S. dollars; this ensured that the U.S. dollar would be the global reserve currency. In the
next 5 years, Russia increased its gold reserves by 100% while China increased its reserves by several
hundred percent. Deals are being made between Russia, China and Iran involving oil and Swiss Francs to
bypass US sanctions on Iranian oil sales. When confidence in the US dollar collapses (as Rickards expects)
then the international monetary system will go through some chaotic gyrations.

Rickards is convinced that a new international monetary system must have gold play a larger role than
today but he is paranoid that governments do not repeat the massive mistake in the 1920s when the wrong
price was chosen. He is convinced that gold today would have to be priced at between $10,000 and
$50,000 per ounce but he seriously expects at least $10,000 per ounce. He does avoid making a firm
prediction WHEN this might happen but expects it within the next ten years. He hopes for system using
gold-backed Special drawing Rights (SDRs) issued by International Monetary Fund (IMF) to provide an
escape path when the world hits its next liquidity crisis. Only gold will provide insurance against the
destruction of real value of dollar-denominated assets, although only a tiny number of experts understand
SDRs.
6.2.1 BAIL-INS
Rickards warns the naive readers about the threat of 'Bail-Ins', where bank depositors do not get all their
money back in the event of a bank failure or economic crisis. Smaller deposits may be insured but larger
amounts will be converted into bank equity (without consent); the fate also of a bank's debt holders and
bondholders. The motivation for this widespread dramatic action is the 'Bail-Out' the few bank owners and
executives. Few know that this has been federal law since 1934 when the Federal Deposit Insurance
Corporation (FDIC) was established. This dramatic action was not taken in the 1980s when many Savings
and Loans were closed; probably because most of these were owned by 'shady' individuals who ended up in
jail for financial fraud. The latest example of this "legal theft" occurred in the financial crises in Cyprus in
2013 and Greece in 2015. This technique was agreed to internationally as the preferred Crisis Response at
the G20 Leaders' summit in Brisbane in 2014. Rickards reminds readers that in the minds of government
officials, the continuity of government power always comes first and the individual takes a backseat; the
present global Covid-19 crisis should be a sharp reminder of this preference.
6.2.2 WAR ON CASH
I agree with Rickards' fears that modern governments are planning to totally abolish the legal use of cash in
the economy so as to increase their control over the citizens as digital transactions can now be tracked at all
times, everywhere and one's digital bank (or credit card) accounts can be instantly frozen. Many people
have been seduced by the "convenience" of digital money; the Covid-Crisis will also be invoked to abolish
"filthy money" that can carry invisible viruses. Instead of paying interest on accounts, there could easily be
enhanced fees but called 'negative' interest rates. The 'War on Cash' was launched ostensibly to pursue drug
dealers and terrorists who use cash to enhance their anonymity so 99% of the population are being treated
like 'Bad Guys' who are probably less than 1% of the total numbers. The irony is that the only way to get
around these draconian restrictions is to act "illegally" - regressing to the Black Market, perhaps using
coins of real value. Even today in America where cash is still legal, there are already tracking mechanisms
in place where any bank activity (deposit or withdrawal) over $10,000 will automatically generate a
Currency Transaction Report (CTR).

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7 HOW TO ACQUIRE GOLD
7.1 HOW TO ACQUIRE GOLD
Rickards is obviously addressing wealthy investors when he discusses this topic as he spends much time
discussing where one can secure several one-kilo gold bars. As I doubt few readers of this essay are
wealthy enough to have this problem, while the lucky few will already have many informed financial
advisers, I will skip this part of his book.

I will simply share my own limited experience. I have been buying Canadian Maple Leaf coins that are
legal currency in Canada and can be bought and sold at Canadian banks as well as tradable at many coin
exchanges around the world. Each coin contains exactly one troy ounce (31.10 grams) of 99.99% pure
gold minted by the Royal Canadian Mint and has a (nominal) face value of $50 Canadian; it is the purest
gold coin in existence. One can store these in a private safe or (secretly) in a bank safe deposit box. The
price varies with the spot price of gold on the London Markets. I bought several in 1999 anticipating the
Y2K crisis, I remember the price of gold was about $400 per ounce while today (2020) it is closer to
$2000. Even at this price, i recommend those who can afford the insurance to buy a few as soon they will
be unavailable while the coins could easily reach Rickards' estimate of $10,000 US.
7.2 GOLD MINING STOCKS
RR only dedicates 3 pages to owning gold mining shares because he admits he is a "bullion nut", never ever
developing the expertise to buy tradable shares in the gold mining companies themselves. I can understand
his reluctance as this is one of the most speculative and high-risk sections of the Equity markets. However,
I too avoid the Stock Market, being too small a player to compete with the professionals and insiders.
However, Canada (like several countries) encourages tax-deferred Retirement Investing schemes, so I have
all mine in tradable Precious Metals Mutual Funds, who have experts who do check out the mining
companies. I have been with two such companies now for over 30 years and they have been very good to
me as gold prices continue to climb. I personally recommend readers to check out this option as their cash
flows are based on real tangible assets, not leveraged derivatives that might evaporate overnight.
8 BOOK'S CONCLUSIONS
Between 2013 and 2016, gold traded down four times to the range $1,050 and $1,150 per ounce but every
time it bounced back. RR is paranoid about the concentration of the U.S. banking industry: the five largest
today are larger than in 2008, when they nearly collapsed. Their derivative holdings are bigger than ever
with cross-bets being made between each other. They are NOT "too big to fail" next time; the public will
not accept a similar bail-out as in 2008. This was discussed in section 4.1. Panic can spread through every
community, no matter what their level of education; I agree with RR' advice to buy some gold now while
you can: do not wait for the next crisis to begin - it will be too late.
9 REVIEW RECOMMENDATIONS
This book cannot really be recommended, although its own recommendations and predictions can be. The
major problem here is the origin of the book itself that began as a series of online audio interviews with the
author by the Physical Gold Fund, who also sponsored this book, according to the acknowledgments at the
end of the book. These interviews were then transcribed, edited, rewritten and finalized into the book.
This admission explains the repetition and incoherence of this 170 page book.

Since I admit myself to being something of an amateur "Gold Bug" (at least when I could afford it 25 years
ago) I thought the information was worth sharing with the reader today. This is why it was suitable to end
with an appropriate cartoon of Mitch McConnell the Republican Leader in the U.S. Senate who probably
agrees with the idea that gold is just as important today as it always has been.

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