Jim Rickards: The US Dollar Is a Shadow Gold Currency – The New Case for Gold

Get ready to dispose of your preconceived notions regarding the Federal Reserve and its take on gold! Is it possible that the Fed wants a higher gold price after all? That is what Jim Rickards reveals in this riveting interview with Palisade Radio.

Upon quick review, the Federal Reserve today looks like a really bad hedge fund with leverage of roughly 100:1. However, Jim made a discovery in the Fed’s balance sheet, revealing a treasure trove of gold at Fort Knox and West Point worth a staggering $300,000,000,000!

Adding $300 Billion to the Fed’s capital account reduces Fed leverage from 100-to-1 to a much more respectable 12-to-1, the capital ratio for most well-capitalized banks. This hidden asset is more than enough to absorb the mark-to-market losses on the bond portfolio when they arise.

“Countries around the world are acquiring gold at an accelerated rate in order to diversify their reserve positions. This trend, combined with the huge reserves held by the United States, the Eurozone, and the IMF, amounts to a shadow gold standard!” – The New Case for Gold

The historical changes of the way gold was used in banking led to the formation of the gold deposits at Fort Knox. Unlike many today, Jim Rickards believes the gold is indeed in Fort Knox but has not been audited to avoid drawing attention to it and to downplay its role. There is no proof of its absence.

China is probably suppressing the gold price through the COMEX market in order to build up more physical supplies itself. Once they have a sufficient supply, equal to the United States, they will no longer care what the price is and the price is likely to skyrocket after the expected reset of the international monetary system.

There are extreme physical shortages of gold. All the elements to cause a bull run are in place. Jim even talks about gold stocks, an area he believes is set to outperform and in a big way!

“The confidence of the entire global system of finance rests on the U.S. dollar. Confidence in the dollar rests on the solvency of the Fed’s balance sheet. And that solvency rests on a thin sliver of… gold. This is not a fact anyone at the Fed wants to acknowledge or discuss.” – The New Case for Gold

Talking points from this week’s interview:
• Jim Rickards’ book: The New Case for Gold
• How the dollar is indeed a shadow gold currency?
• Breakdown of the world’s 35,000 tonnes of official above ground gold
• Why Fort Knox should be audited and why the gold will all be there!
• All gold price suppression schemes have failed throughout history


James G. Rickards is the editor of Strategic Intelligence, the newest newsletter from Agora Financial. He is an American lawyer, economist, and investment banker with 35 years of experience working in capital markets on Wall Street. He is the author of The New York Times bestsellers Currency Wars and The Death of Money. Jim also serves as Chief Economist for West Shore Group.