Jim Rickards continues:

“By the way the European Central Bank will start printing as soon as they see deflation, which we can expect in the first quarter based on the fact that Europe seems to be slipping back into a recession.  So with printing from the ECB, printing from the Fed, printing from the IMF, the Treasury shorting the dollar and the currency wars in full swing, how can this mean anything other than the price of gold going up a lot.

So it looks like we are going to get flooded with dollars.  One other thing I would add to that, which I think is extremely bullish for the price of gold, I’ve been talking about QE3, but there is something even more insidious than that which we may see.  It’s called NGDP targeting. 

NGDP stands for Notional Gross Domestic Product.  Targeting just means that the Fed is going to pick a target for growth in NGDP and then print as much as it takes to hit that target.

Now notional GDP is not the same as real GDP.  In other words, notional GDP is real GDP plus inflation.  If the Fed targets NGDP, what they are really saying is they don’t care about inflation anymore, they’ve given up.  I’ve said all along the Fed wants inflation and this is a way of getting it.  It’s also a way of destroying the debt by cheapening the dollar.

...Targeting notional GDP, it’s just a fancy way of saying printing or QE forever.  I’m using the phrase QE3 to mean more printing, but I actually think what the Fed is going to do is target NGDP.... 

Continue reading the Jim Rickards interview below...


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“That means no limits, no time limit, no quantity limit, just a target.  And since real growth is not great, the target is going to be mostly comprised of inflation.  That’s going to send the price of gold to the moon.” 

In part I of Rickards blockbuster KWN interview he let King World News listeners globally know what would trigger QE3: “I was one of the ones going back to March of 2011 saying that QE3 was not coming in the summer.  When QE2 was over in June, a lot of voices were saying things are desperate, the Fed’s got to print, they’ve got to monetize the debt and you are going to see QE3.  I said no you are not going to see it and that turned out to be the case. 

But here we are six months later and what I’ve said is that the key to QE3 is not economic conditions in the United States, it’s the cross rates.  Look at the euro/dollar cross rate and look at the Chinese Yuan cross rate and that’s your green light (for QE3).

It’s a little bit of an estimate, but to me the key level is 1.30 (on the euro).  With the euro 1.30 or higher, that is going to accomplish the Fed’s purpose of a cheap dollar, so we will not see QE3.

But now that the euro has breached 1.30 and if you see it at that level or going lower, 1.28, 1.27, trading in there, then you are going to see QE3.  That’s going to cheapen the dollar and get the euro back up again.  So, yes, it (the euro) has traded down, but I view that as a temporary phenomena and something that is going to be a trigger for QE3 from the Fed.

As for Europe, they will get this done over the next couple of months.  There has been a lot of talk asking why doesn’t the ECB monetize the debt?  That’s not their job, but they will print money when the time comes.  The signal for that is deflation.  You’ve got to see deflation in Europe in the price indices and that’s the signal for the ECB to print.”

In part II of his King World News interview, Rickards has more to say about exactly what the central planners are up to and how it will impact the gold market as well as global markets.  Part II of the KWN Jim Rickards interview is available now and you can listen to it by CLICKING HERE. 

Jim Rickards’ new book Currency Wars: The Making of the Next Global Crisis has just officially launched and has made the New York Times Best Seller list for the second week in a row!  Make sure to order your copy today! 

James Rickards is a Senior Managing Director of

Tangent Capital in New York and the author of

“Currency Wars: The Making of the Next Global Crisis”

Penguin/Portfolio Nov., 2011, to order CLICK HERE.

© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.

Eric King

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© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast,

rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.

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