Jim Rickards continues:

Bernanke made it crystal clear they were going to go to some kind of quantitative easing.  One of the reporters asked, ‘Do you worry that inflation may get out of control?’  The Chairman (Bernanke) responded, ‘We’re targeting 2% inflation.’  Of course, I don’t believe that.  My belief is they are targeting something like 4% or 5%.  

When they hit 4% or 5% and, in effect, (they will) spook people into spending money or getting into riskier assets.  They want to stampede people into lending and spending again to get the velocity up and get the economy going.  That’s the plan.  It’s a game of expectations, it’s a game of psychological manipulation.  One of the ways to do that is to set expectations low and then deliver a much higher inflation number.

So when the reporter asked him if inflation could get away from him, Bernanke said, ‘Yes.’  His exact words were, ‘Inflation may move away from desired levels.’  To me that was code for saying it will move away from desired levels.”

When asked about gold spiking on that news, Rickards stated, “Well, I think the impact is direct and it’s exactly why gold went up the last couple of days because the Fed said they are going to print more money.  So gold just took off.  You should expect gold to continue to rise because the full impact of what Bernanke said has not completely sunk in yet....

Continue reading the KWN Jim Rickards interview below...  


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“They (the Fed) really want to trash the dollar.  Contrary to what a lot of people think, the Fed wants gold to go higher.  They just want it to go up in a controlled way, they don’t want to see a super-spike.  We may get a super-spike anyway just because of panic buying.” 

When asked about India buying oil from Iran with gold, Rickards responded, “To the extent I’ve been surprised by anything in the world lately, it’s that things I could see coming are happening faster than anticipated.  Again, in the wargame in 2009, we contemplated these kind of scenarios.  We thought they would play out in 2013, 2014, but here they are, early 2012, playing out in earnest.  

For every action there is a reaction.  In other words the US likes to think we severely damaged Iran by forcing them out of the dollar system.  But Iran is saying, in effect, ‘Keep your dollars.  We have another payment system, it’s called gold.’  

There’s a lot of gold in India and they are willing to exchange that for oil.  You don’t need a banking system and you don’t need dollars.  So I think the US, by throwing its weight around, may find because they’ve weakened the dollar so badly that people don’t just stand there and take it.  So what happened this week was full scale financial war.  We’ve cut Iran out of the dollar system and caused hyperinflation in Iran and they’ve responded.

China is ready to jump into the same game.  They have a banking system and it connects to the Russian banking system and Russia has a fair amount of gold.  So there could be a whole network among Central Asian countries, China, Russia, India, Iran and others, who say the time has come leave the dollar system completely.

(These countries will say) Let’s get our own payment system going.  Let’s use our own trade currencies.  Let’s use gold as a foundation.  It’s exactly what I talked about in my book, but having forecasted all of this I am surprised to see it happening so quickly.  This could be the beginning of the end of the dollar.” 

This interview is Jim Rickards at his best.  He lets King World News listeners know exactly what the central planners are up to and how it will impact various markets, including gold.  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 launched and made the New York Times Best Seller list!  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 to order CLICK HERE.

© 2012 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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© 2012 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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