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TIP514: Permanent Supply Chain Disruptions That Will Sink the Economy w/ Jim Rickards

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Jan 13, 2023

Jim Rickards, a renowned author and expert on financial markets and geopolitics, shares insights on the faltering global economy. He discusses the tug of war between inflation and deflation and how the Federal Reserve's strategies may not suffice in combating supply chain disruptions. The conversation explores the declining influence of China, the evolution of supply chains, and the urgent need for sound monetary principles. Rickards also emphasizes the protective role of gold and the need for companies to adapt to new geopolitical realities.

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INSIGHT

Supply-Side Inflation and the Fed's Dilemma

Inflation currently stems from supply-side issues like energy shortages and geopolitical events.
The Fed's interest rate hikes aim to curb demand, but this approach may trigger a severe recession to control supply-driven inflation.

INSIGHT

The Fed's Fear of Deflation

Deflation increases the real value of debt, making cash a potentially high-performing asset.
The Fed fears deflation because it limits their control, making QE and negative interest rates ineffective.

ADVICE

Protecting Investments from Inflation

Inflation significantly erodes purchasing power over time, even at seemingly low rates.
Consider assets like gold that historically retain value during inflationary and deflationary periods.

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Currency Wars

The Making of the Next Global Crisis

James Rickards

In 'Currency Wars: The Making of the Next Global Crisis', James Rickards explores the history and potential impact of currency manipulation, highlighting the dangers of financial warfare and the need for a new global monetary order. He argues that competitive currency devaluations, such as those seen in the U.S. and China, could lead to economic instability and disaster. Rickards proposes solutions like a return to a gold standard or the use of IMF's Special Drawing Rights as a global reserve currency.

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