James Rickards: The Next Financial Crash is Coming

Oct 27, 2019

James Rickards, a respected lawyer and economist with a rich background in finance and author of books on global crises, delves into the precarious state of the U.S. economy. He outlines the cyclical nature of financial downturns and the dangers that come with national debt and derivatives. Rickards warns about the potential of impending crises tied to subprime mortgages and critiques the allure of Bitcoin as a bubble. He emphasizes the timeless value of gold and discusses the shifting dynamics of U.S.-China relations and the IMF’s future role.

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ANECDOTE

LTCM Crisis

In 1998, Jim Rickards helped manage the Long-Term Capital Management hedge fund crisis.
The Fed organized a bailout due to LTCM's massive derivatives exposure, preventing a global market closure.

INSIGHT

Unlearned Lessons

Instead of learning from the 1998 crisis, the government worsened the situation leading up to 2008.
They repealed Glass-Steagall, increased derivative usage, and created conditions for another crash.

INSIGHT

Derivatives Magnified Crisis

The 2008 crisis was amplified by $6 trillion in derivatives tied to a $1 trillion subprime mortgage market.
These leveraged side bets significantly increased the crisis's impact beyond initial estimates.

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