Right now, central bankers around the world are fighting currency wars.
They’re waging war in all major financial centres at once — from New York, to Moscow, from Beijing to Sydney.
Bankers, traders, politicians and automated systems are fighting these currency wars 24 hours a day. This titanic battle will have a deep impact on your savings…your investments…and your family’s livelihood.
Make no mistake, the fate of the Aussie economy, prospects for Aussie companies and the value of your investments all hang in the balance.
That’s why — with Wall Street insider and currency guru Jim Rickards by my side — I’ve spent this week trying to sound the alarm for readers like you.
I’ll admit that Jim has painted a dire scenario in his e-letters to you this week. But we haven’t yet told you about the possible upside to these wars…
I’ve worked with some of the best-connected stock market operators from Australia to Europe.
I’ve witnessed financial wizardry first-hand on the trading floors of New York.
But when it comes to market influence and the ability to provide actionable advice to investors…Jim Rickards shades them all.
Jim understands the value of money better than anyone I’ve met. He’s a trusted advisor to senior financial officials around the world. He’s a man to whom gatekeepers open their doors.
Here Jim is holding a 400-ounce solid gold bar inside a secure vault near Lugano, Switzerland:
The custodians of bars of this kind are melting them down and re-refining them for shipment to China. The bar in this photo above is 99.90% pure, but the Chinese prefer a smaller 1-kilo bar — about 35 ounces — that is 99.99% pure.
What could make the Chinese value highly pure and concealable gold? The answer will reveal to you how the key belligerents will fight the next leg of the currency wars…
As Jim explains, the IMF runs a list of official reserve currencies based on whether they are freely available and widely used. Every five years, the IMF updates its list.
Right now, the list consists of US dollars, Aussie dollars, euros, yen, pounds sterling, Swiss francs and Canadian dollars.
China and the IMF are in talks to include the Chinese yuan as the next reserve currency.
This will likely happen in September, and it may cause a severe weakening of the US dollar in the years ahead. A weaker dollar could bring more inflation to the US. This is an important development that you should watch.
At the same time, growth is slowing down dramatically in China. In the past, China’s remedy for this was to cheapen the yuan to increase exports and create export-related jobs. But that hasn’t happened this time.
Instead, China has kept the yuan pegged to the US dollar at roughly a fixed rate. The Chinese are also accumulating gold.
As Jim will show you, the US wants a low gold price as China buys…because it needs China ‘in the game’.
But this situation is unstable…and it could see the gold price soar.
The Chinese, for their part, are trying to gain favour with the IMF so the yuan can be included in the IMF’s world money basket — what it calls the ‘special drawing right’, or SDR.
Most pundits, bloggers and journos in the financial mainstream don’t properly understand how these themes fit together. But with Jim Rickards in your corner, you’ll see that complex systems can be simplified…and if you react at the right time when alarm bells ring, you can set yourself up to profit.
Read on to see why most commentators are dead wrong about what the Chinese are up to…
Editor, Markets and Money