03/22/15: The Death of Money – A Conversation with Jim Rickards

Think about the role money has in your daily life…

As real estate investors, we buy, rent, sell and refinance…all to acquire dollars…which is currently the money de jour.  And because, since 1944 the dollar has served as the world’s reserve currency, the health of the dollar affects virtually everyone…everywhere.James Rickards is on the record saying that currency wars have already begun

Lately, we’ve seen a lot of headlines proclaiming the “strength” of the dollar.  Some say it’s good.  Others say it’s bad.

But what happens if the dollar gets “sick”?  Or worse, if it dies?

Could that happen?  How?  Why?  And what does it mean to investors…real estate and otherwise?

In this episode, we’re excited to talk with a guy who’s hugely qualified to have an opinion on the subject of the relative health and future of the dollar.

So, in our radio reposing room undertaking the conversation for this edition of The Real Estate Guys™ radio show:

  • Your minister of monetary musing, host Robert Helms
  • The coroner of conversation, co-host Russell Gray
  • Best-selling author, former CIA advisor, lawyer, Wall Street veteran and a REALLY smart dude, James Rickards

If you’ve been paying ANY attention at all to alternative (i.e., not “mainstream media”) financial news sources, you’ve probably already heard of Jim Rickards.  We were going to include his bio, but we ran out of space on the server…so you can learn more here.

Rickards came to our attention through his two best-selling books, Currency Wars and The Death of Money…both of which have been on The Real Estate GuysRecommended Reading List since they first came out.

The message is straight forward…although understanding the mechanics underneath Rickards’ conclusions takes some study…

The U.S. dollar is vulnerable to being supplanted as the world’s reserve currency.  And while that has HUGE implications for everyone, it could be DEVASTATING for unprepared Americans.

That’s the BAD news.

The GOOD news is that there will be BIG OPPORTUNITIES for those who are paying attention and in a position to act decisively when the time comes.  We obviously want to be in THAT club!

Of course, if you’re a skeptic…and there’s nothing wrong with some healthy skepticism as long as you’re willing to do the research and go wherever it takes you…you might wonder why Rickards would share his strategic intelligence with anyone and everyone who will listen.

We wondered that too.

And the answer is really pretty simple….

Jim says the international monetary system has collapsed three times in the last 100 years.  Each collapse was followed by a period of civil unrest…and in some cases, war.

That’s not good for ANYONE…even guys eager to use insider knowledge to gain personal wealth.  So it’s in everyone’s enlightened self-interest to make sure as many people as possible are prepared for the possibility of a mega-shift in economic order.

So what does that look like?

Again…it’s pretty simple.  In fact, it’s so simple that many people won’t do it.

First, it’s important to understand the risks.  So listening to this broadcast and reading Jim’s books is a GREAT place to start.

When ALL your wealth is denominated in a single currency (like the dollar) and most of your liquidity is stored in banks or other institutions or instruments which expose you to “counter-party risk”, then you’re NOT well-prepared.

“Counter-party” risk simply means that your asset is simultaneously someone else’s liability.  In other words, you don’t actually possess the wealth…but merely a claim to it.  And if the person who owes you the wealth…the counter-party…fails to perform, you have nothing.

Just ask the depositors who lost huge chunks of their savings during the Cypress banking crisis in 2013.  They found out that “money in the bank” isn’t the same as money in your pocket (or safe).  In other words, having a claim to cash isn’t the same as having the cash.

So Rickards says it’s smart to have some of your wealth stored OUTSIDE of the banking system…and even outside of currency itself… in things like precious metals, art and real estate.

And as our friend Simon Black from Sovereign Man rhetorically asks, “How are you worse off by taking these precautions?

In short…you’re not.  In fact, it can be readily argued you’re MUCH better off.

However, it’s easy to get caught up in the fear, uncertainty and doubt about the future.  After all, the only thing certain about the future is that it’s uncertain.

So worrying about it to the point of paralysis is useless.  If you’re not going to do anything anyway, you might as well eat, drink and be merry.

BUT…

Every day of our lives we routinely take precautions against potentially catastrophic events…including wearing seat belts, looking both ways when crossing the street and (at least for some people) exercising and eating well to stave off illness.

However, when you’re in an unfamiliar environment where you might not be as readily aware of the risks…like on an airplane, in a factory tour, or on a firearms training range…you count on more experienced people for critical safety guidance.

As a financial insider, Jim Rickards is far more aware of the dangers lurking in the financial system than the man-on-main-street real estate investor.  And he’s saying there’s a high probability of stormy weather ahead.

Of course, it’s always up to you whether or not you care to heed the advice.  But step one is being aware of the potential danger.

So when it comes to your personal wealth…and all the efforts you put into building and protecting it…we think it makes sense to pay attention to a guy like Jim Rickards.  We are.

Because if Rickards is right and the dollar is truly vulnerable…or worse, actually under a current attack (and we think it’s EASY to make that argument simply based on the daily headlines)…then putting the effort into preparing yourself might just be one of the best investments you ever make.

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