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Tangent Capital Senior Managing Director James Rickards on the impact on the U.S. of Europe’s economic woes.
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And a record says if that happens where are gonna feel a lot of the follow up -- -- estimated to break it if we can avoid.
Yeah I think your first -- other fewer falls apart we're gonna suffer the consequences.
That's absolutely correct there's no worry that that just to -- and we don't we're not a flight to quality haven where the dollar might do well dollar -- of flight to quality but our stock market or banks -- financial sector of -- -- the idea that the reason -- wind will be visiting the inner connectedness -- they're exposed to correct and the Fed is propping -- Europe today the -- the European banks have dollar liabilities ECB cannot print dollars it can only print euros to -- those banks skipped the dollars number of European central European Central Bank.
They get the dollars in the Fed ECB the European central bank and fed have this dollar Euro swap going -- So -- -- -- the oxygen supply here were already provided on the liquidity.
But people we've -- in the -- went well they will what they really mean our couple things that -- rate cuts.
And they need a little bit of inflation in Germany and -- -- kind -- anathema to the -- has been very recently the good news is.
The Germans have been understood embraced the idea that they -- -- little inflation.
What they're saying is we need to measure inflation -- the European wide basis so Spain is negative two or three Germany can be positive three or four.
And the average comes out around one that's okay that's pretty had pushed up against you think this is.
I'm beyond an academic argument that part of -- -- -- part of that the changeover in administrations in France and the inability of parties to coalesce again and he's supporting Greece.
It's just a populist way that that people are getting sick of -- the -- are getting sick of compromising and having to keep giving stuff up even though.
In the skew things that they're not.
You just give -- and and Germans themselves are saying.
-- -- -- -- -- There's some of that look I'm pretty positive and Europe in the Euro.
Well we have a rough three weeks or thinks I think US stocks will be higher in November than they are now but they could be lower three weeks from now.
Sentinel president and don't -- -- -- -- we're gonna have to a rough couple weeks -- because the Greek election.
In the Greeks -- who do -- with the elections that they have settled over the last election.
And stepped up to the austerity plan ECB could cut rates in Europe would be on the mend right now that didn't happen because the inconclusive elections.
They're gonna do a do over in the middle of June.
Then -- step up than these should be he cut rates -- that means three weeks between now in the middle of June we're gonna have this kind of volatility but beyond that you can ECB easing.
Probably some more fed easing.
It's good for stocks are visit Kennedy's angers me pretty when interest rates can't get any money out -- -- -- whether there's of this print money that's exactly quantitative easing QE3 would everywhere so that that that's already happening if you.
Well they've done two rounds and then they did Operation Twist to -- protectively right now the Fed is not.
Expanding the money supply than on these and nobody could -- -- intellectual foundation Jenny -- has speech couple weeks ago.
Made the case.
For hockey is getting a few more of us probably in the market -- I would look for that kind of maybe now on the August -- -- behind the scenes they're doing -- to prop this ridiculous Europe sure -- the united vote a certain expression get -- -- big bazooka well there's a bazooka -- bigger than these two -- bigger than fed.
Which is the IMF they can for this world money these special drawing rights SDRs -- sounds technical but.
Just think of as the IMF -- -- praying for our state just putting more expensive candidates on the same gaping wound.
They are but they can have a lot of band days I guess every time we've done and it's been months later we're back to the same problem no I don't think it's healthy -- -- -- the right Evans does an analyst in China it's what I understandably doesn't have to spiraling gigabyte.
But what they're hoping is that they can temporarily get buys you say.
Until the economy gets on the self sustaining path that never happened was not going to happen because we haven't so we keep -- we keep down a bit -- memory.
What you think what I think we have to go lower or not he thinks he think he's got a model -- -- said that says if you print enough money you get results I disagree but that's what chairman story.
James was we shall see who is could sing thank you very very much currency -- the making of the next.
Global crisis is that meanwhile.
