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James Rickards, “Currency Wars” author, on the Fed’s monetary policy and why he believes we are in a currency war today.
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Now James records he's managing director at tangent capital also the author of currency -- the making.
Of the next the global crisis James welcome thank you how close are we to a currency war all are we in the middle one.
We're actually in the middle -- I would say -- you're there is a another warning shot from.
We're not tango the other day -- he yes there's two years ago -- we're really began in 2010 January 2010.
When President Obama announced the national export initiative in the State of the Union Address he said the US is gonna double exports in five years.
While that sounds find out how you gonna do a unit we're not gonna get -- -- Smart they're gonna be twice as many of us the only way to double exports in five years is to trash your currency and that's with -- treasury and the Fed.
Have been doing we're trying to do for the last three years the problem with as the -- succeeding very well because there are -- to trash a currency by quantitative easing.
Have been offset by the flight to quality because -- of the euros like my this -- the -- answers if it for shall succeed try.
They're trying how that's probably have more QE and also other countries who responded by doing the same track so that also takes away.
Be the impact.
But that's doesn't mean question the other day and some decisions -- -- -- sewers and said you know everyone loses that's the problem with -- who is there it's like a ping pong match is back and forth and back and forth.
But at the end of the day not everyone can devalue against everyone else which you end up with -- -- contraction a world trade which was so I'm thirty -- Russian.
Or inflation which we saw -- the seventies it could go either way.
-- cannot heed to -- -- the chances so far inflation is under control.
But it could take off quickly correct although it was inflation's under control -- and rewrite has been pretty well behaved but -- -- deflationary forces from the depression.
Inflationary forces from policy so it's a little bit like standing on the San Andreas Fault if let's -- -- -- shaking so good as how good it's gonna break one or the other I expect inflation.
So okay.
Switzerland China Brazil old pushing back -- how do they do that by devaluing their own currency.
-- graduation doing what he has to valuing your own currencies the goal -- the questions how do you do a betting rates is once you have -- encompass some of these countries have deserved down right of Brazil's -- zone has been buying up the precise listens and buying up the Euro shorting their own currency.
Brazil's been imposing capital controls and put my -- -- -- you can't get elaborate way.
To the right way to fight that -- sewers is well Australia is doing which is to embrace a strong currency and do things such as issue infrastructure bonds.
That I sort of capital inflows and the other thing you've got -- -- parents who are frustrated.
You should buy gold as a great opportunity when -- we -- the strong currency by gold.
Is ironic that the US is being accusing me Chinese of devaluing the yuan for years now but they're doing.
The same thing the ever all countries manipulate their currencies it's just a policy tools like interest ratio -- -- the US is the greatest currency manipulator in the world where the best.
At the very quick annual bullish on the Europe.
Yes mainly because a lot of Chinese capital's waiting to come into Europe they want to Europe to get their act together which they now have.
-- in China desperately wants to get out of dollars into euros of that capital command and bolster the -- remember.
People say you ought to do devalue the Euro -- you can have a cheap dollar and cheap here that's right that's the problem don't have both thank you so much for being here really appreciate it thanks very interesting stuff.
Currency walls it's going on right now and we're the king of the currency yes later England and a plan to quite settled and.
