Today we held an expert call for our Hedgeye Risk Manager and Macro vertical subscribers with CEO Keith McCullough and currency expert, lawyer and investment banker Jim Rickards. We live tweeted the call so that everyone could get insight into what Rickards’ thoughts are on the global currency wars, the US dollar, reverting back to the gold standard and monetary policy in the US and Europe.
Below are some of the highlights we think best represent the call and the ideas behind it. You can check the @Hedgeye Twitter account for a full play by play.
-John Taylor, Bob Barbera would make excellent replacements for Federal Reserve Board of Governors.
-In a crisis, there's not a central bank that wants gold. If you get CHAOS, countries may have to go to gold standard.
-Regarding the Eurozone crisis: you don't need to diffuse debt of Italy, etc. you just need to take care of enough to reinstate confidence in the markets.
-China is dying to diversify away from dollars and is looking at Euros. Once Europe has act together, China will invest heavily.
-50-year-old Greeks will throw Molotov cocktails rather than take pay cuts. 25-year-old Greeks will take entry level jobs with pleasure as they just want to work and have a different set of future incentives laid out for them.
-The Euro is getting stronger and stronger. Those thinking of par? No country is leaving the Eurozone; new members will be added.
-If GDP growth expectations are at 2% but we really want 4%, delivering something like 3% looks really good psychologically. So when the Fed says it expects 2% GDP growth, it really wants something more like 4% in order to manage expectations.
-Net exports are the key to getting out of this mess. Double exports in 5 years, we have a 1-1.5% increase in GDP which is decent.