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As interest rates turn negative, gold becomes the high-yield asset, Rickards says

Section: Daily Dispatches

3:58p ICT Wednesday, March 30, 2016

Dear Friend of GATA and Gold:

Wall Street for Main Street's Jason Burack gets some interesting observations out of financial writer and geopolitical strategist James G. Rickards in an interview posted this week. Among other things, Rickards remarks:

-- As interest rates increasingly become negative, gold becomes the high-yield asset even as it may pay no interest at all.

-- Governments can't reliably dump U.S. government debt instruments to protect themselves against dollar devaluation, since the president can freeze any threatening financial transaction, none more easily than government bond transactions. But governments can hedge their dollar exposure by buying gold, and many indeed are doing so.

-- A major Swiss gold refinery can't keep up with orders, especially from China.

-- China's government wants a lower gold price at the moment because the government is still pursuing acquiring at least another 3,000 tonnes, so the Shanghai Gold Exchange is not likely to be permitted to boost the gold price for a while.

-- The gold price "has been manipulated for over a hundred years" by governments, but investors should buy the monetary metal anyway because "all the manipulations ultimately fail." But do the manipulations necessarily fail within the lifespans of all gold investors? Burack didn't ask and Rickards didn't say.

The interview is 38 minutes long and can be heard at YouTube here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


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