Full transcript: James Rickards on London Real
0:00 Brian Rose: This is London Real. I am Brian Rose. My guest today is Jim Rickards, the American lawyer and investment banker turned economist, thought leader and author. You have over 35 years of experience working in capital markets on Wall Street while also acting as an adviser to the CIA and the Pentagon. You are a New York Times bestselling author, and your soon-to-be-released book, MoneyGPT: AI and the Threat to the Global Economy, looks at the danger AI poses to our national security and the global financial order.
You are also known as the man who predicted the biggest financial crash in American history, and right now you believe that a second crisis in the banking system could happen at any moment. You have also said that we are in the early stages of World War III, which could become nuclear if the Western superpowers continue to provoke Vladimir Putin and escalate the war in Ukraine. Jim, welcome back to London Real.
Jim Rickards: Thank you, Brian. It’s great to be with you.
Brian Rose: Jim, great to have you here. I know that you have gone pretty deep on this World War III scenario. You’ve gone deep and game-planned out a lot of the nuclear issues. I’m wondering what you see that other people don’t see. From what I’ve heard, the way you describe it, we don’t know until it’s too late, and until then no one really takes it seriously, until you can’t walk it back. I’m curious what you see that maybe other people don’t see as this threat seems to be escalating.
4:01 Jim Rickards: Well, that’s a really good synopsis, Brian. What I see are things that people did see in the 1950s and the early 1960s. But somewhere along the way, with the end of the Cold War, a long period of prosperity in the 1990s, the collapse of the Soviet Union and the liberation of Eastern Europe, all that knowledge, not just folklore but highly technical knowledge about nuclear war fighting, got lost. Everyone just said, well, this is not going to happen, or they forgot about it completely.
When I was in elementary school, a fifth grader or sixth grader, we did duck and cover drills. We had to get under our desks. I’m reading material now because I’m following it very closely, and it’s like, oh, I read that when I was nine years old. They show you a site where there’s a thermonuclear explosion and they have concentric radii. This is the flash zone where you’re blinded. This is the blast zone where everything is destroyed. This is the heat zone where things melt, the skin’s ripped off your body, and then there’s a much larger zone of radiation from the fallout.
We would study wind patterns. Like I say, I did this in the 1950s. In 1969, when I went to university, I studied it; I was an international relations, international studies major. The leading texts at the time were mostly written in the late 50s and early 60s, but they were completely timely. It was Herman Kahn, Henry Kissinger, Albert and Roberta Wohlstetter, Paul Nitze, Tom Schelling and some other leading scholars. They had different takes on it, but they all agreed on one thing.
They said nobody’s going to wake up on a sunny day and say, “Oh, nice day for war, let’s drop a nuclear bomb.” That’s not how it’s going to happen. It’s going to happen on what Herman Kahn called the escalatory ladder. You raise the ante, I see you and raise, you raise me. The two sides keep hitting and hitting. Eventually one of the powers feels an existential threat. You’ve crossed the line.
They now prepare to use nuclear weapons because they’re going to be defeated or extinguished or annihilated anyway, so they feel they have no choice. And the irony at that stage is that the side that wasn’t going to use nuclear weapons ends up using them, because there’s a first strike advantage. If you strike the other guy, you might wipe out his missiles and he can’t hit back. That’s the dynamic. It hasn’t changed.
I have a chapter in my new book on nuclear war fighting with AI introduced: what does AI do to the nuclear war fighting scenario I just described? But I went back and refreshed myself on all those other materials, and I was like, “Yep, this is still true today.”
Now, we thought we learned our lesson in the Cuban missile crisis. We were on the escalatory ladder. We were getting closer to nuclear war. It was finally Khrushchev who sent a letter through, believe it or not, a US journalist. Someone from the Soviet embassy in the US reached out to a journalist and said, if Khrushchev wrote a letter, could you get it to the president? The guy said yes. It’s really an intriguing story.
The letter said, we’re both pulling on a knot and it’s getting tighter and tighter; has the time come to ease up on that and maybe even untie the knot? Without giving any concessions, that was Khrushchev’s way of saying we need to back off a little bit here. Kennedy responded in kind. We took missiles out of Turkey, they took their missiles out of Cuba, the embargo ended, and the whole thing de-escalated. That was the classic case. Nothing has changed, Brian.
7:52 So when you look at what’s going on today, just to show why I’m so concerned about it, we’re on that escalatory path. Now, I mainly fault the United States, but it takes two to tango. The US has probably never had a less competent, more blind foreign policy establishment. I think of the giants, liberal or conservative, Democrat or Republican: John Foster Dulles, Dean Acheson, Dean Rusk, Robert Gates, James Baker, George Shultz, Henry Kissinger. These are the giants of US foreign policy since the end of World War II. Where are they?
I go to China and people say, “Don’t you guys have another Kissinger?” Kissinger just passed away; he lived to be 100. They would say, “We love Kissinger, but don’t you have another one?” And the answer is we don’t. We have Tony Blinken, Jake Sullivan and Victoria Nuland, although she just left the State Department and still keeps her hand in. And Biden, sadly, should be in some kind of assisted living facility. That’s our foreign policy team, and they’re blind to the dangers I just described.
So what are we doing in Ukraine? We, meaning the United States, have given the Ukrainians over $100 billion, and the NATO allies, mainly in Europe, the collective West, have given an additional 60 or 70 billion. So we’re pushing $200 billion of either cash, because we’re paying for the whole government, or weapons. And we’ve always said these are the wonder weapons, they’re going to change the war: the HIMARS artillery, the Patriot anti-missile batteries, the UK’s Challenger tank, the Germans’ Leopard tank, the US Abrams tank, Bradley fighting vehicles, and now we’re sending some F-16s, I think from inventories in the Netherlands.
And then more money, and now these ATACMS missiles that have a range of about 200 miles, positioned so they can be fired deep inside Russia. They’re striking civilian areas in Belgorod. And one of the Ukrainian missiles, about two weeks ago, struck a radar facility in Russia. But the radar facility was part of Russia’s nuclear war fighting capability. It was an early warning radar for an ICBM attack from the United States. That’s what it’s there for.
You put them all around your country and you get early warning. Early means you have 20 minutes, but at least you see the missiles coming in. When you take out that facility, which the Ukrainians did, you create a blind spot in the blanket of radar coverage for an ICBM attack with nuclear weapons. Ukraine’s not a nuclear power. They’re not going to shoot nuclear weapons at Moscow. So what’s the point of doing that, other than to go up this escalatory ladder and threaten Russia at a very existential level?
And by the way, everything I just mentioned has failed. Flipping over to Ukraine for a minute: the HIMARS precision-guided artillery, the Russians jam the GPS system, so those missiles just fly off into nowhere. The Leopard tanks, the Challenger tanks and the Abrams tanks, no need to pick on the UK, it’s Germany, UK and US, all those tanks have been left burning on the battlefield because of Russian mines, drone attacks, artillery, helicopter gunships and so on. The Bradley fighting vehicle, same thing, burning on the battlefield.
There are probably close to 500,000 dead Ukrainians at this point. I don’t know when enough is enough in terms of the blood on the hands of US policymakers. Now these F-16s are going to be shot down. First of all, they’re old models, not the latest and the greatest. They’re going to be shot down by the S-400, the Russian surface-to-air missile. The Ukrainian pilot has had six months of training in the United States. To be a competent F-16 pilot takes two years; you’ve got to be a pilot to begin with, then two years of specialised training. These guys are getting six months, and all the training manuals and maintenance manuals are in English, and they don’t speak English.
12:24 So none of it makes sense unless you say, well, what Biden is doing is trying to keep the war going, fight to the last Ukrainian, past the election. That makes sense, except it’s vile and it’s political. The war’s not over. Russia’s definitely going to win. Ukraine will be left with a landlocked rump state if they don’t wake up and negotiate a treaty, which they show no signs of doing. I understand all that, and I understand, even though it’s despicable, an election strategy at the cost of dead Ukrainians to keep the thing going past November 5th, five months away.
What I don’t understand is why everyone is blind to nuclear escalation. Russia is a nuclear power. The US, UK and France are nuclear powers. The attacks that the Ukrainians are staging they cannot do by themselves. They can’t operate these systems. They’ve got US and UK trainers. A lot of them are out of uniform, militias, contract hires, whatever they may be, but they’re basically US and NATO forces in there. You can’t do these attacks unless you’re getting satellite information and positioning from the US. Ukraine doesn’t have that satellite network.
And by the way, there’s a query whether these F-16 pilots might actually be taking off from Romania. Now Russia would feel justified in attacking Romania, which is a member of NATO. Now you’re in Article 5. You can see where this is all going, Brian. Why has no one blown the whistle and called a timeout?
Brian Rose: Yeah. Putin doesn’t bluff. When Putin says something, you get accused of, “Oh, you’re doing Putin talking points.” Putin doesn’t do talking points. When he says it, he means it, and we’re supposed to pay attention, but we’re just not. And then you’ve got Bobby Kennedy tweeting out that in 1963 his uncle had a direct line to Khrushchev, which was probably one of the only reasons they were able to avert that crisis, because the men they had under them probably really wanted that war.
Then you’ve got a case where Biden’s not talking to anyone over there. You’ve got Russian warships rolling up into Cuba now, which I don’t know if that’s a normal thing, but it definitely feels like it escalates. Like you said, they’re hitting those radar systems inside Russia. Someone did a really interesting proxy and said, “What if China was in Mexico right now, arming people and putting things there? Wouldn’t that upset the US?” And of course it would.
On top of that, you’ve got over here in the UK saying we have no problem with UK weapons being used against Russia and in Russia. And now when Biden stops by to see Macron in France, it seems like they’re gung-ho about pushing in. Again, how many more pushes will Putin take before he’s going to do something?
15:36 Jim Rickards: Well, he is doing some things. The question is how far. You’re right, Brian, how far is this going to go? I travel abroad a lot, and people in Asia and Europe ask me about US politics. They go, “Jim, we don’t understand US politics.” And I say, “Don’t worry, Americans don’t understand it either.” So I don’t want to hold myself out as an expert on European politics, because that’s a whole other world. I follow events, but I honestly do not understand why Germany, France and the UK have joined the US in this warmonger position. I don’t get it.
They’re much closer to the battlefront. They’re much more in danger. They stand to suffer more economically. Germany’s in a recession. Germany’s outsourcing manufacturing. Germany is the economic, technological, manufacturing powerhouse of the world. China does cheap assembly-type stuff, and they’re making some strides in electric vehicles; that’s a whole other issue. But when you talk about high-quality machine tools, engineering, automobiles, trucks, transportation equipment, computers and telecommunications, the Germans excel at all of that.
But they’re outsourcing to Hungary. I just bought a new German car. It’s got a Hungarian engine. I’m fine with that. But my point is, why are they doing that? The answer is that energy costs in Germany are sky-high and they’re cheaper in other locations. And why is that? Angela Merkel spent 14 years shutting down every coal-fired and nuclear power plant in Germany with the exception of one or two. And NATO, probably the US and UK, blew up the Nord Stream pipeline. So why are you surprised that Germany is de-industrialising?
17:27 But I think the European Parliament elections that happened the other day are very, very telling. They say that the Rishi Sunaks, the Emmanuel Macrons and the Olaf Scholzes are very much out of touch with their own people. You’ll have elections on July 4th. I think we all have a pretty good sense of what’s going to happen there. My friend Nigel Farage is trying to give people a third choice. Macron has taken a beating. Scholz has lost his majority, or he will soon.
Some of it is reaction to the green new scam, but a lot of it is a reaction to Ukraine, the amount of money spent to prop up Ukraine, and they’re losing the war. To prop up Ukraine, the US and NATO have depleted their own arsenals. The UK doesn’t have any Storm Shadow missiles left because they gave them all to Ukraine. They’ve given most of their Challenger tanks. The Germans have given most of their Leopard tanks. Everyone’s like, “Send them Patriot anti-missile systems.” The US doesn’t have that many left. We have a few, and if we scrape up a couple, they’re going to go to Israel, not Ukraine, because Israel has its own problems.
It turns out not only is Ukraine losing the war, which is obvious; I would say NATO has lost the war, because this is the best stuff NATO has to offer. These Bradley fighting vehicles were designed in the 1980s. The Patriot anti-missile systems that the US sent to Ukraine are a billion dollars apiece. They’re multiple stations, radars, arrays and so forth. The Russians have destroyed about seven of them. I think there are one or two left, at a billion dollars a pop.
How did they do that? They did it with hypersonic missiles. A Patriot anti-missile battery can shoot down a cruise missile or a drone, but it cannot shoot down a hypersonic missile. Well, guess what? Russia has hypersonic missiles. We don’t. The US is still working on its first hypersonic missile.
19:36 I’ve never believed, and I don’t believe, that Putin is trying to do any more than basically liberate the Russian-speaking Orthodox population of Ukraine, which until not that long ago was part of the Soviet Union and historically part of Russia. But he’ll fight as long as the Ukrainians don’t agree to a peace treaty, and it keeps getting worse for the Ukrainians. This is a war that never should have started, so start there.
The Ukrainians had a deal that they were ready to sign. Zelensky was ready to sign with Putin. It was intermediated by President Erdoğan of Turkey, and it was called the Istanbul deal, in April 2022, less than two months after the war started. Boris Johnson went to Kyiv, he was still prime minister, and said to Zelensky, if you sign that deal, we’re out, forget it. But if you don’t, we’ll do whatever it takes for as long as it takes. And Zelensky foolishly agreed to that. And then of course Johnson’s out.
I spend a lot of time thinking about this. I understand why the US are warmongers, because we’re not very well led, we’ve got weak leadership, and there is the military-industrial complex and all that. But I don’t understand why the Tories, the Social Democrats in Germany and Macron are acting like flunkies in this situation.
21:09 Brian Rose: Yeah, it’s a good question. You mentioned Israel there. Is that a nuclear power we need to be concerned about? I know they’ve been trying to thwart Iran’s weapons development in that area, but I’m curious if that’s another nuclear power we need to be concerned about. And also your thoughts on how the ground war there is going and how that affects geopolitics.
Jim Rickards: Yes, of course, Israel is a nuclear power. They’ve never admitted it, but everyone knows they are. There’s a pretty good estimate of how many nuclear weapons they have, and they have very good missile technology. Now, they’re butting heads with Iran. Iran does not yet have a nuclear weapon, but they’re probably less than two months away.
The hard part in building a nuclear weapon is uranium enrichment. Enrichment is really, really hard. You’ve got these centrifuges that spin and separate the U-235 and the U-238, and you skim it like cream off the top of an old milk bottle. It’s very expensive and very demanding. The machines are fine-tuned and they break easily. The Israelis have sabotaged some of them, but the Iranians are there, and they have enough.
Five per cent is almost natural, 20% will run a nuclear power plant, and at 90% you’ve got a nuclear weapon. They’re stockpiling that highly enriched uranium. Actually putting the weapon together, I’m not saying it’s easy, it’s not, but that’s much easier than getting the enrichment facility, which they already have. So probably a couple of months. Whether they want to cross that line, whether there’s more downside than upside, I’ll leave that to the ayatollahs, but they’re not that far away. Israel has it, of course, and so does Russia, which is in the neighbourhood.
23:02 Now, I can tell you what’s going to happen in Gaza, and I can give you some dates. It’s not that hard to figure out. At the time of the October 7th massacre, Hamas had about 40,000 fighters. You don’t have to kill all of them, but you probably have to kill 30,000 or more, with an emphasis on the leadership, and the rest of it will just dissolve. They’ll be done as a fighting force. It’s hard to estimate, but the Israelis have killed maybe 20,000, maybe a little more. So they have to kill another five to 10,000 Hamas fighters, and then they’ll be able to say, “Okay, the war’s over.”
They came into Gaza City, which is close to the Israeli border. Then there’s a medium-sized city in the middle, I’m sorry, I don’t have the exact name in front of me, and they cleared that out. The only remaining large city is Rafah, which is on the Egyptian border. That was the exit point for many Palestinians who wanted to get to Egypt, except Egypt had it closed; they’re not really letting them in.
Biden says, “Don’t go into Rafah.” He actually didn’t say Rafah. He said, “Don’t go into Haifa,” which is an Israeli city, but that just shows how far gone Biden is. But the Israelis don’t care. No one takes Biden seriously, or Tony Blinken for that matter. So they did go to Rafah. They’ve made progress. They’re moving to the city centre and annihilating the fighters.
Of course, the Hamas fighters are cowards. They have command headquarters in elementary schools. So if you want to kill seven or eight senior Hamas commanders, there are going to be civilian casualties, including children. My answer would be: hey, Hamas, number one, don’t go massacre 1,400 Jews, and two, put your command headquarters someplace other than an elementary school. Netanyahu, this is his last rodeo, and they’re determined to wipe them out.
That will take another six weeks, so I would look for maybe the end of July. Why would you have a ceasefire when you’re that close to victory? Why would you give Hamas time to preserve a core and rebuild, so we repeat this again in another four years? My estimate would be end of July; August is a time when Israel might actually say, “Okay, it’s over.” It’s not something for the UN Security Council. We don’t need Henry Kissinger on this, although he’s always a contributor. It’s just annihilating the enemy, and that just takes time.
What’s more troubling is that there are a lot of signs that the northern border may erupt. The northern border of Israel abuts Lebanon, the Golan Heights and Syria, and up there it’s Hezbollah. Hezbollah is much closer to Iran than Hamas. Hamas are Sunnis. Hezbollah are Shiite, and Iran, of course, is the centre of the Shiites. I’ve done a lot of work in that area; I wrote a monograph on Lebanon a couple of years ago. They probably have 10,000 missiles.
So how does Israel deal with that? They have the Iron Dome. This is all very recent, but it appears that Hezbollah has done a very good job of defeating the Iron Dome. I don’t know exactly how they’ve done it. I think they’re doing it with drones. If you just send a missile, the Iron Dome is pretty good, but drones are a whole different technology. One by one, Hezbollah has been blowing up radar stations, ground installations and Israeli intelligence-gathering stations.
Israel is at a point where it can’t let this go on much longer. Their population is defenceless. If the Iron Dome can’t do the job, they’ve got to go in; they have to go from defence to offence. And now we’re back to 2006, or if you like, all the way back to the early 1980s, when Israel went to Beirut and then you had the Sabra and Shatila massacres. That’s a whole other chapter.
28:03 I’ve studied Israel and regional history very, very closely, and I’ve come to the conclusion that this is one long war. It started in 1917, when the British high commissioner in Cairo sent a letter to Emir Faisal saying, if you Arabs have an Arab revolt and join Allenby fighting on the eastern front, we’ll give you some kingdoms when we’re done. They said okay, they sent Colonel Lawrence in, and off they go. We all know the story of Lawrence of Arabia and the Arab Revolt.
But at the same time there was the Balfour Declaration, which said the Jewish people should have a homeland of some sort. Then there was the Sykes-Picot agreement; this is all 1917, 1918, 1919, the Versailles treaty. Sykes-Picot said we’re going to carve up the Middle East. I would say the UK lived up to their end of the deal. The Arabs got their kingdoms: Jordan, Syria, Iraq and the Hejaz.
The fact that King Saud took the Hejaz, and Iraq had a Baathist military coup, and Syria had a Baathist military coup, that was on the Arabs. That was not the doing of the British. Who knows if MI6 had a hand in it, but the point is the British delivered the kingdoms they said they would deliver. But they kept the Palestinian mandate under the League of Nations and they stuck to the Balfour Declaration. And the problem with the Palestinians today is they could have had their own country 30 years ago, 35 years ago, 15 years ago.
I’ve been in the Middle East a number of times. I was there in late 1999, between the first intifada and the second intifada, so it was relatively calm. What was interesting was Netanyahu was the prime minister back then, and there was an election coming up with Ehud Barak, who was considered the peace candidate, all relative in Israeli terms. So the word went out from Arafat to the Palestinians: calm down, we don’t want any bombings or terrorism, because we want Barak to get elected.
It was great for us, because we went from one end of the West Bank to the other. If you go from Jerusalem to Bethlehem, you’re crossing a border into Palestinian Authority territory. We were careful and we had pretty good information, and we did all that without incident. You couldn’t do it today, of course. But I view this as one long war that started in 1917 and is still going on. This is a 107-year-old war, and I think it’s now going to open up with Hezbollah and the Israel Defense Forces and their air force on that northern border.
But going back to what we said earlier, Brian, Israel’s on an escalatory path. For them it’s existential. Iran is supplying the enemies of Israel. There have already been some missile exchanges between Iran and Israel, so there’s your escalation with at least one nuclear power. Maybe Russia wants to intervene at some point. And over in Ukraine you’ve got the US and Russia, with France and the UK behind the US, on the same escalatory path. Doesn’t anybody study history? Doesn’t anybody understand where you’re going?
By the way, I’m pretty shameless when it comes to plugging my own books, but every now and then there’s a book by another author I feel like mentioning. There’s a new book, you may have read it, called Nuclear War by Annie Jacobson. It’s been out for a few months; it’s a bestseller. The best advice I can give people: get it and read it. I’ll warn you, you will not sleep. It’s pretty horrifying, but it’s extremely well researched.
I’ve been to a number of the locations that she writes about. She went to far more, but I’ve been to Strategic Command, STRATCOM, in Omaha, Nebraska, and the White House, the Pentagon and a lot of other locations. She did something that was fascinating. She found some of the people who worked at Los Alamos when they created the atomic bomb under Oppenheimer, going back to 1944 and 1945, and who then participated in the thermonuclear testing throughout the 1950s and into the early 60s. Nobody knew more about the destructive power of these weapons than the individuals I’m describing.
When she caught up with them, they were in their late 80s or early 90s, and some of them had died. It was almost as if they had to get something off their chest, because all this was highly classified. But you’re 85 years old, maybe near death, and the information’s 60 or 70 years old. They revealed it to her and she put it in the book; she was under no obligation not to. Some of it confirms what you thought you knew, but some of it is brand new material from 80-year-old guys near death.
From what I know, I can vouch for the fact that it is highly, highly realistic. It’s non-fiction, but she does some scenarios. Anyway, read the book. You’ll be scared to death, with good reason.
Brian Rose: I think I’ve heard her discuss it, actually. We’ll check the book out. Maybe I’ll even get her on as a guest.
Jim Rickards: She’d be a great guest. When you put her scenarios, which stand on their own, in the context of what we’re talking about, which is escalation, going back to Herman Kahn, and I talk about this in chapter four of my new book, you just shake your head. You’re like, what are they doing?
34:18 Brian Rose: I want to get to the book and talk about AI, but before we do that, I want to talk about Trump. I was actually in Austin, Texas, on the Alex Jones Infowars show when the verdict came out. I was there to promote our new movie, We Will Not Be Silenced, which premiered on X the same day. It’s at three and a half million views. But then of course an hour later, perfect timing for my movie launch, the Trump conviction comes out.
This is something that you had predicted was going to happen, at least in one of the cases. We spoke to a lawyer earlier on the show and he said it was an 86% probability, and yet everyone seemed super shocked when it actually happened. What did you think of it? Obviously you’re a lawyer. You and I game-planned this out six months ago. By the way, you said Trump in a landslide back in 2023. Did you see any new information, or did this just confirm everything that you suspected?
Jim Rickards: Well, forecasting is the main thing I do in my newsletters, and the books also lean forward. I have models and methods of doing that. I think they’re a lot better than what Wall Street and the government use by and large, and they actually are neural networks and AI-type models, but I devised them myself. You’re right, we talked about this a while ago. In one of my flagship newsletters in September 2023, I went through the cases, because they had all just been filed or were pending at the time, and I said Trump will definitely be convicted of something.
There were over 100 felony counts thrown out there. The Georgia case had a bunch. The New York case had 34 felony charges. There are two federal cases, one in Washington and one in Palm Beach. As a lawyer, and knowing the motivation behind it, not one of these cases would have been brought against anyone but Trump. Trump was singled out. To say it was a stretch is an understatement. It was an embarrassment. It’s a travesty of justice.
Having said that, the venues were carefully selected. Washington DC is 90% plus Democrat. Manhattan in particular is 85 to 90% Democrat. Atlanta, Georgia, same thing, probably 75 to 80% Democrat. They say Fulton County, but the city of Atlanta is most of the population of Fulton County. The only one that was maybe even a little bit balanced was the Palm Beach case, and that’s the one that seems to be going best for Trump at the moment.
These were handpicked jurisdictions, 80 to 90% Democrat. It’s very difficult, even with careful jury selection, to get a jury that wasn’t biased against Trump and heavily inclined to convict him. The prosecutors were all handpicked. Alvin Bragg, the Manhattan DA who actually got the convictions of Trump, is kind of a buffoon. But the Department of Justice sent their number three guy and seconded him to the Manhattan DA’s office to run this case. Everyone knew Bragg wasn’t capable of doing it. He was the charging official, but they sent the top guy from the Justice Department to actually run the case, be in the courtroom and come up with the charges.
I happen to be a lawyer, but you don’t have to be a lawyer if you just look at it probabilistically. The judges were handpicked. That’s another thing: Judge Juan Merchan in Manhattan. There’s a pool of judges in the Supreme Court. By the way, the Supreme Court in New York is the lowest level, the trial level; most people think it’s the highest level. They’re supposed to use a lottery method for picking the judge. They didn’t. He was handpicked because of his Trump hatred.
His daughter is making millions as a pro-Biden Democratic fundraiser and media adviser. Her business thrives when Trump gets trashed. That’s the kind of conflict where any ethical judge would say, “Sorry, my daughter’s making millions off attacking Trump. I have to recuse myself from this case.” Of course, he didn’t. So I didn’t feel like I was going out on a limb at all. I just said he’s going to get convicted of something. I was warning my readers: be ready for this. And of course it happened. Now, the irony is that, putting my lawyer hat on, they’re all weak in different ways, but this was by far the weakest case.
39:19 Let me digress for a minute. The Washington DC case is the January 6th case. They didn’t charge him with insurrection, but with egging on his followers to attack the Capitol and interfere with the election process. That case is where Trump has claimed presidential immunity for official acts. That issue is before the US Supreme Court right now. They’re going to decide it before the end of June, because the Supreme Court has a seasonal term that ends at the end of June, so June 21st, 22nd, 23rd, somewhere in there. Your viewers should know they’re going to rule on that.
My estimate is that they will say the president does have some immunity, maybe pretty broad, for official acts. If the president takes a gun, walks out on Pennsylvania Avenue and shoots somebody in cold blood, no one’s going to say that’s an official act. But giving a speech to your followers on January 6th, when he was still the president? Biden wasn’t sworn in until January 20th. Trump was still president on January 6th. That was an official act.
If you wanted to debate that, and of course both sides argued it before the Supreme Court, all you have to do is look at the Alvin Bragg case. They got 34 felony convictions on a president for things that he did while he was president, because that’s when he signed the checks. By the way, I did a wire transfer to an intellectual property lawyer in the UK the other day for some inventions I’m working on. I go to my banker and give her all the information, and she says, “There’s a memo section. Do you want to say anything?” I said, “Just say legal fees.” And then I caught myself. I said, “Wait a second. That’s what Trump did. He just got convicted for saying legal fees.” But they were legal fees. I had an invoice. So did Trump.
The point is that was a case about something he did while he was president. He signed the check in 2017. That postdates the appeal on the presidential immunity issue, but if you’re a Supreme Court justice, you’re like, “Wait a second. That’s exactly the kind of thing Trump was warning us about. Imagine how handicapped any president would be if every left-wing DA in some no-name county in the United States starts charging the president with crimes.” So my expectation is they will find that there is presidential immunity.
All this goes back to Nixon and Watergate. I just did a Watergate round table at the Watergate Hotel, which was kind of cool. I lived through it, but I brushed up on it. These are the same issues that were floating around Nixon in 1973 and 74. So that could be the end of that case, if they say the president has immunity. There are other issues there, including whether the so-called special counsel was legally appointed, and the answer is maybe he wasn’t, because he was not a federal government employee at the time. You can’t create federal offices out of thin air. You’ve got to go to Congress.
42:36 Brian Rose: And meanwhile Trump gets a bump in the polls by six points, raises $100 million plus, including 30% new donors, and he goes out to Silicon Valley, which used to be the place that hated him, and guys like David Sacks put on a half-a-million-dollar-a-plate dinner, literally thumbing their noses at the Democrats. It’s quite a victory.
Jim Rickards: You’re right. 100 million was the first print. That was within 18 or 20 hours, but that number was 200 million within another 24 hours. You’re exactly right, Brian. I don’t know them personally, but the Winklevoss twins, they were co-inventors of Facebook and Zuckerberg ran them off the road, but then they came back with Gemini, which I take it is one of the leading cryptocurrency exchanges. So they’re doing fine, and they’re on board with Trump. Peter Thiel, who’s a multi-billionaire. Elon Musk is buddies with him, and who knows, maybe he ends up in the cabinet.
That’s probably not a good idea. He’s a genius, but he’s an unpredictable genius, I’ll put it that way. So who knows if he should be in the cabinet. But my point is, you’re right. The stigma of supporting Trump has disappeared in places where it was pretty much in the air, and that’s good news for Trump.
Brian Rose: Including a lot of pop stars and people in the media and people in music. Hollywood, it used to be your own death certificate if you supported Trump in the last election, and now people are openly coming out. Jim, you were the first guy on this show who said Trump in a landslide, as far back as September last year. Is that your same prediction, and is it now a triple landslide?
44:22 Jim Rickards: Well, the answer is yes. And let me define landslide, because I want to be clear about this. I’m talking about an electoral college landslide, which is how we elect presidents. The national popular vote will be close. Biden could even come out a little bit ahead, but it doesn’t matter. That’s not how we elect presidents. There are 538 electoral votes, and it takes 270 to win. If you get over 300, you’ve had a good day.
I could see Trump at 320 or 325 versus low 200s or high 100s for Biden. That’s an electoral college landslide. I would put Trump at least at 315, but maybe 320, and now you’re into landslide territory. As far as the popular vote is concerned, just take the state of California. Biden will get six to seven million more votes than Trump in California, because it’s California. But it doesn’t matter. You can only win California once. You get, I think, 48 electoral votes, something like that. You only need to win it by one vote. If you win it by six million votes, the other 5,999,000 don’t count.
So when you look at the rest of the country, Biden starts out with something like a six-million-vote head start in the popular vote from California, and you’ll see similar margins in New York and a few other places. Trump will roll up the vote in Texas, Alabama, Florida and a lot of other places, but they’re not as big as California. So the popular vote could be close, and Biden might even pip Trump by half a percentage point or something like that. But it doesn’t matter. You have to go to what are called the battleground states.
I can tell the audience right now: Biden’s going to win California, Trump’s going to win Florida, Biden’s going to win Illinois, Trump’s going to win Texas, and we go down the list. You pretty quickly get down to about seven states, by most counts, that are the so-called battleground states: Wisconsin, Michigan, Pennsylvania, Arizona, Georgia, North Carolina and Nevada. According to the most recent polls, Trump is winning in seven out of seven. But he doesn’t have to win all seven to get to 270 electoral votes.
Byron York, a US pundit, did a very good job on this. He said all Trump has to do is take all the states he took in 2020, which seems very doable. He has to pick up Arizona and Georgia, where his margin right now is four or five points. We’ve been talking about one percentage point differences; he’s up four to five points in both those places. Pick up Arizona and Georgia, which looks very doable at the moment, and then he only has to win one out of Pennsylvania, Michigan and Wisconsin. Any one of those, with everything else I said, and Trump wins.
To turn that around, if Trump holds his 2020 states and picks up Arizona and Georgia, Biden has to run the table. He has to win Pennsylvania, Michigan and Wisconsin, all three. That’s the easiest way to think about it. And Trump’s margins in those three states, where he only has to win one, are very solid at this point.
But what Trump is doing is pure genius. President Eisenhower, another genius, once said, “If you can’t solve a problem, enlarge the problem.” Meaning you’re probably looking at a slice and you can’t solve it, but if you make the problem bigger, you can see a lot more inputs and you can solve the problem. Trump is going beyond what I just said. He’s expanding the map. He said, what about Minnesota? No Republican has won Minnesota since, I think, the 1980s. What about Virginia? There are a lot of MAGA supporters in Virginia.
The only reason Virginia went Democrat was because half the government or maybe more lives in Loudoun County, right across the Potomac River from Washington. The rest of the state is as red as you can get. But the population is concentrated in Loudoun County and Arlington and Alexandria, right around there, and they’re all bureaucrats voting for their jobs. Even there, Virginia’s very much in play. And Trump’s having rallies in New York. That’s really weird, because in the polls he’s still behind Biden in New York, of course, in the high single digits, 8 or 9%. Could you turn that around in four months? If anyone can, Trump can.
49:40 So Biden’s on the ropes. I did a large interview, it was promotional for our newsletters, but we have serious content, and I said don’t be surprised if the Democrats replace Biden on the ticket. We recorded that late last year, in December, and we could game it out and put it out there. I wouldn’t have done it if I didn’t feel it was real, and I feel strongly about it. I wasn’t saying it was absolutely going to happen. I was alerting readers to the fact that it could happen and that you ought to keep an eye on it.
Well, now you can’t wake up without seeing it. James Carville; Nate Silver, who’s one of the top pollsters, I’ve had my disagreements with Nate, but he’s a pretty good pollster; David Axelrod; Mark Penn. Go down the list of Democratic pollsters and Democratic analysts, and they’re all saying the same thing. Biden’s approval rating just came in yesterday in the latest poll, the lowest of all time. Not his time, all time: lower than Nixon at Watergate, lower than Bush at the worst part of Iraq in 2006.
It was about 36%. Usually 45% is considered not too good. At 40%, alarm bells are going off. Biden was at 39, 38, and they said you’ve got to turn this around. Now he’s at 36, 37. I’m not putting a stake in the ground, but don’t be surprised if they kick Biden off the ticket in the next three or four weeks.
Brian Rose: And put in who? Michelle Obama?
Jim Rickards: No way. Michelle is really getting pretty close to being a billionaire, which is what they really care about. My publisher treats me very well, and I have a very good relationship with them, but they also publish Barack and Michelle Obama. This is all public: they got a $60 million advance on a four-book deal, two each. I do fine, but not $60 million worth. Then they got, I believe, 200 million from Netflix to be creatives on a series of movies or multi-episode shows. And if I’m not mistaken, they get two or $300,000 a pop to do speeches.
I write books and I do speeches, but you can take a couple of zeros off for where most speakers are. So their net worth is probably over the $500 million mark at this point. You can see their estate on Martha’s Vineyard, he’s got one on Maui, and there’s a mansion in Kalorama, which is a fancy section of Washington DC. Why would they want to do this? I don’t see it. And by the way, I think she’d be a really terrible candidate.
You go back to 2016: there were only about five people in the world who said that Trump was going to win before the fact. After the fact, everyone jumps on the bandwagon. Before the fact, I did live interviews on Bloomberg TV and a couple of other channels. I was on with Francine Lacqua, who I really like. She’s the host of Bloomberg Europe, and she’s in New York every now and then. I was on with her and Michael McKee, who’s the top geopolitical analyst at Bloomberg.
Francine goes to Michael, “Who’s going to win?” And he says, “Well, in 1992, we were all in bed at 10:30, because Bill Clinton just rolled up the East and won and we could go to bed early. I think this time we’ll be in bed by 10:00. Hillary’s going to roll up the East and take it from there, nothing to it.” And Francine turned to me and said, “Jim, who’s going to win?” I said, “Trump.” Her jaw dropped. She turned white. Then she said, “Well, are the polls wrong, or will the turnout be different?” I said, “Both.” And I went through it analytically, explaining why the polls were skewed by two points and why turnout would be higher than expected.
But it was me, Steve Bannon, Kellyanne Conway, Rebekah Mercer; there were only a handful of people who thought Trump was going to win. Trump didn’t think he was going to win. Melania was afraid they would win; she didn’t want to go through what she’s been put through. But that kind of analysis, if you put the ideology to one side and put the blinders to one side, you can actually do those kinds of forecasts. So looking ahead, I think Trump’s in very good shape for this cycle.
Brian Rose: And nothing changes that in the next five months?
54:54 Jim Rickards: No, because even if they kicked Biden off the ticket, it would be easy to say, “Hey, Joe, sorry. You had a good first term. You did this, you did that, the infrastructure act, the inflation act. Time to go, but you’ve got a good legacy here.” I wouldn’t agree with that, but that would be the pitch. But then what do you do with Kamala? Because she would say, “Well, then I should be the head of the ticket.” Her poll ratings are lower than Biden’s.
I don’t mean to be harsh, but she’s kind of a dunce. She’s not senile or demented the way Biden is, but she’s just not that bright. She giggles at inappropriate times, for reasons no one can understand. It’s obviously a nervous reaction to not knowing what to say next. And then they say, “Well, she’s an African-American.” No, her mother was Sri Lankan, which last time I checked is in Asia. Her father was Jamaican. She grew up in Canada. I don’t know how that makes you an African-American. I know a lot of real African-Americans, but this is America, where everything’s categorised.
So your list would be obvious: Gavin Newsom, Gretchen Whitmer, J.B. Pritzker. If you said to me, “Hey Jim, is there a Democrat on the list who actually is really smart and a really good politician and could maybe turn this thing around?” I would say yes, Gina Raimondo. And everyone’s like, who is Gina Raimondo? They’ve never heard of her, but she happens to be the Secretary of Commerce and the former governor of Rhode Island. So she’s got executive experience. She’s in the Biden cabinet. They obviously know her.
Again, I don’t agree with her on policy, but that’s not the only way I think about how smart people are and how capable they are, and I would rank her very highly. So who knows? They talk about Buttigieg. Okay, you just hope planes don’t crash in the meantime.
Brian Rose: So, to be continued, but Trump in a landslide, nothing’s going to stop that.
Jim Rickards: That’s it.
Brian Rose: I mean, they gave it their best shot. They get 34 felony convictions and he goes up in the polls. Okay, you gave it your best shot.
57:12 Jim Rickards: By the way, I should add, Brian, if we have time: if Trump wins, and I expect he will, that’s not the end of anti-Trump Democratic lawfare. They’re going to try to stop him on January 6th. If Trump wins, and again I expect it, January 6, 2025 is going to be a much nastier, bloodier battle than January 6, 2021.
Brian Rose: Really? What are they going to do?
Jim Rickards: Well, here’s what they’re going to do, and they’re already working on this. Remember, when we have the presidential election, we also elect the entire House of Representatives. That’s really hard to call, because there’s not a lot of polling, 435 seats and so on. It’s not inconceivable that the Democrats could win just a couple of seats; the Republicans only have about a two-seat majority. So the Democrats could win. That’s entirely possible, because abortion is a bigger issue at the local level.
So what happens on January 6th? We vote on November 5th, but we don’t really vote for president. We vote for electors. The electors gather in state capitals on December 8th and cast their electoral votes for whomever. Then they take those votes to Washington. This is all from the days when you had to get on a horse and ride. The votes go to Washington on January 6th, and Congress counts the votes and certifies the winner, and then the president is sworn in on January 20th.
The Congress on January 6th is not the Congress we have today. It will be the Congress newly elected on November 5th. The president isn’t sworn in until January 20th, but the new Congress will be sworn in on January 4th. So let’s say the Democrats have a one or two-vote majority in the House. Jamie Raskin is the head of this; he’s already written the filings. They will introduce a resolution declaring Trump to be an insurrectionist.
Brian Rose: Wow.
Jim Rickards: Under Section 3 of the 14th Amendment, an insurrectionist is disqualified from holding federal office. That was designed for the Confederate Congress in 1865, but it’s still there. So if the House says he’s an insurrectionist and Section 3 of the 14th Amendment applies, which on its face it would, then Congress would be prohibited from counting any electors who voted for Trump. In that world, Biden didn’t get 270, because Trump won in this landslide, but you can’t count votes for Trump because he’s an insurrectionist.
So what happens then? This has happened twice before, in 1824 and 1800. The answer is nobody wins, and then you throw the presidential election to the House of Representatives and they pick the president. They could pick Nikki Haley or Gretchen Whitmer. They could pick anybody they want. Nobody’s ready for that except the Democrats, and they’re already planning it and drawing up the paperwork. I don’t make things up. I’m actually a lawyer. I’ve read the Constitution. I know what happened in 1824 with John Quincy Adams. This has happened before, and the Democrats are already teeing it up. They’re not done with lawfare.
1:00:42 Brian Rose: Wow. Thanks for giving us the heads up on that. Jim, I want to finish talking about artificial intelligence. Recently we saw Apple launch their big play in AI. They’re calling it Apple Intelligence. They’re actually partnering with OpenAI, which I didn’t see coming, because Microsoft, a direct competitor, has a huge ownership stake in it. You’ve just written this book that’s coming out soon called MoneyGPT.
I’ve got to speak with people like Professor Max Tegmark of MIT, who’s part of the Future of Life Institute and who famously wrote the letter for the six-month moratorium. I’ve spoken to Mo Gawdat, who has a book called Scary Smart; he’s former Google X. I’ve spoken with a bunch of AI scientists, including Peter Diamandis, who regularly has conversations with Elon Musk. We’ve gone pretty deep here, and it can go a little dark the deeper you go in AI, for sure. What do you see when you look at artificial intelligence and the ramifications for the banking sector, and what do you see when you look at big tech and how they’re playing their hand when it comes to AI?
Jim Rickards: Yes, it’s very disturbing, and I look at the dark side of it. I’m not a technophobe. You’re not looking at what I’m looking at, but I’ve got a war room here, three 27-inch screens in front of me. I use technology all the time. I’m tethered to my cell phone just like everybody else. So I’m not against it. I’ve actually done AI designs. I’ve created neural networks, which I use in forecasting capital markets. So I get it, and I did a ton of research for the book.
There’s a little bit of a rah-rah atmosphere. Obviously it’s driving Wall Street. But if you look at the S&P 500, approximately, you’ve got 496 losers and four winners. The degree of concentration of the gains in the S&P 500 index in a small number of stocks is unprecedented. That’s a bubble dynamic right there.
I really distinguish between the hardware people and the systems people. Nvidia is a great company. They make great, super-fast processors, the new ones, the H200 or something. Whether it’s overvalued or not, I don’t really have a view; I’m not speculating in Nvidia. But that’s a real company that makes real hardware, and they’re going to thrive no matter what. I’m much more focused on the software providers: OpenAI, which is not public but is a good example, Microsoft, now Apple joining the club, Facebook, which is Meta, and Google, Alphabet, whatever they call themselves.
1:03:30 I make a couple of points. Number one, they have the smartest people, the biggest brains, the people who run DeepMind at Google and others. I’m not particularly impressed with Sam Altman, by the way. He’s got a good shtick, but I think the real brains of that operation are in the ranks. But they don’t understand it themselves. They develop it, they test it, they train it, they have the large language models, they understand all that. But they do admit in some interviews that we don’t know how it works, except at an abstract level. You have inputs and you get outputs, but it is a black box. They actually don’t know. That’s number one.
Number two, a lot of the output is just false. There are many examples. There was a UK journalist who, when ChatGPT first came out, the GPT-4 model, was using it. His prompt was: give me a biography of somebody, but he put his own name in. The computer didn’t know that was him. It came back pretty quickly with a pretty good biography: born, went to school, did this, did that, and then died in 2019. The guy said, “Well, that’s interesting. I died in 2019.” Then he asked, “What did he die of?” and engaged ChatGPT, and it answered every question, but it was just making things up.
I actually call this the puppy theory. If you’re training a puppy, you throw a ball. Maybe the dog doesn’t care, but if the puppy grabs the ball and brings it back, you give it a little pat on the head or maybe a treat, and that’s how you train the puppy to fetch the ball. The computer actually wants to please the master. It wants to give you results. It’s indifferent as to whether they’re accurate or not.
It turns out, and this was the punchline, the guy who was alive and well in 2023, who the computer had dead in 2019, was the obituary writer for the Guardian, and he had written a thousand obituaries. So the computer’s like, “This guy’s name keeps coming up in all these obituaries. He must be dead.” That’s not crazy. It’s not totally illogical, but it’s just wrong.
It goes a lot deeper than that. I have a whole chapter on censorship, bias and confabulation. People in the industry use the word hallucination; I put hallucination in a different context, but that’s their jargon for making things up. I call it confabulation, which is when you tell a falsehood but you actually don’t know it; you kind of believe it yourself. That’s a little different than just being a bald-faced liar.
And then I raise the question: if you’re a real subject matter expert and the computer comes back with something, you’re going to look and say, “Well, that’s wrong. That date’s wrong, or that guy never did that.” But if you have to be a subject matter expert to vet the output, what good is having the system? You’ve got to do the work anyway. The danger is when you’re not a subject matter expert and you take it at face value, and you hand it in to your professor as a term paper you supposedly wrote, or a book, or you make a business decision on it or a military decision. You don’t know it’s wrong, and now you’re in a world of danger.
1:07:08 I have one chapter on capital markets and one chapter on banking, on how AI will affect banking. Banking panics are as old as banking. They’re as old as finance. Capital markets panics go back to the Bardi and the Peruzzi in the 14th century, just before the Black Death. That was a good old-fashioned banking and capital markets panic. So that’s not new. But AI and GPT act like what the military calls a force multiplier. They take what’s there and they amplify it. They make it worse. They make it faster.
You can go back to the 1930s. There was a rumour, “Hey, the bank’s going out of business, I’m going to run down and get my money.” You’ve seen the old black and white grainy photos of men in hats and raincoats standing in the rain, lined up to get their money before the bank closed, and it usually did. That dynamic and that psychology hasn’t changed. What has changed is the tempo. This happens in minutes rather than hours and days.
That’s what happened in the case of Silicon Valley Bank. One guy said, “Hey, get your money out,” and they lost at least $70 billion in deposits in one day and had to shut their doors. That’s true without AI. Now imagine putting a layer of AI on top of that: deepfakes, hacks, various ways of issuing false information. By the way, all this has already happened. This isn’t made up. Annie Jacobson did her nuclear war scenario, which is brilliant, and I do a capital markets meltdown scenario. I take it like a tick-tock, hour by hour, minute by minute, showing how markets could not just crash but actually close in one trading day.
1:09:07 It gets worse when you go over to nuclear war fighting. We talked about escalation at the beginning of this conversation, and how exactly Khrushchev and Kennedy de-escalated. By the way, there were several other close calls in the early 80s, including something called Able Archer 83. Prior to that, there was a Russian colonel, I believe, Colonel Petrov, who got a warning from an early version of AI that the Russians had put in place to spot incoming nuclear missiles. It said the missiles are coming, launch, meaning launch the Russian missiles.
His orders were to tell the next guy higher up very quickly, and then it would have gone to the general secretary of the Communist Party. Their doctrine is launch on warning, so they probably would have started World War III accidentally. It turns out the radar inputs were reflections from the sun; the “missiles” were actually the sun reflecting in a weird way. But this guy had worked on the computer and knew that it was fallible. So he did not call his superiors. It turned out to be a false alarm, and World War III didn’t start.
Able Archer was another one, where the Russians saw a war game but thought it was real. As the West was escalating in the war game, Russia saw a real escalation and said, time for us to launch. And again it was an individual, a US commander named Perroots, who chose not to escalate even though his orders were to do so. So you had three cases: the Cuban missile crisis, the sun reflections and Able Archer 83.
In all three cases, we avoided a nuclear war because somebody disobeyed orders. Somebody was insubordinate. So what is that actually? It’s your gut feel. Call it intuition if you want, but it was something that no one has been able to program into a computer. There’s no computer that does gut feel.
In other words, a computer would act in line with what Biden’s doing now; Biden is kind of a failed computer. A computer would escalate, because the kind of logic that computers use would say: they did this, you do that. That’s what the large language models and the coding would do. There’s no nuance in AI, and so it is extremely dangerous. It’s a lot more in depth in the book, but I say to the West and Russia, and I think the Russians understand this better: don’t let AI into the kill chain, because you’ll get killed.
1:12:06 And then there’s a lot on censorship. Maybe we don’t have time to talk it through, but just to give you the long and short of it, Brian: Meta and Alphabet, or call it Facebook and Google, and Microsoft and others, they lied to us about COVID. They lied to us about climate change. They lied to us about Ukraine. And they lie to us about a lot of other things. Why would you trust people who have done nothing but lie to you for the last five years? Why would you trust their AI output?
Brian Rose: Yeah, amen to that. Let alone them running the AI systems that are going to control everything in the world.
Jim Rickards: Right. That’s right.
Brian Rose: In their own little black box. Thank you for retweeting our film, by the way. It really is the explanation of what happened to us in 2020: literally being censored by YouTube, violating my human rights and First Amendment rights, you name it. And it’s still happening today. And these are the people we’re going to trust with our AI systems?
Jim Rickards: Right.
Brian Rose: And again, it’s not just them. Like you said, it’s Meta, it’s Amazon, it’s Microsoft, and they’re developing rapidly. This technology is growing and growing on an exponential curve, and when it’s ready, it’s almost too late. So there’s a lot of darkness and danger here.
Jim Rickards: Yeah. It’s in the book, but I was able to talk to some real Silicon Valley insiders, people at the top of the food chain who have one foot in Silicon Valley and one foot in the CIA. I was able to have some private conversations with individuals of that background and got some very interesting reactions. So I hope people enjoy the book, and your movie.
Brian Rose: I was at the Myrtle Beach film festival, where we won best international documentary, and I was there with a guy named Mike Benz, who has spent most of his career researching the entire government and corporate censorship complex. He has a book he’s releasing called Weapons of Mass Deletion. He came because we were doing a freedom of speech symposium afterwards, and he was the one guy in the theatre whose reaction to the movie I cared about. He was chuckling to himself, and I thought, “Oh my god, he either loves it or he hates it.”
Afterwards he said, “Brian, everything you were experiencing from a censorship perspective, I could see what was happening behind the scenes.” We were early: March 2020, April 2020, May 2020. We were literally the tip of the spear when it came to big tech censorship. He could see everything that had been laid out months earlier, with the social graphs and the keywords and everything going on behind the scenes, that led to me being censored.
At the time I was getting hit in parallel by all the tech companies, and yet if you brought that up with anyone, they would say you’re just a weird conspiracy theorist, because there’s no way this is being coordinated by anyone. Of course, later, through the Twitter Files, we saw that it was. So it was really interesting for me to look at what happened to me through the lens of someone who can see government fingerprints in all of it. It’s interesting times, to say the least.
1:15:33 Jim, I wanted to finish on gold and Bitcoin. Since we talked last time, the Bitcoin ETF has been approved, and the Ethereum ETF has also been approved. I’ve heard you talk recently about how there will be a flight to gold at some point as we see the dollar being weaponised and withdrawn from places like Russia. I’m curious what you thought of that, including the political talk from Trump, who wants to be the crypto president, and the bill in Congress banning CBDCs. To see Wall Street give its blessing on Bitcoin has been pretty interesting. I think it’s the fastest-growing ETF in history, and there’s 300,000 Bitcoin now in ETFs. What are your thoughts on that, Jim?
Jim Rickards: Well, a couple of things. I haven’t really focused on Trump’s position on that, but if he says he’s the crypto president, he’s the crypto president, and he does take these things seriously. But he has also said categorically that he will not approve a CBDC, a central bank digital currency, for the US dollar. Now, a central bank digital currency is not really a cryptocurrency. First of all, it’s not blockchain. The ledger would be maintained by the Fed or the Treasury. It is digital, and the message traffic is encrypted, but it’s a dollar in a different form, a different payment channel.
I always try to explain to people that a CBDC is not a new currency. It’s the old currency in new clothes. It’s a new payment channel. The difference is that the government sees all your activity. They don’t need a subpoena. They don’t have to subpoena Mastercard or Visa or give you Fourth Amendment rights to inquire into your purchase history. They know it because they have the ledger.
So if you buy a book, 25 Reasons Why I Love Donald Trump, and you give money to Elise Stefanik and you buy a MAGA hat from a merch store, the government’s going to know that. And then combine that with AI and create a profile of enemies of the people. That’s a whole other scary scenario we can talk about some other time. So I’m glad that Trump is getting rid of the CBDC.
Now, crypto is different. Your statistics, of course, are right, and I’m not surprised at that. I only have one rap on crypto, which is: what are you going to do with it? I know people love it. I know friends and acquaintances who have personally made 20 or 30 or 40 million in crypto. They bought it at 1,000 bucks, sold it at 20,000 bucks, paid their taxes like good citizens and walked away with 10 or 15 million dollars. Those stories are real.
But there are a lot of stories where people lost everything, hocked their inventory to buy Bitcoin at a very high level, lost it all and committed suicide. So what is that? The answer is it’s a zero-sum game. You can make a lot of money, there’s no doubt about it, but there are winners and losers. For every winner there’s a loser somewhere who bought it at a high level and watched it go down, versus those who bought it low and saw it go up. In my view it has no utility, though you can make money.
By the way, I understand all the technology. When I say these things I’m critical, but I’m not a technophobe. I read Nakamoto’s paper in 2009. I’ve been in gold versus Bitcoin debates for 14 or 15 years at this point. So I get all of it. But I will admit it took me a long time to understand what it actually is. Again, I know the math. The best metaphor I’ve been able to come up with, two really, is that it’s a lot like gambling.
You go into the casino and put $1,000 on the roulette table. The croupier gives you your chips. You gamble; you can make money or lose money. At the end of the night, you take your chips to the cashier, get your money, walk out and maybe have dinner. But the point is the chips are only good in the casino. If you walk out on the street with your chips, you’re not going to get dinner. You have to go through the portal to get back to dollars to go back into the real world and buy anything or use it as a medium of exchange.
You’re right, there are a lot of different cryptocurrencies, exchanges and custodians. By the way, there’s very powerful research by top scholars using hard data from the blockchain. There’s anonymity in terms of an individual’s name, but there’s complete transparency in terms of transactions; that’s what the blockchain is. They’ve ascertained that approximately 90% of all Bitcoin trades are wash trades. They’re just whales trading back and forth with each other. It’s not real retail interest, if you will.
So you take your dollars or your pounds sterling and you come into this world, get your crypto, hold it, and it goes up. Interesting that they measure it in dollars, right? So you haven’t quite lost the dollar, have you? And you can take it out and sell it. By the way, most Bitcoin is not purchased with dollars. It’s purchased with Tether. People go into Tether and use the Tether to buy the Bitcoin.
Who knows where the Tether money went? I’m not throwing any accusations out there, but there’s been no accountability and no audit in terms of what Tether actually did with the money. They sent out a pie chart that said commercial paper was, I think, 55% or so. Commercial paper is an unsecured IOU. Who issued it? They haven’t told us that. But the point is, if you want to live in the real world and go get dinner, you’ve got to take your Bitcoin, get dollars in some account, send it to your bank and then use your debit card or credit card. So it’s a self-contained world.
Now, Wall Street never misses a chance to make money. So they apply ETFs and technical analysis: candlesticks, trends, differentials, one coin outperforming another. The entire technical analytical apparatus of Wall Street, technical, not fundamental, has been brought to bear on this sector. CNBC has a crypto show every day, and everyone’s like, “Oh, it went up, it went down, it went sideways, good entry point, good place to sell.” I’m like, yes, I understand, but what the heck is it? At least if I buy Tesla, and I’m not an EV fan, I know there’s a company there.
The other metaphor, and I think it’s a good one, for cryptocurrency is that it’s hallucinogenic. In other words, everybody sees what they want.
1:22:55 Brian Rose: Interesting take. I always respect your take on it in a huge way. It’s definitely something that takes a long time to understand and process what it actually is. Even someone like Michael Saylor has evolved his view on it from 2020 until now. To be continued, I think, so I’ll continue to ask you about it. The book is called MoneyGPT: AI and the Threat to the Global Economy, and I think you can pre-order it right now on Amazon. Jim, if people want to learn more about the book and also follow you, what’s the best way for them to do that?
Jim Rickards: The book’s available for pre-order on Amazon, and there’s a lot of information there. My flagship newsletter is called Strategic Intelligence, from Paradigm Press. If you just Google those terms, you’ll find it. And my Twitter handle is @JamesGRickards, R-I-C-K-A-R-D-S. I put out a steady stream; usually when I do interviews, I’ll post the link on Twitter. So that’s a good place to keep up if you’re interested.
Brian Rose: Fantastic. I recommend everyone pre-order the book now, subscribe to the newsletter and follow this man on Twitter. Jim, I always enjoy these conversations. I hope you make it to London later this year so we can do one here in the studio. We’ve been doing this now for coming up on 10 years, I think, and some of the most insightful things always come from you. So thanks so much. I really appreciate the time and look forward to seeing you here in the UK.
Jim Rickards: Thanks.
Brian Rose: All right. Thanks, everybody. We’ll see you next time on London Real. Bye.
