Is Jim Rickards A Fraud? What You Need To Know

Doomsayer or Truth-teller?

Gold standard

In a 2014 Forbes article, writer Ralph Benko reviews Rickards' The Death of Money. Although the author presents some arguments, the reviewer was still not convinced of Rickards' thesis.

He does not believe that money was about to end. The writer even quotes another review that he feels encapsulated his sentiments:

Extraordinary claims require extraordinary proof. There is evidence here, but not extraordinary proof.

Even as the reviews have the same tone, Rickards defends his book. According to him, the death of money is not unusual at all. It has already happened three times in the last 100 years.

But that doom and gloom is not the focus of his book. What he wanted to emphasize was the future of money. The author says he is more interested in how the powers-that-be will reform the system.

Benko also critiques Rickards' assertion that the "resistance to the restoration of the classical gold standard" is due to a lack of political will. According to the author:

Gold standards are disfavored by those who do not create wealth but instead seek to extract wealth from others through inflation, inside information, and market manipulation.

But the Forbes reviewer says that this is not the case. For Benko, decision-makers in Capitol Hill are just not that familiar with gold. For him, political will is not the key.

Adopting a classical gold standard policy "merely requires more “demonstrable data and reasonable inference.”

According to him, there is a lot of research suggesting that world economies will benefit from a gold standard. So he agrees with Rickards on that point.

It is in this vein that most commentaries about Rickards is structured. Many say that the newsletter editor is indeed a smart man, even brilliant. But in the same breath, they also disagree with his style, focus, or tone.

In the case of this book and review, the author defends himself against critiques of the negative tone of his predictions.

But honestly, how can you not be frightened by a title like "The Death of Money: The Coming Collapse of the International Monetary System"?

Besides, it's not like the lawyer-investor has not built a reputation and career on being a doomsayer.

Sound but bleak

In a January 2021 Financial Times review of his book, the title goes like this:

A bracing collection of salvos on the ‘new Great Depression’
An enjoyable, if unduly pessimistic, forecast on the post-pandemic economy

Writer John Plender calls his measures on dealing with inflation and deflation "sound" advice. He adds that The New Great Depression has "many genuine insights" and is an "enjoyable book to argue with."

Moreover, Plender admits that a slow growth prediction after the pandemic might have grounds.

However, the writer also admits that Rickards' commentary on the pandemic policies has been "provocative." He says that what the author paints is indeed a bleak picture.

So it does appear that there is a basis for how many characterize Rickards, his books, and his newsletters.

Apocalypse

We also found a 2014 review of an article the editor wrote. Apparently, he predicted that by 2020:

all the gold of the G-20 nations will be confiscated and buried in a former nuclear bunker under a mountain in Switzerland to take it out of the global financial system.

The review said that this was from his newsletter, Strategic Intelligence. It also asked the question:

Has the normally sober and thoughtful Mr. Rickards lost his marbles?

Well, it's past 2020 and this has not happened. So what was the investor thinking? Even the reviewer at the time commented that it was indeed absurd, a "totally unrealistic world gold confiscation scenario."

The Arabian Money review adds that the investor also predicted that by 2024, there will no longer be money, markets, or bonds. You can only survive if you bought gold, land, and fine art.

The reviewer opines that these scenarios are not possible. It's interesting to note that, of course, you will thrive in the apocalypse if you heed his newsletters' recommendations.

So it seems like his assertions have more to do with subscriptions and book sales. Do we think this is the case?

Well, it's hard to tell, really. He has long held such views and we cannot determine what his intentions truly are. Even his worst critics acknowledge his intellect. 

In the end, the article calls his assertions "alarmist nonsense."

Legit or scammer?

From the people

These days, one cannot easily dismiss Reddit boards anymore. Though anyone can just post anything on the platform, it is increasingly becoming an influential community.

A case in point is the r/investing thread. Created in March 2018, it has two million members. Even if not everyone is actively posting, people see what others post.

We found two questions that pertain to Rickards. One asked, "How credible is James Rickards?" 

One particular comment here pointed out that the editor is a purveyor of "financial doom porn." Though they admit that Rickards seems to have a credible background, it does not help his case that he focuses on crises.

User "dvdmovie1" also adds that the editor has always predicted a crisis for years. It has been the topic of his newsletters and books.

Though these are "compelling and engaging," the commenter says that these are irritating. Using a "financial crisis that's continually just around the corner" is not helpful at all.

Worse, they feel that the tactic victimizes older people. Naturally, since they are concerned about their savings, they will heed Rickards' advice.

Unfortunately, the commenter feels that treating gold "as the one true savior" is wrong. 

Meanwhile, another user minces no words. According to "WilliamNyeTho":

He is very good at speaking, thinks very highly of himself, talks in a way that makes him seem smart, and has a dogshit track record.

The other thread wanted to know if he is a "wise insider or gold peddler?"

A comment there advised readers to read more history. Throughout the years, "Spezza" argues that markets and economies have collapsed. But the system allows it to recover after that. They add:

Economic apocalyptic thinking isn't materially useful. It is just one end of a spectrum, the other being an exponential bull market - which nobody thinks likely either.

Another commenter admits that Rickards's ideas were interesting. However, they ignored his commentary on gold as his peddling was off tangent in his book, Currency Wars.

Admittedly, these are not blockbuster threads. But there is value in them, as many can access these comments. In addition, we do get valuable insights from regular investors who post there.

All about the money?

In our research, a harsh Rickards critique came up from the San Diego Consumers' Action Network blog. It comes with the title: SCAM ALERT: Learning Not to Fear Rickard’s “Day After Plan.”

The 2014 article begins by enumerating a few of the lawyer-editor's supposed claims in The Death of Money. Apparently. there was going to be a "70% stock market crash."

The article also claims that Rickards was warning people about a "$100 trillion meltdown" and an "upcoming catastrophe." We are not aware of these because "our leaders have kept us in the dark about this dangerous situation."

So what's the issue? The article contends that these are merely scare tactics. Further, it asserts that Rickards does not actually want to safeguard your wealth.

The article says that his ultimate goal in being a doomsayer is to get more book and subscription sales. You need to be aware that "Mr. Rickards wants your money," it adds.

The review backs this up with Rickards' prescriptions as proof. You will be safe from the bloodbath only if you invest in "gold, real estate, art, hedge funds, and cash."

However, the article says that these are all complicated investments. Naturally, you need his advice as you proceed. So in order to survive, you of course need to purchase his books and subscribe.

But he’s not selling a policy book. He’s exhorting individuals to substantially change their investment portfolios and plunge their assets into very challenging and risky investment vehicles.

So is the blog calling the book and its author scams? Well, not really.

Is it a scam? Perhaps not, as he is offering information, even though it may be skewed. Is it fraud? Again, probably not, as these people may actually believe their dire warnings.

But the point is clear. For the writer, Rickards's agenda is not the welfare of his readers and subscribers. The editor-author merely is leading people in complicated portfolios so they would need him. 

Defense mode

But what is the deal with the constant warnings of impending doom that do not seem to happen?

The economist-investor gives a sober response in the video below starting at the 36-minute mark.

In the interview, Rickards seems to distance himself from the more dire predictions. He says that most of the time, people put words in his mouth. 

He even clarifies that he has never once said that "the world is ending, sell everything and buy gold." What he asserts is that it would indeed be a different world when the next crisis happens. 

You do not need to sell everything but would benefit from putting 10% of your portfolio in gold.

So why has the crisis not happened yet? The interviewers asked if it was "just around the corner" or if he was just wrong? Rickards answers that it might only be delayed.

To add texture to his defense, he gives some history nuggets on previous financial crises. Then he pointed out that logically, it means that the next one is indeed about to happen.

He even jokes that he is certain no one would be willing to bet that there will never be a crisis again. For him, the point is to prepare early because it is inevitable. If you don't, you won't be able to protect your wealth.

What he can do based on science, he says, is to "estimate the magnitude." But he admits that knowing the exact day and hour is challenging.

We do see his point. However, we wonder why he does not seem to make an effort to correct such impressions of him as a doomsayer? In fact, all his books and newsletters capitalize on this branding.

Does he want us to believe that everything is the fault of his copywriters or PR people?

Controversial Involvements

Government agencies

His profile makes a lot of claims that point to his being the ultimate insider.

Rickards says that he was an adviser to John Mccain's presidential campaign. Also, he claims to be on a first-name basis with Donald Trump's cabinet.

Moreover, his bio states that he "fraternized with four-star generals and NSA director, Michael Hayden.

Before the 9-11 attacks, Rickards claims that the CIA asked for his help. There were anomalous investing patterns on Wall Street then, so the agency solicited his expertise.

He talks more about it in the video below:

According to him, the CIA reached out because they wanted to know if the markets can predict another 9-11 attacks.

This would be possible if there was suspicious insider trading again. Apparently, the agency saw that two days before the terrorist event.

Since he says he was an expert in the markets, he was among the consultants in Project Prophecy. Its mission was to save lives through the initiative.

While he was working on the project, Rickards says he was also able to learn statistical techniques. He then realized that aside from counter-terrorism, such tools are also useful for other things.

Among them are predictive analytics in geopolitics and capital markets.

Naturally, since this is a high-profile work, Rickards capitalizes on this a lot. He mentions this to boost his profile, along with his involvement with the U.S. Department of Defense and the Pentagon.

Genius hedge fund

John Meriwether founded the hedge fund, Long-Term Capital Management (LTCM). It has a rather interesting history, as covered by Business Insider.

Previously, Meriwether was with Salomon Brothers, serving as vice chairman and head of bond trading.

Back then, LTCM was a huge deal in the industry. Its key leaders included professors, Nobel Prize winners, and finance professionals with doctorate degrees, among other people.

Meriwether founded the company in 1994 with a whopping $1.25 billion initial capital investment.

From the beginning, LTCM was a firm that demanded a lot. It also Asked for a 25 percent asking fee on profits, in addition to its substantial capital.

Moreover, the company requested a two percent charge on assets on an annual basis. Those who wish to invest must also ensure that they retain their capital for a minimum of three years.

LTCM was able to grow to be worth $140 billion in assets in just two years as a result of its aggressive stance.

However, the honeymoon period was short-lived. During 1997 and 1998, the world witnessed devastating crises in Russia and Asia.

By 1998, LTCM's losses on swaps and volatility trades had totaled nearly $3 billion in value.

Because of the exposure of different companies within the firm, if LTCM goes bankrupt, the entire Wall Street financial system will go down with it. This was how significant this issue is.

It was during this period that the Federal Reserve finally intervened to arrange for a bailout to take place.

This is where Rickards came in. His role proved to be consequential as he served as the company's chief negotiator and legal counsel.

There was a lot of wheeling and dealing, for sure. However, in the end, LTCM became successful in securing a $3.635 billion bailout from the Federal Reserve Bank of New York.

Even though Bear Stearns and Crédit Agricole refused to participate in the transaction, others contributed.

Eventually, eleven of the banks agreed to put in $300 million, Lehman $100 million, and two French banks at $125 million each, for a total $3.65 million bailout.

LTCM was able to regain its footing shortly after.

We believe it is important to mention this because this is a watershed moment not only in the financial sector but also in world affairs. 

Due to his prominent role in the ordeal, we admit that this signals that he possesses the gravitas and know-how necessary to negotiate the complicated bailout.

Based on relevant literature, including one written by Addison Wiggin on Forbes, he indeed appears to be competent. However, we want to note that the writer is from Agora, a publisher with which Rickards has links.

It also seems like his knowledge of international affairs, economics, and law came in handy. After all, he does claim that he is an expert in these.

As a potential investor, this could be a promising sign for you. 

Consider what it would be like to follow the financial advice of someone of his caliber. Without a doubt, his previous experience with the LTCM distinguishes him from other newsletter editors.

This is a frequently heard comment. Unfortunately, several so-called experts lack a substantial amount of practical experience. Despite this, they continue to dish out investment commentary with a lot of sass.

So, to be fair to Rickards, this is a significant boost to his overall credibility.

Ultimately, he says he learned a valuable from the situation. The model Wall Street banks and the Federal Reserve use to assess risks is completely inaccurate. It is the reason why such a "genius venture" failed.

Eventually, this guided his strategies and perspectives.

Conclusion - Is he a fraud?

It seems like he has been called all names.

We have already enumerated them in our introduction. But even that is not a complete list. You may head to our previous articles on his credibility and Strategic Intelligence newsletter to see more. 

But until now, he is a sought-after guest and speaker everywhere. People and even other experts still want to hear what he has to say. He often mentions his roles in the CIA, Pentagon, and Department of Defense.

In addition, he has money. For an investor, we think this is a critical point to see if their analysis works for them as well. According to an article on his net worth, he has about $19 million as of January 2022.

Though he has a public persona, he mostly keeps a private life. We know, though, that he has been married for 43 years, he lives in New Hampshire, and is a registered Republican.

When we scanned relevant information about him, we found a lot that justifies some labels. He predicts a lot of things. Included here are the dollar's collapse, gold confiscation, another great depression, and the like.

Those familiar with his work generally agree that he does provide a set of arguments. But not everyone is impressed by his justifications. For most, he needs to give extraordinary evidence for his extraordinary claims.

When confronted about some predictions that did not happen, he defends himself well. According to him, it really is difficult to know the timing of such things.

Moreover, no one argues with him that a financial collapse will happen again. Many seem to agree that it is a part of the market life cycle.

The main point in his books and newsletters, according to him, is to prod people to prepare. It's either you are ready, or it's too late. besides, a lot of the extreme statements attributed to him are wrong.

Or at least that is what he claims.

So there are people who also say that he appears to be smart. But his predictions and investment recommendations are not useful. Many say they will listen to Rickards but not necessarily follow his advice.

In the end, we go back to our main question. Is Jim Rickards a fraud? Based on our discussion, have you arrived at a conclusion? Do tell us your thoughts below.