Tuesday, May 11, 2010

Jim Rickards on CNBC: "Goldman Can Create Shorts Faster Than Europe Can Print Money"




Market observers have been quick to agree that Europe can not print its way out of its crisis, in spite of the $1 trillion emergency rescue package announced Monday. The best quote expressing this view comes Jim Rickards, senior managing director for market intelligence at Omnis, Inc., a scientific consulting firm in McLean, Virginia, from his appearance on CNBC.

Rickards quote, from the CNBC video above from Monday, May 10 during early morning show Squawk on the Street at 7:23 AM, is as follows:

"Look at what Soros did to the Bank of England in 1992. He went after them, they had a finite amount of dollars. He was selling sterling and taking the dollars, and they were buying the sterling and selling the dollars to defend the peg," Ricards said. "All he had to do was sell more than they had and he wins. But he needed real money to do that. You either had to have cash, which he did, or bank lines of credit."

"Today, you can break a country. You don't need money. You just need synthetic euroshorts and CDS. You have a trillion dollar bailout. Butm Goldman can create 10 trillion of euroshorts. So, it just dominates whatever governments can do. So, basically Goldman can create shorts faster than Europe can print money. You say the market wins, but it's not really a market, it's back to this casino thing, and that's the problm."

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