Rickards recommends how to hedge against crisis April 14, 2014 EXCERPT: "Jim Rickards: I think Gold will sort of grind its way higher over the course of the year. So, it's around $US1,300 now, you know, you could see it moving towards the $US1,700 level, maybe a little but higher. $US2,000 might be a stretch. You know ultimately, my intermediate three to five year target is more in the $US7,000 range but it's going to take a catastrophe and some realisation that there has been a loss of confidence in paper money to get there. But in the short run, sure, $US1,700 is a realistic target for the end of the year. Lelde Smits: So this catastrophe that you speak of, that is what you expect will be the catalyst for the price of gold to jump from say, $US2,000 to $US7,000 or $US9,000 per ounce? Jim Rickards: Correct. For one of two reasons. One is if you decide that paper money is not worth anything, if you've lost confidence in it, where do you go? Well, there are a variety of hard assets, gold isn't the only one. I mean there is fine art, land. I look at Warren Buffet; Warren Buffet bought the Burlington Northern Santa Fe railroad a few years ago. But what's a railroad? It's all hard assets. It's land, rolling stock, rail, switches, yards, signals, mining rights, et cetera. So, I see Warren Buffet dumping paper money, getting into hard assets. It doesn't matter what happens to the dollar. He owns a railroad. Now, not all of us can go out and buy a railroad or a Picasso, but we can buy some gold, some physical gold for our portfolios and that will preserve wealth. Lelde Smits: Jim you mention preserving wealth. If we can finally take a look at your investment advice. You've consistently advised investors to build a diversified portfolio filled with fine art, energy, precious metals and land. Which asset classes are working the best for you now? Jim Rickards: Well, for the last four years my best performing asset has been fine art actually. And again, as I say, not everyone can spend $100 million on a Picasso, I certainly can't, but there are some very good funds where you can invest significant amounts of money and the fund managers will pull the money, buy the art, over time sell it and distribute the proceeds. So, that has been a very good performer. Land has done very well. Cash has a place in the portfolio. People are surprised to hear me say that. They say, 'Hey Jim, you're talking of The Death Of Money why would you have cash?" And, the answer is, you might not have it forever but it is a good hedge against deflation. You know I'm warning about inflation, but deflation is a danger. Cash also gives you a lot of optionality; the ability to jump into something else when you want to. So, I would say a mix of silver and gold, land, fine art, cash and some alternatives, some hedge funds, carefully selected. That's a good portfolio that will stand up to these kind of crises that I expect."
