- Jim Rickards says the Israel-Hamas conflict could lead to a global recession and financial crisis.
- He says the US economy is already slowing down as people’s savings are declining and credit-card bills are rising.
- Wall Street veterans flagged the risks of rising oil prices, weak demand and de-dollarization.
A Wall Street veteran has warned that if the Israel-Hamas conflict spreads, it could lead to a worldwide recession and financial ruin.Thank you for reading this post, don't forget to subscribe!
Israel is currently bombing Gaza and is preparing to launch a ground offensive in retaliation for Hamas killing approximately 1,300 civilians and taking 150 hostages in a surprise attack on October 7. The Lebanese terrorist group Hezbollah and Iran could go to war against Israel and draw the US in. At war, Jim Rickards recently told “The Julia LaRoche Show.”
“These are the kinds of things that are really going to lead the global economy to a global recession, if not a financial crisis,” said Michael Schwartz, a former employee of Citibank and Long-Term Capital Management and author of “Currency Wars: The Making of the Next.” ” Global crisis.”
Rickards said the US economy already appears to be faltering. American consumers have “hit the brakes” in recent weeks, he said, as they have nearly exhausted their pandemic savings and accumulated massive amounts of credit-card debt.
This may explain why gasoline consumption has declined over the past few months, which is “a really negative economic sign,” said the editor of the “Strategic Intelligence” financial newspaper. He said soft demand could explain why oil prices have not risen since the Israel-Hamas fighting began, which has sparked fresh supply concerns.
Both Brent and West Texas Intermediate crude are currently trading below $90. If the latest Middle East war escalates they could rise to $120 or $150, Rickards said. He said the prospect of higher oil prices coupled with weak consumer spending and the continued headache of the Russia-Ukraine conflict bode poorly for U.S. growth.
Rickards also sounded the alarm on de-dollarization, accusing the US government of “destroying the dollar” by excessively using economic sanctions. He pointed to the country’s decision to freeze Russia’s dollar reserves as punishment for its invasion of Ukraine, and warned that it would force other countries to develop alternative currencies and dump the greenback to avoid the same fate. Can inspire.
“We weaponize the dollar, you should expect trading partners to weaponize the dollar back,” he said. “We’re losing the financial war in Ukraine, we’re losing the financial war with the BRICs,” he added, referring to Brazil, Russia, India, China and South Africa.
Rickards is not the only expert to sound the alarm on the Israel-Hamas conflict. Billionaire investor and economic historian Ray Dalio recently estimated the probability of world war at 50% next decade,