JIM RICKARDS: Here's How To Trade In A World Of Currency Wars And Potential Collapse

We start with the quantity theory of money, which links the money supply to prices

The money supply has exploded since 2008 as the Federal Reserve has expanded its balance sheet through quantitative easing

Even though the money supply is expanding, the velocity of money is tanking

The Fed needs to figure out how to remedy falling money velocity

And it's already tried quite a bit

JIM RICKARDS: Here's How To Trade In A World Of Currency Wars And Potential Collapse

JIM RICKARDS: Here's How To Trade In A World Of Currency Wars And Potential Collapse

JIM RICKARDS: Here's How To Trade In A World Of Currency Wars And Potential Collapse

The Fed's models rely on an outdated view of financial markets

Markets are more like complex systems, which tend to move away from equilibrium, rather than toward it

And complexity and interconnectivity have increased considerably over time

Here's another look at that

There are a few different paths forward for the international monetary system

The first is a world of multiple reserve currencies, as opposed to just one (the U.S. dollar)

Another is a system revolving around IMF Special Drawing Rights

There's also a return to the gold standard

The United States holds the most gold in the world

Unless you count the euro zone as a single entity

JIM RICKARDS: Here's How To Trade In A World Of Currency Wars And Potential Collapse

The stock market is nowhere near a high in gold terms

JIM RICKARDS: Here's How To Trade In A World Of Currency Wars And Potential Collapse

Here are some trade ideas

JIM RICKARDS: Here's How To Trade In A World Of Currency Wars And Potential Collapse

JIM RICKARDS: Here's How To Trade In A World Of Currency Wars And Potential Collapse

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