Dear Reader, Cometh the hour…cometh the man… The markets are imploding, but the calvary is galloping over the ridgeline… Our Jim Rickards Fat Tail Portfolio makes its debut tomorrow. You’ll be sent our full ‘docu-demonstration’ with Jim via email in the morning. In the meantime, if you’ve just joined this induction series, you can view all the ‘prep material’ here: Why you need Jim Rickards’ Fat Tail Portfolio, right now A portfolio to own as markets balance on the edge of the abyss A glimpse ‘under the bonnet’ of Jim’s Fat Tail Portfolio The inflation section of Jim’s portfolio explained (and why it matters) Tomorrow, you’ll receive a full televisual demonstration with the man himself. Advance warning: it’s not short. You’ll need to block off at least an hour of your time to view it. But you can do so at any time that suits during the day. Then you’ll have the weekend…without the noise of chaotic open markets…to mull the recommendations over. And decide which…if any…suit your unique situation. We’re in the process of putting it into transcript form, which we’ll be sending you as well. Here’s a preview of that to whet your appetite… JAMES WOODBURN: So that’s the INNER part of the portfolio. First...strategic element plays. KEY INPUTS that are going to be hotly contested. These cover lead, zinc, copper, silver, and the platinum group elements. Then moves that benefit from broader global inflation. These are portfolio moves...where the fat tail risk is minimal...because the trends are predictable... In fact, they’re already in motion. This section of the portfolio alone could see you come out well ahead over the next few years. Now we move further away from the centre of the bell curve...closer to genuine fat tail territory… These holdings are not pure gambles. They’re not based on crazy predictions. But this is where Jim’s modelled outcomes become slightly less probable...or a little further down the track...but no less significant if and when they occur. This is where Jim projects what the current situation might look like one to two years from now. This is difficult...but not impossible. At the time of recording, for instance, Russia is on the brink of defaulting on its debt. The initial losses could be as high as a hundred and fifty billion US dollars. That’s based on the outstanding debt. How does that affect YOU? Well, if default happens, then contagion takes over. Losses cascade out of control. Like the subprime crisis in 2008…but potentially worse. Here’s something 99% of investors right now don’t realise… Russia actually brought the world to the brink of systemic collapse once before. Unlike today, THAT Russia-caused crisis wasn’t on the front pages 24/7. It was dealt with behind closed boardroom doors. But, just like now, we were perilously close to massive defaults...and a global contagion. One man was instrumental in stopping it dead. And saving millions of ordinary peoples’ retirement portfolios worldwide. That man...as you might guess...is Jim Rickards. JIM RICKARDS: I mean, to use an American expression: this is not my first rodeo. On 17 August 1998, Russia defaulted on their external debt and greatly devalued their currency. That triggered a global financial crisis. This had actually started in June 1997 in Thailand with a devaluation of the baht and a run on the bank. And then contagion took over that spread to Malaysia…Indonesia. By the late fall of ‘97, it hit South Korea. You know the old expression; you should always buy stocks and bonds when there’s blood in the streets. Well, sadly, there was real blood in the streets. People were getting killed and riots in Korea calmed down a little bit over the winter, and then boom, in 1998, it blows up in Russia. And everyone thought that Brazil would be the next domino to fall. It turned out to be a hedge fund called Long-Term Capital Management. I was their chief lawyer. So it ended up in my lap. And I negotiated that bailout, that rescue...US$4 billion all cash to support a US$1.4 trillion balance sheet of derivative dispositions. Now, what people don’t realise is we got it done. The money changed hands. The Federal Reserve cut interest rates twice in very rapid succession at emergency meetings. And the world went on. But we were hours away, just hours away, from shutting down every market in the world. It would’ve started in Tokyo, Sydney, gone around the world, and ended up in New York. They all would’ve been closed at least for a few days. That’s how bad it was. And Lehman Brothers would’ve failed THEN! We wouldn’t have had to wait until 2008. They were the next in line. So having watched this happen from a front-row seat, I look at it now. And by the way, Russia learned their lesson after ‘98. They said never again for us. They built up their reserves up to US$600 billion, 20% of that about, maybe US$150 billion, give or take, is in gold, physical billion, euros, some Chinese yuan. So they have a low debt load and a very high reserve position relative to GDP. And they were sovereign. They were actually one of the best creditors in the world. But now that’s all been thrown out because they’re banned from the payment system. They can’t pay if they want to, even if they have the money. So my point is what happened in 1998 was unforeseen. It was debatable whether Russia had to do it or not, but it happened and it was bad. Here we are almost forcing it to happen. Almost demanding that it happen. Why would we think the consequences would be any different? JAMES WOODBURN: So...what are those consequences going to be? And what might the big headlines look like a year from now? That’s all you get for now. Stay tuned for the entire presentation tomorrow! Regards James Woodburm,
Publisher, Fat Tail Investment Research | 
