Paradigm’s macro expert, Jim Rickards, offers his up-to-the-minutes perspectives on three major geopolitical and economic flashpoints: the India-Pakistan conflict, the upcoming BRICS summit and the evolving U.S.-Saudi relationship.

His analysis underscores the interconnectedness of global events and their impact on markets, while consistently urging investors to prioritize financial resilience.

First, Jim warns that escalating tensions between India and Pakistan have brought the world to “the brink of an existential war between two nuclear-armed powers.”

He contends that if the situation deteriorates toward nuclear confrontation, “it’s not inconceivable that the U.S. or perhaps a joint U.S.-Russia mission would attack and destroy both the Pakistani and Indian nuclear weapons systems in a way that did not set off a nuclear explosion.”

The goal, he stresses, would be to “eliminate an existential threat to the human race,” not to choose sides.

He advocates for a “game theory approach” in which this potential response is communicated in advance to both countries, aiming to deter escalation.

Yet, Jim is clear-eyed about the challenges: “Pakistan’s politics are perennially unstable, and India’s ruling party has staked out a nationalist pro-Hindu platform. Those realities make compromise more difficult.”

He suggests that U.S. mediation may be necessary, especially as “the last thing the world needs is a shooting war between two nuclear-armed powers.”

For investors, Jim advises prudence: “reduce exposure to risky assets like stocks and increase allocations to safer assets including Treasury notes, cash and gold”.

Your Rundown for Monday, May 19, 2025...

BRICS Summit and Petrodollar 2.0

Turning to the upcoming BRICS+ summit in Rio — the coalition of Brazil, Russia, India, China, South Africa plus several other nations — Jim tempers expectations about a dramatic overhaul of the global financial order.

“The BRICS will not be announcing a new BRICS currency,” he clarifies, noting that speculation about such a development is premature.

He adds: “There may not be a BRICS currency for many years, maybe ever.” Similarly, the idea of a return to a gold standard is dismissed as “overhyped,” though he emphasizes that “gold is still a central part of what the BRICS are all about.”

Jim explains: “Those calling for a new BRICS currency seem not to realize that the BRICS already have a common currency — it’s gold!”

He argues that gold serves as a “leading reserve monetary asset for BRICS central banks” and is “freely accepted by the other BRICS members.”

While the summit may disappoint those “predicting a ‘global reset’ or the ‘end of the dollar,’” Rickards believes it will still be “momentous” for the direction of the global monetary system.

His advice: “Get your gold while you still can.”

Addressing the evolving dynamic between the United States and Saudi Arabia, Jim describes ongoing negotiations as the emergence of “Petrodollar 2.0.”

He outlines that the new arrangement would see Saudi Arabia recognize Israel as part of the Abraham Accords, in exchange for expanded U.S. security guarantees, including “uranium enrichment technology.”

Financially, Saudi Arabia would “continue to price oil in dollars but could agree to be paid in other currencies, primarily euros,” while maintaining purchases of U.S. Treasury securities and gold.

Jim notes that “not much would change from the current petrodollar deal except for the enhanced security guarantees.”

The delay in finalizing this agreement, he explains, is due to the ongoing Gaza War, as “Saudi Arabia will not recognize Israel until the Gaza War is over.”

He sees the potential for the Trump administration to play a pivotal role in completing this process, which would “stabilize oil prices and make the dollar stronger in global markets.”

Jim’s analysis draws a consistent thread through these global developments: instability and transition create both risks and opportunities.

Whether considering the specter of nuclear conflict, the incremental evolution of global financial architecture or the recalibration of strategic alliances, Jim’s message is clear: “investors would be prudent if they reduced their exposure to risky assets… and increased their allocations to safer assets including Treasury notes, cash and gold.”

His insights offer a roadmap for navigating a time when, as he puts it, “the world continues to be on fire with wars still raging… and so much uncertainty.”

Market Rundown for Monday, May 19, 2025

S&P 500 futures are down 1% to 5,910.

Oil is down 0.45% to $62.20 for a barrel of WTI.

Gold’s up 1.80% to $3,244.40 per ounce.

And Bitcoin is down 1.60% to $102,500.