My Blog

Eveillard - If Italy Sells its Gold Here is What Will Happen

With gold near $1,750, silver around $34 and investors around the world focused on Europe’s debt problems, today King World News interviewed legendary value investor Jean Marie Eveillard, who oversees $50 billion at First Eagle Funds. KWN wanted to get Eveillard’s thoughts on what is happening in Europe and how it will impact the price of gold. When asked about Europe, Eveillard replied, “I understand the stock market was up today in Europe and the US, to some extent, because there is a new Greek Prime Minister. It doesn’t matter, Greece is gone. Italy is too big to fail but it’s also too big to bail. I think it’s a phenomenon of contagion.”

Jean Marie Eveillard continues:

“With the Italians and the French too, I must say, in the post World War II period they love to devalue every now and then. All of the sudden you have the same monetary union, you have the same currency as the Germans, so you can no longer devalue.

What Italy is suffering from, of course, together with Greece, Spain and Portugal, is the fact that the euro is twelve years old and over the past twelve years Italy, Greece and a few others, they are no longer truly competitive. And they don’t have the alternative of devaluation.

Let me put it another way. The Germans see themselves as the ants and they look at the Greeks and the Italians as the grasshoppers. The ant was busy all summer, didn’t sing, didn’t dance. Come winter, the ant is not particularly eager to help the grasshopper.”

When asked about gold specifically, Eveillard responded, “I think the secular bull market continues. I mean today the price is weak. I remember in late 2008 the price of gold was going down, in spite of the fact that I thought the financial crisis was extremely helpful for the gold outlook....

Continue reading the Jean Marie Eveillard interview below...

To hear which company $10 billion Sprott Asset Management and Sun Valley Gold

are the largest shareholders of and why click on the logo:

“I don’t know when the end game will be, whether it’s in six, twelve, eighteen months, who knows? But the end game is extraordinarily positive for gold. I mean one has to keep in mind that at some point the authorities will try to punish the gold holders.

During the days of the Weimar Republic, in the early 20s in Germany, with hyperinflation, the government made sure the ownership of gold, not just the purchase of gold, but the holding of gold was illegal.

I’m not saying that the American government is going to confiscate the gold. Franklin Roosevelt did it, admittedly, but I think today it would be a lot more difficult to confiscate gold. But maybe taxes will be increased for owners of gold.

The authorities will try to punish the investors in gold. But that will simply delay the ultimate peak in the bull market for gold and I think we are far away from that.”

When asked if the Italians would sell their gold, Eveillard replied, “It would make a terrible impression. It would be the idea that, ‘Gee, they are selling the family jewels,’ if they were to do so. It would be a little bit like the IMF at the beginning of 2010 sold 200 tons of gold. It was India that bought it.

The gold price subsequently went up because I think it was interpreted as gold moving from the weak hands of the IMF, to the strong hands of India. The idea is the West is declining. The West, which dominates the International Monetary Fund, is declining and the East is rising.”

The extraordinary KWN audio interview with Jean-Marie Eveillard is available now and you can listen to it by CLICKING HERE.

Eric King

KingWorldNews.com

To return to BLOG click here.