John Hathaway continues:

“This summer, when we got up to $1,900, gold was overcooked and sentiment was bullish.  All of the front page stories were about the reasons to own gold.  The usual suspects were bulling it like (Dennis) Gartman, to give one example.  Now Gartman is calling it a bear market in gold and that is a good contrarian indicator.  This is the time when you want to put some money to work, particularly in the metals.

Basically, we have to take our cue from gold when looking at silver.  The things that are going to drive gold are going to drive silver, but as always, silver will get a bigger percentage move. 

Don’t lose sight of the long-term rationale for investing in precious metals and that is monetary debasement.  I see nothing to suggest anything has changed.  I listened to (Jim) Sinclair’s interview and he was saying there is no way that austerity is going to last as something that is politically acceptable.  I couldn’t agree more with him. 

Austerity is deflationary and it means people lose jobs, benefits are cut back.  Uncertainty at the consumer level has to be undermined by a program of austerity.  It’s kind of like the flavor of the month in political policy, but I give these guys about six months, the technocrats, and even Merkel in Germany. 

We are not going to have an advance word of when they are going to turn on the printing presses....

Continue reading the John Hathaway interview below...


To hear legendary company builder Rob McEwen, original Founder of

Goldcorp discuss which company he invested $60 million

of his own money in and why click on the logo:

“Therefore you can’t time it if you are dispirited in gold or the mining shares.  You just can’t get in ahead of that moment when everything goes ballistic.  You have to be in already and endure the pain that we are all feeling.”

When asked about the full-blown bash on gold from the media and some claiming there will be a collapse in price, Hathaway stated, “I have a hard time seeing that.  What we are seeing is the momentum guys, the dumb one got in at the top, they are all getting out now.  That’s really all that is going on here, it’s as simple as that.

The bigger picture is gold continues to be in a long-term bull market.  This correction is well within the confines of what you can tolerate to say gold is still in a bull market.  Frankly, this is exactly what we need to set up a base for going to new highs.  I think we are going to be done with this by the end of the year.

We are seeing the last couple of weeks of tax loss selling in the mining shares to end the year.  This will all be over shortly.  I think we will be set up very well after that because so many people are out of the space.  The buying power is going to be there to take us to new highs as key events unfold.

As an example, the Fed is extending swap lines to the European central bank.  If you look at what’s going on at the European Central Bank balance sheet, they say they are not printing money, but the balance sheet doesn’t say that.  The balance sheet is going up at a tremendous year over year pace.  It has something to do with the fact that the Fed has become the lender of last resort, not only for troubled banks in the US, but also for those in Europe.”

© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.

Eric King

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© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast,

rewritten, or redistributed.  However, linking directly to the blog page is permitted and encouraged.

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