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John Hathaway continues:


“But I think they’ve got six months before people start to get very restive with their medicine of tightening government spending, cutting back on entitlements and all that kind of thing.  I think if you want to have a bet that they don’t have as much time as they need, you should have some gold.


What I expect (out of the European mess) is something on the order of a plan without a lot of details.  They are talking about more of a fiscal union, stiff penalties, you know all of that has been tried in the past without a whole lot of success. 


But it may sound good and that’s probably why the commercials are long (the euro) for the trade.  At the end of the day I think it’s a bunch of fig leaves and then they will try to hammer out details in the coming months, that’s where the difficulty is going to be.


I think gold is waiting for something like that to see just exactly how this plays out.  But once Merkel and Sarkozy put on the table whatever they are going to put on the table, then the way for gold is clear to move higher....


Continue reading the John Hathaway interview below...




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When asked about the action in gold, Hathaway said, “I think it’s pretty decent, Eric.  You know we had that one big surge when the Fed started providing liquidity to European banks and then we’ve been backing off  of that move very quietly.  I think some people were asking is this a one day wonder or not?  But yesterday morning sort of looking like it was kind going to fade lower and it came back pretty strong and I just think it’s terrific action.”


When asked about the coordinated central bank actions, Hathaway replied, “I thought it was terrific because (the fact) that the Fed was involved just shows you how desperate the situation is.  The message is the Fed will provide unlimited liquidity to get us through this. 


The history of providing that liquidity is basically expansion of the Fed balance sheet.  So at the end of the day we are not going to see any solution other than more central bank money printing.”


When asked how the gold price will act after the next round of money printing, Hathaway responded, “I think it could definitely get to new highs.  New highs are not that far from where we are.  It just seems to me that it’s (gold is) a coiling spring.  It tries to go to new lows, but I mean if you just look at the pattern of higher lows I find that very encouraging.  If it can’t go down, ultimately it’s going to go higher.”


When asked about silver specifically Hathaway stated, “It’s like a small cap stock.  There is not a lot of capacity in silver to absorb a fresh flow of new money coming in.  So I think you could get a big, violent move upwards, especially if gold goes to new highs.  I think silver would do so (hit new highs) in a very short period of time.”


The KWN interview with John Hathaway will be available shortly and you can listen to it by CLICKING HERE. 


© 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

KingWorldNews.com

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