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James Turk continues:


“Here in Europe there have been a slew of downgrades of sovereign debt, with France losing its AAA standing.  Yet few question the solvency of the ECB, which has purchased over 200 billion euros worth of paper from governments whose credit ratings are seeing a steady series of downgrades. 


Another example is MF Global.  Can people really believe the regulators and MF Global management don’t really know what happened to the missing $1.2 billion?  I see all of these things as serious warnings, Eric, confirming two things.  First is the obvious one, that the financial system is in disarray and things are not functioning as they normally should be.  The second point relates to the psychology of the market.  When there is a bubble in the markets, people are either not paying attention or accept as conventional wisdom premises that do not stand up to logic or any kind of rationale analysis.


We’re seeing this mentality today and it confirms my longstanding belief that we are still in this national currency bubble.  People still believe currencies backed by nothing except government promises are in fact money.  This belief is widespread, throughout the globe, even though countless national currencies have been destroyed over the past 100 years by government and central bank mismanagement. 


Taking all of this together, and looking a year or two ahead, it seem to me that we are heading into the vortex....


Continue reading the James Turk interview below...




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“I’m afraid that the Lehman event was just a warm-up for what promises to be a much deeper, widespread and more severe banking and currency crisis.


To protect themselves from the coming collapse, investors need to own physical gold and silver as well as other tangible assets that make sense, like farmland, mines, oil related assets, etc..  These are the things people will need regardless of what happens in financial markets.  So in my view, investors should continue to stay away from financial assets and the promises in which they rest.


Last week was a pretty good one for both gold and silver, Eric.  With each passing day, the odds improve that the recent lows in the metals represent a level of unbreakable support.  As you already know, I think the lows we saw the first week of January will in fact be the lows for 2012. 


2012 could turn out to be the strongest year for gold during the entire bull market to date.  I think it’s possible gold could see $3,000 this year, given the acceleration I expect to see in my Fear Index.  People can sense the fear building because of all of the financial problems unfolding around us, and that doesn’t even take into consideration the cloudy geopolitical outlook.


The rising price of crude oil is a very important indicator.  Crude is only $15 below last year’s high.  If that high is taken out on the upside, the price of gold will soar.  So, I think a lot of people are going to be surprised at how well gold performs in 2012.”


When asked about the mining shares, Turk stated, “My view is quality mining shares represent great value and one rarely goes wrong buying undervalued assets.  But the markets are not there to make our lives easy.  Sometimes we need patience and that’s clearly been the case for everyone owning mining shares.


I look at the XAU and the HUI in terms of gold and right now the mining shares are at the same historical extreme, in terms of valuation, reached at the selling climax in the shares after the Lehman collapse in 2008.  It’s hard for me to imagine the mining shares will become any more undervalued.  The breakout points, on the upside, are about 230 on the XAU and roughly 620 on the HUI.  I full expect both of these levels will be taken out in 2012.”


Also, for the listeners globally, the extraordinary KWN audio interview with a legend in the gold business, Keith Barron, has now been released and you can listen to it by CLICKING HERE.


© 2012 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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