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Chris Whalen - We Have Panic Right Now & Flight Into Gold
With gold and silver on the move, and growing concerns about the health of the banking system on both sides of the Atlantic, today King World News interviewed Chris Whalen, from Tangent Capital. When asked about the record demand for gold and panic in Europe, Whalen stated, “Well they should be. We have paralysis, in terms of fiscal policies, as you know. Most of the EU governments are still not willing or able to engage on the more fundamental issue of money or budgetary constraints within the member countries. So, by definition, you raise the issue is this currency any good? Are we going to be using this currency a year from now?”
© 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 This material may not be published, broadcast,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.
January 18, 2012
Chris Whalen continues:
“So Europeans, who have the wherewithal, of course they are going to flee to gold. They are going to flee anywhere where they believe they can preserve principal. I hear the same concerns from US investors by the way. So if you are looking for havens, where can you go? You can go into physical gold and take delivery.
There are lot of people doing this now because they look at the gold market, the ratio between outstanding contracts and physical available for delivery and they don’t like it. They actually want the gold in their vault. So there has been a boom of building (vaults) in Switzerland, Asia and other markets where you can take physical delivery of gold in your own name. That’s not a good sign (in terms of confidence in the system).
When people are actually fleeing markets and they want to take delivery of the underlying, you know you really have a panic on your hands....
Continue reading the Chris Whalen interview below...
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When asked what former Fed Chairman Paul Volker has been saying to him lately, Whalen responded, “I haven’t really spoken to him about the economy, but I know he’s very concerned about the fact we have a lot more people who want to work than we have work for them.
But he’s always been friendly towards big banks. He’s, as I called him in my book, the father of too big to fail. While he’s lionized for his role in terms of monetary policy back in the 70s and 80s, I think, in a large sense, his contribution to this whole discussion about the financial markets and reform has been somewhat oblique.
Again, going back to the earlier point, I don’t understand why we’ve gone after things like principal trading, but we have barely touched over the counter derivatives.”
When asked about the banking crisis in Europe, Whalen stated, “There’s such a connection between the governments in Europe and the banks, they didn’t want to let people short the securities of the banks because of the political implications for Europe. That’s unfortunate because it’s a sign of weakness.
If the Europeans had a reasonably strong hand, and if they did indeed have a plan for dealing with their problems, they would welcome investors into the market. They would want them trading their bank securities. So, I think, unfortunately, we still don’t have a solution in Europe. The more the European governments try to protect themselves, by limiting transparency, by limiting market activity, I think this is all for the bad.”
The KWN interview with Chris Whalen 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
