Paul Brodsky continues:


“We have fractional banking and there isn’t enough reserves in our banking system to cover the debt, let alone repay depositors should everyone come in at the same time for their money.  Now we are starting to see this play out and I don’t think that MF Global story has permeated the psyche of Americans, but I think there’s a general unease of confidence. 

Certainly among investors we see this (unease of confidence) in volume and daily participation and trading.  Investors are leaving the financial marketplace.  I think it’s ringing loud and clear that we are seeing the status quo system of commercial trade and transactions and monetary settlements start to fade.

Obviously the thing of the moment is Europe and how that’s going to (shake out).  I was very interested to hear Jim Rickards, his conversation with you where he is calling for something to occur by May, which makes total sense.  We tend not to be that tied to timing, (but) we couldn’t agree more with the setup that he (Rickards) provides....

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“So there may be an event occurring by then.  I think he (Rickards) was speaking of the Fed and other central banks targeting notional GDP, which is a fancy way of saying QEX, to infinity.  It’s nice to hear a time being put on that.  Lee Quaintance, my (business) partner, said sometime in the next six to twelve months we should be seeing significant change in the global monetary regime.

It’s hard to say how this plays out exactly.  I don’t think they players know, and again, I don’t think there’s a Vince McMahon (one man in charge), behind the curtain, pulling the strings and telling everyone what to do.  But it seems very clear that you probably do have players that have a lot of balls in the air and trying to keep them all up in the air and have an increasingly difficult time doing so.

This seems to be coming to a head now and at the end of the day, whoever this is, and let’s just call them global policymakers, as they try to keep this going they are holding a burning match because the real economy itself is suffering as they are doing this.

So, I don’t know what the flash point would be.  I am willing to take Rickards at face value and say, ‘Gee it might be Europe in May or it might be sooner than that.’

When asked about the impact on gold and silver, Brodsky responded, “Well, they are either going to rise in the marketplace or they are going to rise formally, by devaluation.  My sense is that at some point in time any gold or silver that has been leased is going to have to be covered.

Whoever is shorting it, whoever is on the other side of that trade, is going to lose confidence they are going to be able to cover and you’re probably going to see it rise in the marketplace.”

The tremendous KWN Paul Brodsky interview is available now 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

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