James Turk continues:

It is beginning to pump some money into the system.  Last week it turned $42.5 billion of debt into dollar currency - what is called monetization.  Only $2 billion was new cash currency, which are the dollar notes that we carry in our pocket.  The rest was deposit currency, which are dollars that circulate within the banking system.

Regardless, both are currency, and they both can juice the system, though deposit currency tends to have a bigger and immediate impact because it circulates more efficiently and usually more quickly....

Continue reading the James Turk interview below...


UPDATE: To hear which company has one of the highest grade gold

deposits in the entire world, as well as a number of other

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“And we are seeing that impact today in higher prices in just about everything, but particularly the precious metals and of course the stock market.

The following chart illustrates the close correlation between the S&P 500 and the securities the Federal Reserve is monetizing.  The amount last week is not that big, but even small amounts can impact stock market prices. Note the small recent uptick in the red line in the chart.

The important message from this chart, Eric, is that the stock market is not rising because of good economic activity, which is understandable.  The economy will not be improving until employment starts growing again.  After all, that is what economic activity is all about - people working and saving or spending the money they earn.  And here's the horrific part.

On an inflation adjusted basis, on average people in the US are earning an income which is lower than it was years ago.  The Financial Times here in London reported recently that the median income of American households is at to its lowest level since 1995, and that's using the government's own CPI calculation, which is as fictitious as the unemployment report that shows fewer people out of work.  Government economists and their reports are politically motivated.  Inflation is much higher than the government reports, and so is unemployment.  

Private economists show a much higher level of unemployment.  John Williams of ShadowStats calculates it to be 22.9%, just below the all-time high of 23.0%.  He calculates the present inflation rate at 9.8%.  Both of these estimates are much closer to the truth, which is bad news for the dollar because the Fed will get those printing presses working overtime before too long.  Printing money is the only answer the central planners have for everything, but it does nothing except buying some time, at a cost of making the problem that much worse.  All of this of course is very bullish for gold and silver.

The December options expire in a few days, and that might create some downside volatility as we have mentioned many times before.  But don't let any volatility or other noise keep you from your mission of accumulating on a regular cost-averaging basis physical gold and if you are so inclined, silver too.”

© 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.

The interviews with Don Coxe (BMO $538 billion), Ben Davies, Art Cashin (UBS $612 billion), Nigel Farage, Bill Fleckenstein and Rob Arnott (RALLC $100 billion) are available now.  Also, be sure to listen to other recent KWN interviews which included Gerald Celente, John Hathaway, John Embry and Stephen Leeb by CLICKING HERE.

Eric King

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© 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.

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