Michael Pento continues:

“So he (Japanese Prime Minister, Abe) has promised to declare a war on the Japanese middle class.  He has also declared a war on deflation and he is saying he is deliberately attacking the value of the yen and has a specific inflation target of at least 2%.

Now that sounds very familiar to what we have with Mario Draghi, and doing whatever it takes to control the entire bond market of Europe....

Continue reading the Michael Pento interview below...


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“It also sounds very familiar to inflation targets here in the United States with Ben Bernanke.  This is a watershed epiphany (on the part of central bankers).  This has never been seen before in the major economies of the developed world.

When can you point to a time in history when the leaders of the developed world, when the owners of the world’s reserve currency, have all decided that they are going to destroy the value of that currency vs not only other currencies, but against precious metals and hard assets?

We’ve seen it before (at different points in history) in Weimar Germany, Argentina, Hungary, but we’ve never seen it where Europe, Japan, and the United States, have a declaration of war on their currencies.  The average American, Japanese, and European, must vastly increase their holdings in precious metals, and the (gold and silver) equities, starting now.

When asked if the Dow/Gold ratio is headed back to 1/1, Pento responded, “That number is headed down to low single digits, but I think the bulk of that move is not going to come from a collapsing Dow.  You can get to that (1/1) ratio in two ways:  You can collapse the Dow, or you can increase the price of gold.

I think the price of gold comes up much closer to where we are on the Dow Jones Industrial average.  In nominal terms it’s very hard to crush these major averages when you have a central bank printing $85 billion a month.  Just look at any of the monetary aggregates, M2, MZM, M1, they are soaring, Eric. 

Money supply growth rates will continue to expand, and their rate of expansion will grow.  That is going to bring gold much, much higher than anybody is factoring into their predictions right now.”

Eric King:  “So we would see gold above $10,000?”

Pento:  “Absolutely.  I know it sounds ridiculous, but don’t forget that back in the 1930s it was (around) $21 an ounce.  No one would ever have believed that 80 years later we would have gold trading anywhere near $1,900 an ounce, but that’s what happened.

If you look at the rate of destruction of the purchasing power of all of the developed world’s currencies, it’s a slam dunk that gold is going much, much higher than its inflation-adjusted high of around $3,200 an ounce. 

People are realizing this is an unprecedented scenario where all of these countries have been put on the life support of the their central banks to perpetuate the illusion of solvency.  And when you get to that condition, there really is no limit to how high gold can go.

It wouldn’t surprise me if gold eventually goes to $10,000 an ounce or even higher because there is no limit to the productive capacity of central bankers to produce currency.  I think it would be more surprising if gold didn’t go to $10,000 an ounce.  When the US dollar loses its world reserve currency status and the US bond market collapse is in full swing, a $10,000 gold price may prove to be very conservative.”

Eric King:  “What else do you see happening in 2013?”

Pento:  “Israel will finally address the Iran issue.  I think they attack Iran in April or May.  That sends oil prices of WTI (West Texas Intermediate Crude Oil) to $170 a barrel.  If that’s the case, then you can kiss whatever nascent recovery that we have in this country and around the globe goodbye.”

This is an incredibly important interview with Pento because for the first time, the man that spotted QE4 gives King World News listeners his remarkable long-term target for gold and the reasons why gold will trade at that level. This interview provides an extraordinary wrap to the the 2012 trading year.  The powerful KWN audio interview with Michael Pento 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.

The interviews with John Mauldin, Michael Pento, Egon von Greyerz, Gerald Celente, Andrew Maguire, Roberto Giorgi, James Turk and Rick Rule are available now.  Also, be sure to listen to the other recent KWN interviews which included Nigel Farage, Chris Powell, Bill Fleckenstein, John Hathaway and Ben Davies 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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