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Rick Rule continues:


“The insane amounts of liquidity being pumped around the world by this idiotic printing means people are afraid.  And one expression of that fear is very, very strong demand for physical precious metals.


You have great timing asking me about the longer-term picture.  This is a question I have been thinking about a lot since you last interviewed me when I was in New Zealand.  What we have been noticing over the last twenty years is that greater and greater amounts of debt, liquidity and easing, in other words counterfeiting, are required to produce every unit of nominal GDP growth....


Continue reading the Rick Rule interview below...




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“So you have a situation where the debt is growing much more rapidly than the general economy they are trying to stimulate by taking on the debt.  At some point in time the fear of the debt will overwhelm their ability to stimulate the economy.


A much more fundamental problem, of course, is that you have to have real growth, not fake growth, to service the debt.  And debts don’t go away unless they are paid off or repudiated.  So, on a longer-term basis this idea that it’s somehow justifiable, in a Keynesian sense, to stimulate the economy by encumbering the public sector, is taking a greater and greater amount of debt to produce a lesser amount of economic growth.  


In the end it has to be that growth that grows us out of the debt.  It’s very circular and very destructive, Eric.  I wish I didn’t have to say this, but in the context of what we have done in these (Western) societies over the last twenty years, you have to buy some gold for insurance against these very dangerous and frankly strange trends.


There are a whole bunch of different things that could go wrong here and unfortunately not that many things that could go right.  The good news is individuals themselves can come through this thing shaken, but not stirred.  But as a society, the overwhelming lesson we have to take home is you can consume more than you produce for a while, as long as you have a reliable income stream in the future to mortgage. 


But I think with regards to most Western economies, we’ve already mortgaged most of our future.  The ultimate reckoning is going to be who pays and how much?  Who gets left holding the bag?  Unfortunately, I don’t see a pleasant outcome to that a a society.”


To read Rick Rule’s “Greek Bailout & What it Means for Gold” CLICK 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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