James Turk continues:

“These diverse groups probably mean any coalition to form a ruling majority is unlikely, so Greece is plunging head-first into political uncertainty.  Then French president Sarkozy was defeated by a socialist, who is quoted in a London newspaper saying he ‘does not like the rich’ and ‘my real enemy is the world of finance.’”  

The newspaper then says the new socialist president wants to be ‘ploughing millions into creating more civil service jobs,’ as if the unproductive state sector in France wasn't already bloated enough.  Even Germany's Chancellor Merkel was handed a setback in regional elections.  

The clear verdict is that European austerity measures to control their spiraling debt burden and runaway government spending are out, and more government spending is in.  But if so, how are European governments going to pay for it all?....

Continue reading the James Turk interview below...


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“They have run out of money and run out of borrowing capacity.  Most lending to governments comes from banks buying their government's bonds.  But banking problems are worsening as the European economy, already in recession, slides deeper under water.

I think these election results highlight a growing friction between taxpayers and tax-eaters and indicate a couple of things, Eric.  First, there is an unrealistic view in Europe that by soaking the rich, the tax-eaters can continue to strap on the government-feedbag to pay for their socialist policies.  

Second, a lot of people simply do not understand that many of the promises made by politicians are going to be broken because they simply cannot be afforded.  They will be broken in either of two ways and neither alternative has a happy outcome.

The present austerity measures will somehow be allowed to continue.  In other words, the new leaders will back down on their campaign promises and government spending will be cut.  Alternatively, these politicians will try to pay for their largesse with the printing press, in which case there will be a showdown with Germany, which rightly fears inflation because of that country's past history.  

The prospect for more QE, as a result of this weekend's elections, caused European bond prices to weaken.  We'll see what happens when London, Europe's biggest financial center, opens tomorrow after its 3-day weekend.  The key point is that falling bond prices mean big losses for the Euro banks and the ECB, which have been the big buyers of these bonds of late.

The bottom line is that a new European banking & debt crisis is coming soon, and that will be bullish for gold because physical gold is a tangible asset, and it does not have counterparty risk.

It is also a safe-haven from socialist governments looking to tax people's wealth.  With London closed, the precious metals are getting buffeted today.  But there is a storm brewing here in Europe, and that is bullish for gold and silver.”

Turk also added: “Remember, back in the beginning of the year, the first week of January, the sentiment was very similar to what it is at the moment.  I stuck my neck out and said the low for gold and silver were being made right then and there.

The fact that sentiment feels like we are at the same level again, it may not turn this week, it may be next week, but we’re very, very close to a bottom.  I still believe the lows for both gold and silver were made earlier in the year.”

This is an extremely timely and important KWN interview with James Turk, that 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 Pierre Lassonde and James Dines audio interviews are available now.  Also, be sure to listen to this week’s incredible line-up of other KWN interviews, which include Peter Schiff, Jean-Marie Eveillard, Dr. Keith Barron, Eric Sprott and more by CLICKING HERE.

Eric King

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