John Hathaway continues:

“You’ve got slow motion bank runs taking place.  People who see this and understand it are moving into gold.  You’ve got rot in the periphery (of Europe) that’s spreading to the core.  The core is Germany and ultimately the United States.

The idea that somehow the dollar is protected by some firewall is ridiculous.  They are (all) basically fiat currencies, and I don’t think this stops with the euro.  This attack is ultimately going to affect the dollar, and it will eventually be reflected in the dollar/gold price.

They (central planners) are buying time right now with the euro.  It’s clear to me that policymakers are resorting to prescriptions in order to deal with economic sluggishness, but they are using very shop-worn Keynesian monetary stimulus applications.

They are so mentally bankrupt in their thought process, that it’s clear to me they don’t understand what’s happening....

Continue reading the John Hathaway interview below...


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“You can be sure that neither political candidate in the US has a clue about these issues.  If you look at what they say, it’s not even in the dialogue.

So, whoever wins the election is going to be caught by surprise.  Whoever wins is going to be in the hot-seat and they are going to be backpedaling.  They will just be applying the same patchwork answer that hasn’t worked for all of these years.”

Hathaway had some fascinating comments regarding QE:  “Quantitative easing is the big buzzword these days.  People forget that, from 1999 to March of 2007, gold went from $250 to $1,000, and quantitative easing wasn’t even a known term in the English language.

Do we need quantitative easing for gold to go higher?  I would say not.  Will we get more QE?  We probably will.  But what I would note is, it’s like the boogeyman for gold now.  Every time Bernanke opens his mouth and says, ‘No more QE,’ gold takes a hit.  On February 29th, gold was hit for $100.  When they released the Fed minutes in early April, gold was hit for around $80 in roughly 24 hours.

Most recently, in his (Bernanke’s) Congressional testimony about a week ago, this was after a weak jobs number which led to hopes being very high that he’d be forced to his knees and say, ‘QE, we’ve got to do it,’ but he said, ‘No, we’re not going to do it.’  So gold took another hit.

My feeling is the absence of QE is priced into gold here.  Gold has taken three distinct hits since it made its low last December, at around $1,523.  Even with the prospect of no QE, if you believe the Fed, gold has not made a new low.  So as I said, in my opinion the absence of QE is priced into gold.

On the other hand, if market conditions hit emergency levels, the central banks will be forced to their knees and they will be doing QE by whatever name it’s called.  I think at that stage you are going to see gold go ballistic because it will be an admission of failure on the part of policymakers.

I think market participants will view that as a sign that none of the policymakers know how to deal with these problems.  it will be something like that which will bring sideline money into gold in a big way.  If investors don’t do something now and take advantage of this funky period we are in, this daily grind of back and forth, they are going to be paralyzed.  They will just be bystanders when gold finally takes off.”

Hathaway also added:  “The action in gold has been terrific in the sense that it has demoralized the gold community.  Gold investors wonder, with everything going on, how come gold isn’t doing more? 

My feeling is don’t worry too much about that.  Instead, just back up the truck, fill up your allocations and establish your positions because I think we are setting up for the kind of move that, if you are not already positioned, you are not going to have time position yourself in the kind of dynamic move I see coming.

I think we are within months or at the outside twelves months from this thing blowing wide open.  When that happens, money will look to find whatever it can in order to participate.  Gold is obviously the first step in any process like this, but physical silver will benefit, as will gold mining stocks.

People that hate mining stocks right now are going to find reasons to love them because whenever you have the kind of dynamic move that I expect, anything that can be viewed as a way to participate is going to be explosive.  And certainly gold, silver and mining stocks will be at the top of that list for investors.”

© 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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Eric King

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