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Don Coxe continues:
“The big story that’s unfolding is something I’m very interested in because I started writing about the odds of this last summer. As a result of that, I’ve been kept up to date about the discussions that are proceeding to try to find a way to save the euro, by getting at the gold reserves of the PIIGS countries.
Some of them, particularly Italy, have huge gold reserves....
Continue reading the Don Coxe interview below...
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“So, there was a paper prepared by what are called, ‘The German wise men,’ last fall. It was immediately rejected by everybody in sight.
They came back a few weeks ago with a revised version, where they came up with this formula where the countries would have the guarantees of all of their debt above 60% of their GDP (the legal limit under the Maastricht Treaty) -- they would be covered by a euro bond. And the countries who were getting this euro bond would pledge their holdings of gold.
This wouldn’t have the situation, where as Jens Wideman of the Bundesbank said, ‘We’re not going to use Germany’s credit card for those who spend too much.’ They would have the security of gold. This is under active discussion. I have reason to know they have been discussing it with people in the industry.”
This European gold bond is huge news. When asked if this was bringing gold back into the financial system, Coxe responded, “Yes, exactly. I did conference calls with people in our organization about this. I said, ‘Something like this could be unfolding because this crisis is developing so fast.’”
When asked if this event would begin to trigger a significant revaluation for gold, Coxe replied, “At this point, how they would do it, and whether there would be any revaluation, what it would be is security for issuing specific bonds. But, of course, once you do that, what you do is you break the virginity of the system.
Then you have to start looking at revaluations, you’re right. All of that will come. My own take is that I think there is a very good chance of this ... that within the next three months we will find that something like this has been done for some of the countries in the eurozone.
That means that gold will have been moving back into the (financial) system.”
Coxe also discussed QE3: “The payroll number, what this did was remind people that the figure who said the US isn’t doing very well at all was Ben Bernanke. The market quite correctly assumes that this is going to mean that he’s going to be forced into QE3. He won’t be fighting it.
But he’s got members of the Fed Board who, up until now, have opposed him because they thought the economy was stronger. So we have the combination of the eurozone, which may find a way to try to get some gold in to save its system, and we now have the reasonable prospect of money printing over here. In other words, the case for gold is starting to get quite wondrous.”
Coxe also added: “If the European stock markets fall a further 15%, and banks are going down in Europe, I believe there will be an emergency meeting of the Fed Board. This happened once under Paul Volcker. And they will make a move in between meetings.”
Because of the chaos in the markets and the importance of this KWN interview, this crucial discussion with Don Coxe is available now. The above was small portion of what Coxe had to say. He talked about how investors should be positioning themselves ahead of these historic events, the move to bring gold back into the financial system, major markets, central planner moves, mining shares and more. You can listen to the interview 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 Art Cashin ($612 billion UBS) and Rob Arnott (Oversees $100 billion) are available now. Also, be sure to listen to this week’s line-up of other KWN interviews which include Newmont CEO Richard O’Brien, John Hathaway and James Turk by CLICKING HERE.
Eric King
Don Coxe - Emergency Fed Meeting & Gold Backed Bonds
With continued turmoil in global markets, today King World News interviewed 40 year veteran Don Coxe, Global Strategy Advisor to BMO ($538 billion in assets). Coxe shocked KWN by saying that Europe is actively working to introduce gold backed bonds. He said, “They would have the security of gold.” Coxe stated we could see this take place “within the next three months ... because this crisis is developing so fast.” Coxe also discussed the possibility of an emergency Fed meeting, but first, here is what Coxe had to say about the spectacular gold rally which took place on Friday: “First of all, a rally like this, you know a huge amount of it is short covering. The short positions had been building up on this. We were having one of the highest short positions on the gold futures that we’ve seen in a long time.”
© 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.
June 2, 2012
