John Hathaway continues:

“Let’s not forget we are fighting the powers that be, and they don’t want to see gold going to $2,500.  So they are trying to paint the tape.  People have talked about gold manipulation, and now we know that banks have manipulated LIBOR.  There is tremendous corruption in the banking system, and I think the banks are now essentially agents of the state, more than they ever have been.

So that’s just one more reason to be distrustful of financial assets you have in the banking system....

Continue reading the John Hathaway interview below...


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“Certainly this has been a huge test.  It has not been the scary test like we had in 2008, when the world was falling apart and people were really frightened.  Now you just have people with a strategy to invest in gold bullion or gold stocks that are just frustrated beyond belief.

They are frustrated for good reason because you look at what’s going on and say to yourself, ‘How can this not be working?’  But bull markets are not there for the convenience of people who have a particular insight.  It’s more a test of will and a test of fortitude. 

So you have to stick to your guns if you have a certain belief and just wait it out.  I would add that I see more and more evidence that the resolution of this sideways action in gold is going to be to the upside, and I think it will be big time.

If you look at this from the bear’s perspective, gold hasn’t gone down (below $1,500).  That has to really frustrate the bears.  And if you look at those CFTC numbers, they are actually very constructive.  You spoke with Dan Norcini regarding this.  I read that piece, and he’s probably as good as anyone on that subject.

There are a number of things that can light a fire under the gold price, but if you look at the behavior of the gold price, it’s been hammered every time they say no more QE.  But you have to conclude that the gold market knows that and expects it. 

So why is gold not falling apart?  Well, there is something else out there.  And if you look at Asian demand, it’s very solid, it’s robust.  If you look at India and China and you talk about financial repression and lousy banking systems, they have them in spades.

In that scenario, if you are a wealthy individual in India or China, you are going to look to gold as a way to preserve capital.  So it’s not more QE that’s bringing money into gold here.  The reality is people are concerned that their liquid assets are not safe.

Then you have the fact that the Fed and ECB balance sheets are just bloated with crappy assets.  They have been monetized and are sitting as free reserves in the banking system.  Because of that we are in a very precarious situation in that inflation could come like a flash flood.  It could be explosive.

This inflation would be purely a monetary thing.  It would be people saying, ‘Currencies suck and I want to get my money into something real.’  And that’s kind of what the Fed wants.  They want money to go into stocks, housing, anything but cash.

This inflation would force interest rates to go up and this would cause people to lose their shirts in bonds.  This rise in interest rates would also have a disastrous impact on the budget deficit.  This would force governments in the direction of more financial repression.  They may tax savings, implement capital controls, but in the end this is just a situation that is loaded for more trouble.

With all of that as the backdrop, gold has been in a very lengthy base-building process, and that process has been very constructive.  The bottom line here is there is enough in the system right now to justify gold trading well above $2,500.” 

© 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 Embry, Egon von Greyerz, Bill Fleckenstein and Jean-Marie Eveillard (oversees $50 billion) are available now.  Also, be sure to listen to this week’s line-up of other KWN interviews which include Michael Pento, Gerald Celente, MEP Nigel Farage, Dr. Stephen Leeb and Rick Rule 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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