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Gold Shorts Getting Torched, Don’t Lose Your Position
Today legendary value investor Jean-Marie Eveillard told King World News, “This will end in destruction at some point, and that is why I say to you that I don't want to lose my position in gold. At some point there will be a fire that cannot be contained.” Eveillard, who oversees $50 billion at First Eagle Funds, also said, “I don't want to lose my position in gold because I continue to believe that currencies are being debased.”
He also discussed Europe and the US, but first, here is what Eveillard had to say regarding gold: “Over the past week I kept reading various pieces, I think more recently it was from the people at Barclays, saying, ‘Gold is going to get into trouble. That from a technical standpoint gold is not acting well, so look out below.’ I suspect what has happened is that there were many short-term traders who were caught being short gold, and they are being forced out of their positions.”
Jean-Marie Eveillard continues:
“There have also been many bulls who have sold out their positions and said, ‘I will buy back maybe 7%, 10% or 15% lower.’ But the 7% or 10% or 15% never came and they lost their position. I don't want to lose my position in gold because I continue to believe that currencies are being debased.
KWN readers have to understand that after a major financial crisis, a balance sheet related crisis, there is no quick recovery....
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“So it seems to me that the Western world, Japan and possibly China, what they decided to choose was not a short burst of pain and a natural recovery, but rather continually trying through Neo-Keynesian remedies which should have been discredited by now, to get a sustainable recovery.
They are not getting that recovery so they are trying to continually stimulate and vaguely accepting that nothing seems to be working. This will end in destruction at some point and that is why I say to you that I don't want to lose my position in gold. At some point there will be a fire that cannot be contained.”
Eveillard also added: “I was a bit surprised in the past few weeks when gold was going up at the same time that stocks were going up. To me it's a question of what is a safe haven? So far, the attitude of investors seems to be that the safe haven is the 10-Year Treasury bill in the US, Germany, or for that matter, and this one puzzles me, the UK bond.
Yes, the UK has the ability to print money and devalue, but that has never been the way to prosperity. There are also inflationary risks associated with devaluing. So I find it puzzling that the ability to devalue is helping the UK 10-Year bond.
As far as the strength in the German 10-Year, investors seem to forget that Germany is already on the hook for other countries in Europe. They have some of their debt on the books of the German Central Bank and these are countries which are on the periphery.
In essence, what happens is that when a Spanish bank needs money they go to the Spanish Central Bank. The Spanish Central Bank then goes to the ECB, and then the ECB goes to the Bundesbank. So, as I said, the Germans are already on the hook for a tremendous amount of debt.
There is also a great deal of monetizing of debt around the world, particularly in Europe and the US. So I'm not interested in buying bonds at all. The true safe haven, of course, is gold, which the Federal Reserve or any other central bank cannot print.”
© 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.
If you missed it, the KWN Exclusive: Sneak Peek of the “Summer Trends Journal” by Gerald Celente has just been released. It was one of Gerald’s best interviews as he discussed with King World News listeners globally The Greatest Bank Robbery In World History, The Big Secret Nobody In The Mainstream Is Talking About, Gold and much more. And you can listen to it by CLICKING HERE.
The interviews with Gerald Celente, Don Coxe, Eric Sprott, Nigel Farage and Peter Schiff are available now. Also, be sure to listen to this week’s line-up of other KWN interviews which include John Embry, Egon von Greyerz, Bill Fleckenstein, Jean-Marie Eveillard (oversees $50 billion) and Michael Pento by CLICKING HERE.
Eric King
© 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.
July 26, 2012
