My Blog
Ben Davies continues:
“The ECB, even in this last meeting, has effectively reduced its criteria again on collateral. They are effectively saying, ‘We’ll take everything, including the kitchen sink into the ECB, if it allows us to backstop the system. So in that situation collateral is running out.
We noticed this also in the US. Smaller banks are now allowed to have gold as a zero risk-weighted provision....
Continue reading the Ben Davies interview below...
Advertisement
To hear which company has one of the highest grade gold deposits
in the entire world, as well as a number of other
extraordinary projects click on the logo:
“I think that’s a tacit admission that gold is the only really remaining collateral at this point, and people realize the only volatility in gold is primarily driven around the currencies.
Eric King: “In that stagflation in the 70s we saw gold up (roughly) 25 fold, silver up 38 fold, are you looking for a repeat performance like that longer-term?”
Davies: “You have to countenance into the largest Debt Supercycle that’s known to man, that what happened in the late 1970s could pale in significance relative to what could happen in the next five years here.
I think September 12th might well have marked the day the world embarked on serial debasement of the reserve currency, and set the train in motion for a really gigantic move in gold over the next five years. There is no limit to the price.
If we were to have bubble type moves, which we have not had to date, unfortunately that would spell the death knell for the market. It would seed its own end. I hope we come to a point where the monetary system is backed by some commodity such as gold, in which case we find an appropriate price level for it.
But failing that, free markets will take the market (for gold) much higher. In light of government intervention today, I think they will be overwhelmed at some point. It seems to me more and more people are entering the gold space because they are beginning to realize it’s here to stay.”
Davies also added: “Our trend intensity signal suggested the median was 10% (for this move). But in reality, when we have such readiness in the market, we really are looking for at least (a) 20% to 25% (move).
In light of the policy decisions that have been made, and the fact that the market has been surreptitiously held back, and that’s without a doubt, I think we really are pulling out the cork here. So I feel that by the end of the year gold will be over $2,000. I really feel that by May of next year, we’ll be $2,400 to $2,500. We’re starting a primary trend here.
So here’s the problem. I’ve just given you some target levels. The market has run up quite a lot. The market feels structurally short. The market participants are not there yet. So the next pullback in the market, and potentially there will be one from these levels, but not that deep, you have to buy it.
I would even go so far as to say that the market is not going to pull back much more than $1,735 to $1,740. Now it’s very to underestimate, when a market has run up, how far it can pull back, but it just doesn’t feel like market participants are in there yet, and I think even a shallow dip like that is going to bring strong buying in.”
© 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.
This was a tremendous interview with Davies. In this interview, Davies gives specific price projections in both the short and intermediate-term for gold. He puts KWN listeners ahead of the curve on what to expect in the metals markets, as well as the macro-picture. The interview with Ben Davies is available now and you can listen to it by CLICKING HERE.
The interviews with Jean-Marie Eveillard, Bill Fleckenstein, Egon von Greyerz, Felix Zulauf, Rob Arnott, Michael Pento, Gerald Celente, James Dines and Marc Faber are available now. Also, be sure to listen to last week’s line-up of other KWN interviews which included James Turk, Art Cashin, and Egon von Greyerz by CLICKING HERE.
Eric King
Ben Davies - This Move In Gold Will Take It To $2,400 -$2,500
Today Ben Davies spoke with King World News about why he believes the gold market is headed much higher than current levels. Davies made some bold predictions. Here is what the rising star had to say: “Right now, the best expression of our macro view is still to own gold and silver because we believe this is ultimately going to be the survivor of this Debt Supercycle. We believe it’s going to be the surviving collateral.”
© 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.
September 20, 2012
