Jeffrey Saut continues:

“That should be followed by another rally.  Again, the correlation so far has been at 98%.  We got very overbought on a short-term basis on the QE to eternity announcement.  I don’t think we will see any more of a pull back than maybe the 1,400 to 1,420 area on the S&P.

Having said that, you could have the Straits of Hormuz shut down and crude oil could go to $200 a barrel....

Continue reading the Jeffrey Saut interview below...  


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“That would put the world into a recession, but an outlier like that is hard to predict.  Speaking of oil, our energy team here is expecting $65 a barrel for oil next year.  I think that’s too low, unless we are going into a world wide recession. 

If I had to make a call for oil prices, providing there is not a blowup in the Middle-East, I think we will be range-bound, somewhere between $80 and $100 a barrel.

In November of 2001, China joined the WTO, and I think that put us into the 3rd SuperCycle that the world has seen.  I don’t see a worldwide recession.  The growth is not just going to come from India and China, but Indonesia, Malaysia, Vietnam, Thailand, Brazil, etc..  So I’m not in the recession camp.”

Saut had this to say regarding gold: “Again, when China joined the WTO in November of 2001, we made the connection that per capita incomes were going to rise, and when per capita incomes rise in the emerging and frontier markets, the people consume more stuff.

It’s not just oil, gas and coal they consume, it’s base metals, precious metals, cement, timber, water, and electricity.  We rode that theme really hard until the Dow Theory sell signal in November of 2007, and I pared back on the ‘stuff’ stocks. 

But following the 2009 bottom, we’ve kind of geared back into them.  In fact, we geared into some of them a few weeks ago, some of the precious metals stocks.  So I think gold is still in a secular bull market.  You can’t find an economy in the world where there has been this much cash thrown into it and not had inflation come out of the other side.

I think gold has been in a correction for most of this year.  Right now gold is testing the upper side of the trading range we’ve been in, and if it breaks out I think it travels back up to the old highs, a little bit above $1900 an ounce.”

Saut had this to say regarding the mining shares: “The mining shares have lagged.  The mining shares told you over a year ago that gold was making a peak because they were not following in the footsteps of a higher gold price.  Now the gold shares are pretty much back in step with the price of gold.  I take that as a very positive sign, not just for gold, but for the gold shares.”

© 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 Don Coxe, Pierre Lassonde, Rick Rule, Nigel Farage and Ben Davies are available now.  Also, be sure to listen to last week’s line-up of other KWN interviews which included, Dr. Keith Barron, Jean-Marie Eveillard, Bill Fleckenstein, Egon von Greyerz, Felix Zulauf and Rob Arnott by CLICKING HERE.

Eric King

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