Eric King:  “Ben, your call for the Japanese to enter the gold market was absolutely brilliant.  You were the first one in the world to do that (make that call).  That’s become mainstream, so everyone is talking about this now, but you were way ahead of the curve on this.”

Davies:  “Well, we did write about it a few years ago in a piece called, ‘The World Monetary Earthquake, The Dash From Cash.’  Also, ‘Let’s Say Gold Went To $13,000.  We revisited it a few months ago, ‘There Is A New Buyer Entering The Gold Market,’ and it’s definitely an ongoing theme.  Obviously the Japanese are going to get religion like our investors, and they are going to start buying physical gold to protect themselves from what we see as an inevitable hyperinflation in Japan.

But it’s all part of a much bigger theme here.  We now know for certain how policy makers are going to respond to this crisis....

Continue reading the Ben Davies interview below...


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“They’ve teased us all along with liquidity and monetization, but now they’ve come out and said, “We’re effectively going to do something called ‘Nominal GDP Targeting.’” 

The Fed, for instance, is targeting the unemployment rate, but this is really an implicit version of that.  What that means is we’re going to move away from what’s traditionally been titled as ‘Inflation Targeting.’  I think this is an inverse ‘Volcker Moment.’ 

Why are they doing this?  They want to get GDP levels up, and nominal levels up.  Why do they want to do that?  Well, in their debt-to-GDP calculation, if your numerator rises in your equation, then your GDP goes up.  You will cut your debt-to-GDP levels, and, in theory, make your fiscal burden less.

Obviously that can come at a price if you print too much money.  And that’s what they will have to do to try to create inflation.  Japan has a horrendous deficit situation.  They’ve turned towards a current account deficit, which is a first in the last six months.  Once that happened, the end game has really started to happen whereby they are going to have to monetize.

Trust me, once those reserves get into the system, long-end rates will be going up in Japan.  So inflation is really our big theme, and I think that can mean the bond bubble that we’ve seen grow over the last decade is probably going to burst.  The yield bubble will burst.  I think we’ve seen the low or very near the lows (in bonds), maybe one last hurrah.”

Here is a small portion of what Davies had to say regarding gold:  “Looking at the 10 parameters we focus on, I would say the likelihood of a descent to the downside is probably quite limited now based on those parameters.  In fact, I feel completely the other way, I think people are giving up.

But I would go so far as to say that I’m very disappointed the market hasn’t behaved better.  I’ve been trying to rationalize to myself, has anything changed?  In fact, if anything I think the prospects for gold have improved.  And the more gold stays at this price (consolidating), it actually sets up for that last sort of epic move in the market which starts to go really exponential.

The more sideways action you have, it normally leads to a higher vertical action.  I fundamentally believe that will still come to pass.”

© 2013 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 segment Davies gives his outlook for gold in the short-term, as well as for 2013.  He also discusses why he believes gold is headed for a vertical explosion to the upside.  The interview with Ben Davies is available now and you can listen to it by CLICKING HERE. 

The interviews with Egon von Greyerz, Ben Davies, Kevin Bambrough, Nigel Farage, Eric Sprott, Art Cashin, Stephen Leeb, John Embry and John Mauldin are available now.  Also, be sure to listen to the other recent KWN interviews which included Michael Pento, Gerald Celente, Andrew Maguire and James Turk by CLICKING HERE.

Eric King

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© 2013 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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