Eric Sprott continues:

“What I found most striking about it is if people really imagined that the Fed was not going to buy bonds, what should happen to interest rates?  What should happen to the stock market?  What should happen to the homebuilders?  What should happen to gold?   

The only thing that really got smashed (out of those asset categories) was gold and silver....

Continue reading the Eric Sprott interview below...


To hear what billionaire Eric Sprott & Rick Rule are doing with their own

money and which $10 billion company John Embry &

Dr. Marc Faber oversee click on the logo:

“My own view is this statement was meant to keep a lid on the inflation indicators.  Of course the inflation indicators are oil, gold, and silver, particularly gold and silver.  And they have a hell of a fight on their hands. 

Going into the year, gold and silver were acting pretty well.  We obviously had a real sour fiscal cliff solution.  People were losing confidence in governments, and people should be losing confidence in central planners.  The tell that people have lost confidence is gold and silver prices going up.  Let’s not forget, the Fed knows that.

The Fed doesn’t want gold and silver prices to go up because it would be the indicator that we’re out of control.  I’m sure most of your listeners (and readers) know we are out of control.  The fact is we spend $4 trillion buying bonds, which is an utter joke, and we’ve accomplished nothing.

We have a recession in Europe, we have minimal growth in the (United) States, we’ve got a recession in Japan, China is kind of kicking along, but all of the countries that have spent the money have accomplished nothing, other than to load up their central bank’s balance sheets.

So they don’t want to have the market indicate the fallacy of their policies, but as you and I would agree, their policies are ridiculous.  We just need more people to realize there is only one place you can really be safe, and that is by owning real assets such as gold and silver.”

Eric King:  “Going back to 2012, when the Fed was saying there would be ‘No more QE,’ of course we were coming out and saying, ‘Of course there will be more QE.’  It was strange, not that the Fed lied, but that they would come out with such a bold lie because it was so ridiculous. 

Essentially they are doing the same thing here, but it’s different.  They are not coming out and saying, ‘We’re not going to do more QE.’  It’s, well, let’s just release some stuff in the minutes and it will basically look like we are going to walk away from QE.  It’s the same lie (as 2012) packaged differently isn’t it?”

Sprott:  “And they try to look like they are responsible, right?  It’s the irresponsibility of the central banks that we all have to be aware of.  And the fact that they come out with this thing in the minutes and suggest that something might happen, which we all know can’t happen, is to give them some sort of ability to say, ‘Well, we are going to take this way out.’

It’s like the ‘Exit Plan’ as you may recall (from a few years ago).  What is the exit plan for the Fed?  Well, as you know there is no exit plan.  There never was an exit plan, and there is no exit.  And it just gets worse all the time. 

There’s not a hope in hell that the Fed will not continue to buy the bonds, because who is going to buy the bonds?  There is nobody who is going to buy the bonds.  Japan can’t buy the bonds, China can’t buy the bonds, Europe and the UK have their own problems.  There’s no one left to buy these bonds.

It’s a losing proposition owning bonds that pay you 1.95% over ten years, when inflation is above that level.  The risk you have is rates go back to normal, which would be like 5% or 6%.  And we’re not even in normal times, we’re in abnormal times.

The US GAAP budget deficit is $5 trillion dollars per year, in a $16 trillion economy.  We’re going to get another release on that GAAP accounting statement in mid-January, it was supposed to come out in mid-December.  It’s been estimated by ShadowStats that it could be as much as a $7 trillion deficit.  So there is no way out for the US government at this point in time, other than to cut the promises. 

And we’ve seen what happens when promises are reneged on, such as the austerity programs in both Spain and Greece, where you say to the pensioners, ‘We’ve got to cut your payment.’  Next thing you know retail sales fall by 15%, unemployment in Spain goes to 25%, and Greek bank loans go into default.  It’s just a horrible situation we are heading into without any doubt at all.”

This is the first in a series of interviews with Sprott that will be released which reveals the increasingly desperate situation that Western central planners face going forward.  The written portion above is just a small part of this extraordinary interview with Sprott. 

Sprott discusses the recent action in gold and silver, the fragile nature of the current financial system, and the frightening reality of what the West faces as we go into the new year.  This is also the first interview where Sprott gives his predictions and outlook for 2013.  In addition to the written interviews which will be released, the KWN Eric Sprott audio interview is available now and you can listen to it by CLICKING HERE.

The interviews with 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, Egon von Greyerz, Gerald Celente, Andrew Maguire, James Turk, Rick Rule, Nigel Farage and Bill Fleckenstein by CLICKING HERE.

© 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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© 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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