Greyerz:  “Eric, the United States government is clearly concerned about the state of the US economy and the trading action in the dollar.  So time and time again they are doing what they can to smash the gold price.  Today we saw a $25 drop within 60 seconds....

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“Why are they doing this?  Because gold measures the confidence, or lack thereof, in the government.  Gold reveals the governments’ deceitful actions in destroying the value of paper money.  So governments don’t want to see gold compete with fiat money because with gold as a competing currency, governments have lost control of the economy and the people.

Of course they can’t print gold either, which is a major disadvantage.  But right now that’s the only way they can run the economy is by printing money.  Just look at what’s happened to gold in the last 3 years.  Gold, priced in US dollars, is now where it was in the autumn of 2010.  Priced in most European currencies, it is where it was in the spring of 2010.

So gold has not really moved for 3 years, but if we look at what has happened to US debt during that time period we find that it’s continued to explode.  US money supply is up 50% in that same time period, to $10 trillion.  And the Fed’s balance sheet is also up 50% as well, to $3.6 trillion.

Federal debt has also gone up by $4 trillion -- a staggering 30% increase.  If we look at Brent Crude Oil, that’s up 40% over the past 3 years, to $110, while gold hasn’t moved.  And the Dow continues to go up, currently trading 50% higher since 2010.

But, of course, the dollar continues its long-term decline.  It will be the falling dollar which will lead to fall of the US economy and major problems in financial markets.  So with exponentially expanding debt, there is no question that gold is being held down artificially, Eric.

All of us who are involved in the physical gold market know that demand for physical gold continues to be very strong.  Look at China, where just in August imports into Hong Kong were 300 tons.  At that monthly rate, China is absorbing more than the entire annual world gold production.  In India, despite punitive import duties, demand in the fourth quarter is expected to jump 15%, compared to the same quarter last year -- to a total of 300 tons 

As you can see, Eric, physical demand is incredibly strong, but, in spite of that, gold is not going up.  So there is clearly major intervention in paper gold, a market which is 100 times bigger than the physical markets.  Can they push gold lower to test the lows again?  In my view this is very unlikely. 

Short-term they have the tools to manipulate the gold market, but I want KWN readers around the world to know that this 3-year dry spell in the precious metals is virtually over.  Gold and silver will soon reflect continued exponential growth in debt, as well as the fact that the entire global economy is poised on the edge of a precipice.

Now we know that Janet Yellen will be the new head of the Fed.  She understands what is happening in the economy better than most of her predecessors.  She has declared in speeches that she doesn’t just look at the headline unemployment, but more importantly at the long-term unemployed.  And we know that the real unemployment figures show at least 16% unemployment, and 23% on a consistent basis.

So, Yellen will print -- that is guaranteed.  We always knew the next head of the Fed had to be a money printer because this is the only way the US can kick the can down the road.”

Greyerz added:  “2014 will see increased QE, leading to a lower dollar and much higher precious metals prices.  And we will see more large entities and investors wanting physical gold, rather than paper gold.  This will put additional pressure on the physical gold market which already has a very tight supply situation.  All of this will lead to an explosion higher in both gold and silver because the manipulators are running out of time and ammunition.”

IMPORTANT - Due to events, KWN will be releasing interviews all day today.  Part II with Maguire is still to come.

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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.

The audio interviews with Andrew Maguire, Art Cashin, Egon von Greyerz, Bill Fleckenstein, David Stockman, Robin Griffiths, Jim Grant, Gerald Celente, William Kaye, Dr. Paul Craig Roberts, Chris Powell and Eric Sprott are available now. Also, other recent KWN interviews include Marc Faber and Felix Zulauf to listen CLICKING HERE.

Eric King

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