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Ing:  “What we’re going through right now is the pause that refreshes after gold hit a 5-week high.  So, we’re getting a pullback.  Everyone seems to be pointing to the FOMC Meeting, but more realistically you have to look at the fundaments for gold.  We are now heading into the strong buying period of November and December.... 

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“We have the coming Christmas season, and the Indian Diwali festival.  But here we go again in India, where they are trying to stifle gold buying by putting in yet another higher import tax.  Even in the face of this, demand for gold still remains very strong in India.

Then, over in China you have the ‘Third Plenum,’ and that is their third meeting of the party.  This is the one, Eric, where they outline the economic framework and outlook.  They are going to concentrate on reform, infrastructure, and accelerating growth.

So, my expectation is that we should be getting some good news over the next moth, after this Third Plenum, where the Chinese will pledge for growth.  This growth announcement from the Chinese will be incredibly important for global markets.  This will surprise a great many market participants, and also give the gold market a pick-up because China is the dog that wags the tail.

The Western world is still faced with increasing debt.  The mainstream media has been focused on the fact that there was a very small decline in the budget deficit, but if you look back in history it took the United States 192 years to rack-up $1 trillion of debt.  Then, the next $1 trillion of debt took only 30 years.  Astonishingly, now we are going through $1 trillion each year.

But you just can’t keep on piling on more and more debt.  The reality is the QE will continue into 2014, and that simply means the US is going to keep piling on even more debt.  This means the problems for the United States are actually becoming increasingly worse.  This also means that gold’s underpinning is strongly reinforced by this piling on of debt.”

Eric King:  “How do you see that playing out on a longer-term basis, John, because there is this massive accumulation of debt, but people are wondering, ‘When is this going to really matter?’”

Ing:  “It’s a very valid question.  People say to themselves after a while, ‘Well, nothing has happened so far.’  But we only have to look at the unbelievable turmoil which has already taken place in Europe, where the debt load was unsustainable, and horrific problems emerged.

We can also look at Argentina, which is most likely going to undergo their second currency devaluation and default.  So, history is telling us that you just can’t keep piling debt on.  Yes, America has the world’s reserve currency, but there has been quite a bit of blowback regarding the United States’ deteriorating fiscal condition, as well as the chaos in Washington.

Right now China has somewhere on the order of $1.2 trillion, and has been diversifying away from those dollar reserves into everything from skyscrapers, to companies, to gold.  The Chinese will continue to do that, but, meanwhile, because of the slowdown of international investors buying dollars, ironically the Fed has had to print dollars in order to buy dollars (laughter ensues).  That, too, is unsustainable.

We are getting into the last innings of this (end game), so my expectation is that when you see the increased volatility in the price of gold, what that’s telling us is the time is drawing close.”

Ing added:  “Barrick just came out with an announcement that they are going to mothball Pasqua Lama.  This was going to be the word’s most expensive gold mine.  That tells me that we are going to get closures of some of these high cost and ridiculous-sized projects.

At the same time, we have B2Gold buying Volta Resources at a 50% premium.  What this tells me is that gold companies need reserves, they just don’t need expensive reserves.  So, selectivity is very important, but I think these high quality gold companies are very undervalued at these levels.”

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