Eric King:  “Art, you were one of the youngest traders to ever earn a seat on the (New York Stock) Exchange.  You’ve been doing this for half a century.  What are your big worries going forward?  What has you concerned?”

Cashin:  “A couple of worries:  Number one, that the bond market may decide it’s not going to wait for the Fed.  It’s going to make some adjustments.  And if interest rates begin to move independent of the Fed, that could be a devastating problem.

Secondarily, some of the recent data has weakened.  And as Ray Dalio said in the piece that I cited, and the piece that you referred to (earlier), the programs that the Fed has have shown very little efficacy, (however) they have helped distort things.

And I think his (Dalio’s) phrasing was that he was not so much worried about whether they would ease up on the gas pedal, but in case of a crisis, in case of an exogenous event, was there any gas left in the tank?  You are already at zero rates.  You’ve done quantitative easing.  Heaven forbid if something came up and the economy slowed, what is left in the gas tank?”

Eric King:  “Art, because you brought up Dalio again, some of you veterans will look at each other when everybody is partying like they are now in the stock market, and kind of raise an eyebrow at each other and say, ‘This is going to end at some point.’  With all of this QE and the fact that the markets have moved (to new all-time highs), is the reality that underneath it all there this is this rot -- that the country is really in trouble and the Fed has set us up in an enormously dangerous situation?  Is that the big worry here?”

Cashin:  “The question reminds of something that was written by Adam Smith in his book, ‘The Money Game.’  It was fabulously famous in the 1960s, and I recommend that everybody go out and get a paperback copy of it.  But in it he talked about being at a party where the food and drink are absolutely magnificent and everybody is having fun.

Yet the veterans know that soon it will end, the music will stop, and the riders will come through the doors and there will be great trouble.  The only problem is the clocks have no hands.  We don’t know exactly what time it is.  That’s about where we stand today.”

Eric King:  “Art, there have been people that are speaking out in the West and saying that draining the Western central bank vaults, and allowing this gold to leave to go to China is a bad idea.”

Cashin:  “The problem is that many of the academics have been dismissive of gold, despite its millennial history of being a storehouse of value.  And they use Greenspan’s old phase about it being a ‘barbarous relic.’  Yet demand is always there.  The people in the villages and the towns know they have gold they can trust. 

If you look in Europe, you had wars where people marched in with different colored uniforms and gave you different colored money, and told you it would be good.  Only to have somebody march in with a yet another uniform and tell you, ‘That money is no good.  Use this money which is this (different) color.  And people always found ways to protect themselves by buying things like gold and precious stones, to protect what value they had.

If you note in Yellen’s testimony, one of the senators asked her, ‘Do you monitor gold?’  She answered, ‘I’m fully aware of it and I watch it.’  And I don’t remember who said it but it was quite a witty remark, but somebody said, ‘Yellen may not know about gold, but gold apparently knows about Yellen,’ because as she testified the price of gold rose.”

IMPORTANT - This is an incredibly powerful and timely interview with Art Cashin where he covers the historic action in major markets around the world, the incredibly dangerous position the Fed has put the financial markets and the US in, as well as many of the great dangers facing the United States and major markets.  Cashin also covers gold.  The above information was just a small portion of his incredible interview.  The King World News audio interview with Art Cashin is available now and you can listen to it by CLICKING HERE.

IMPORTANT - KWN will be releasing extraordinary interviews all day today and this weekend with David Stockman, Art Cashin, and others.

© 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 David Stockman, Art Cashin, Dr. Stephen Leeb, John Hathaway, Bill Fleckenstein, James Turk, Andrew Maguire, William Kaye, Gerald Celente, Dr. Paul Craig Roberts, Eric Sprott and Jim Grant are available now. Other recent KWN interviews include Marc Faber and Felix Zulauf to listen CLICKING HERE.

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