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Eveillard:  “I just returned from Europe, where I was mostly in France, and the mood was not good there because the economy is not doing well.  And since the economy is not doing well, there are political developments on the far-right and on the far-left....


Continue reading the Jean-Marie Eveillard interview below...




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“Some people, and I cannot blame them, believe that the establishment has failed them in the sense that the economy continues to do poorly.”


Eric King:  “Jean-Marie, it sounds like there is a polarization happening in Europe where people are jumping on both sides and the middle-ground is being lost.”


Eveillard:  “Yes, and usually it’s the middle-ground that governs.  That has been the case in France where both the socialist party, which is currently in power, and the center-right party, both of them have historically been close to the center.  That’s not the case any more.


They both have their own extreme wings, but it has been the center that has always governed.  Now people believe that the ‘center’ has governed poorly enough that you have more people who are being seduced by the far-right, and the far-left.”


Eric King:  “Does that worry you?”


Eveillard:  “Yes, but, again, it’s a result of the establishment and it’s happening in the US as well.  You have the center disappearing in the US, which means that both extremes on the left and the right will keep gaining additional audiences.”


Eric King:  “This trend obviously has you worried.”


Eveillard:  “It worries me particularly because in the US, France, and elsewhere, it’s Neo-Keynesian policies that are being followed because it’s the fashion of the day.  Even though the Neo-Keynesians didn’t see the financial crisis coming, nevertheless they are still in power in academia, the political world, and in the world of corporate economists.


I ask myself, ‘If Keynes were alive today, would he be a Neo-Keynesian?’  I don’t think so.  But the Neo-Keynesians believe, as Keynes did, that every now and then private sector demand is weak and has to be supplemented by public sector demand.


What we’ve had in the US over the past 5 years , both from a monetary and from a fiscal point of view, is the most stimulative economic policies ever -- completely unprecedented.  The printing of money, QE, etc, the budget deficit, the tremendous increase in government debt, and yet the economic recovery continues to be weak.


Now, the stock market is up sharply because some of the excess liquidity being created by the Fed is going into stocks.  Some of it has also gone into things such as the real estate and fine art markets.  But the money goes particularly into the stock market.


And the stock market is strong not just because of the excess liquidity, but because the vast majority of investors seem to believe, they are wrong, but they believe that, ‘Yes, we had a financial crisis 5 years ago, but that’s all over.  We are going back to normal, and within a few months the economy in the US will grow at more than an annual rate of 2%.’ 


It hasn’t happened yet.  How come it hasn’t happened yet?  Nobody seems to be asking the question.  It hasn’t happened yet because the medicine being prescribed by the Neo-Keynesians is not working.  Incidentally, I don’t think anything will work because there no steps which can be taken by the politicians that would, almost overnight, result in a non-inflationary economy growing at 3% or 4% a year.


The reality is the steps which have been taken over the past 5 years will cause tremendous chaos and problems in the future, but we haven’t seen that yet.”


Eveillard also spoke about gold:  “I believe that if I’m right, and the Neo-Keynesian medicine continues not to work, although they can continue with their QE, even at the Fed they know that quantitative easing cannot go on forever.  So at some point something will have to give.  That’s the point where investors will change their attitudes and move to gold.  But it isn’t happening right now in the West because investors continue to believe the Neo-Keynesian medicine will succeed any day now.”


Eric King:  “If there is this move you just described back to gold in the West, Jean-Marie, do you see new all-time highs in gold?”


Eveillard:  “Yes, because gold will become the substitute currency.  People will say, ‘I don’t want the yen, dollar, or the euro because they are all engaged in a race to the bottom.’  Yes, then gold will become the substitute currency.  Gold will be money again.  In a sense it never stopped, but 40 years ago the politicians decided that we were going to operate on the basis of a pure paper money system.  But I can assure you that the history of pure paper money systems is not inspiring.”


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Eric King

KingWorldNews.com

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