Eric King:  “There was this call (last week) to print $30 trillion, and at the start of 2011 there was a great deal of coverage surrounding the calls for $100 trillion to be printed.  You’ve been around this business for so long, what are your thoughts when you hear those kind of numbers just tossed around?”

Cashin: “They’re stunning.  In days past you would never hear numbers like that bandied about.  It took us 200 years to get to a certain level in our national debt.  It took us something like 20 years to then double that.  Then, in a matter of 3 years we’ve quintupled it.

Up until now it has not been a burning problem, and the reason is fear.  You have to lend money or spend money to get inflation.  That having been said, the Federal Reserve Bank of St. Louis puts out what is called the ‘Monetary Stock.’  It is the ‘raw material’ of the money supply, and it has been dormant throughout the year.

The report for the first part of this year suddenly spiked higher, and it’s something that I’m going to keep a very close look at.  It may be, and there is some seasonality, but I think people need to begin watching the money supply, particularly the M2, and see if that starts to accelerate. 

If the velocity of money begins to accelerate and M2 begins to move up, then you will begin to hear people talking about or at least worrying about inflation again.  That could be the really critical story for the next month or so ... (Bond) vigilantes will require some sign that inflation is beginning to show. 

That’s why I will be watching that spike in the monetary stock, and I will look to see if M2 begins to grow rapidly and the velocity of money begins to flow.  If money begins to change hands rapidly, the risk of inflation rises dramatically.”

Eric King:  “Art you’ve been warning about this on this network for some time, is that because you believe this great inflation is ahead of us?”

Cashin:  “I will tell you this, historically, throughout hundreds of years, you have virtually never seen the expansion of available money and assets as we’ve seen here without inflation popping up.

Now that having been said, we’re living in the exceptional world, if you would ... But you go back and look at history, you look at things like the Weimar Repulbic in Germany in the 20s.  There it was very strange too because they actually printed money, and for months no inflation showed up, even though the money supply was increasing and increasing.

Somebody once asked a famous literary character (who lived through the Weimar hyperinflation) how did he go broke?  He said, ‘Slowly and then suddenly.’  The Weimar Republic saw inflation develop very slowly, and then suddenly.  Once it developed it was almost like Zimbabwe except it was in a major nation, and destroyed the moral values of a whole civilization and basically led to the underpinnings of World War II.”

This is an incredibly powerful and timely interview with Art Cashin.  The above information was just a small portion of his interview.  Cashin covers key global markets, gold, inflation, as well as other key markets.  The King World News audio interview with Art Cashin is available now and you can listen to it 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.

The interviews with Eric Sprott, Art Cashin, Michael Pento, MEP Nigel Farage, and Michael Belkin are available now.  Also, be sure to listen to the other recent KWN interviews which included James Dines, William Kaye, John Embry, Jean-Marie Eveillard, Rick Rule, Pierre Lassonde, Gerald Celente, and John Hathaway by CLICKING HERE.

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