Eric King:  “Rick, in the aftermath of this, and obviously it’s still ongoing, but your thoughts on this Cyprus catastrophe and what it means going forward, because people are frightened here.”

Rule: “Well, congratulations on your early coverage of the Cyprus situation.  One of the beauties of outlets like yours is you can cover things in real-time.  But with regards to Cyprus, moving forward what you need to understand is it is another example of just how fragile the international financial situation is.

If you now have a bank run in Cyprus that gets out of control, what happens in other parts of the world?  It’s just a continuing example of ongoing fragility in the system....

Continue reading the Rick Rule interview below...


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“It’s also another example of why people want to have a financial asset that isn’t somebody else’s liability.

John Mauldin says, ‘Own things they can’t print.’  It’s a very important lesson.  If you happened to be a Cypriot, and you had your money in gold, silver, platinum or palladium, all of the events which took place over the last week would be extraordinary to witness, but not relevant to your financial position.

But the bigger consequences are interesting.  There was a time, long ago, which means before you and I were born, when people who put money in the bank paid attention to what bank they put the money into.  They wanted to make sure that when they put the money in that it could be taken back out.

In Cyprus, the risk of counting on deposit insurance failed.  Eric, what’s important to recognize, in the context of what happened in Cyprus, is that the whole range of promises which have been made over the last 100 years, medicare, medicaid, social security, federal deposit insurance, are very difficult to keep in an increasingly stressed world.

The ‘Cyprus’ that you and I have to worry about is the ‘Cyprus’ called the United States.  If you look at the liabilities we have as a people, and the federal deficit, social security, medicare, etc, these are the types of promises that were made to depositors in Cyprus.

What I am saying is our promises are equally likely to be stressed on a going forward basis.  That’s the real reason for Cyprus, and everybody needs to take it into account.”

Eric King:  “The fact that the people and investors are in a state of shock and they are frightened, what do you say to them?”

Rule:  “What I say to them is there are a lot of people who are not forward-thinking enough to listen to an outlet like King World News and pay attention.  You cannot ultimately save the world.  You can only save you and yours. 

Of course, ironically, if everybody was worried about saving you and yours, the world wouldn’t need any saving.  So it’s very important to look at the way we live, and look at how we live incorporate promises from the government.  These promises will be increasingly difficult to keep on a go-forward basis.

Do not trust in your government to look after you, begin to trust in yourself.  Yes, by all means have some dollars, euros, or some yen, but also have financial assets that aren’t simultaneously somebody else’s liability.  Own some bullion, it’s important.”

Eric King:  “The concept that governments will just steal from people.  This has people deeply concerned right now.  Can you talk about that?”

Rule:  “What just happened in Cyprus was the surface manifestation of an underlying problem.  Theft, to a much greater degree, has been going on in the United States for the last 6 or 7 years.

The suppression of interest rates in the United States is the exact same thing.  The government has penalized people who have done the right thing for 30 or 40 years, and have saved and accumulated wealth.  They have penalized these savers by manipulating interest rates down and depriving those people of the rightful benefits from their savings.  We are talking about lost interest here.

Yes what happened in Cyprus is tragic and represents theft and the transfer of one person’s wealth to another wealth.  But the fact is that Americans shouldn’t look at it as a problem just in Cyprus.  Americans have to look at the fact that the same promises have been made here.

In addition to the fact that the promises won’t be kept, the theft is taking place right here, right now in the United States to a much greater degree.  Cyprus, for you and I, is a prologue or an example of what has been happening under our nose, to us, for the last 5 or 6 years.”

© 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.

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