Eric King:  “Gold took a hit in Globex trading late yesterday, Rick, and the mining shares turned negative.  What do you say to people as gold, and particularly the shares, continue to struggle?”

Rule:  “You know, Eric, somebody who’s in the resource business for a day or a week, take any resource, but in particular gold, is in the wrong sector.  A day doesn’t make any difference at all.

You will recall a couple of weeks ago in one of the KWN interviews I pointed out that when people ask me when gold is going to move I say, ‘June or July of 2000.  Gold has moved from $252 to just shy of $1,500 an ounce.  A five-fold move.’

A five-fold move in 12 or 13 years and we’re supposed to be apologizing for that.  If you had the ability to predict a five-fold move in the next 12 years, how would that make you feel?  It would make me feel pretty good.  The point of gold is to preserve one’s purchasing power....

Continue reading the Rick Rule interview below...


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“When I drive to work each day in California I pass a Motel 6 and the sign reads, ‘Rooms for $69.’  It’s called Motel 6 because those same rooms used to cost $6 each night.  I can assure you that the rooms have not improved, but what has happened is the US dollar has lost an enormous amount of purchasing power.

So I say again, the point of owning gold is to preserve your purchasing power, and gold has done a superb job of doing just that, yesterday’s move down not withstanding.  The narrative associated with the trades that you and I talk about, the resource trades, the precious metals trades, is exactly the same.

There is nobody in the world that can convince any of your readers, because it isn’t so, that central bank liquidity is a cure for the problems which ail society.  Right now the problem is insolvency and liquidity is not a cure for insolvency.

The anti-gold trade, the anti-resource trade is the 10-Year US Treasury or the 30-Year US Treasury.  How attractive does return-free risk sound to you, Eric?  It doesn’t sound particularly attractive to me.  For me, give me the trade I know.  Give me the trade where the narrative is unchanged, but the perception is off and so the price is off by half.  Give me that trade.”

Eric King:  “Rick, will the global run on gold and silver continue as long as prices stay depressed like this?”

Rule:  “Well, it’s my suspicion that what we are seeing in gold and silver right now is a classic transaction where gold and silver go from weak hands to strong hands.  The sellers have been the leverage momentum-style institutional carry trade players.

When gold gets out of a fairly narrow band, particularly with regards to the derivatives players, they have to sell.  And they have been selling to unleveraged individuals on a global basis.  So this is a classic situation where gold is going from weak, leveraged hands, to strong, unleveraged hands.”

© 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 James Turk, Andrew Maguire, John Hathaway, John Embry, Dr. Paul Craig Roberts, Jean-Marie Eveillard, Eric Sprott, Gerald Celente and Nigel Farage are available now.  Also, be sure to hear the other recent KWN interviews which include Art Cashin, Marc Faber and Felix Zulauf by CLICKING HERE.

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