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Barron:  “ETFs continue to be stripped of gold and the bullion banks continue selling the gold overseas when they can arbitrage the price.  So investors just need to sit tight and ride this out because available physical supplies of gold are dwindling rapidly....


Continue reading the Keith Barron interview below...




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We are at or very near the bottom because gold has now tumbled below the cash cost of production for the mining industry.  So almost nobody is making money mining gold at these prices.  As gold falls below the average “cash cost” it begins to get very dire and we start to see mines close.


I have just seen two operations close without any notice in the last couple of days.  Certainly the world is not out of the woods yet, and another crisis is just around the corner.  A major crisis will emerge in Europe or the United States that will move the price of gold significantly to the upside.


In the meantime, if the bullion banks do not turn the price of gold higher we are going to see gold production plummet.  I’m not sure that’s what Western governments want to see at this point.  They (Western central banks) are already supplying gold, along with the ETFs being drained, in order to meet the massive global demand for gold.  The last thing they need is to see a supply crunch.


If that’s the case, the gold simply won’t be there anymore and Western vaults will be drained at an ever greater pace.  There have already been a lot of projects which have been canceled or deferred and this will definitely impact supply already in years to come. 


It takes a long time to commission a mining project, and when they cancel it or defer it they stop work and it takes a long time to get going again on these projects.  So supply will already be constrained in the marketplace going forward, now it’s just a question of what degree supply will be constrained.”


Eric King:  “That collapse in production you are talking about, Keith, will it be fairly dramatic?”


Barron:  “It’s already happening, but it’s only to get more and more severe if the gold price continues to weaken or does not rally significantly from current levels.  We have already seen major shakeups inside the mining industry and many CEOs have been fired and replaced.  So everyone is aware of costs.


The reality is that all of that fat is being trimmed away.  A classic example of this was the Barrick announcement to let go of a large number of key personnel.  We can expect to see more of this as additional projects get mothballed going forward.  A lot of major companies have also halted exploration or cut their budgets for exploration way back.  So they will not be finding new deposits in the short-term.  The last thing that actually goes is production and that is what we are seeing right now.


This is what Western central planners and governments don’t consider when they are manipulating the price of gold.  Right now they are destroying their source of supply to keep the manipulation going.  The bottom line is Western governments simply will simply not be able to continue the manipulation of gold as the supply of gold collapses.”


Barron also added:  “The world is in an extremely precarious position and I am shocked by the amount of complacency out there.  This is what is really frightening.  We are seeing a bond bubble which has just now begun to burst, and even though global stock markets have been strong for many years, it has not filtered down to their economies. 


In the United States for example, there are still large numbers of people unemployed and totally dependent on the government for their survival.  This is the sort of thing which is very, very troubling.   None of the problems in Europe have been fixed, they have simply been papered over. 


So the financial world is headed for disaster and yet complacency reigns.  The reality is that those who move to protect themselves while prices for gold are cheap will be greatly rewarded as the financial world lurches into the next crisis.”


© 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 John Hathaway, Dr. Paul Craig Roberts, MEP Nigel Farage, Rob Arnott, Egon von Greyerz, Gerald Celente, Dr. Philippa Malmgren, Eric Sprott, Jim Grant and Art Cashin are available now.  Also, be sure to hear the other recent KWN interviews which include Marc Faber and Felix Zulauf by CLICKING HERE.


Eric King

KingWorldNews.com

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