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Eric King:  “Eric, Egon von Greyerz was saying in his KWN interview they have already revealed that Italy has lost about 30% of its entire position in derivatives.  He overlaid that (30%) number on the over one quadrillion dollars of derivatives that exist globally, and came up with a (total) number of $300 trillion (of derivatives losses).  Obviously that’s a staggering number.  It’s unimaginable.  But it does fly in the face of central planners saying they are going to taper back on QE or things of that nature.”

Sprott:  “When you have a notional (one) quadrillion dollars of derivatives and they change by 1% on one quadrillion, that’s 10 trillion dollars right there.  It’s just incredible.   It would wipe out the (entire) banking system.

It’s a zero sum game, except the guy who’s losing can’t pay.  Then of course they whole system comes crashing down because everyone worries about counterparties....

Continue reading the Eric Sprott interview below...


To hear what billionaire Eric Sprott & Rick Rule are doing with their own

money and which $10 billion company John Embry &

Dr. Marc Faber oversee click on the logo:

“Eric, I’ve always thought that the financial system is totally out of control.  And 24/7 these guys are solving problems.  Whether it’s the banking resolution, or Greece, the problems in Spain, renegotiating some loan, or setting up some bail-in.  ‘Interest rates are shooting up, oh my God, what are we going to do here?  Bernanke says taper, we’ve got to get a bunch of guys to say we’re not going to taper.’  So they arrange for the Bank of England to say, ‘People have misread it.’  Draghi says it and six Fed governors all say it. 

It’s total orchestration.  And it’s orchestration because they might have lost control of the bond market.  I find it such a juxtaposition that central banks on a daily basis buy more bonds today than they ever purchased, and interest rates are going up, which is almost perverted.  I mean how can that happen?

They’ve lost control of the market in my mind, and that’s why they are so desperately trying to get us all to forget the word ‘taper.’  In fact, we probably won’t even hear the word ‘taper’ anymore because it has such a sickening reaction to people in the bond market, and perhaps even people in the stock market.  They will probably do away with the word.  But the system is totally out of control.  And then we’ve got this quadrillion dollars of derivatives.  It just blows blows my mind to think about what could really be going on behind the scenes.”

Sprott also added: “I sort of equate this decline in gold and gold stocks with exactly what happened in 2008, because behind the scenes everybody knew what was going on before Lehman failed.  You could smell it coming.  You can (now) smell another banking crisis happening.  There will be bail-ins in Europe.

And they are just tanking the price of gold to try to make people think that the financial system is stable.  It’s not.  The tanking of gold has brought on tremendous buying.  Of course all people should continue to buy.  There is a shortage of physical gold.  There have been many signs of a shortage of physical gold, and the price of gold could go skyrocketing so fast.

If the smuggling of gold picks up in India, or maybe we’ll see the first linkage in the silver price shooting up out of nowhere.  Then, all of the sudden gold will go, and of course platinum and palladium will go.  The fundamentals in physical gold are awesome.

The reasons to own gold because of this crisis that is going on could never be more clear to thinking people.  Even the BIS (Bank for International Settlements) in their annual report said that ‘The process of central banks printing money would clearly end in failure.’  This is the central bank of central banks saying it.

It has produced no economic growth.  We’ve got all of these debts, and now the cost of holding the debts is going up because interest rates are rising.  We are in bad shape here.  We saw in the first quarter that they announced discretionary disposable income per capita fell 8.2%.  How do you get an economic recovery when discretionary income is down 8.2%.

So we are in tough, tough times here, Eric.  I’ve always believed that people have to fear paper assets, whether it’s stocks or bonds, and they have to own precious metals.  And I think the fundamentals and the analysis of the physical demand is pointing to an imminent change in this direction of this price, and a big, big change.”

IMPORTANT - The extraordinary audio interviews with Eric Sprott and Andrew Maguire have now been released and you can listen to them by CLICKING HERE.  KWN will also be releasing written interviews all weekend with billionaire Eric Sprott and Andrew Maguire.

This is the second in a series of interviews with Sprott which will be released today that discusses the chaos behind the scenes that central planners are dealing with, the massive surge in demand for physical gold and silver, the recent smash in the gold and silver market and more.  In addition to the written interviews, the KWN Eric Sprott audio interview will be available shortly and you can listen to it by CLICKING HERE.

The audio interviews with Eric Sprott, Andrew Maguire, John Hathaway, Dr. Paul Craig Roberts, MEP Nigel Farage, Rob Arnott, Egon von Greyerz, Gerald Celente, 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.

© 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.

Eric King

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