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Dr. Roberts:  “How can the Fed stop printing money?  If it stops printing money, the financial markets will collapse.  And when the bond prices fall from the bond collapse, then the values of the debt related derivatives on the bank’s books fall, and the whole solvency problem comes back.


So everything the Fed has been doing all of these years to try to boost the solvency of the banks is wiped out if the bond market collapses....


Continue reading the Dr. Paul Craig Roberts interview below...




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“So they are committed to printing money.  Now, what’s the long-term effect of endless printing of money?  It’s a house of cards, and at some point it has to blow-up.  Usually it (the blow-up) happens through the exchange rate.


I’m beginning to think that the purpose of the Trans-Pacific (trade) Partnership and the Trans-Atlantic (trade) Partnership that Washington is currently negotiating, is to pull all of the European countries and all of the Asian countries, minus China, into structured trade relationships with the United States.  It requires all of those countries to support the (U.S.) dollar.  They would be dollar-based trade relationships.


So the effect of these partnerships, in fact it may be their real purpose for them, is to achieve this dollarization of trade from Europe and Asia, and thereby a commitment from each of those countries to support the dollar.  That then lets the Fed continue this money printing for longer.  It can’t go on forever.  At some point the currency either finds it way into consumer prices, or people just lose faith in the dollar and abandon it, in which case the whole house of cards would collapse.


So it is a house of cards that the Fed has built, and the Fed can’t get out of it.  And it keeps doing things to perpetuate the house of cards.  Can you perpetuate a house of cards forever?  Well, it would be the first time if something like that happened (laughter ensues), and I don’t see that it’s possible.  When will the house of cards come down, Eric?  I don’t know.  But we’ve got one, and the Fed keeps finding new ways to perpetuate it.”


Eric King:  “When you look at what’s happened in the gold and silver markets, what do you make of their actions (interference) inside of those markets?”


Dr. Roberts:  “I think the decline in gold and silver prices is due to intentional shorting in order to protect the dollar.  The Federal Reserve (is trapped), until it can get all of these other protective mechanisms in place, such as these trade agreements.  If the dollar price of gold is rising rapidly, it raises questions about the dollar’s exchange rate to other currencies, and thereby threatens the quantitative easing.


If the gold price is rising so rapidly, how can the dollar be worth the same amount of euros or Japanese yen or any other currency?  People then start saying, ‘It can’t be, because look at what’s happening to the bullion price.  We’ve got to get out of these dollars.’


When you get out of dollars you depreciate the price of dollar-denominated assets.  So the Fed would lose control of the bond market and interest rates would rise.  Their policy would come undone.  I think that’s why they’ve been manipulating the gold price, driving it down, to create the impression that there is no alternative to the dollar.  At some point they will run out of the ability to do that.”


Dr. Roberts also added:  “What people are seeing is an empire that is overextended, can’t pay for itself, even with its NATO puppet states, and that will not give up its drive for hegemony.  So it continues to overexpose itself and this causes it to do things that are unethical and illicit -- Fix markets, lie, and the outcome of that is unpredictable.  So I think we face very unpredictable times.”


IMPORTANT - This write-up is only a small portion of what Dr. Roberts had to say in his extraordinary interview.  He spoke about gold and silver, the Fed’s operations in key markets, the end game and much more.  The KWN audio interview with Dr. Paul Craig Roberts is available now and you can hear 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 audio interviews with Dr. Paul Craig Roberts, Art Cashin, William Kaye, Marc Faber, Stephen Leeb, Dr. Benn Steil, Eric Sprott, Andrew Maguire, John Hathaway, Nigel Farage, Rob Arnott and Egon von Greyerz are available now.  Also, other outstanding recent KWN interviews include Jim Grant and Felix Zulauf to listen CLICKING HERE.


Eric King

KingWorldNews.com

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