Eric King:  “John, your thoughts in the aftermath of this event (the Fed decision) which has shocked everybody.”

Hathaway:  “It shows you that they (the Fed) don’t know what they are doing.  This also shows how off-base mainstream media is on their commentary.  I was watching financial television today and they gave this virtually no chance of taking place....

Continue reading the John Hathaway interview below...


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“I know KWN readers had today’s events telegraphed to them ahead of time in the Greyerz interview, but the mental anxiety you have to go through to take a stand, where you can see that ‘black is black,’ but everybody else thinks ‘black is white,’ it’s pretty tough to do.

It’s tough for investors, and it’s (also) just sort of tough mentally to go against the grain.  But it’s been clear to me for some time that the economy stinks.  It may not be falling but it certainly isn’t robust.  So the Fed is scared to death that if they tweak it with any kind of tightening, the risks are very much to the downside.

I think what we’ve done here from gold’s point of view is it has been a great test.  Gold rallied off that low back at the end of June.  This last three or four weeks was a retest of that low, and it has now clearly held and we are set for a solid move higher.  The Fed and other central planner policy makers are incompetent, and one thing is certain -- this will not end well. 

In this chaotic environment, any thinking person needs exposure to gold and gold mining stocks as a way to protect against monetary debasement.  If anyone thinks the Fed and other policy makers have the recipe to getting this economy back on track so that we can get interest levels to a point where people don’t need to own gold, they are smoking something funny.

It seems to me that the position we are in today is the same trap we are going to be in 2 or 3 years from now, and maybe even worse.  Again, I know it was hard for investors to take this stance against the prevailing mainstream media, as well as all of the brokerage-side commentary, but here we are -- the Fed has chickened out.  But I do think what it means is that gold has been put to the test, it has stood the test, and we are now well positioned for a major move higher.”

Eric King:  “Is the Fed in danger of losing credibility here, John?”

Hathaway:  “Absolutely.  I don’t understand how they have credibility in the first place.  The mainstream media worships these people at the Fed, but if you look at their record on forecasting, I don’t understand it.  As more and more people start to understand the reality of the Fed’s true track record, that will send gold to new all-time highs. 

But it’s just a mystery to me that people think these guys (at the Fed) know what they are doing.  They are in a box.  The Fed now owns 30% of all US Treasuries outstanding.  They own an even higher percentage of Mortgage-Backed Securities -- something like 45%.

So for the Fed to attempt to back away from those purchases in the future, in any meaningful fashion, poses very serious downside risks to the economy.  I think the exit from the balance sheet they have, and the balance that they will have six months from now, is potentially very destabilizing to the financial markets.  This is one of the major stories that gold now has going for it.

The other major story for gold is the growing distrust that entities have of conventional ways of intermediating between financial markets and the bullion market.  Those would be the Comex, the LBMA, the over-the-counter shadow banking system, and, of course, ETFs.”

To learn more about John Hathaway and his management services CLICK 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 Michael Pento, Eric Sprott, Andrew Maguire, Grant Williams, Stephen Leeb, Bill Fleckenstein, Pierre Lassonde, Dr. Paul Craig Roberts, Art Cashin, Egon von Greyerz and Marc Faber are available now. Also, other outstanding recent KWN interviews include Jim Grant and Felix Zulauf to listen CLICKING HERE.

Eric King

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© 2013 by King World News®. All Rights Reserved. This material may not be published, broadcast,

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