Kaye:  “The longer-term picture (for gold) is extremely bright.  The picture in China itself is phenomenal.  Right now China is, in terms of final demand, consuming virtually 100% of non-China global production of gold.  This is an amazing thing when you think about it....

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“China doesn’t export anything.  Your readers need to think about that.  Chinese production is estimated at slightly over 400 metric tons (each year), which is not huge, but they don’t export that (gold).  All of that (gold) by law belongs to the People’s Bank of China, and if my sources are right, doesn’t even go through Shanghai.

Everything that is brought into China that isn’t produced domestically, and doesn’t go directly to the PBOC, is required by law in China to go through Shanghai.  So if we track deliveries into Shanghai, final deliveries into the market were almost 2,200 tons last year.

Well, since China’s production is a little over 400 tons, and total global production is estimated at between 2,600 and 2,700 tons, what that tells you is that China accounted for approximately 100% of all external (global gold) production -- all non-China production.

So where is everything else coming from (to fill the rest of global gold demand)?  Where is the 1,200 tons that, including smuggling, went into India?  How about all of the gold that went into Russia and into the Middle-East?  This is what people need to focus on.

And this is why what we are currently seeing can’t continue indefinitely.  The question is, at what stage does gold actually get liberated?  The setup would appear, as I look at the options structure and other things, that the bottom should be either late this quarter or possibly second quarter.  I’m doubtful that it can extend past that unless the setup changes dramatically from what I am looking at at the moment.”

Kaye added:  “I think for people who have enough money to live on, they’ve got cash and other assets they can draw on, that are looking for a deeply undervalued investment that has potentially a very high payoff over the next 1, 2, 3, 5 years, gold and precious metals are, in my book, unparalleled.  That’s how we’re set up.  This is something we’ve researched very carefully, and this is where I’ve got my own money.”

IMPORTANT - KWN will be releasing extraordinary interviews all day today and this weekend with David Stockman, William Kaye, and others.

© 2014 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.

IMPORTANT - Part I of Kaye’s interview is only a small portion of what had to say in his extraordinary audio interview.  Part II of his written interview will be released shortly.  This KWN audio interview with William Kaye is incredibly powerful because he gives some astonishing thoughts on the end game as well as price targets for gold, and much more is available now and you can listen to it by CLICKING HERE.   

The audio interviews with William Kaye, David Stockman, Rick Rule, John Mauldin, Bill Fleckenstein, Dr. Stephen Leeb, Egon von Greyerz, Art Cashin, James Turk, Dr. Paul Craig Roberts, Andrew Maguire, Dr. Marc Faber and Eric Sprott are available now. Other recent KWN interviews include Jim Grant and Felix Zulauf -- to listen CLICK HERE.

Eric King

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