Kaye:  “The problem that gold has faced since it peaked in nominal terms in 2011, is that the pricing mechanism for gold has been the Comex.  The problem with the Comex is the high frequency trading algorithms and serious intervention by central banks, including the central bank for the central banks, which is the Bank for International Settlements (BIS)....

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“The problem for gold is that in a highly levered fractional-reserve system, where the paper market is setting the price that mining companies and investors deal with, as long as that goes on essentially two things happen:  One, people in the West who don’t understand what’s going on get scared out of gold.  This is extremely unfortunate because that is essentially one of the only safe havens that exist for people today.

Second, it creates this artificial and really illusionary view of the true state of the financial world.  By that I mean throughout history gold has served the purpose of being an excellent barometer for flawed policies.  In other words, it’s a bit like taking a thermometer when you think someone may have a fever and reading it.

Now if the thermometer is taken out of the freezer before you put it in their mouth, then 60 seconds later you pull it out of their mouth, it’s probably not going to record that they have a fever.  This is the problem with this manipulation of the gold market because it is causing the financial system to have an OK reading on the thermometer (gold), in the sense that it is not showing there is a fever or problem with the system.

What this means is that the financial system is just continuing with the same behavior that nearly led to its destruction 5 or 6 years ago.  The powers that be are aware of this camouflaging effect by ‘putting gold in the freezer.’  They feel that by putting gold in the freezer, gold won’t be free to express the fact that their policies are incredibly flawed.

But, regardless, their policies are going to lead to some extraordinarily disastrous results down the road.  Gold would be signaling this coming disaster if it were liberated and allowed to do its job.  But it’s been put in the freezer by the powers that be, and that’s the problem.

But the way I see it, gold is about to be liberated.  I think gold will be liberated this year.  I strongly believe this is part and parcel of the destruction in some of the other financial markets that have been juiced higher in recent years.  But as people flock to gold, eventually there won’t be enough physical gold left for authorities to continue their suppression scheme.

As the price of gold migrates higher, more and more of the mainstream population is going to wake up and understand that something is terribly wrong.  As this awakening takes place, not only will it lead to more physical gold buying, but it will also lead to even more intense volatility in other financial markets, including bond and equity markets.  All of this will serve to bring forward the actual day of financial Armageddon -- the actual fall off the cliff.  This will be the beginning of a very disturbing secular trend not only financial markets, but more importantly for the livelihoods of billions of people around the world.”

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IMPORTANT - KWN will be releasing interviews all day today with William Kaye, Eric Sprott and many others.

The audio interviews with Bill Fleckenstein, Egon von Greyerz, Dr. Paul Craig Roberts, Nigel Farage, James Dines, Gerald Celente, Michael Pento, Andrew Maguire, Rob Arnott, David Stockman, Art Cashin and Dr. Marc Faber are available now. Other recent KWN interviews include Jim Grant and Felix Zulauf -- to listen CLICK HERE.

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