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Turk:  “The negative talk about the gold price that has developed this weekend is misleading, Eric.  People are reading the wrong article.  Here is a link to what they should be reading Zerohedge Is Wrong.

They should also listen to Andrew Maguire’s interview with you.  In fact, they should listen to it twice just to make sure they pick up all the information that Andrew was willing to share with KWN listeners....

Continue reading the James Turk interview below...


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“Contrary to the buzz going around this weekend, the China Commodity Funding Deals (CCFDs) are bullish for the gold price.  Here’s why:

As we all know, Chinese investors are gobbling up whatever physical metal they can at these low gold prices.  The CCFDs are being used by wealthy Chinese - namely those who have access to these credit facilities - to borrow against metal they own in order to buy more metal.

The metal being used here as collateral is stored in China, not in the LBMA banks.  That’s an important point, because there is no fractional reserve lending going on.  Instead these wealthy investors are making a strategic decision.  They are using their physical metal stored in China to borrow national currencies, and are using the proceeds of these loans to buy more physical metal.  That is the important point.  They want as much exposure to physical metal as possible.

So these deals are not being hedged.  To the contrary, these investors are adding to their long physical positions by borrowing national currencies because they want this exposure.  They are long physical gold and short national currencies because they expect the gold price to rise and currencies to fall.  It is useful to note how the Chinese yuan has fallen these past several weeks, so the yuan gold price was not hit that hard last week.  It probably just whetted their appetite to borrow CCFDs so that they could buy more physical metal.

These Chinese buyers know what they are doing.  They understand gold is good value, and therefore they want all the physical metal they can possibly get in their possession.  And the banks have been willing to heighten this insatiable demand with these CCFDs.

So owners of physical gold should rest easy this weekend.  They own what is in short supply, which means that the gold price is ready to climb higher.”

James Turk: Founder & Chairman of GoldMoney

and the author of “The Money Bubble”

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© 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 - KWN has more interviews being released today.

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

Eric King

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