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Eric King:  “Rick, we’ve had this pullback off the recent highs in gold.  Where are we headed from here?”


Rule:  “I think it’s interesting to describe this as a pullback because it depends on the time frame you examine.  If you take the period from June of 2013 to today, that pullback actually represents a 12% gain....


Continue reading the Rick Rule interview below...




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It’s very important for investors to take a longer view of a market so that they remain grounded in reality.  The reality is the market is now digesting the gains that it has enjoyed.  You know, Eric, that markets need to consolidate, and that’s precisely what we are doing -- we’re consolidating.


We are now off the lows, but in our last interview we talked about how the recovery was going to be saucer-shaped, as opposed to V-shaped.  This applies to the commodities and to the junior and mid-to-large commodity related stocks, and we are seeing precisely that.  We are seeing higher highs and higher lows.


We are in a gradually rising channel.  Investors just need to keep in mind that these markets are highly volatile.  As I mentioned to you in the last interview, we are going to see 15% or 20% increases and decreases for absolutely no reason whatsoever.  Mainstream media propaganda aside, we are going to see these markets fluctuate in a rising channel, and we are in the midst of a recovery today.  This situation is what I would expect.


The big fundamentals that investors need to take into account is that this recovery the mainstream media keeps touting is really is liquidity-driven recovery.  This isn’t a recovery that has things like jobs or investment associated with it.  What this means is that people need to be careful about economy-centric commodities such as copper and oil.  Those prices have held in because we have supply concerns, but they haven’t held in because of demand.


One bullish factor that investors have to keep in mind is that commodities are priced in dollars, and I strongly believe that the U.S. dollar will continue on the course that it’s been on for the past 40 years, which is decidedly lower.  This will lead to higher nominal commodity prices.


The third factor people need to pay attention to is global demographics.  As people at the bottom of the pyramid have access to more financial resources, they buy things, and that is happening, Eric.  People in these countries who move to make their countries more investable become a little more rich.  As they become a little more rich, they buy a lot more stuff.  So demographics are very, very bullish for commodity related assets.


The last thing KWN readers need to keep in mind is that this is an extremely cyclical business.  Many of your readers are long-term investors and they have suffered through pain as the mid-cycle correction has been brutal in the last few years.  Now that the pain is over, they will stick around for the gains, and the gains are going to be enormous.


We are in the very beginnings of a recovery now.  It’s going to be volatile, but we are headed higher from here.  When people try to understand where the gold, silver, and mining share markets are headed from here, they need to think about 2004, 2005, and 2006.  If you are older and have a better memory, the years that you might want to think about are 1994, 1995, and 1996.


This won’t be V-shaped because we didn’t get issuer or market capitulation, it’s going to be saucer-shaped, but despite that, we are through the worst and we are coming into better times.”


Eric King:  “What kind of gains will investors be looking at in the future?”


Rule:  “I think about the decline we just suffered as being analogous to the decline we suffered in 1975/1976.  That bull market in gold was a $35 to $850 move -- a hell of a move.  Gold quickly rose from $35 to $204, but then the gold price declined by nearly 50% to $108.


The next 5 years were the kind of thing that legends are made of as gold soared a staggering 850%.  After seeing gold get hit for nearly 40% this time around, and the TSXV getting hammered with a 75% decline, I can tell you that bear markets are the authors of bull markets.  What I am saying is that I expect to see a minimum of 300% to 400% gains from here.  And if this is anything like the 1970s bull market, investors may see gold and silver soar to unimaginable heights from current levels before this is over.”


IMPORTANT - KWN has more interviews being released today.


© 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.


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

KingWorldNews.com

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