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Eric King:  “Dr. Roberts, we’ve seen Goldman Sachs reiterate their call for $1,050 gold, which has facilitated the smash on gold today.  This comes on the anniversary of last year’s $200 two-day smash in gold.  But Goldman is claiming gold will decline because the U.S. economy will accelerate in the second half of this year.”

Dr. Roberts:  “The American economy is not going to boom because real consumer incomes have been falling, not rising.  If there is no income growth then there is no credit growth either.  So the U.S. economy is definitely not going to accelerate....

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“I think this is just all part of keeping pressure off the dollar.  This quantitative easing has done nothing for the U.S. economy except hurt it because it’s deprived everyone of interest income.  This lack of interest income has caused a consumption of savings from the elderly.  This is very detrimental for these people and detrimental for their heirs as well.

Also, the other day it came out that the massive amount of soybeans we ship to China have been refused.  The corn we sent to China has also been refused because it was GMO tainted.  So this is creating a hit to U.S. exports.

Second, there are no good paying jobs being offered in the United States -- they are just not there.  The job statistics are always the same -- it’s always low-paying minimum wage stuff.  These are also part time jobs, so this is not an income that supports consumer demand.  The bottom line is people are really struggling.

You also have to remember that Goldman Sachs is one of the bullion banks.  They are totally corrupt, and they are in league with the Fed to keep pressure off the U.S. dollar.  The problem for the Fed and Goldman Sachs is that these dollar pressures could be on the verge of exploding.

The reason the dollar pressures may be on the verge of exploding is because the sanctions that we threatened the Russians with are forcing them to leave the dollar-based payment system.  Meaning, they are going to start selling their energy in rubles, or for gold.  They are also making barter deals with Iran.

But given the size of the Russian energy industry, if they remove that from the petrodollar it will mean a huge drop in the demand for dollars.  It may well be that the Fed has caught on, and if it can’t get the American sanctions against Russia cancelled it will have to take even more offsetting actions in order to protect the dollar.

I’ve read the reports that say Russia has given us the ‘finger’ and is saying, ‘We are not going to play with dollars anymore.  We are simply leaving the dollar system.’  If the Russians are able to do this, if China, India, and Brazil go along with it, then you will have removed a lot of the international payment system from dependancy on the dollar.  This will also severely undermine the American SWIFT international payment system.  So this could produce a run on the U.S. dollar.

I’ve told you many times, the Fed can print all the money it wants to buy bonds and keep interest rates low, but it cannot print money to buy dollars.  And there is some limit as to how much it can prevail on its puppet states (in Europe) to supply money to buy dollars.  At some point these puppet states will realize that the consequences for them may mean a very high domestic inflation.

The West may not be in a position to prevent an explosion in the gold price if Russia and other countries drop out of the SWIFT system.  The Russian energy transactions are a trillion dollars or more (each year).  Well, that’s equal to the amount of QE that was injected into the system annually.  So the elimination of that demand for dollars in international transactions would offset a year of QE.

All of this means that I think the time for a reckoning for the U.S. dollar may finally be coming.  So Goldman Sachs, the Fed, and the other bullion banks, are doing whatever they can to stave this off.  But if there is a run on the dollar, the gold price will explode, particularly if there is not any gold to speak of in the West.”

UPDATE - KWN has many 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 Dr. Paul Craig Roberts, Bill Fleckenstein, Gerald Celente, Dr. Marc Faber, Egon von Greyerz, Rick Rule, Ben Davies, Rob Arnott,  Andrew Maguire, Art Cashin, Eric Sprott and John Mauldin are available now. Other recent KWN interviews include Jim Grant and Felix Zulauf -- to listen CLICK HERE.

Eric King

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