Eric King:  “You were saying earlier that you believe China’s central bank now has 4,000 tons of gold.”

Kaye:  “Yes.  And unlike the United States, China has been encouraging the population to save in gold for over a decade.  The people have been listening and that’s one of the reasons you’ve seen the enormous demand and these huge withdrawals of gold over the past year from the Shanghai Gold Exchange....

Continue reading the William Kaye interview below...


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“It’s largely the population, whether it’s demand for jewelry, gold bars, gold panda coins -- which the People’s Bank of China still mints, and they run out of early in the year -- demand has remained robust for many years. 

I’ll probably buy more pandas myself later today because we can get them here in Hong Kong.  That is another way your readers might want to consider saving in gold because these gold panda coins are very attractive and the People’s Bank of China strictly limits the production of pandas.  This means they have the ability to appreciate in terms of the premium they will command because they change the design every year.

So this is another way for KWN readers to save in gold.  Certainly our firm’s holdings are in 400-ounce 'good delivery’ bars stored safely outside of the banking system here at the Hong Kong airport.  But for personal purposes and for the idea of leaving something for the children, I like to buy these panda coins.”

Eric King:  “What about this war in gold near the $1,300 level?”

Kaye:  “I think there has definitely been an effort to suppress the price of gold and keep it below $1,300.  Every time they try to get gold down to $1,280 or below, serious strains begin to reappear in the gold delivery system.  In other words, gold goes permanently backwardated and GOFO rates go negative, which is indicative of lending not occurring in the system.

So there is an evident problem that reveals an inability to supply enough physical metal to sustain a smash in the price of gold much below $1,270 to $1,280.  There is always the possibility that the central banks will hemorrhage more gold out of their already dwindling supplies to make one more push lower.  I am reasonably optimistic but the history of the past year would make anyone cautious.” 

Kaye added:  “Corruption in the West is rampant.  Unfortunately that is the ‘new normal.’  The system is so corrupt now that I don’t think it’s fixable, and to me this is the scariest point about all this.  That might also be the best reason to own precious metals.

I strongly believe that the United States is so beset by institutional corruption that it is beyond being fixed.  This relates to all the official agencies.  We see this in the inability to prosecute blatant crime on Wall Street.  Nobody goes to jail and everybody continues to rake in enormous bonuses.

The perpetrators, far from being harmed and being prosecuted, continue to benefit  And as long as that’s the case, people should expect it to continue because it’s being rewarded.  So, yes, I'm cynical about what I see and I guess the most discouraging thing is that I hold out little hope that the process can be corrected, because I think the institutions responsible for doing the policing have been thoroughly corrupted.”

© 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 many more interviews being released today.

The audio interviews with Gerald Celente, Felix Zulauf, Michael Pento, James Turk, Victor Sperandeo, Dr. Philipa Malmgren, Grant Williams, Bill Fleckenstein, Dr. Marc Faber, Egon von Greyerz, Ben Davies and Art Cashin are available now. Other recent KWN interviews include Eric Sprott and Jim Grant -- to listen CLICK HERE.

Eric King

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