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Ing:  “Gold had been in a funk for the past week because the U.S. dollar had been the currency of choice.  However, Thursday was what I consider a turnaround day as Draghi dropped European rates to negative territory....

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“And we know that when interest rates are negative it is not only inflationary but it’s also good for gold.  Gold jumped after being inside of a trading range the past couple of weeks.  The stock markets have also continued showing strength, but it seems to be a bull market that no one is enjoying.

There now seems to be an ingrained belief in the invincibility of the global stock markets.  Investors now see this as a risk-less market.  We believe that the move in the markets has been Fed-induced.  But the negative interest rates in Europe are an indication that we will see more money printing and that will be good for gold.

Against that backdrop is that Ecuador swapped their gold.  That’s a country with financial problems and they have had to use their gold that’s held in reserves as a way to raise funds.  We’ve seen other countries doing that in the past, including Russia.  But Russia is buying gold because the Russians remember what it’s like to have financial problems.

That’s the history of this fiat period of money inflation.  We have seen times of tremendous chaos.  As an example, we’ve seen the Mexican peso crisis, the Asian crisis in the late 1990s, the 2008 crisis, etc.  All this came about because governments print money to get out of their problems. Of course the consequences come afterward.

For some time now we have had food inflation and inflation in hard assets such as real estate and classic cars. For some time now we have had a push in stocks and real estate.  People think it’s idiot-proof to buy real estate because the carrying costs are so low.  But they will pay because when interest rates normalize, as they always do, that will crush stocks and the real estate game.”

Ing added: “When the Fed purchases large amounts of Treasuries, they are trying to put money into the system but the money is being held in the banks in reserves.  The Europeans went to negative interest rates because they are trying to force the money into the financial system.

But with the economy where it is, people aren’t borrowing.  Companies are not borrowing for factories, they are not borrowing for expansion.  The only people borrowing are the gamblers using leverage in the financial markets and the only winners at that are the major brokerage houses -- the banks.

All these years of printing trillions of dollars have left the West with negative economic growth.  So, yes, central banks in the West are pushing on a string.  But my concern is that by pushing on a string, every day, every hour, central planners are piling up the debt and piling up the inflationary consequences as well.  So this will end in disaster.  It’s just a matter of time.”

IMPORTANT - 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 David Stockman, Bill Fleckenstein, MEP Nigel Farage, Michael Pento, Dr. Paul Craig Roberts, Gerald Celente, John Mauldin, Eric Sprott, James Dines, Andrew Maguire, Art Cashin 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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