With gold and silver higher and the dollar lower along with global stock markets, today James Turk told King World News that gold and silver may be set to skyrocket just like Bitcoin has within the past weeks.
James Turk: “There is another Federal Reserve meeting this week, Eric. When the meeting concludes on Wednesday afternoon, the Fed will advise what, if anything, they are going to do to dollar interest rates…
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James Turk continues: “There will also be a press conference by Janet Yellen after the meeting. She will provide a summary of the Fed’s view on the economy as well as an update to their economic forecast. She will also try to provide a rationale for whatever it is the Fed decides to do regarding interest rates.
What all of this means is that the markets could be volatile before and after the Fed meeting. But we should not be confused by any of this short-term noise that is irrelevant to the big picture, which is what will happen to the dollar in the weeks and months ahead.
We have to first recognize that the US economy is moving toward stagflation, just liked occurred in the 1970s. Stagflation is a terrible result because you have both a stagnant economy and rising inflation, which is what is happening not only in the US but in many other parts of the world as well.
We are no longer in an environment of falling commodity prices. Crude oil, for example, is up 80% since its low in January. When added to the underlying inflation in services that never ceases, it is not surprising that even by the government’s own understated measure, inflation is above the Fed’s 2% threshold, signaling that it should be raising interest rates.
If the Fed doesn’t raise rates, then inflation will only worsen. As we know from the 1970s, higher inflation makes economic activity even weaker. Inflation distorts an economy and disrupts the flow of capital. So the Fed has two alternatives routes to take. They either raise interest rates to demonstrate that they have the resolve to protect the purchasing power of the dollar, which is what Paul Volcker did, or the Fed sits on its hands pretending that all is well with the dollar and the economy, which is what I expect it to do.
The reason for its failure to raise interest rates of course is that the Fed is a political animal. It is not independent of government, so it takes orders from the ruling elite. And right now those orders are to keep interest rates low to maintain the illusion that the US government is solvent.
In other words, the US government has such a huge debt load that it cannot afford to pay a fair rate of interest. Higher interest rates would raise federal outlays, which in turn would increase the federal budget deficit, causing the government to borrow more money, and further increase its interest expense burden.
You can see from this chain of events that the US government debt would spiral upwards, and the ultimate outcome would of course be hyperinflation of the dollar – and nobody wants that.
There is one other observation I would like to make, Eric. As we speak, Bitcoin is at $690, which has soared a stunning 60% over the last three weeks. So we have to ask ourselves, is Bitcoin leading? In other words, are the buyers of Bitcoin fleeing potential problems like European banks, the Chinese economy, simmering geopolitical events that could boil over at any moment, and other trouble spots? If so, it won’t be long before gold and silver are on the same trajectory as Bitcoin and they explode higher, resuming the uptrend in price they began earlier this year.” To hear what John Embry is doing with his own money right now as well as more about the coming plunge in the stock markets, surge in the price of gold, silver, and the shares, CLICK HERE OR ON THE IMAGE BELOW.
***Also just released: Bloodbath In Asian Stock Markets Catapults Gold Higher In Early Trading CLICK HERE.
***KWN also released an absolutely jaw-dropping interview discussing the gold and silver markets with the man who advises the most prominent sovereign wealth funds, pension funds, hedge funds, and institutional funds in the world and he discusses the gold and silver markets, coming chaos and much more! To listen CLICK HERE OR ON THE IMAGE BELOW.
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