Today a legend who was asked by the Chinese government to give a speech to government officials in China, alerted King World News that any further weakness in gold will be short-lived.
John Ing: “I think last week’s action in the gold and silver markets was more the Charlie Brown moment. That’s where there have been hints of rate increases, but, as has been the case for the last couple of years, the Fed never follows through with raising rates….
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“So people think that this week there might be a rate increase, but as I said, it will be a Charlie Brown moment where the football will be taken away from the market and we will not get a rate hike. Meaning, I believe the probability of a rate increase is zero.
China Buying As Some Entity Keeps Dumping Paper Gold…
Meanwhile, on Friday morning we saw some entity dump a lot of paper gold in the futures market. That’s the second time that happened last week. Against that backdrop, China has purchased another 10 tonnes of gold and they now hold 1,833 tonnes of gold. The Chinese have been accumulating gold every single month for as long as I can remember.
While European Banking System Is In Major Trouble…
At the same time, we are seeing stresses in the European banking system, particularly since Germany and the Italian banks have said, “no,” to the BIS (Bank for International Settlements). There are something like 1.2 trillion euros of problem loans. And of course Deutsche Bank is leading the way on the downside because of the prospect of a $14 billion fine. Most important, however, is the number three bank in Italy and now the the largest Spanish bank that are both having major problems.
While Contagion Concerns Spread From Oil Price Collapse…
Then we have the concerns about the oil market and the falloff in demand and the buildup of production. This is putting additional stresses on the financial system. In the first half of the year some of the companies had hedges in the oil market. But they cashed in on those hedges and they don’t have them to fall back on any longer. So there are mounting concerns about the future solvency of these weaker companies in the oil sector and the potential domino effect that will cause both inside the oil sector as well as in the financial system.
While Second World Collapses Accelerate…
Then we have the ongoing concerns about Venezuela, Nigeria, etc. In fact, when you stand back and look at the situation, the reality is much bigger because we have a first world problems that are suffering because of second world problems. The West keeps on printing money and spending it because we are not learning any lessons from the second world countries that have been collapsing.
And First World Concerns Mount
So just as the second world money has become worthless, the first world countries are now also in danger of collapse when they finally hit the wall. Western debt as a percentage of GDP continues to climb, just like it has in Venezuela and Nigeria where they now have hyperinflation.
What Should Investors Do?
So the underpinnings of the gold market are extremely strong, even though some games are being played in the paper markets. For citizens of the West who are looking to protect themselves, gold is the alternative. Meaning, they should accumulate gold while the price is under pressure. As far as the gold mining stocks, in another two weeks we will start to see earnings being reported, and the higher prices we have seen this year bode very, very well for their expanding margins. So any further weakness in the high-quality shares is likely to be short-lived.”
***KWN has now released one of Egon’s most important interviews ever and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***Also just released: China’s Stunning Plan For Gold And A New Monetary System CLICK HERE.
***Nomi Prins also discusses China and their plans for gold and a new monetary system, what to expect in the gold market as well as what surprises are in store for the rest of 2016 and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
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