Today James Turk spoke with King World News about a “Black Swan” event, the
coming global monetary reset, and the incredible price action that KWN
readers can expect to see in gold and silver over the next 60 days. Here is what Turk had to say in this fascinating and powerful interview: “What
we saw in 2012, Eric, is a good example of what I have been calling a
‘managed retreat.’ The central planners were out in force -
particularly in the fourth quarter - trying to keep a lid on precious
metal prices, and they managed to accomplish that to some extent.
Nevertheless, despite their best efforts, last year gold rose 7.0%, and
silver climbed 8.2% in US dollar terms.”
“In fact, gold and silver were higher
against all the world's major currencies last year, which is an
important point. National currencies are being destroyed by misguided
government policies. So while the purchasing power of these currencies
is being eroded, the best governments can do and the most they can
expect is to try keep the gold price from rising faster than the rate at
which the purchasing power of currencies is being debased.
This battle is what the
phrase ‘managed retreat’ is all about, and it is indeed a retreat. The
central planners are losing the war, as evidenced by the fact that gold
has now risen twelve years in a row at an average annual rate of 16.8%
“That is a spectacular achievement for
gold. But silver has done even better, rising 20.1% on average over the
last twelve years. I also found it interesting that the US Mint
stopped selling silver eagles. There are only two alternatives to
explain it and both are bullish. Either they don’t have any physical
silver, or they don’t want to sell what they do have at such a low
price. As I said, either case is extremely bullish for silver.
So while the central
planners may win the occasional battle or two, like the one being waged
over the past couple of months, they are clearly losing the war. And we
can expect more of the same in 2013, Eric. Gold and silver will climb
higher, but the central planners with their interventions will continue
to fight the free market.
I would like to go back to
one point, Eric, namely, that gold has risen for twelve years in a row
in terms of US dollars. Statistically speaking, we are in the tail-end
of a Bell-shaped Curve. To put it another way, twelve consecutive years
of price increases in anything is one of those so-called Black Swan
events. It is very rare for anything to rise twelve years in a row, but
despite this big increase in price, the important point is that gold
The dollar and other
currencies are being debased at basically the same rate at which the
gold price has been rising, so gold, in essence, remains as undervalued
as it was years ago. Its price has risen almost entirely because of
currency debasement, not because gold has become more highly valued.
And gold is far from being overvalued. The gold price still has much
higher to climb before this bull market in gold, and bear market in
Looking a year or two
ahead, I expect to see a global monetary reset. It will likely hit
sometime between 2013-2015, with the result that governments will return
to gold as the core component of monetary policy, and it will occur in
one of two ways. Either governments go back to gold through a
well-reasoned plan, implemented over a few years, or they will go back
to gold kicking and screaming.
I fear it will be the
latter, which means there will be a lot of chaos ahead. What has been
lost in the discussions of the fiscal cliff is that government has
become too big. It has to shrink because the productive sector of the
economy can no longer support the level of spending governments are
Total government spending
in the US, for example, is now a greater percentage of GDP than during
World War II when the economy was on a war-footing. But the situation
is not much better elsewhere in the world. Governments everywhere have
become too big.
But rather than cut
spending in order to reduce their footprint, monetary history shows that
they always print money. It is the easy political option, and
invariably it is pursued until the money is destroyed. Sadly, that is
where the dollar and nearly all of the other national currencies are
headed, and the best way to protect oneself and their family from this
coming monetary debacle is to own physical gold and physical silver.
There is one lost point to
make, Eric. 2012 ended just like 2011, with sentiment for the precious
metals as well as the mining stocks at or near historic lows. The first
two months of 2012 were good ones, and I expect the same thing now. So
I expect a big rally in gold and silver - and probably the mining
stocks too - is long overdue.
Given the similarity of how
2011 and 2012 ended, I expect 2013 to begin the same way as 2012. To
put some numbers to it, in the first two months of 2012, gold rose over
$200 and silver soared $10. There is every reason to expect that the
same thing will happen again this year. So despite Thursday’s weakness,
the metals will be seeing a tremendous surge in the next 60 days.”
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