Game Over – “It’s All A Farce, The Fed & German Gold Is Gone”

Today one of the savviest and well connected hedge fund managers in the world shocked King World News by taking us once again on a trip down the rabbit hole that was nothing short of breathtaking.  Outspoken Hong Kong hedge fund manager William Kaye spoke with KWN about the missing Fed and German gold, where it has gone, and how much gold the People’s Bank Of China (PBOC) really owns.  This interview is going to stun readers around the world.  Kaye, who 25 years ago worked for Goldman Sachs in mergers and acquisitions, had this to say in part I of his remarkable interview.

Kaye:  “Global hegemony (leadership or dominance) is changing in a way that most people don’t fully comprehend.  This area of the world, the Asia-Pacific, China in particular, is positioning itself to be the leading global power as we look out over the next five to ten years.

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My sources tell me that contrary to the public numbers that are available, China has anywhere between 4,000 to possibly 8,000 tons of (physical) gold….

“They are not only the world’s largest producer of gold, but they are the largest importer of gold in the world.

This is an ongoing process for China.  This is a strategic initiative.  So China is massively accumulating the gold that is being extricated from the West at a very rapid pace.  The dynamics here are very geopolitical, and the Far-East is being elevated by this.

In the ‘New World Order,’ which will ensue when this raid ends, China’s position, Russia’s position, Brazil’s position, will be greatly enhanced.  The position of the United States, as well as Europe and the UK, will be greatly reduced.  Those are the major consequences.”

Eric King:  “Bill, you say China has over 4,000 tons of gold already, possibly as high as 8,000 tons.  Where do you see them heading in terms of their overall ownership of gold?”

Kaye:  “Well, they’re not done yet.  Gold has been leased out, and we do know this (takes place) because it’s been admitted to by the major central banks.  The Fed has admitted it, the European Central Bank has admitted it, the Bank of England has admitted it.  They’ve all admitted that they engage in wholesale leasing of gold to the market.

Source: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/7/9_Game_Over_-_Its_All_A_Farce,_The_Fed_%26_German_Gold_Is_Gone.html

Sell Equities And Buy Physical Gold Now While Prices Are Low

Faber said it’s a good idea to take money out of the stock market.

“I don’t think there is a lot of upside potential, but I think there is considerable downside,” he said.

Marc Faber, managing director of Marc Faber Limited and the author of the widely read monthly investment newsletter “Gloom, Boom & Doom” report, said weakness in China’s economy could spell big trouble global markets.

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Faber said that if the Chinese economy grows at 3 or 4 percent—or even not at all, which he sees as a possibility—it will have a huge, negative affect on industrial commodities and the incomes of countries that produce them. In turn, he said, if countries such as Russia, Brazil or nations in Africa, Central Asia or the Middle East have less income, they’ll buy less from China, Western Europe and America, leading to very little earnings growth or an earnings contraction for those more prosperous economies.

China preferably would show trend line growth of 10 percent, as it has done for the past 20 years, Faber said.

Faber said it’s a good idea to take money out of the stock market.

“I don’t think there is a lot of upside potential, but I think there is considerable downside,” he said.

However, he said that markets are now seeing emerging markets and their currencies go lower, and “It could be that all the money in the world flows in to U.S. stocks and avoids emerging markets.”

Gold can eventually be a source of profit, according to Faber. He said it’s possible the price of gold can go somewhat lower, even though he thinks it’s now at a reasonable level. “I keep on buying gold and I have faith that gold prices will eventually be higher,” Faber said.

Faber said that, in general, corporate earnings will disappoint.

“They may not collapse, but I don’t think they will be as a good as expected,” Faber said. He said cyclical stocks, such as semiconductors and materials companies, will have tough time matching earnings expectations.

U.S. aluminum giant Alcoa kicks off the unofficial start to quarterly earnings season after the closing bell on Monday.

Source: http://finance.yahoo.com/blogs/big-data-download/mark-faber-china-puts-global-markets-risk-164954983.html

$10,000 Gold

I interviewed Nick Barisheff, who is calling for $10,000 gold. Normally, I shy away from these “sky-high” predictions but after seeing him interviewed more than once, I felt he presented a realistic and legitimate case.

Nick Barisheff is President and CEO of Bullion Management Group Inc., a bullion investment company that provides investors with a secure, cost-effective and transparent way to purchase and store individual Good Delivery gold, silver and platinum bullion bars. Recognized worldwide as a bullion expert, Barisheff is the author of $10,000 Gold: Why Gold’s Inevitable Rise is the Investor’s Safe Haven. He is a speaker and financial commentator on bullion and current market trends.

Here’s the interview:

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Is the gold bull over or, as you contend in your new book, is it headed to $10,000 an ounce?

The first thing people have to realize is that no fiat currency, ever, has resulted in anything except decline followed by default, while gold has always maintained its value in mankind’s history of money exchange. Today we have a coordinated, and in terms of fiat currency creation epic, decline orchestrated by the world’s largest central banks. Debt-fueled fiat currency creation is among several long-term irreversible trends I spell out in $10,000 Gold. All of these trends have been in place since the late 1990s, when gold was trading below $300 an ounce.

2. What evidence can you put forward to support the case for gold in light of recent events?

There is no question gold is going to resume its bull market trend after blatant market interference in April and Fed jawboning in June about tapering bond purchases.

If you examine the April gold price decline, sales estimates for the COMEX on Friday April 12 and Monday April 15 were between 125 and 400 tonnes. It was, purely and simply, a deliberate paper gold attack as indicated by the size and speed of the sales that then triggered sell stops and margin calls. There are only a few large global institutions that could have flooded the market in that manner.

In June, this price raid on gold was reinforced by the idea that the U.S. Fed Chairman, Ben Bernanke, is somehow going to end his crescendo of computer-generated currency creation based on a mending economy. From German car sales being at a 20-year low to the slowdown in China’s GDP growth to Japan’s failing stock market to the U.S. record in food stamp usage, there is dominant evidence that the global economy is coming undone.

What people seem to have overlooked is the Fed Chairman’s admission that, should the economy worsen, he will expand, not taper or discontinue, quantitative easing. Observers such as John Williams at ShadowStats point to U.S. household income that’s flatlined since 2009. Williams has also stated that any talk of tapering is pure propaganda to placate global markets on the U.S. dollar while trying to suppress gold. [1]

3. If one supports the fact that the paper market has been manipulated and/or jawboned into temporary submission, what is the physical market signaling?

In India, one of the world’s most robust markets for physical gold, the government has tried to curb gold imports through a series of warnings, and now actual restrictions.  Yet India’s national body of jewellers, the All India Gems & Jewellery Trade Federation, says reports of gold smuggling at different airports in India rose by 2,200 percent last year. The GJF also stated that despite an increase in the import duty from 1 percent to 8 percent in January last year, gold consumption has gone up, not down. [2]

In the United States, even after the April gold price shock, the following month we noted that the 40 percent premium U.S. consumers were willing to pay for one-tenth ounce coins from the U.S. Mint priced gold at $1,932 an ounce, a physical price that is higher than the $1,900 an ounce record for paper gold set in 2011.

In China, the premium that gold buyers paid to take immediate delivery of bullion jumped four-fold in the six weeks following the gold price “crash.”[3]

If this were truly a natural correction or actual bear market, then physical gold market participants would be panic selling, not panic buying. Over the long term, these artificial declines in the price of paper gold are good for gold, because they allow a lot of big, smart, long-term investors to enter the markets. Allowing for what often is a slow summer season, I would not be surprised to see gold hit new highs before year end.
4. Let’s talk about more of the long-term irreversible trends in $10,000 Gold. What is the link that oil, population growth and the aging population have with the price of gold?

As I state in my book, the world’s rising population, aging population and outsourcing all create the need for more government debt to compensate for slowing growth, and increased government debt equals more currency, lower purchasing power and a higher gold price.

When natural economic growth does not come through productivity, or the manufacturing and production of natural resources, then the government must fuel growth through debt creation. In 2012, it cost the U.S. government $2.47 to grow its GDP by $1.00.

Despite the claims of energy independence because of shale oil in the United States, the world’s growth has been fueled by cheap land-based oil, located mainly in the Middle East. Oil sands and shale oil are extremely expensive to produce by comparison, and are therefore inflationary. Apart from currency printing creating inflation, the rising price of oil will also be inflationary because it is used for virtually everything.

These irreversible trends all impact growth negatively, reduce taxation revenues, cause inflation and require ever greater government expenditure, which lead to ever-increasing government debt. Therefore, the world’s citizens will suffer through increasing waves of currency debasement, which naturally causes the value of gold to appear stronger against currencies.
5. Is $10,000 gold a price limit in your mind?

We are in uncharted financial territory. If you look back over the history of fiat currencies it’s actually extraordinary. Several reputable analysts are calling for $10,000 gold, such as Société Générale’s Edward Alberts. Jim Sinclair, the man Barron’s labeled “Mr. Gold” because of his proven understanding of the gold market, has stated he expects gold to eventually trade at $50,000 an ounce.

Given systematic global currency debasement, people need to understand that it is not necessarily gold that will rise in value, but currencies that will lose value against gold. Yet due to the temporary manipulation of the paper gold price, I would suggest that those with foresight have a historic opportunity to acquire uncompromised physical gold.