Brace For Financial Destruction & Sovereign Defaults

On the heels of Friday’s gold and silver smash, Marc Faber warned King World News about the extraordinary dangers that will cause destruction in the global financial system.  This is part II of a series of written interviews that will be released today on KWN in which Faber discusses the end game, government theft, how investors can protect themselves, gold, silver, bail-ins, central planner actions, global markets, and much more.

Eric King:  “What is the biggest danger in the financial world as you see it?”

Faber:  “I think we have many dangers.  The biggest danger is governments themselves with their interventions into free markets, and their fiscal policies….

“In other words, increasing or decreasing government spending.

Usually it’s an increase, and as a result the government becomes larger and larger.  Of course the larger a government becomes, the less economic growth you will have.  The extremist, socialist-to-communist economy that we had in the Soviet Union and China, it was a complete failure economically speaking.


Riot police clash with protesters at Centerra gold mine in Kyrgyzstan

Hundreds of protesters attempted to storm a Canadian gold mine office in Kyrgyzstan on Friday, clashing violently with riot police and prompting the Central Asian nation to declare a state of emergency. Dozens of people were wounded.

Riot police used stun grenades and rubber bullets to disperse the stone-throwing protesters, the Health Ministry said, adding that at least 55 people, including 13 police, were wounded in clashes. A police bus was set on fire.

About 2,000 protesters had descended upon the Kumtor mine office near the eastern village of Barskoon, furthering a protest that began earlier this week to demand that the mine be nationalized and provide more social benefits in the impoverished nation.

The mine, operated by Toronto-based Centerra Gold, is the largest foreign-owned gold mine in the former Soviet Union.

Protesters had blocked the road leading to the mine. On Thursday night, several hundred demonstrators, some on horseback, besieged a power transformer unit and cut off electricity to the mine for several hours.

Riot police moved in overnight, detaining about 80 protesters and restoring the power supply.

Kyrgyz President Almazbek Atambayev introduced a state of emergency in the area on Friday.

Centerra says the protests are illegal and that it’s working with the government and local authorities to resolve the situation.

A senior cabinet member visited the area Friday and tried to persuade the protesters to disperse, saying that further disruptions to the electric supply would have crippled the mine and cost significant economic losses.

“The government is asking you to have patience and wait until the autumn, when we will look at the issue,” Deputy Prime Minister Shamil Atakhanov told protesters.

Kumtor, which accounts for about 12 per cent of the economy of the ex-Soviet nation, has been at the centre of heated political debate between those seeking its nationalization and officials who believe that would deter much-needed foreign investment.

Kyrgyzstan, a country of 5 million people on China’s mountainous western border, hosts a U.S. air base used to support military operations in nearby Afghanistan.

The nation has seen the overthrow of two governments since gaining independence amid the 1991 collapse of the Soviet Union, the latest after bloody protests in 2010.


Gold To Advance A Stunning $2,000+ From Current Levels

Top Citi analyst Tom Fitzpatrick’s team sent King World News three extraordinary gold charts illustrating why gold is headed for a massive $2,000+ gain from current levels. KWN is pleased to share this information with with our global readers. Below is what top Citi analyst Fitzpatrick’s team had to say along with three very powerful charts.

Fitzpatrick’s Team: “On a medium-to-long-term basis we remain very bullish on Gold. However, it remains too early to call this correction lower as over, and we still believe that a lower low close to $1,260 can be seen. If so, we suspect that will be a platform for a much higher move in the months and indeed years ahead. The Equity market may also be instrumental in this story.

That low (in gold) was hit at $682 in October 2008, and within 3 years Gold had rallied to $1,921. A similar fall and rally would see Gold at $1260 near-term and then above $3,500 by 2016. That $3,500 number resonates with us for a number of reasons. When Gold rallied in 1970-1980, it went from $35 to $850 (It multiplied over 24 times).

However, in looking at our long-term target and comparing it to this 1970’s period (Our favorite comparative period to today), we truncated our expectations (A 24 fold rally from the 1999-2001 lows of just over $250 would suggest over $6,000 for Gold)….

“Why did we reduce our expectations? While the reasons for Gold going up are (in our view) as strong if not stronger than that period (hard currency), the final move in that trend was “event driven.” On December 27, 1979 the Soviet Union invaded Afghanistan and the Gold price surged from the pre-Christmas level of $473 to a peak of $850 by January 21, 1980.

If you exclude that move, then Gold had multiplied by a factor of about 13.5 from the start of the uptrend at $35. A 13.5 fold multiplying of Gold from the $254 low in 2001 gives us a price around $3,430 (Very similar to what we would see if Gold first went to $1,260, in a move like 2008, and then saw a move like 2008-2011).

Within this (1970s) bull market, Gold had a severe correction in 1975-1976 as the Equity market recovered back towards the 1973-1974 pre-crash peak. This time we have managed to overcome the 2007 peak but it has taken twice as long and has needed zero interest rates, multiple QEs and trillion $ deficits. Is that a better or worse performance than the 70’s????