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Sunday, February 27, 2011

Weekly King World News Interviews

This week interviews Pierre Lassonde, Michael Pento, Jim Rickards and Art Cashin.  These interviews cover the political unrest in the Middle East, its effects on the price of oil and gold, the IMF's efforts to displace the dollar as a reserve currency, the FED's continued printing of money (as well as QEIII) and gold/silvers rise.

Pierre Lassonde - Discusses how the German Chancellor and her party were voted out of office and there may be a more bias toward socialism in Germany and the Euro structure will become tenuous causing Greece and others to fall.  Pierre expects Gold to go to $1500 on the back of those events.  Pierre talks about China and India's current growth and demand for gold.   Pierre, then discusses gold, diamonds and mining and mining companies. 

Michael Pento - Discusses how Bernanke's raising the estimates for GDP everybody is turning bullish.  Michael talks about mortgage rates (which are going up) how the Government borrowing more money is only going to cause interest rates to go higher.  US Dollar is getting crushed and has lost 5% since December of 2010 and the US dollar is no longer considered a safe haven for international investors.  This will force investors to up their allocations to commodities (especially precious metals).  Michael also discusses the geopolitical unrest in the Middle East and is going to cause oil to go much higher.  He asks what is going to happen when we try to return to a normal market with interest rates going higher.  He believes the end game is the US will default and/or go through restructuring.  Michael believes that gold is the way to go and any pull back on gold should be taken advantage of.  Michael believes that QE3 is right around the corner and going to be a done deal.

Jim Rickards - Discusses the turmoil in the Middle East and how it is creating opportunity for Al Queda to create additional instability which will cause more issues in the sovereign debt crisis.  He points out that oil could go higher due to this unrest, but don't underestimate the ability of government to keep a lid on prices through various ways.  Jim talks about he discussion that occurred in Davos where it was pointed out the world needs to re-liquify (with $100 trillion dollars).  He asks where that money is going to come from?  He points out that the IMF has then followed up with a report using SDR's targeting issuance (global QE) to various countries at $200 billion a year (removing the dollar as a reserve currency).  He points out that the IMF wants to create a bond market for the SDR's (and notes) so the international community has investable assets to put money in and that this is a step toward having SDR's become the reserve currency.  He believes we are not coming out of discussion of this and moving toward implementation.  The SDR is a basket and currently the dollar is a major component and this could be changed at any time by reducing the dollar and brining others in.

Art Cashin - Discusses how the political unrest in the Middle East and has had little effect on the US stock market.  Art believes the US stock market is very over extended currently.  He recommends to look at advancers/decliners to assess if we are at a top in the stock market.  Art says the events in Egypt, Bahrain and Libya should have caused a stampede of a flight to safety in the dollar, but instead went into other things (like US treasuries).  Art believes Bahrain is the key to future issues in oil, if things continue to get bad in Bahrain this could cause issues for Saudi Arabia.  Saudi Arabia is doing everything they can to cool down the unrest in Bahrain.  

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