This week on KingWorldNews Eric King has a terrific line up with Michael Pento, Rick Rule, James Grant and Jim Rickards. These interviews span multiple topics from the health of the stock market, the debt situation, Gold/silver, Japan economy as well as numerous other topics in our economy and their effects.
Michael Pento - Discusses inflation and how it is destroying the middle class currently. Michael says that Wages and Salaries have been falling while year-over-year prices have increased dramatically. Michael discusses various statistics that show huge inflation yet the FED says they have nominal inflation. He mentions how multiple countries have raised their interest rates and would probably be better served there as the FED has kept interest rates at zero. He mentions Q1 2011 GDP will be less than 2% and if you use a real rate of inflation which is close to 9.5/10% we have a very negative GDP reading. Michael believes the cuts being proposed still doesn't get the job done, even with the very aggressive Ryan plan. Michael puts together a very strong argument in this area. Michael believes the only way out of this debt issue is to default and that is what Gold and Silver is telling us. He believes we are experiencing a lower standard of living in the U.S. due to the currency destruction making discretionary spending dwindling and non-discretionary costs rising very quickly. This whole interview is a wealth of information and is a must listen.
Rick Rule - Discusses how silver is taking off, but Rick is taking some profits of silver (but is exiting the trade on the equity side, not the physical). Rick says that physical silver market is extremely tight as far as physical inventory. Rick says he doesn't think we are in such a gold bull market as much as we are in a paper bear market (causing the price to go higher). Rick thinks long term he is a bull on Gold, but believes short term we may see a retrenchment of gold. Rick says that their seems to be a race to devaluate all paper currencies, but gold is the only one that nobody is interested in or can devaluate. Rick says in the next 5 years the energy complex will increase significantly for multiple reason (supply side, growing energy demand). Rick goes on the discuss more about energy (impact of Fukishima on Uranium) and other interesting topics.
James Grant - Discusses how the FED owns the stock market and the FED claims responsibility for ensuring the markets rise since QE1. James asks what happens if the FED doesn't do QE3, which may cause the market to fall hard (making equity holders suffer). James says the humble saver has been left with nothing in their money market savings. He says the FED has been managed negating the original founders goals and provides multiple examples of those failures. James says he is bullish on gold right now mainly due to the reduction in confidence around the world in central banks ability to manage fiat currency. James believes we need to move back to a gold standard to manage money supply and says it need more study as to what number gold would have be valued at. James makes the best analogy I have heard which is "the country needs a debit card, not a credit card", which would definitely manage our spending. He says we need to get back to honest money (money convertibility to an asset) to regain confidence in our currency. James goes on with a very valuable discussion on multiple topics.
Jim Rickards - Discusses events around the world starting in Japan, where we are a month from the event and there are still people struggling to survive. Also he says that Japan is not going to recover from this incident very quickly (like is being said). There are multiple issues in the supply chain which is impacting businesses around the world. Jim says China and Japan could form a regional currency long term due to strengthened relations and linkages (to the dollars detriment). Jim says the Libya issue isn't as cut and dry as one might think with multiple issues on both sides (rebels and Khadafi's side). Jim raises some very interesting complexities in the Libyan conflict currently that are not easily solved. Jim says that the endgame of the Libyan war is a stalemate and has not stopped the decrease in oil flow. Jim discusses changes on how the FED communicates with the public (more like the other central banks in the world). He believes that the FED is going to let QE end in June (but will not terminate early) and will work on perpetual QE, which Jim discussed weeks ago (the size of the FEDs balance sheet is so big that they can continue to perform operations perpetually off the maturities). By creating higher inflation the FED creates negative interest rates and increases borrowing and stimulates spending. He says QE is not about monetization it is about suppressing interest rates. Jim says gold doesn't have many industrial uses and its increase has been due to dollar devaluation (gold as a currency) and may not move with other commodities that have industrial ties. Jim doesn't think gold will go to the 1330 level (be the bottom now) and goes on to make the argument on why gold is not a bubble due to being under-allocated by most. Jim discusses more market impacting topics which are very important and must listen topics.
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