GoldSeek.com Radio
30 September 2011
Chris Waltzek: It’s a pleasure to welcome back Gerald Celente to GoldSeek Radio to help make sense of the epic market volatility we’re seeing today. Gerald is Director of the Trends Research Institute. His team produces the The Trends Journal with cutting edge analysis of the global economic trends. Hello, Gerald.
Gerald Celente: Hello, Chris.
Chris Waltzek: Let’s begin our dialogue, if we could, with the eurozone sovereign debt issue. You know, as debt-strapped nations start to fall like dominos, their officials are struggling to hold the EU together. Moody’s Investors Service downgraded eight Greek banks last week. How do you see this crisis playing out and what does it mean for the typical investor’s portfolio?
Gerald Celente: The way it’s playing out is that the media and the politicians, of course, first of all, keep this line. You know, the Europeans have to get their act together. Matter of fact, just following the IMF meeting this past Monday, we heard from PIMCO’s head over there, Mohamed El-Erian. He said, “What I learned in Washington is that the Europeans finally get it. They recognize they have deep problems and they recognize they need to do something about it and now they are going back and will try to do something about it. This was a very important wake up call to Europe.” What wake up call? What are they gonna do about it? They’re gonna do about it with the same thing the United States did about it, is throw money after bad debt. They knew what was going on over there. There’s no solving it and the big lie is that if only the brilliant people put their minds together and work as a unified force, and speak with the same propaganda, that it’s all going to be fixed. So, what it means is that this thing is gonna continue to collapse and, just as in the United States following the panic of ’08, when things should have collapsed a lot quicker, they pumped it up by all of this phony money. And they’re doing the same now in Europe, just with the fed. They’re doing it again.
Chris Waltzek: They tell us they’re going to fire with fire. But, in reality, they’re just throwing Napalm on the forest fire, claiming that that’s gonna solve everything because heaping debt on top of a funny money, debt-based financial system just doesn’t work. And, you know, Gerald, when we take a look at the charts of all the world’s markets, it’s amazing how correlated – how highly correlated – practically every stock market now is to the U. S.; and my guess is that’s because the dollar has such a stranglehold as the supposed reserve currency. Where do you see this all ultimately leading?
Gerald Celente: We’re leading into the greatest depression. There’s no way out of this. And what are they going to do? What are they gonna do in the U. S.? The nerve of people of like Timothy Geithner, for example, our U. S. Treasury Secretary, telling the Europeans that they have to get on this and fix it when we can’t fix our own problems. I mean, this is fodder for comedy and, yet, they say these lines as though they’re serious about it. This is a great unraveling. It’s only been held up again and made it look like there’s a recovery from the continuing dumping of dollars and Euros into failing banks and institutions. And they’re going against, by the way, in Europe, they’re against the Lisbon Treaty, the Maastricht Agreement, every piece of paper that they put together to design the European Monetary Union. The European Central Bank isn’t supposed to be buying bonds of failing countries. They’re not supposed to be covering the debt of failing banks, and they’re doing it, just like they’re doing here in the U. S. And all you all have to do is look at these two-bit actors. If it wasn’t for the red carpets and the stage and the staging, everybody would be able to see through these people. It’s a disgrace.
You know, they have names – fancy names like the IMF, you know, International Monetary Fund. I’ve said it before. It’s the International Mafia Federation and rather than names, you know, they have three names like in the Central Bank over there in the – in Europe. You know, Jean Trichet. How about Lucky Luciano? ‘Cause just, that’s all these people are. They’re the loan sharks of last resort. They’re robbing the people in front of their eyes. Look at the riots that are going on over in Greece, this white shoe boy language, austerity measures. “We made some loans and we want ‘em back and you can’t pay us. We know they were bad loans, but we don’t like to lose money, so we want your ports. We want your water supply. We want your electric grid and you can’t do that, we’re gonna put more austerity measures on ‘ya. You don’t have a job, you’re losing your income, your pension’s shot, you have no benefits? Try this one on for size. We’re gonna increase your property taxes and we’re gonna make sure we get your property taxes because we’re gonna include it on your electric bill. And I got another one for ‘ya. We’re also going to raise your heating oil just when the winter’s coming. You got it? We wanted our money.” But, they don’t say it like that. They put people with funny names, like Le Grand to say the grand scheme. It’s a rip off. It’s thievery and you’re seeing workers on the world 2.0 unravel in front of our eyes.
Chris Waltzek: I think that’s why our listener’s enjoy your comments so much because you don’t water down the truth. When Gerald Celente comes on the show, you get the unadulterated picture of reality.
So, that leads me to my next question here. You know, at the FOMC meeting last Wednesday, federal officials announced a plan to swap $400 billion in debt to bolster the ailing economy. Operation Twist involves selling $400 billion in near term bills and then reinvesting in the longer dated maturities to help keep the benchmark lending rate artificially low. Otherwise, we’d likely see soaring rates, as we’re seeing in Greece. So, the fed seems to be playing a game of QE3 chicken with the markets. Who do you think is gonna flinch first, them or the investors?
Gerald Celente: Apparently, the investors have first and we saw what happened. Just go back to last Wednesday when they announced it. You saw the world equity markets tumble and gold and silver and other precious metals along with it. Gold and silver should have gone in the opposite direction, which leads me to believe that this was all preplanned. When the G20 meeting people get together, they do have schemes that they’re putting together that we don’t know about and it was an engineered fall in the precious metals market. We’re learning now that Central Banks are dumping gold and we also understand that the higher the price of gold goes, the less people want to buy their fiat currency. And that, to us, was an engineered move on many different levels, and they’re trying to scare people out of precious metals.
I began purchasing gold. My first bar was $187.50 an ounce in 1978. I remember when the market collapsed in January of 2000 of 1980. It was a whole different scenario. You had interest rates on the Paul Volcker, you know, going through the roof. It made more sense to put your money into dollars and get a high return on interest than it did to invest in just about anything. They wanted a strong dollar and they made it very clear. This has nothing to do with it. In fact, it’s the opposite. You mentioned about low, long-term interest rates. The lower the interest rates, the less value of the currency. And what are we at? Near zero now. So, this whole thing, to me, is a manipulated game and we know they manipulate the game because every time, after a couple of months or a couple of years, the facts tell how they were rigging the game. So, that’s all this is right now and you could go back to that date of last Wednesday and you can see the engineered collapse. There was no reason for gold to take that kind of a hit and there’s no reason for it to stay at the levels it is now.
Chris Waltzek: Exactly. I mean, last week, the CME, once again, rated the precious metals markets. Margins were raised 21 percent for gold, 16 percent for silver, on the heels of numerous recent hikes. The event fomented the steep sell off that you referred to in commodities. The prices were already well off their highs, which I think eliminates their excuse for raising margin requirements. Do you agree that this was a bit suspicious?
Gerald Celente: Absolutely. You raise the margin requirements and the prices are going up, now when they’re going down, you know, to discourage the speculation. And the other one, of course, as well, is that a lot of people made a lot of money in the markets, in the precious metals markets, and what they were doing was they were dumping gold and silver to pay for their losses in the other equities. I mean, that’s well known as well.
So, again, to me, this is – I’m in gold for the long-term and I have recently started buying silver and I’ll tell you why. Because I’m very concerned, and we’re starting to see signs of it around the world, that they’re going to start regulating the sale and ownership, actually, in the future of gold. You can see it happening now and I’ve been saying this so much. So, that’s my concern and that’s why I also own some silver. I like gold a lot more, believe me. But, I’m using silver as my second – my backstop.
Chris Waltzek: We’re hearing stories this week that in France they are limiting the sale of gold to $600.00 and, of course, capital controls here in the United States are becoming more and more stringent. But, you know, on a more positive note, this commodities plunge has certainly made silver more appealing from a fundamental and technical vantage point. Several recent studies are showing conclusively that industrial demand has consumed most of our above ground stockpiles of silver. There is actually, according to record, more than twice as much gold compared to silver, if we just look at investable supplies. Now that silver is roughly 40, 50 percent from its peak price, do you see a big buying opportunity in the next few weeks?
Gerald Celente: I cannot say that because I’m restricted on what I can say about investment advice. So, and only speaking for myself, as I said, the reason I’m in silver, and I don’t claim to be an expert in silver by a long shot, but I do feel that I’m very qualified to speak about gold considering, not only the length of time that I have been investing in it, but also because of the forecasts about it. I called the bottom in 2001 at $275.00 an ounce and it went as low as $255.00. But, and when it hit $275.00, I called the bottom. So, you know, on silver, again, speaking only for myself, it’s the second smart alternative and it goes, again, with that very – if you wanna talk about diversification, that’s the one to go for because, you know, pieces of silver have been with us throughout history, and, like gold, they’ve bought their way to freedom. And, as you point out, most of the stockpile has been used up; but on the negative side of silver, is that if there is a sharp economic downturn, which we believe is going to happen, industrial demand will also diminish and that may put somewhat of a cap on it. But, again, you know, I want to make it really clear that there are a lot of other people that know a lot more about silver than I do. But, for me, I’m in gold for my golden years and I’m not getting out of it I the foreseeable future.
Chris Waltzek: I share your sentiments regarding AG silver. And when we look at the remarkable increase in just the past few weeks in the gold to silver ratio, it certainly indicates that relative to gold, silver has become a remarkable value, fundamentally speaking. We’ve shot up from the lows in the 30’s all the way to, roughly, 53, 54 area on the gold and silver ratio to more natural levels. And that makes silver somewhat more appealing to speculators and investors.
Gerald, as the discussion comes to a close, in previous chats you have discussed gold and foreign currencies. Are you interested or shifting back into the U. S. dollar?
Gerald Celente: No, I’m not. Not at all. And I – it’s like jumping, you know, out of the Lusitania, which is the Euro, and into the Titanic, which is the dollar. I think it’s one of the biggest cons coming down the pike, trying to make the dollar seem as though there’s a loss of value behind it. And we could already hear, by the way, from the hypester in chief, Timothy Geithner, talking about how the whole world looks at America for the strength and confidence that they have and why it’s wise to go the American way. I don’t know who he’s talking to, but everyone I know is very, very frightful of the future of America when it comes to economics.
Chris Waltzek: Gerald, can you please tell folks how they can find out more about The Trends Journal and all of the cutting edge analysis there offered to your subscribers?
Gerald Celente: Yes, it’s trendjournal.com; trendsjournal.com. And what we do is we paint the picture of the future so that people can go into the future with planned strategies and implement them before it arrives. By the way, the motto of The Trends Journal is “Think for Yourself” and we provide that kind of information that shows the way and it’s up, really, to you to make the final decision. And I just wanna repeat what Timothy Geithner just said, talking about having faith in the U. S. “We can borrow money for 10 years as the government of the United States because people have confidence in this country at less than 2 percent.” He means less than two percent, they could borrow it. “The responsible path now is to take advantage of the unique position we’re in as a country. People have a lot of confidence in us. Let’s take that advantage of that now and do things that help growth in the short-term.” And you read that line, you can’t make this stuff up. “Help growth in the short-term.” That’s the perfect, perfect line where you let go of your future. You mortgage your future for the short-term.
Chris Waltzek: Sage words, indeed, from Gerald Celente at The Trends Institute. Sir, it’s always a pleasure and we thank you so much for taking time from your busy schedule today for us.
Gerald Celente: Thank you for having me, Chris.
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