With gold hitting new all-time highs in all major currencies and silver breaking above $40, today King World News interviewed James Turk. When asked about the action in gold Turk stated, “I wouldn’t be surprised to see $2,000 (gold) very quickly. It’s just a question of how the European bank crisis unfolds or the US debt limit unfolds or any one of these number of trouble spots around the world unfolds. Any one of those could light a fire under the gold market and you could see $2,000 very, very quickly. You could also see silver over $50 very quickly. That’s the way the trend is going so just position yourself and ride the trend.”
"It’s all very positive Eric, it’s still within my bigger point of view that the summer is going to be spectacular. It has started out that way and I still think there is a lot more left. There are really two types of gold buyers, you’ve got the accumulators and you have the momentum players.
What the London Trader (KWN interview earlier today) was saying is that the accumulators have basically been out of the market, which is reflected by the discount to spot price on a number of the Asian markets where a lot of the physical accumulation takes place.
Now the interesting thing is you can drive prices higher if either one of those players are in the market, and while the accumulators are out, the momentum buyers are in there. I still think these momentum buyers are going to take gold and silver much higher and that’s basically what the London Trader was referring to by saying there was going to be a lot of short covering once we get over $40 (in silver) and $1,600 (in gold), which is what we did today on a closing basis in New York.
People are looking for the safety of gold and exiting national currencies. Exiting the dollar, exiting the euro, exiting the British pound, gold is at record highs against all three of those currencies.”
When asked about Felix Zulauf’s KWN interview where he discussed the simultaneous inflation and deflation Turk said, “If you look in terms of the dollar we are actually seeing inflation, prices are going up all around us. But if you actually look at prices in terms of gold, prices are going down. So you’ve got deflation when prices are measured in gold and you’ve got inflation when prices are measured for the dollar.
We’re in a 1930’s type of situation with regards to deflation, if you measure that deflation in terms of gold. Gold’s purchasing power went up in the 1930‘s as the huge debts that were accumulated during the boom years of the 1920’s were eventually reconciled.....
“They were either repaid or written off as bad loans. It’s the same thing that’s going on now, the only difference now is that the dollar is no longer tied to gold as it was back in the 1930’s.
My view is that we still have a long way to go before this bust that we have been in plays itself out. This boom and bust cycle that we go through in monetary history, you have to look at it from a big picture point of view because it doesn’t happen over weeks or months, it happens over decades.
For example, in the 1920’s you had the boom, you had the bust in the ’30’s. In the ’50’s and ’60’s you had the boom, you had the bust in the ’70’s. In the ’80’s and the ‘90s you had the boom and we are currently in a bust, and this bust is not going to be over until all of the bad loans that were made in the ’80’s and in the ’90’s are eventually reconciled.
They will be reconciled in one of two ways, they will either be repaid or they will be written off. While we are going through this financial bust, people should avoid financial assets and focus on tangibles. That’s the way you are going to get through this bust with as much of your wealth intact as possible.”
When asked about Ben Davies $2,000 target on gold within 4 months Turk responded, “Maybe that $2,000 Ben Davies has talked about is going to be happening pretty soon. All we need is a little bit of a fuse on any one of these monetary events going on around the world to just put a tidal wave of buying into the precious metals.
