Today the man that spotted QE4, before anyone else in the financial world, surprised King World News when he boldly predicted that gold will eventually trade above $10,000 an ounce. Pento also warned that in the first half of 2013 Israel would attack Iran, sending oil prices skyrocketing to $170 a barrel.
Here is what Michael Pento had to say in this extraordinary interview: “The charade of independence between a government and their central bank is being shattered throughout the developed world. Let’s just take a look at Shinzo Abe, and the Bank of Japan. Abe comes in and he has a 2% target of inflation. Right now inflation is negative in Japan.”
Michael Pento continues:
“So
he (Japanese Prime Minister, Abe) has promised to declare a war on the
Japanese middle class. He has also declared a war on deflation and he
is saying he is deliberately attacking the value of the yen and has a
specific inflation target of at least 2%.
“It also sounds very familiar to inflation
targets here in the United States with Ben Bernanke. This is a
watershed epiphany (on the part of central bankers). This has never
been seen before in the major economies of the developed world.
When
can you point to a time in history when the leaders of the developed
world, when the owners of the world’s reserve currency, have all
decided that they are going to destroy the value of that currency vs
not only other currencies, but against precious metals and hard assets?
We’ve
seen it before (at different points in history) in Weimar Germany,
Argentina, Hungary, but we’ve never seen it where Europe, Japan, and
the United States, have a declaration of war on their currencies. The
average American, Japanese, and European, must vastly increase their
holdings in precious metals, and the (gold and silver) equities,
starting now.
When asked if the Dow/Gold ratio is headed back to 1/1, Pento responded,
“That number is headed down to low single digits, but I think the bulk
of that move is not going to come from a collapsing Dow. You can get
to that (1/1) ratio in two ways: You can collapse the Dow, or you can
increase the price of gold.
I
think the price of gold comes up much closer to where we are on the Dow
Jones Industrial average. In nominal terms it’s very hard to crush
these major averages when you have a central bank printing $85 billion
a month. Just look at any of the monetary aggregates, M2, MZM, M1,
they are soaring, Eric.
Money
supply growth rates will continue to expand, and their rate of
expansion will grow. That is going to bring gold much, much higher
than anybody is factoring into their predictions right now.”
Eric King: “So we would see gold above $10,000?”
Pento:
“Absolutely. I know it sounds ridiculous, but don’t forget that back
in the 1930s it was (around) $21 an ounce. No one would ever have
believed that 80 years later we would have gold trading anywhere near
$1,900 an ounce, but that’s what happened.
If
you look at the rate of destruction of the purchasing power of all of
the developed world’s currencies, it’s a slam dunk that gold is going
much, much higher than its inflation-adjusted high of around $3,200 an
ounce.
People
are realizing this is an unprecedented scenario where all of these
countries have been put on the life support of the their central banks
to perpetuate the illusion of solvency. And when you get to that
condition, there really is no limit to how high gold can go.
It
wouldn’t surprise me if gold eventually goes to $10,000 an ounce or
even higher because there is no limit to the productive capacity of
central bankers to produce currency. I think it would be more
surprising if gold didn’t go to $10,000 an ounce. When the US dollar
loses its world reserve currency status and the US bond market collapse
is in full swing, a $10,000 gold price may prove to be very
conservative.”
Eric King: “What else do you see happening in 2013?”
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