Mr. Bernanke is so anti-deflation he’s willing to risk hyperinflation, and we are on this path of hyperinflation given the policies we are following.” Turk contends gold is a good value right now. Turk says, “Because it is money outside the banking system, it doesn’t have any counterparty risk, and that is very important as this crisis continues to unfold.”
Turk predicts, “Either we cut back on spending or the dollar is going to collapse. . . . Those are the two choices.” Turk’s advice, “By owning physical metal, you are preparing for what looks like a collapse of fiat currencies. In fact, I call the environment we are in now a fiat currency bubble.” Turk predicts gold will reach “$11,000” per ounce in the next five years.
Turk goes on to say, “It might come sooner. It depends on when confidence finally breaks, and we’re getting very, very close to that stage. There’s nothing holding the dollar together but confidence.” Join Greg Hunter as he goes One-on-One with James Turk.
Gold To Surge Over $460 & Smash Through Key $2,000 Level
Weakness in Chinese Iron Ore Imports, weakness in Chinese Asset markets, a bullish USD, USDCNY at the lows, a cheap Gold price, how are they linked and what could it mean? These charts may help…
The setups (on the above chart) clearly indicate a move lower by the tune of 9%-11% and at a time when Chinese asset markets are looking vulnerable.
Posted a bearish key day yesterday and is making lower lows for this trend. The next decent support levels are at 2,138-2,145 (see chart above).
The bearish indications on the Chinese Iron Ore imports chart and the Shanghai Composite (as well as the other equity indices shown) seem to be consistent according to the overlay above.
These worrying developments come at a time when USDCNY (US dollar vs Chinese yuan) is at or near the trend lows in a general USD bullish environment (see monthly US dollar chart below).
Bullish outside month for February (noted above).
To sum up:
There are clear indications that Chinese asset markets are likely to post further losses over the coming weeks. In addition to the weakness seen on the Shanghai Composite and Property indices, we see a setup that warns of a significant fall in Chinese imports of Iron Ore.
These worrying developments are taking place against a backdrop of a rising USD generally but, at least until now, a falling or low USDCNY.
When bringing these together, we believe we could be seeing a dynamic whereby financial market and economic conditions in China stop USDCNY from falling, lead to more USD diversification as a consequence and thereby provide a strong bid in the market for Gold.
We will of course have to wait and see if these building blocks follow through but our growing conviction at this stage is that the lows in Gold may already be in place.”