Sunday, August 14, 2016

Endless Stimulus and $2000 Gold

September 30, 2009 by · Leave a Comment 

Bullion Vault

Monetary chaos will follow the current stimulus…

SELF-AVOWED “old rock hound” Byron King earned his bachelor’s degree in geology at Harvard, and then worked as a geologist in the exploration and production division of a major oil company, says The Gold Report.

After “earning his wings” in the US Navy and the US Naval Reserve, logging more than 1,000 hours of flight time in tactical jet aircraft and recording 128 aircraft carrier landings, Byron practiced law in Pittsburgh before becoming a prolific author and popular investment speaker.

Now a core contributor to Agora Financial’s Daily ReckoningWhiskey and Gunpowder and Penny Sleuth, he also edits the Energy and Scarcity Investor andOutstanding Investments newsletters.

Here he speaks to The Gold Report about the “bottomless pit” of stimulus spending and why he sees $2,000-per-ounce gold on the not-too-distant horizon…

The Gold Report: We’ve seen quite a rebound in the markets since we spoke in May, and governments across the world have begun releasing some positive economic news. Are we out of the recession as Bernanke has told us?

Byron King: I don’t agree with that all. It’s like at the funeral home where they put really good makeup on the corpse and people walk in and say, “Oh, he looks so good.” Then you think to yourself, “Wait a minute. If he looks so good, why is he dead?” That’s where we are now, I think, with our economy. We’re still in the recession, it has been well-masked.

Let me digress and say that yes, the stock market rebounded. The “sell in May, go away” thing didn’t work this year. So if you stayed in the market, you probably benefited very well from the market recovery. But it was a recovery not rooted in fundamentals. Part of it is that we’ve had a banking recovery, too. But that was because of massive infusions of new liquidity out of the Federal Reserve and the Treasury Department into the financial sector. That’s not the prescription for long-term health.

As with someone really sick in the hospital, the problem isn’t putting him on life support; the problem is getting him off the respirator. Now the question is how to stop hemorrhaging public money into the system, and in fact, begin pulling some of it back out.

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