Sooner or Later All Paper Money Systems Crash and Burn (Video)
Precious metals analyst Ed Steer shared his expectations for the price of gold and silver with Cambridge House Live. While Steer believes that the paper gold markets are the main determiner of prices right now, he thinks Western investors should mimic the habits of the Chinese and buy as much physical gold and silver as possible. He believes the East is preparing for the day when the US dollar and the paper reserve currencies collapse. Like Peter Schiff and Jim Rickards, Steer doesn’t believe the Federal Reserve can raise rates this year – if ever.
Highlights from the interview:
“I think the IMF is going to take the yuan under its wing when the final meeting comes in October. There was a story about it in the paper just the other day. As far as their gold reserves are concerned, everybody knows that they haven’t declared their reserves for five or six years now at 1,054 tons…
“Everybody has a pretty good idea that they have many thousands of tons more than that. How many more thousands of tons they have – are they going to disclose all of it or part of it? The Chinese have been around for 5,000 years as a culture and civilization, and I greatly admire and respect that. They’re going to do what’s in their own best interest…
“[China’s ability to accumulate gold] all depends on the price. The price is not set by anybody in China. It is set by the COMEX and the CME Group and the central banks and JP Morgan Chase and three other banks basically set the price of gold. So if we don’t get any change in what JP Morgan does, then we’re not going to see a change in the price… Demand is through the roof. Supply isn’t there. But it doesn’t matter when it’s all set by the paper market in New York…
“If they raise rates, it’s going to be by about this much. I think the psychological effect of raising interest rates in the United States, even by the smallest amount, would have a very bad impact on the bond market and the stock market. The ripple effect around the world would be instantaneous…
“Jim Rickards, whose work I admire greatly, said they’re never going to raise rates again. Basically, that’s what the world situation is. If they can’t get the money for free, they can’t afford to paper over everything. So I’d be very surprised if they raised interest rates…
“I’m just sitting here waiting for the whole thing to blow up. Like we talked about before, the Chinese and the Russians are buying all the gold they can, because they know sooner or later all paper systems crash and burn. That’s what they’re waiting for…
“I don’t really advise investors… But what I tell people is that for what money you can afford to spend, go out and buy as much physical silver and physical gold as you can afford, because sooner or later it’s going to be at a price that will make your eyes glaze over…”
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