# James Turk - Gold To Explode Higher As US Debt To Be Downgraded



## BillS (May 30, 2011)

http://kingworldnews.com/kingworldn...plode_Higher_As_US_Debt_To_Be_Downgraded.html

On the heels of the Fed decision and continued volatility in gold and silver, today King World News interviewed James Turk out of Europe. Turk stunned KWN by saying that US debt is about to be downgraded once again. Turk also warned, "The reality is the Fed is losing control," and the Fed is now being "overwhelmed." He went on to say that all of this means right now we are going to see an "upside explosion" in both gold and silver.

Here is what Turk had to say: "The Federal Reserve has made another announcement, Eric, and each one of their proclamations makes it more obvious that the Fed is no longer in the driver's seat. It is just rehashing the same stuff. The reality is the Fed is losing control. It is slowly but surely being overwhelmed by events, and particularly, the reality that US government finances are out of control."

"The 800-pound gorilla in the room is the US government's horrendous deficits and addiction to debt. The Fed is keeping interest rates low to sustain the illusion that the US government is solvent, while hoping that low rates will also jump-start the US economy and thereby increase federal tax revenue to service the mountain of debt.

But despite all of the money printing by the Fed from buying government paper, the economy remains in the doldrums, so the US government's financial position is becoming increasingly precarious....

"That's why the US lost its triple-A status. We should expect another downgrade soon, just like is happening with the serial downgrades in Europe.

This brings up an interesting point -- even though Europe is getting most of the attention of late, the sovereign debt crisis is global, Eric. Just like the spendthrift kings of old, all of the sovereigns today are spending money they don't have, and financing their largesse by debasing the currency.

That is what quantitative easing is all about. Keeping interest rates low is debasing the dollar, but there are also other bad outcomes from this misguided policy. Low interest rates are killing middle-class savers, and doing nothing to improve the economy.

The Fed's interventions to keep interest rates abnormally low are making the US government's borrowing costs artificially below what they should be. This tactic is keeping the federal government's deficit from being even worse. Just a 1% rise in its borrowing costs, on the $16 trillion of debt, would deepen the deficit by $160 billion. The so-called fiscal cliff is really a 'currency cliff,' and the US dollar is headed straight for it."

When asked about gold and silver, Turk responded, "A huge base is now in place for gold and silver at $1600 and $27. We just need a spark to get a rocket launch in precious metal prices. It would be an upside explosion from here, meaning that this bull market would be taking along with it as few people as possible, which I always see as a key characteristic as to how bull markets work.

An upside explosion would mean a lot of the money that is now on the sidelines would remain on the sidelines because there would be little opportunity to buy on pullbacks, which is what I mean by an explosion. The market will relentlessly keep going higher. We have probably missed the last chance to buy gold at $1580 and silver under $27. So KWN readers need to get ready for the big summer rally I have been expecting."


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## The_Blob (Dec 24, 2008)

The DOW is (currently) surging because they *know* Bernanke is going to unveil QE3 & print more $$$. Personally, with my index fund I'm going to benefit, but it still means the country overall is going to suffer in the long run... 

I turned much of my gold into silver because the ratio is just too good to ignore. I have no idea how many years it will take to bring them back to historical parity, but IMHO when it happens those of us who chose silver will make out better than those with gold, who will still be lightyears ahead of those with fiat-currency backed... well, anything.


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## db2469 (Jun 11, 2012)

We've talked about this before but it's an important question to me and perhaps others and that is, even if gold and silver skyrocket how can we sell? We'd be getting paper dollars back in return and it seems those will be worthless when the dollar collapses so I will keep the gold/silver until hopefully they will be good for currency when the new gvt. establishes order. Even if gold hits $3000 an oz I wouldn't sell while I still believed that a dollar crash is imminent..
DB


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## hiwall (Jun 15, 2012)

Like I said before the stock market can make you alot of money right now. You have to buy and sell once in a while and watch it a little but there is alot of money being made. Will it all fall down in the dump? Yes I certainly think so. But right now it is a money maker. Is PM safer? I think so but it is not a money maker(see db's post above). Make money now and then cash it out later for PM's and preps.


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## The_Blob (Dec 24, 2008)

db2469 said:


> We've talked about this before but it's an important question to me and perhaps others and that is, even if gold and silver skyrocket how can we sell? We'd be getting paper dollars back in return and it seems those will be worthless when the dollar collapses so I will keep the gold/silver until hopefully they will be good for currency when the new gvt. establishes order. Even if gold hits $3000 an oz I wouldn't sell while I still believed that a dollar crash is imminent..
> DB


You don't sell ALL of it, silly, but if you NEED some quick cash...

Unless transactions are frozen, I intend to pay off every property I have for pennies on the dollar until whatever stabilization occurs, if I can manage to pre-pay property taxes in a similar manner, so much the better as well... Hey, I can dream...


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## CulexPipiens (Nov 17, 2010)

db2469 said:


> We've talked about this before but it's an important question to me and perhaps others and that is, even if gold and silver skyrocket how can we sell? We'd be getting paper dollars back in return and it seems those will be worthless when the dollar collapses so I will keep the gold/silver until hopefully they will be good for currency when the new gvt. establishes order. Even if gold hits $3000 an oz I wouldn't sell while I still believed that a dollar crash is imminent..
> DB


You're assuming you sell... instead you have two other options:

Barter/trade with it. "I'll give you an ounce of $3000 gold for those AR's and that shotgun you got over there." After the trade the other guy can go trade it in for FRN or whatever and take the hit and you have tangible goods now.

Hold it for the long term as a preservation of wealth. As some point some type of economy/currency will get re-established and then you can sell within that new currency, most likely preserving your pre collapse value.

True it is all speculation however through the rise and fall of many economies, societies and empires, PMs having value have always been the one of the few constants.


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## BillS (May 30, 2011)

db2469 said:


> We've talked about this before but it's an important question to me and perhaps others and that is, even if gold and silver skyrocket how can we sell? We'd be getting paper dollars back in return and it seems those will be worthless when the dollar collapses so I will keep the gold/silver until hopefully they will be good for currency when the new gvt. establishes order. Even if gold hits $3000 an oz I wouldn't sell while I still believed that a dollar crash is imminent..
> DB


You sell it as you need the cash to buy stuff. The day you get the cash you spend it. It would be good to own gold AND silver. Buy junk silver. The government might make owning bullion illegal but if buy junk silver all you have is a pile of old coins.

Gold is going much, much higher as the dollar collapses. You have to think of the gold price as an inverse reflection of the value of the dollar. Gold will hit $50,000 an ounce. Not because gold is that valuable but because the dollar is that worthless. Zimbabwe printed 100 trillion dollar notes. I don't know if the dollar will lose that much value. But if the dollar loses 90% of its value you would have gold at $15,000 an ounce. If it loses 99% of its value you would have gold at $150,000 an ounce. And so on.


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## machinist (Jul 4, 2012)

BillS,

I have some junk silver and bought in when it was around $13 spot. I want to sell that and turn it into steel for my repair shop. I retired and closed the shop business, but will have to reopen it and work when SS, and/or the dollar goes poof. 

So, I'm trying to figure out the best time to make that trade into steel and welding shop supplies. Not easy, since both silver and steel are commodities of a sort, but with different price influences on each. Selling out for the most dollars does not necessarily result in getting the most steel. 

I'm in farm country and did farm repairs here for the past 10 years, so reopening is very feasible, as long as I hold up physically. I shut it down because tax accounting is a real pain, we don't need the money as long as SS holds up, and I need to spend time and effort on other preps at the moment. 

I also read something about US coins being construed as the "property of the government", which could become a problem if they decide they need them back. 

Any thoughts on this?


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## BillS (May 30, 2011)

I would wait to buy steel. Could you use steel from junk cars? In a post-collapse world there will be a lot of cars with no living owners. Chances are you would get them for free. 

I wouldn't expect silver coins to be confiscated. It would be way too much work for the government. It would be easier for them to just buy them back with new money. I expect the US to go back to the gold standard. I expect silver to trade at a more traditional ratio of 12 to 1 or 15 to 1 compared to gold.


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## The_Blob (Dec 24, 2008)

machinist said:


> BillS,
> 
> I have some junk silver and bought in when it was around $13 spot. I want to sell that and turn it into steel for my repair shop. I retired and closed the shop business, but will have to reopen it and work when SS, and/or the dollar goes poof.
> 
> ...


I'll chime in with this liitle tidbit of anecdotal information: Scrap steel dropped $100+/ton in the last month... 

The price of new steel is still rising (for now), but IMHO will soon plateau or start to drop as the current scrap gets recycled into new product.


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## machinist (Jul 4, 2012)

Thanks, BillS and The_Blob.

I think you're right that I should wait a while. I expect steel demand to drop and silver demand to go up as the dollar falls. 

I can use some car salvage for a few things, but that is mostly blacksmith material. Mostly what I need is long lengths of HRS flats and angles, black pipe (have used a lot of salvaged galvanized pipe, but the zinc stinks when you weld it), CRS rounds for shafting, sheet metal in plain and galvanized, bolts and nuts, pillow block and flange bearings, bronze bearing stock. 

Usually, salvaging steel costs more in torch gas, grinding wheels, and sanding discs than it is worth new, but that depends on how good a job you do selecting the right salvage to be close to what you really need. 

I save old bolts and other hardware and have a huge collection, including metric stuff. But, there comes a point when new stuff is about the only way, at least with present economics and supply available. Thus, steel and the other stuff I mentioned is my version of "precious metals".


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