Financial writer and precious metals expert Craig Hemke says forget about new threats that the Federal Reserve is raising interest rates in September. Hemke explains, “They are trying to move things by talking, which is their primary policy. That’s why so many of these Fed goons, not Fed Governors, as we like to say, that’s why they seem to have conflicting messages all the time. They are always trying to get the markets to do what they want them to do. Rational human beings are telling you that they are not going to raise rates in September. Not only are they going to do it right before an election, that never happens, if you look at FOMC minutes, the expectations actually went down. . . . People see through the nonsense, and actually you’ve got to go all the way out to March of next year, seven months from now, before you at least have a 50/50 likelihood of a an interest rate hike.”
On gold, Hemke contends, “What people have to understand here is what you think of as a market, two rational people exchanging goods at a certain price that works for both of them, is not what happens here. The price is discovered for the paper derivative itself, and it is determined by electronic high-frequency trading. All this is machines taking ques from other things that seem totally unrelated. So, it sounds like these are markets that are broken. I think that is a safe assumption to make. . . . The speculators trading the paper derivative is what is allowed to set price, and that is absolutely breaking everything. For my specific purposes, it is going to break the derivative paper pricing scheme, as well. We can’t wait for that to come because the price is not going to be discovered to be $1,360 per ounce at that point. . . . I know how this is going to end. Tolstoy in ‘War and Peace’ said ‘time and patience are the greatest warriors,’ and that’s exactly right. I have time and patience on my side because I know how this ends.”
Hemke goes on to say, “One day, this unallocated, super-hypothecated system, where one ounce of gold is pledged to 100 different owners, that is going to stop when a couple of those owners show up at once wanting their ounce, and they are told they can’t have it. . . . They all tell you we’ve got your gold and as long as only one person shows up at a time wanting to make a withdrawal then everything is hunky-dory. But when everybody shows up at the Bailey Savings and Loan on George Bailey’s wedding day wanting their gold all at once, the thing just crumbles. It’s a confidence game. Negative interest rates are the greatest fundamental we have ever seen. This is physical demand that extracts gold from the banker’s system that will eventually lead to shortages, and lead to lack of confidence, lead to delivery failure, and finally, the paper derivative pricing scheme will fail.”
Greg is the producer and creator of USAWatchdog.com. The site’s slogan is “analyzing the news to give you a clear picture of what’s really going on.” The site will keep an eye on the government, your financial interests and cut through the media spin. USAWatchdog.com is neither Democrat nor Republican, Liberal or Conservative. Before creating and producing the site, Greg spent nearly 9 years as a network and investigative correspondent. He worked for ABC News and Good Morning America for nearly 6 years. Most recently, Greg worked for CNN for shows such as Paula Zahn Now, American Morning and various CNN business shows.