Greg Hunter – Renowned gold expert James Turk says prolonged gold backwardation like we are seeing now, where the spot price is higher than the future price, has never happened before. Turk contends, “No, never, and I am a student of monetary history as well, and I have never seen it happen like this in monetary history.

Typically, when a backwardation would occur under the classic gold standard, for example, the banks that would have fractional reserve banking would go under. There would be a banking collapse. So, typically, if there was a backwardation, it would only last for a few days as it did in 1999 and in 2008. So, we have an unusual situation where we have heavy government involvement where they are trying to keep the gold price under wraps so they can maintain this policy of zero interest rates. They are thinking they are going to jump start the economy, but the economy is not being jump started. All it’s doing is deferring the ultimate collapse and the governments’ ability to repay all the debt that they owe.”

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Turk, a best-selling author who co-wrote a book called “The Money Bubble,” says what is happening now is nothing short of an historic bubble getting ready to pop. Turk explains, “In other words, just as we look back to the South Sea bubble and the Mississippi bubble, people are going to look back to today and say this is the money bubble. People are using what they think is money, but what they are using is really a money substitute. That’s the theme of the book that John Rubino and I wrote. We have lost sight as to what money truly is. It is a physical asset without counter-party risk and that is gold and silver.” Continue reading →