Today James Turk warned King World News that something “shocking” has occurred in the gold market. Turk also spoke about a key change in another market that KWN readers around the world should be aware of. Below is what Turk had to say in this powerful interview.
Turk: “There are two major events underway which everybody should be paying close attention, Eric. The first one is rising interest rates. You and I have already focused on this point to some extent, but we saw another huge surge in rates to a new multi-year high after the unemployment report on Friday, which is very telling. We need to look at this rise in interest rates in relation to an economy that is barely crawling along.
Here we are nearly five years after the 2008 collapse, yet people are still looking for an economic recovery….
“Of course there have been some bright spots, but they are isolated. The economy remains in a weak state and won’t reach its pre-collapse level until employment goes back to its previous high, with people once again filling the quality jobs they previously held, rather than the part-time and hamburger-flipping positions that have distorted the unemployment report by making the headline number look better than it really is.
Yet the Fed continues to purchase more government debt, as its balance sheet last week reaching another new record high with total assets of $3.49 trillion. The Fed is not tightening monetary policy, so why are interest rates rising even though the economy is weak and the Fed continues to purchase debt for its QE program?
I think there is only one logical answer, Eric: Interest rates are rising because of QE. We have reached a tipping point, meaning that QE can no longer keep interest rates from rising. The market is now focusing on the dark-side of QE, which is the inflationary consequences of all this money printing.
Rising interest rates with QE ongoing means that we have reached the stage where the Fed has now lost control. This result was inevitable because market forces always beat central planners and its groupies in the end. Only the timing of this event could not be predicted.
Since the bailout of the financial system in the autumn of 2008, and the launch of QE in March 2009, desperate central planners had been hoping their crazy theories which try to create wealth by printing money would work. But those theories never had a chance. All one had to do was read monetary history to see that these schemes have always failed.