Ben Davies talks with James Turk

Subscribe to our newsletter at http://www.goldmoney.com/goldresearch. Ben Davies (http://hindecapital.com) and James Turk, Director of the GoldMoney Foundation, talk about the current fiat currency world monetary system established under "Bretton Woods II". They explain the imbalances created by the hegemony of the fiat dollar, and how it allows mercantilist vendor financing and the accumulation of huge FX reserves in sovereign wealth funds and other vehicles. Ben Davies thinks that this system is close to the breaking point.

They talk about potential problems in China, and how the Chinese need to import huge amounts of raw materials in order to keep their economy growing. Davies and Turk also explain how China has more gold than they are admitting.

They talk about the economic outlook and how growth is slowing in the US and the EU as the sovereign debt crisis takes its toll. They discuss the probability of further rounds of monetary stimulus, be it QE3 or an equivalent. The two men also explain how this will result in a crack-up boom as described by the Austrian economist Ludwig von Mises. They both see gold as undervalued, but explain the problems of using dollar price targets because the fiat dollar is a changing yardstick. Ben Davies explains that money, like any other good, is affected by supply and demand, which set the price.

They talk about the potential for hyperinflation; Davies comments that hyperinflation is a political phenomenon, and that the conditions for it are in place in many countries. They see the rising gold price as a reflection of the flight from fiat currency into real goods and tangible assets.

They see gold breaking the $2,000 barrier this year and moving exponentially higher. Ben Davies explains that he uses a power-function model to analyse the price of gold, based on Benford's law.

This interview was recorded on August 4 2011 in London.

Category:

Education

Tags:

• James Turk
• Ben Davies
• GATA
• gold price
• fiat currency
• central banks
• China
• hyperinflation
• interview
• video

[jgbloyd]

I admire Ben Davies because he's one of the few "experts" who always seems to be thinking as he's talking and not just repeating ideas; a very careful and genuine intellect. Oh, and then there's his uncanny ability to call even the short term pullbacks, like all the times James and I were overly optimistic whilst Ben was there talking like he's 100x times older than he looks.

[yaahme]

These two great minds agree that in any environment whether it be inflation or deflation PM's will do well. I had thought that in most depressions all asset classes dropped and we are in the midst and at the precipice again of a global depression which had been artificially postponed by the printing presses. So, I would expect a drop in Au and AG along with everything else. No?

[SilverMalthusian]

China's population: 1.33 billion

China's population growth rate: 0.5%

China's urbanization rate: 1.0%

Amount of Chinese moving from the country to the cities p.a.: 6,650,000

Building a city for a million people to inhabit sometime in the future, does not necessarily sound like unrealistic planning or misallocation of capital, unless you take into account the peaking of resources e.g. peak oil & peak coal.

[FreeGoldObserver]

@yaahme

No that's wrong. There has already been enough money printing to have hyperinflation. All of it is hiding in the bond markets of the world. See my video titled, "Why Peter Schiff and FOFOA Are Wrong On How Hyperinflation Will Arise"

[circuitdesign]

Most important quote in this interview:

"We have not moved to a price high enough for a long-term holder of gold in this environment to say, 'I'm prepared to sell-out (gold) and go into something else.'"

Ben hit a home-run with that statement.

[PeaknikMicki]

James Turks interviews are top notch. Would be good if he could revisit them every 6months for a cpl years. (Weird but it's the samme crowd that is interviewed at KingWorldNews but somehow I find Turks's interviews even more interesting and exciting).

[gonobdotcom]

in this interview turk is overbearing on davies.

[MattyS54]

great discussion ben is one of the most clued up minds in the business. cheers.

[yaahme]

@blackswanflea Very insightful, thanx for responding with a keen answer. Maloney has great research on it yes. I just hate to think of the cliff that is just ahead us all - I am well stocked from AU, AG, H2O, Food, etc to weapons... not necessarily in that order.

Don't know if the WW3 insane solution card will be pulled...but that is about par for the course per Celente Trends research.

[blackswanflea]

@yaahme Yes, a drop in Au and Ag would be logical. Yet, economy is a relative game. If we measure the "drop" in fiat, you might actually get a "rise" because the fiat is losing value so much more rapidly. In fact, if all our way of live drops a lot, still everything not made of precious metals will drop so much more. So, what gives me food for thought is Mr Maloney's wealth cycles and how much real estate drops relative to Au and Ag. I think 1930s was just a dress rehearsal. That much.

[abbasg84]

if huge grant was born with a brilliant mind as well..

he could have been ben davies.