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| 2008-09-02 11:35:00 | |||||||||||||||||||||||
Expect explosive growth in precious metals 
In this exclusive interview with The Gold Report ,Greg McCoach forecasts a maelstrom of financial catastrophes with the potential to cripple the U.S. economy. While most Americans are clueless about the impending meltdown, investors in mining stocks and the precious metals markets could soon realize explosive growth. McCoach is a bullion dealer, investor, and since 2001, author of The Mining Speculator newsletter. The Gold Report: Not long ago we talked about gold being on the verge of a big upside move, the last opportunity to pick it up for under $1,000. What happened? Greg McCoach: That’s right, I did expect at the time that we were getting ready for the next big move in gold. The financial hell-storm that I believe is about to hit the financial markets was the reason I said that. When the bad news regarding Fannie Mae and Freddie Mac hit in July, gold began to rise rapidly and hit the $980 level before leveling off. This move in gold was premature to the bigger events that will soon be unfolding and taking gold to the next new high. GM: I think the Fed is propping up the dollar in preparation for the financial tsunami that’s about to strike. This would explain why the dollar made an unexpected leap of 5% in the last two weeks, and why gold isn’t moving as expected. TGR: Why would the Fed want to do that now? GM: Because they know the dollar will be hammered as the bad news continues to come out regarding the collapse of various financial firms. We know that several major banks are in trouble, including Bank of America, Wachovia, Washington Mutual, and CitiGroup, to name a few. In addition, Lehman Brothers, Merrill Lynch and Morgan Stanley also appear to be in severe financial stress. The Fed, knowing they have a massive wave of financial stress that is about to hit the system, are trying to brace for the impact. They have propped up the dollar with the help of other central banks around the world in preparation for what is coming. TGR: The Fed is trying to prop the dollar up, yet the markets say it’s headed down. GM: Right. We've been hearing that the dollar is going to get stronger for five years now. All these people try to talk the dollar up, and what happens? It stays up for a couple of days, weeks, maybe a month and then it goes lower than before. The 70 benchmark on the U.S. dollar index is an extremely critical level. They are doing everything they can to keep the dollar from sinking below this number. Because if it does, you would see a massive exit from the dollar worldwide, and it would take the dollar to, say 50 or 60. That would be very, very painful for the U.S. When the dollar dips below 70, gold will start moving up. We’ll start having $100-up days. There will be huge moves in gold and silver prices, as free-market forces overcome the many games that are being played in the paper markets of gold and silver. TGR: When investors give up on the dollar, will they turn to the euro? GM: You’ll see a lot of flip-flopping from one currency to another, but ultimately investors will realize that all currencies are in trouble. Why? Individual debt loads, federal and state government debt loads, financial institutions debt loads. There’s trouble everywhere you look and I think it’s going to implode. Here are a few examples of what’s in store. New York and Maryland are both suing Merrill Lynch and Citigroup, the institutions that sold them all this worthless paper for their pension funds. I’m sure more lawsuits are coming, and they’re going to cause big problems as they ripple through the system. Then there’s the mortgage situation. According to the latest figures, 70% of people who have purchased homes in America since 2003 can’t sell their houses for what they owe on them. That’s unprecedented. In 2.8% of the foreclosures, people are dropping the keys off at the bank and walking away. This situation is only going to get worse. TGR: It sounds as if you’re predicting a major financial disaster, but good news for gold and silver. GM: I believe our financial system is in very deep trouble. And I think deflation is at the heart of it. Plunging asset values mean deflation is getting the upper hand and that means that the titans of U.S. finance are on the verge of systemic cross-defaulting. If this happens, it will precipitate an avalanche of U.S. bankruptcies – the tsunami, if you will. The general public doesn't have a clue. Those of us who understand the signs are running for the hills. As far as gold and silver, frankly, I’d rather see more stability. I liked the way gold was moving up, hitting a new high every year and then correcting back 10% to 15%, settling into a choppy, boring trading range, and then suddenly running up to the next new high. The volatility we’re seeing now is frightening. Something is clearly wrong, and I do believe it’s going to lead to explosive moves in the precious metals. Continued... |
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