Thursday, January 13, 2011

James Turk - Momentum Toward Hyperinflation is Accelerating via KWN

With gold and silver strengthening off of the lows, King World News interviewed James Turk out of Spain. When asked about the action and gold and silver and increasing inflation Turk stated, “So what we’re seeing here is the money being printed by central banks around the world is going to useful and valuable tangible assets. These rocketing prices are a clear warning that the momentum toward hyperinflation is accelerating.”

Turk continues:

You have to look at the big picture here. You’ve got commodity prices up across the board, but let’s look more closely at what’s happening. Corn prices have nearly doubled since June, wheat and soy bean prices are up more than 50% since June. People can blame bad crops and bad weather, but the reality is there is too much money chasing the availability of food.

Which brings us to gold and silver, the CRB continuing commodity index is at a record high. What King World News readers need to understand is that there is a direct correlation between the CCI and gold and silver prices.

With the CCI poised to climb even higher because of the increasing attention paid to food prices being at record levels, you should understand this will translate into higher gold and silver prices going forward.

Remember, last Friday when I was talking about the black-box trend followers reversing their positions and feeding the pockets of the commercials, that’s the first half of the story. The second half of this story is that the black-box trend followers will reverse their positions once again and become buyers above $1,400 gold and $30 silver. When that buying comes in, that will be the momentum to drive both gold and silver to new highs.

Investors should continue to accumulate both gold and silver with their monthly buy programs.

Bullishness by gold traders has dropped to shockingly low levels at this point in the bull market. I would say that we will need to have an increase of almost 25% more bulls for this move in gold to crescendo.

In order for that to take place gold will have to put on one hell of a move to the upside. If the sentiment numbers turn out to be a proper guide, I would say the gold shorts are about to be butchered once again, much to the delight of hard money advocates around the globe.

Eric King

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