Philip Manduca of ECU Group spoke to CNBC this afternoon about the dollar’s decline, the rise in gold, and the failure in decision making by the U.S. government.
- 0:30 There has been a covering up of the cracks in the EU. They will resurface in 2011 because the problem of a lack of fiscal union in a monetary union persists. Growth will not rise to the point where tax revenues will be high enough to combat deficits.
- 1:15 Money push, QE, is what is being priced in. There’s loads of money out there, that’s not the problem. When everyone stops worrying about this, the focus will return to the eurozone.
- 2:00 The problem is not supply, it’s the velocity of money. The government in the UK may be tempted to push cuts to 2012 and 2013. The pound may be underpriced at the moment.
- 2:55 “There hasn’t been an empire in the history of mankind that has given away its wealth and its power base like the United States is currently doing. What are you doing? You’ve got 20% unemployment, you’re trying to bailout out the Chinese, you’re trying to bailout the Indians, you’re trying to bailout the Middle East, and no peace is arising you’ve got wars still everywhere. So what are you doing? Why are you allowing this huge transfer of your wealth to these other countries, who, I promise you, from and international perspective, are laughing.”
- 3:30 You have to go to gold, because of the continued necessary rate of deleveraging. More money is being pushed, and debasement is a problem.
- 3:50 Gold is an emerging market driver. Inflation is going higher, interest rates aren’t dealing with it because they want those low to deal to preserve exports. There is a real inflation bubble coming out of the emerging markets and these guys are going to buy bubbles. Gold will be through to $2000 in the next 12 months.
Business Insider Emails & Alerts
Site highlights each day to your inbox.