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James Turk continues:

“It’s the fourth largest amount of debt in the world. It’s estimated that over half of this is owned by banks around the world. Four hundred billion euros of it is owned by the European banks alone. As I mentioned in a previous interview here, they can no longer kick the can down the road because it’s become a two ton boulder.

Clearly the two percent plus drop today by the euro against the US dollar is a warning sign that a major crisis is brewing. I mentioned before that the Dexia and MF Global collapses are not the Lehman event I’ve been expecting before year end. But the markets are telling us that a major crisis is now brewing. So be prepared for another Lehman type of collapse which will bring the financial structure to its knees.

The media has been portraying these problems as a crisis of capitalism, but they have it completely wrong. What we’re witnessing is a crisis of socialism. Governments have been making far too many promises which have been based on borrowed money coming mainly from the banks....

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“The banks were foolish to make all of these loans, but we’ve seen this behavior before. Back in the 1970s, banks made huge loans to various countries, particularly in Latin America. The Chairman of Citibank received a lot of ridicule when he said, ‘Countries don’t go bankrupt’ and because the formal bankruptcy was not declared, a lot of those loans had to be written off.

This bring us to Italy. The EU and the IMF telling Italy that it must adopt austerity measures is advice that comes about five years too late. The Italian government cannot cut enough or fast enough to improve their financial picture. The bottom line is the fallout from Italy is going to get very bad very quickly.”

When asked about gold, Turk responded, “We’re approaching a situation in which the price of gold is of secondary importance. What is of great importance is whether or not you own it and in what form. What I’m getting at here, Eric, is that we could see tremendous volatility, both up and down, as Italy falls over, but when all is said and done, the only way for people to survive this type of cycle is by owning gold outside of the banking system.

You know I’ve made this point before that sometimes the markets are like a spinning top losing momentum. The decline in the euro of over two percent today is a wake up call that this is a wobble on the spinning top. The only question is when the top is going to fall over? Also, in anticipation of that event, you need to own physical gold.

My observation for KWN readers is that the wheels are finally coming off the cart and they need to be prepared for some volatile and cataclysmic events over the next several weeks.”

Eric King

KingWorldNews.com

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James Turk - Expect Cataclysmic Events in the Coming Weeks

With stocks plunging, the dollar rallying and the situation in Italy spinning out of control, today King World News interviewed James Turk out of Spain to get his take on what is happening. When asked about Italy and if we should expect more bank failures, Turk replied, “We had a major development here in Europe today, Eric. Yields on the ten year Italian bond soared to over 7%. The 7% hurdle is considered critical because once Greece and Ireland went over 7%, they turned to the EU for a bail out. So the thinking now is that Italy needs a bail out too, but here’s the problem. Italy has two trillion euros of debt. That’s greater than the total amount of debt owned by Greece, Ireland, Portugal and Spain combined.”

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November 9, 2011

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