Dr. Bruno Bandulet (www.bandulet.de) and James Turk of the GoldMoney Foundation talk about about the gold market, the Euro and the European debt crisis. Bruno explains how far the Euro has evolved from being a German-like currency to following French monetary policies and now is being managed like an Italian currency. He talks about how, despite it being a big issue in Germany, no major party has spoken out against it and so germans are devoid of alternatives.
They talk about how a major party in Switzerland has proposed a referendum over the reintroduction of a gold franc, which would circulate parallel to the paper swiss franc and allow the swiss to save in gold.
They discuss competing currencies and how the drive to centralize money had nothing to do with monetary stability or international trade, but rather was about political control. The return to the world’s traditional international money, gold and how this is disliked by politicians because of the discipline it imposes. Bruno explains how central banks still keep their gold as a base on which to build if the fiat money experiment crumbles.
They explain the impending dollar crisis, the dire US fiscal situation and possible solutions that could be made if the political will existed. How 40% of US government spending comes from debt, levels only seen in countries near the tipping point on the road to hyperinflation. They also talk about confiscatory measures taken in many governments in similar straits, rather than curb their spending.
They contemplate the possibility of Greece or Germany leaving the Euro. They talk about the possibility of reestablishing the Deutsche mark and how this was already proposed during the pre-Euro European currency system. The different economies of the Euro-zone and the growing distance between France, Italy, Spain, Portugal… and Germany.
They move on to the current Greek situation coming to a critical point this summer and the impact that this could have on the price of gold as well as the European banking system. They see an impending bank run looming in Greece, but according to Bruno it is still manageable as the Greek economy is not as large as, for example, Spain. They talk about how strong Asian demand has been on pullbacks in gold’s uptrend.
They comment on the very strong fundamentals that are driving the long term uptrend in commodities and specially precious metals, the possible corrections that we may encounter as a normal part of bull markets and the growing divergence between physical and paper markets. They draw parallels with the ‘70s commodity boom and also point out how it could end differently this time.
This interview was recorded on 14 May 2011 in Hamburg, Germany.