Stunning Events To Create A Historic Financial Earthquake

Sunday, November 17, 2013
By Paul Martin
November 16, 2013

Today 50-year veteran Art Cashin warned King World News about the historic events taking place in the major markets, including gold. Cashin, Director of Floor Operations at UBS ($650 billion under management), also spoke with KWN about the massive accumulation of gold by the Chinese and the flow of gold from West to East.

Eric King: “Art, you’ve been warning recently about the great danger, the fact that the Fed is employing so much leverage. KWN published a piece of yours which included comments from a couple of individuals, including Peter Tchir. Can you talk about the danger of this leverage that the Fed is employing for the listeners (and readers) globally?”

Cashin: “The Fed has bought up significant amounts of some of the (Treasury) issuances, particularly the 10-Year, in trying to affect rates further out. They’ve become a dominant factor. And I wonder how they can get to tapering because they have become kind of addicted in these purchases.

The Japanese are not buying (US Treasuries) at the rate they were buying a year ago. The Chinese are not buying Treasuries at the rate they were buying a year ago. So you begin to wonder, how can the Treasury manage if the 3rd leg of the stool, which is the Fed, comes apart? So, there will be a good deal of pressure there. They talk about, ‘Tapering is not tightening,’ but the markets may see it another way.

Now, that having been said, they have induced the banks, who can’t get in a full lending cycle, to take the money that the Fed gives them when it buys the bonds in its quantitative easing program, and they are leaving them in the vault at the Fed under their name. And that’s in the trillions of dollars.

The Rest…HERE

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