FutureMoneyTrends.com: Greetings and thank you for joining us at FutureMoneyTrends.com I’m here with Jay Taylor. He’s a very famous mining analyst. For anyone who’s ever wanted to invest in gold or silver or oil, even other investments outside of the resource sector. Really he is the guy that really kind of can guide you through the economy, and he’s on the same page and actually is a leader in helping people understand what’s going on in the economy right now. Jay is with Jay Taylor Media and you may also know him from MiningStocks.com. Jay thank you so much for joining us.
Jay Taylor: Oh, it’s my pleasure.
FutureMoneyTrends.com: Jay, in your recent article you mentioned a visit to Portugal and their depression. And you realized that country was in a depression and now that multi-national banks and other creditors have taken control of some of their major infrastructure projects… You then went on to say that ‘we have to be aware of these global elites and what they’re doing as far as bankrupting our people and governments.’ My question to you is: how do you survive and possibly thrive in this environment of theft and wealth transferring and extreme market manipulation?
Jay Taylor: Yeah, I think what you have to do is first of all, you have to recognize that there is manipulation going on and try to understand what it is and then act accordingly. And of course the masses of people don’t get it, they don’t believe it. They’re content to take at face value what they’re told by the mainstream media and what people really have to understand is that the manipulation is systemic. It is the fiat currency itself is a manipulative tool that allows those to control fiat money to reallocate wealth from those that produce it; I would like to say the miners, the manufacturers, the farmers, the inventors, people that are actually doing things that are of value to other human beings are not getting their fair share. Instead the government and the Federal Reserve and the banking system, that has control and has first dibs at new money creation that really end up becoming more and more wealthy. So just by being in the system and holding dollars you are being taken advantage of.
So what you have to realize is you need to get as much as possible outside the system. And the one way to reduce the systemic risk is to trade those fiat dollars, which are really worthless, they have nothing of intrinsic value, they are really just a con game, and they need to exchange those dollars for gold and silver, real estate, I would say diamonds, I would say other things that are of tangible value. That no matter what the currency does, you still have possession and ownership of those assets. Some other ideas might be to go to digital forms of wealth, like bitcoins. I’m not suggesting that’s for everyone but it might be good for some people. If you’re wealthy enough I would suggest people might do well to do what my friend Doug Casey and Jeff Berwick are doing and that’s investing in other countries and different places. Diversify your assets to the extent you’re able to.
FutureMoneyTrends.com: Now what about the blatant manipulation of the gold price? Can you help us understand what’s going on behind the scenes?
Jay Taylor: Yeah, I think there is a blatant manipulation of the gold price, I think it’s a good way of putting it. I don’t know that everybody, all the traders on Wall Street, I don’t necessarily subscribe to everybody that is trading for JP Morgan or Goldman Sachs or these big bullion banks are necessarily knowingly manipulating the gold market. I don’t think so at all. I think they’re all acting in what they see as their own best interest. But the best interest of Wall Street is not to have people opt out of currency and go in to gold. They wouldn’t have any sales left, they wouldn’t be able to sell any stocks or bonds or derivative products of anything else if people just went back to owning the physical metal. So Wall Street has a vested interest, Washington as much as Wall Street has a vested interest in keeping people conned into owning paper assets. So I think there is very little doubt in my mind. For example, somebody pointed out that when JP Morgan, which is by far the predominant player in the futures markets for gold and silver, that when JP Morgan, when they are taking delivery, or when they are delivering gold, when it’s a delivery month for them, you’ll see the gold price go down very dramatically. Probably so that they can go out and secure gold at lower prices.
And how do they do that? Well they can just go in to the futures markets, which have a 100 times more volume than the paper markets, than the physical markets, and just overwhelm the headline price that everybody sees by driving the price lower, then go back and cover up. Cover their shorts the next month. But it’s pointed out that when they’re taking delivery, the gold price usually goes up. And the point was made, I just saw here, an analyst was suggesting that in fact October should be the bottom here in the gold markets because of that dynamic with JP Morgan. So well, we’ll see but there is just a vested interest. When people say conspiracy they sort of think that there is some people in a smoke filled room of sinister characters that are around just trying to rig every move in the market. No, I don’t think so. I think that there are people who are just simply acting on their own behalf, as they see it in their own best interest, with little concern or knowledge about the system and the bigger impact. I think it’s mostly through the futures markets that they’re manipulating things. I think there’s a lot of con artistry, I think there’s a lot of propaganda that comes out of the major media. The financial times being one, but all major media, you always have the people that are talking down gold because it’s like everything else. They want to talk their book so that they can con people into doing what makes them money.
FutureMoneyTrends.com: Jay in your monthly newsletter you said that you were focusing on your top 12 exploration stocks I saw that you profiled Brazil Resources, a top holding Rick Rule, Doug Casey, and Marin Katusa. In fact, just a few weeks ago at the Casey Summit Marin said that he was buying it actually with his personal account as well, to me. What is it that you see in this company that stands out amongst other gold stocks ‘cause it is interesting that you do have a high quality CEO in Amir, but he is attracting some rather significantly strong players in the gold resource sector.
Jay Taylor: Yeah, absolutely. And I think that’s a testimony to Amir Adnani. He’s a very smart guy, he’s very articulate, but I think one of the things that I find about Amir, and I’ve known him for a number of years now, that not only does he attract talent but he also knows how to work with people very well. He’s a delegator, he knows his limits. And you know many small companies that I see have CEO’s that think they can do it all. Well Amir knows that he can’t do it all and he knows where his strengths are. But I think it’s his ability to communicate, to get along with people, and frankly his track record deservedly makes people confident in his ability to manage things. He’s done very well with Uranium Energy, which has been the first new producer of Uranium in recent years in the United States. I just think he attracts talent because he knows how to work with people, and he knows how to use talent and to treat people decently so I think he commands the respect of the people that work with him. You know his alliance with BrasilInvest is a good example of his ability to attract talent and money. That’s a conservative investment firm in Brazil, and it also allows them then to have a cultural connection with Brazil which is always very very important. And his ability to raise money has allowed him, even in a very weak market then to pick up some very decent assets, like he picked up the Cachoeira Gold Project from Luna Gold and more recently, Brazilian Gold. He picked up a company there with great assets. So the Cachoeira project has got about 1.3 million ounces or so of gold and with lots of exploration potential. I think Amir is going to make this into a very significant gold producing company, or at least a company that builds up a gold asset that will be sold off. And right now with this market for gold shares being so weak, I think it’s time people should really be taking a really good look at this company.
FutureMoneyTrends.com: Jay as a top resource analysts and newsletter editor, you speak at a lot of conferences and I wanted to get your feedback on what you’re hearing from people as far as: Are the gold investors getting tapped out here? They went from 1900 to 1300 over the last two years. Are you starting to hear about people buying Facebook shares and selling their gold?
Jay Taylor: Yeah, I think there’s probably…most of the people that are going to do that have done that. I think there’s a hardcore of believers in gold that understand what I’m talking about, that are long term holders of gold and they’re taking advantage of these lower prices to add to their positions. Certainly if you go to Asia and other countries around the world that aren’t so conned by their governments into believing that fiat currency is a wonderful thing. They’re buying gold, they’re taking advantage of this. But I think at the margins we’re certainly seeing this. The people that drove the gold price up to 1900+ were not necessarily the hardcore gold bugs. They were the people that have come in at the later stages. I can tell you that when I first started my radio show in March of 2009, that was pretty much at the bottom of the Lehman Brothers debacle. There was a lot of willingness, a lot more then from people who had never really considered gold to become interested in investing in gold and thinking about doing that because they were really honestly starting to see what a lot of us were talking about for many years, and that is that the system is sick and that the policy makers didn’t have all the answers.
Well now we’ve had a few years of recovery, at least in the stock market. I would argue that the economy is as sick as ever, it hasn’t really bounced back much at all. If you really use real inflation numbers, the GDP is flat at best. But nonetheless, the people that might be buying stocks, gold stocks from the people that have more money, are doing quite well. As you say in Facebook and other stocks now, they’re doing quite well. The Dow and the other stocks have hit new highs recently. So there is sort of, the con artists are back in town. They’ve restored confidence in the system. So I think that’s why gold, one of the reasons gold is taking such a hit right now in part is because it seems like, to people who want to drink the establishment’s Kool-Aid, that things are looking pretty good. As long as the policy makers can convince us that they have control of the system, ‘everything is going to be fine,’ keep people believing in the dollar or other fiat currencies, then they’ve got you where they want you.
And what I’m saying to my subscribers is that you can’t trust them because you have to understand that the dollar is a system. And more and more dollars are being created so the value of each dollar is declining. It’s very easy with keystrokes of a computer to increase the money supply; the supply of dollars. It’s much much more difficult to mine gold, which is the market’s answer, the market’s choice for free money; for honest money, for real intrinsic money, asset based money. Not liability money like the fiat money that we use. So what people need to do is to get outside of the system. For people of more average means: develop a set of life sustaining skills so that when the system breaks down, and unfortunately I’m absolutely sure the system will break down eventually, and I’m afraid sooner rather than later, people want to have skills that they can trade to barter essentially their services for other things that are necessary. Those are some of the ideas that people need to be aware, first of all that the system itself is sick, it’s a fiat money system, it’s a controlled system by government, it’s not a free market. We do not have capitalism any more, we have something more akin to fascism or state-ism of one stripe or another. And so people really have to understand that and then as much as possible opt-out of the system.
FutureMoneyTrends.com: I was going to ask you if you thought the gold correction was over? Because I saw in your newsletter we had one in ’06 that lasted 71 weeks, in ’08 we had 77 weeks, and this one we’re on our 112th week and we’re really far from making a new high.
Jay Taylor: Oh yeah, there’s no question and I think that the chances are probably 90% that we’ve seen the lows. I wouldn’t rule out though, if you look at the charts it would seem as though we could go down to a little about 1000 potentially and if we did it would be akin in percentage losses to what was experienced in the last great gold bull market in the ‘70s, when we went from about 200 to 100 and then up to about 850. I don’t think we’re going to go down there, but if we do that would be another great buying opportunity. No doubt it would shake even a lot of good solid gold bugs out; scare them out. But you know if I could, I would like to see an end of the bull market in gold, honestly I really would. I would like to see no reason to own gold. Then we could get on to doing things that are really useful for other human beings instead of taking capital and digging holes in the ground and taking gold out and putting it in a vault. We could be doing things that might actually create wealth and do things that are really good for people. But the markets are demanding and people like me who understand how sick the fiat currency system is, the global economy is, as a result of this manipulation of markets for so many decades; realize that we can’t run away from gold now. We have to own it because it is going to be the store of wealth. And I don’t know but I think we’re close to the end. And I’ve had doctor Robert McHugh, he’s an avid Elliot Wave analyst who is on my radio show, believes we could be six months or so away from a major next leg up. But he believes the next leg up will be the fifth wave in an Elliot Wave bull market here for gold. But we will see, that will be by far the biggest move upwards in gold that we will kick out the old highs by a large margin.
Other people like Ian Macleod who I’ve had on my show, said I wouldn’t want to wait around for six months. He’s looking at the fundamentals of the gold market, he’s looking at the shortage of gold bullion to cover the contracts that are out there in the futures markets and he’s not at all convinced that we won’t see something much more significant taking place before six months. So I don’t know what the timing is on this thing, all I know is that the global money monetary system is as sick as ever. I know that in the United States, our financial system, our government is going bankrupt. I know that there’s no way in God’s little green earth that we’re going to have a solvent fiscal situation in any time probably in my lifetime. And so I can only see a bull market in gold and when it’s ready I think the main plan I can make is that people shouldn’t sit around and wait for the market to start to move. Because it could go, we could see it turn in the gold market in a New York minute, to put it one way. Because I think another good point that Alasdair Macleod made on my show that’s very worthwhile considering..these fiat currencies, which run the opposite way of gold, like the dollar being the main world’s reserve currency, they are a total con game. There’s nothing behind them anymore. As Alasdair pointed out, it has nothing to do, it doesn’t necessarily have anything to do with the amount of money that’s created. If you have 50 trillion or $100 trillion of money, if none of those units of currency are worth anything it doesn’t really matter. The point is the con job is up, the dollar could collapse very very quickly. You know he points out that without any increase in the króna in Iceland, that overnight it lost 50% of its value. So once people lose confidence, and then it’s going to be too late. So people need to be lining up, buying, opting out of this system now before everybody else figures out that the system is sick and it’s going down.
FutureMoneyTrends.com: Jay Taylor of Jay Taylor Media, thank you so much for your time sir. If someone would like to reach out to you personally, is Jay Taylor Media the best place for them to go?
Jay Taylor: Yeah, JayTaylorMedia.com is the best place for them to go and MiningStocks.com is also another. Mining Stocks really deals with my newsletter more and Jay Taylor Media is a portal for the newsletter, my colleague Chen Lin’s newsletter, as well my radio show “Turning Hard Times Into Good Times.”
FutureMoneyTrends.com: Alright sir thank you so much for your time. You have a good day.
Jay Taylor: You’re welcome, thank you.