James Turk: Central Banks Are Losing The War to Suppress Gold & Silver Prices

Tyler Durden's picture

Submitted by Adam Taggart of PeakProsperity

James Turk: Central Banks Are Losing The War to Suppress Gold & Silver Prices

My guess is that 2013 and 2014 are going to be big up year for the precious metals, but we still have to contend with the central planners and the various government policies, which have been actively trying to keep the gold and silver prices from reaching fair value. The central planners are losing the war. They may win an occasional battle or two, but they’re losing the war, and eventually gold and silver are going to go higher.

So predicts James Turk, founder and Chairman of GoldMoney.com.

From James’ perspective, gold is not an investment. It’s a sterile asset, meaning it does not generate income. What it is, is money. Its function is to store wealth.

But money, like investments, can be overvalued or undervalued. And what we’re witnessing on the world stage is a gross mispricing of money as central banks engage in depreciation of their fiat currencies via inflation (i.e. money printing).

The process causes a transfer of wealth from those holding overvalued money to those who hold undervalued money. That’s what’s been going on for the past decade as the price of gold has steadily marched upwards versus fiat currencies.

But this process is not efficient. Mass awareness of this wealth transfer is low, so confidence in paper currencies is still high, supporting their perceived value. Market intervention by central banks and other parties conspires to keep the prices of precious metals artificially low and suspect.

This maintains an arbitrage for individuals to buy gold and silver at a discount to true value, which James believes will be slowly realized in full over the next several years as the bull market in precious metals approaches its third and final phase.

A factor in this rise will be the increasing fragmentation of coordination among the central banks. Increasingly, central banks outside the influence of the US’ Federal Reserve are treating the precious metals as true money, and becoming net buyers of bullion for their reserves.

Ultimately, Turk predicts the price of gold will move to somewhere between $8,000-10,000/oz, and that we'll see even higher price appreciation in silver.

The way markets normally work is, after you do have a big move, you get a correction. Even over the past 12 years, if you look at gold, you had big moves in 2005, 2006, and 2007 where you were in some years generating over 20% appreciation in gold. Then you had the correction in 2008. Even though that was a correction, gold was still up that year. Then, in 2009 and 2010 and the earlier part of 2011, you had again big moves. Then you had the correction where basically they moved sideways. My guess is that 2013 and 2014 are going to be big moves on the upside, because what’s important here is not so much the price of gold, but whether it’s a good value.


The proper way to manage a portfolio is, you move assets that are overvalued out of your portfolio and you concentrate on assets that are undervalued. That’s true regardless of whether you’re talking about investments or money. You want undervalued forms of money. You want undervalued investments. I use a couple of mathematical formulas which I’ve written a lot about, one being the Fear index and the other being the Gold money index; by both of those measures, gold is still very, very undervalued, as is silver, for that matter. Silver is even more undervalued than gold. My expectation is that these undervalued assets will continue to rise in price, because the market doesn’t like levels of overvaluation or undervaluation. The market is always constantly changing, moving money out of overvalued assets and moving into undervalued ones. And that’s what we’re basically seeing in the precious metals: people are moving out of overvalued fiat currencies and moving into undervalued gold and silver.


My guess is that 2013 and 2014 are going to be big up years, but we still have to contend with the central planners and the various government policies, which have been actively trying to keep the gold and silver prices from reaching fair value. The central planners are losing the war. They may win an occasional battle or two, but they’re losing the war, and eventually gold and silver are going to go higher – assuming that governments and central planners and central banks still continue to follow these same policies that they’ve been doing, which is defacing fiat currencies.


An interesting thing is that when we saw the price drop in gold and silver at the end of 2012, the demand for physical metal rose tremendously because people recognized that these assets are undervalued, and if they’re going to be sold down to such cheap prices, they may as well just pick them up and continue to accumulate them. So it certainly has a perverse affect when the central banks intervene. In fact, as we’ve noted, gold has risen 12 years in a row against the U.S. dollar – double-digit rates of appreciation. But I guess the best way is using an analogy. If you've got a pot of water boiling on the stove and it’s bubbling away, every once in a while you have to release or pull off the lid to let a little bit of steam out, and then you put the lid back on.


That’s sort of what the central planners are doing. Every year they release the lid, and gold on average has risen over the last 12 years by 16.8%. Then they put the lid back on. One of these days they're not going to be able to put the lid back on, and you're going to go into the third stage of a bull market where gold just keeps rising and rising and rising because confidence will be lost in the currency. I think that’s what we have to be focusing on.


I can’t say that trust between central banks is waning, but you have to recognize that there are two categories of central banks: There are central banks that are in the U.S. circle of control and dominance, and then there are central banks outside the circle of U.S. control and dominance. The ones that are outside of the U.S. control and dominance are accumulating physical gold. The ones within the U.S. control tend not to do that, although it’s interesting that Germany, Netherlands, and now Austria, too, are talking about bringing their gold back.


It’s quite clear that a lot of promises have been made, particularly by politicians and most governments around the world, and those promises cannot possibly be fulfilled. A lot of those promises are going to be broken. Particularly when it comes to the area of gold, a lot of central banks are relying on the promises of other central banks. Oh, yeah, we’ll be good for the gold if you ever ask for it. Those promises are likely to be broken as well, as the demand for physical metal continues to grow. Whether it’s going to accelerate in 2013, 2014, I don't know. But, my guess is the demand for physical metal is indeed going to accelerate over the next couple of years, because I’m looking for serious financial problems to be hitting. 

Click the play button below to listen to Chris' interview with James Turk (34m:47s):

Click here to read the full transcript

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francis_sawyer's picture

Gold isn't going up ~ fiat is going DOWN... Get that thru your domes...

Xibalba's picture

"Strong Dollar Policy" = Naked short gold and silver into oblivion

Zer0head's picture

if they losing the war they need creativity

SFPD Cant do Stop and Frisk, So They Now Turned to ‘Hunting’ & ‘Wolf Packing’


The Juggernaut's picture

I've been asking that shit!!!
What would happen if the NY Fed defaulted on their gold delivery? Also, this is probably why the high powered guns are wanted in the govt.'s hand and not the people's.

GetZeeGold's picture



What would happen if the NY Fed defaulted on their gold delivery?


Seems to me they already have......or Germany would already have repatriated it's gold.

boogerbently's picture

How come the govt. can hand out jets, missles, and war-grade weapons to middle eastern regimes, but not trust its own citizens with 10+ clips???

Alpo for Granny's picture

Gold isn't going up~it is going East. Get that thru your domes too...

WTFUD's picture

( . . and you may ask how did it get there? )

boogerbently's picture

(US to China)

...we can't pay you for your investments in our Treasuries, but we CAN keep the price of gold artificially low while you stock up.

RockyRacoon's picture

Pity the grocery shopper with gold at $8 to $10K.  Aaargh.

francis_sawyer's picture

Possible options are:


- wheelbarrow full of cash

- EBT cards that don't work

- or... most likely, an attempt at PRICE CONTROLS [which means either empty shelves, long lines, or BOTH]

GetZeeGold's picture



It's been hell since the rise of gold from $265 to $1650......but I've managed. Despite the hysterics.


Gold Dog's picture

Good man....that's true grit, you are an example for the rest of us who also have been struggling for the past decade!

Theosebes Goodfellow's picture

"Mercury dimes, bitchez!"

Sorry Francis, I just couldn't resist. Seriously though, I think one of the other possible options is armed guards at the grocery store doors and sales limited to those with either silver or some other valued exchangeable.

Laser Shark's picture

If the dollar collapsed to a point where it was not accepted in international trade, our daily oil imports would stop (along with all the other stuff).  That would remove about fifty percent of the daily consumption of oil.

The just-in-time inventory system of retailers from grocery stores to gas statitions to Wal-Mart relies heavily upon daily deliveries by trucks, which burn gasoline or diesel.

It is doubtful that inventory system could sustain and adjust to such a massive supply shock.  Even if the dollar was just massively devalued and oil went to $500/bbl, the system probably would still cease to be viable. 

There probably wouldn't be any food on store shelves at that point.

francis_sawyer's picture

Yeah ~ & I'd just love to see how many people would be out there supporting the 'oil consuming behemoth' of US military bases around the world [for wars nobody wants] at that moment...


Meh ~ people are dumb fucks... It still might take them awhile to figure it out...

Laser Shark's picture

The wars are actually necessary to maintain the petrodollar's dominance.

Saddam turns his back on greenbacks

Greenspan admits Iraq was about oil

Gaddafi wanted a gold dinar

Iranian oil bourse stopped trading oil in US dollars

The bases around the world ensure that the oil keeps flowing and that trade routes/shipping lanes stay open.

I'm not advocating that, but that's the way it is.

I would expect them to launch World War III before the point where the store shelves actually go empty, anyway.

Doomsday Clock moves to five minutes to midnight

I would also expect the American sheep to demand war if the shelves went empty.  They will want someone to blame.

francis_sawyer's picture

As always... It's all about 'SPIN'...


Easier to create false justification to KILL TOWELHEADS, than it is to KILL CANADIANS or SPOTTED OWLS [I suppose]...

Note: francis_sawyer sees no need to kill any of the three... [at least for a 'sub $5 price on a gallon of gas]... Where's Nikola Tesla when you need him?... Oh yeah ~ some 'cartel' NEVER TO BE NAMED put him in the ground & stole all his patents...

Laser Shark's picture

The Canadians haven't threatened to stop trading oil in US dollars.

They should probably be on alert if we ever run out of wood, though.

Energy Independence - The Big Lie


Once I understood oil and especially peak oil everything else in the world started to make sense from the wars to the economic collapse.

francis_sawyer's picture

I came to the same understanding when I understood what 'types' were heavily involved in central banking...


IMHO ~ [just between YOUR stance & my STANCE]... 'Peak Oil' IS NOT an issue when the moment comes that you evacuate the 'GROWTH TO INFINITY' paradigm...

Sure ~ It may be an issue [ON PAR], as things stand at the present... But REMOVE the 'GROWTH TO INFINITY ON A FINITE PLANET' variable of the equation & it vanishes... Moreover ~ PAPER DEBT is what's RESPONSIBLE for bringing the GROWTH TO INFINITY paradigm into existence in the first place...

Just my 2 cents... [& besides ~ It's SATURDAY ~ relax & be entertained]



Oh Look! 3 quick 'junks' [in succession], of my last 3 comments... kito must have just shown up... Welcome kito ~ I'm sure I'll see you later in the thread... [what you ALL have to understand is the following... KITO ~ as will be evidenced later ~ is FIRMLY in the camp that GRANDMA needs to SAVE her joobux on a pallette so that she will be able to 'corner the market' in CATFOOD in years to come]...

Click forward... THIS ought to get fun...

kito's picture

i dont junk you unless its some really inane jew comment.............im too old for the junking every comment thing...........................

RafterManFMJ's picture

<----- I view an up arrow as an affirmation of my worth

<----- I view a junk as testimony of my speaking truth to power

BeaverFever's picture

No one can declare war on us until hockey season is over. And in Canada, it never ends...

Theosebes Goodfellow's picture

~"Meh ~ people are dumb fucks... It still might take them awhile to figure it out..."~

Yep. Methinks about three meals. After that is when things get messy. There is an upside though. It will only last about six weeks. That's about how long it takes to become so mal-nourished you no longer have the energy to try to fight for food.

The Heart's picture

"There probably wouldn't be any food on store shelves at that point."

And that!...is the plan to drive all the hungry whose new god becomes the stomach to fall under the babylonian culture of control and imprisonments.

Gonna be a lotta not so alive folks after this possible potential maybe could happen might manifest situation just could take place in the unreality. Here from an unnamed blogging is a liberally stolen comment that seemed to go over the heads of those that are pointed over there. Just for fun, have a gander at this.:


Scenario (Financial False Flag)

"A It is a Thursday afternoon, mid April, and you are driving home from work. Your wife calls you and asks you to stop at the supermarket for a few items. As you are getting the bread and milk, a disturbance begins at the front of the store. As you approach the check-out, you realize that the lines are way too long, and there are several people complaining. From the dialogue you realize that the Credit/Debit system is down. The store manager is trying to keep people calm, while on the phone with the company that services the card-reader system for electronic payments.

Now, a new line is forming at the ATM machine in the store, people shoving and yelling. Apparently, folks went to the ATM so they could pay for their items with cash and get home. Strangely, the ATM is giving out too much money – double, to be exact. Suddenly, everyone wants to be in that line… a fight breaks out, and the front of the store becomes mayhem. You quickly pay for the items you have, going through the express checkout, thanking God that you have cash in your wallet, and get the heck out of the store.

By the time you get home, a story is breaking on the news – the same strange events are happening all over the state. Credit/Debit systems down, and most ATMs not functioning, while others are dispensing “free” money. Later in the evening, you hear that there have been multiple shootings at ATMs in the area, as people fight over the free money coming out of them… flash mobs are reported at some of the grocery and electronics stores in the city where you work.

By morning, the news is all about hackers that have broken into the ATM network, and how the banks have had to shut the ATMs down to prevent further losses. There are images on the TV of growing lines at the banks, as people must go to a bank to get cash, in our previously ‘cashless’ society. Later in the day, you hear that there are now fights breaking out at banks as people tire of the long lines, and become fearful…because bank branches are running out of cash. That afternoon, a grocery store downtown gets flash-mobbed for the third time, only this time the activities go beyond plain theft – an all-out riot erupts because people cannot get what they want, the shelves having been emptied by the previous flash-mobs.

On the drive home from work, you hear that several banks have closed branches early because they ran out of physical money. One of the branches was vandalized by people who had been waiting when the branch ran out of cash and closed up – smashed windows, smashed ATM machine, and several injured people taken to hospitals…several people were arrested, but the police are reviewing the security videos and “expect to make more arrests in the case.” That evening the news announces that these things are happening all over the country, and that looting and rioting have begun in several major cities. When bed time comes, you decide to get your pistol out of the safe and keep it by the bed, over your wife’s objections… “just in case.”

You wake up on Saturday morning to a different world – several of your neighbors have been burglarized, and the news is full of riots, robberies, and car-jackings. The mayors of several major cities have declared a state of emergency, and are urging people to stay home and lock their doors. The world seems to have come un-hinged. Your wife is no longer objecting to your pistol being ready at hand.

One of your friends owns the hardware store downtown, and he calls around 11am to ask if you need any shotgun shells, or other ‘security supplies’ – he says that he has a few boxes of 12ga. put aside, and the rest have all been sold. He also says that people have been buying plywood, screws, nails, steel bars, and anything else they can get to protect and reinforce their homes – he warns you that he expects to sell out of many supplies today. He has talked to many people that morning, he is clearly worried. He says one customer told him that he has a brother who lives in Philadelphia who had just called him, and said that there were rioters in the streets there, and that the local news showed pictures of some of them who were carrying guns and waving islamic flags.

By Saturday evening the insanity has infected the city nearest you, about 20 miles away, and there is a constant stream of reported rioting, looting, and shootings on the TV news. Your neighbor is a police officer in town, and he comes over to talk to you briefly before heading in for a shift – he says that his department has been told that they may have to send officers to assist in the city, and asks if you can you keep an eye on his family during his shift overnight? What can you say but “of course I will”…and think to yourself, “it’s not like I was going to get any sleep anyway.” Before heading out, he hands you his police scanner, quickly shows you how to use it.

Overnight, you hear gunshots in the distance…once, then again, then several more times. Gunshots and sirens, and the squawk of the scanner as each event is assigned to a unit. As the night wears on, you think back on the conspiracy theories you have heard over the years, but always dismissed as the ramblings of people living on the edge, with too much time on their hands – restless chatter of New World Order, global banking cabals, communist infiltration, etc. As much as you still don’t buy into the ranting of the “tinfoil hat brigade”, you have to wonder if the hackers who did this actually knew what they would be causing, or whether they were just trying to steal money? Morning approaches, and you realize that the police are sounding rather frustrated – there have been over 50 break-in calls since 11pm, but no one has been arrested. It is as though the police are being sent on wild goose chases. You drift off to sleep wondering, “Dozens of businesses broken into tonight, and a number of houses too, but no arrests, except for one drunk driver. How can that be?”

With daylight, your neighbor returns, but he is not happy, and neither are you when you hear the news – he and most of his squad have been assigned to assist the department in the city for a shift – he is home to grab the bag which is packed with his riot gear and other “special equipment”. He reminds you that his wife has a pistol, knows how to use it. “She also has the keys to my gun safe” he says. Both of you have to look away from the other at that moment – what it suggests about the future is just too ugly to think about, yet it can’t be avoided. He thanks you again for helping him out, and drives away.

Days later, the banks are still not open, the grocery stores are all looted and shut down, the gas stations are all empty, and your life has been reduced to shifts of community-watch duty. Armed raids by gangs are being reported everywhere, including your small town, and there are reports of huge packs of urban residents walking and driving out into the suburbs looking for food and refuge – everything on the news is about violence.

When your police officer neighbor returns (after nearly 4 days) and warns your neighborhood watch that a large mass of people is less than 2 miles up the road, looting and destroying people’s houses. He also tells you that many of the police are exhausted and walking off the job, as he did, to go home and protect their families, because there is just no managing the amount of violence which is happening. “It’s just plain crazy out there – people robbing and killing each other 24/7", he says, “and even with 4 cops in a cruiser, we’re not safe to go in and break things up. A lot of cops have been injured, some killed. It was just time to get out…to get home before I got hurt on the street. We need to get prepared – those people are coming, and they are crazy hungry!”

That afternoon, the mob of people is spotted coming up the road towards your neighborhood, now less than 1/2 mile away. Some are on foot, but they also have some cars and pickup trucks – there must be over 200 of them. Those that don’t have guns are carrying shovels, axes, sticks… in your neighborhood, everyone has been preparing since your neighbor brought home the warning. You have sent several boys out as runners to alert folks in near-by neighborhoods that danger is coming. Every gun is in someone’s hands. Your men have also pulled axes, shovels, and other tools from their sheds to be used as fighting tools, and you have a rudimentary plan -

You have 6 veterans with combat experience, and they each have a rifle and a pistol, plenty of ammo. They will go out and engage the mob just past the edge of the neighborhood, and will attempt to keep them on the main road, to divert them past your sub-division. The rest of your men are assembling along the two entrances to the neighborhood, a few houses back from the main road – they are preparing to make a massed defense against the coming mob, if they cannot be diverted by your advanced force. You have positioned vehicles, trailers, and brush in the roads to stop the mob’s vehicles, as well as providing some additional cover for your defense force. Meanwhile, the moms are gathering the children, the sick, and the old into a small cluster of houses in the center of your subdivision. They are also pulling the food and other resources out of the most vulnerable homes. Hopefully, the combination of high resistance and little/no rewards will keep the mob moving past your neighborhood… The unspoken fact weighs heavily on your group – if there are 250 in the mob, then you are outnumbered nearly 2:1, making a head-on fight a truly horrific ordeal. A painful silence has settled over everyone as you make your final preparations.

It has been 6 days since the ATM machines went down, 4 days since the last grocery store and gas station in town closed, and now you are preparing to fight your first battle against a mob of hungry, violent looters. Another mob has already arrived downtown, and you hear on the scanner that the police and fire department are very busy. You know that help will not be coming, because you have called to tell the dispatcher what is happening, to ask for help, but all he could say was that, “there are no officers available right now. I hope your plan works…”

- – - Here, I will end the story, because what happens next cannot be told in a dignified fashion. In that clash lives are lost on all sides, and many are injured. There are no winners in this combat, only those who survived. The most profound impact is that, in less than the space of an hour, the hope of a return to normal life is destroyed for over 100 families in that neighborhood. War has touched them in their hearts, in their homes, and it has put their community to the test of fire. Those who survive have a chance to rebuild, but they have all been forever changed.

In such a scenario, the majority of Americans would either be the suburban defenders, or would be part of the mob. After such an event, our nation would be forever changed – grossly factionalized, and the gaping wound in our national consciousness cauterised by the violence. Thus wounded, we would be even more sensitive to subsequent events – a second disruption would move even faster than the first, with violence and looting coming within minutes, not hours or days. Our enemies all know this – they consider it a tool for their use against us. We must not be ignorant of the dangers we face…"


vamoose1's picture

    seems  about  right  to  me    if  those  50  million   food  stamp   debit   cards  ever  went  down    it  gets   rather  serious  rather  fast....      50   million  americans  cannot  feed  themselves   not  to  mention  another  12   million  on   disability  so  its  actually  one  in  5  adults    and   one  in  4  children .

   Translate  this  into   1930   soup   lines   and   every  city  in   amerika   would  have  lines    tens  of  miles  long .

    Thats  a  straightforward   unambiguous failed   society   writ large  end  of   story    and  some  have  pointed  out  that  the   social   fabric   when  people  have  nothing  to  eat   holds  together   about   72  hours     then    they   just walk in  and    take  it.  Lock  n  load  people  ....   coming  to  a  theatre  near  you.

francis_sawyer's picture

@Heart & vamoose


Thus the 'IMPERATIVE' for central banks to KEEP PRINTING... I'm DEFINITELY not making them out to be HEROES for doing so... I'm simply saying that I'm certain that they see the same writng on the wall...

QE4EVA... It'll work until it stops working... I have zero control of the outcome... I might not even survive the aftermath... All I can do is TRY... [& what 'internet bloggers' get their panties in a bunch as to what THEY PERCEIVE the francis_sawyer position on Jews is, OR IS NOT, won't matter a bit in that moment]...

mkkby's picture

Scenarios like this may be coming but not for A VERY LONG TIME.  Notice how Greece and S. Europe have been dragged out since 2008.  The US will go last after Europe, UK and Japan.  Until then the dollar will be the safe haven.  THINK DECADES for this to play out.

Vlad Tepid's picture

Greece, S. Europe, UK and Japan are not the USA.  Ask the Korean marketeers in LA if something like this can happen. 

I leave you with a quote from Laurence Peter:  "America is a country that doesn't know where it is going but is determined to set a speed record getting there."


fockewulf190's picture

Humanity as a whole has no plan, it´s not just the US.  We are already at 7 billion+, and using a system of trade and consumption which condems at least 3 billion into poverty, many to premature death.  The rest consume, hoard and waste, some groups much more than others.  Eventually, as the finite resources evaporate, the system starts to fail.  The impoverished swell to 5 billion, and the poor will die screaming, fighting, begging.  The rest close their doors, hoard the last of the supplies, surrender their rights to militant governments, and wonder how this was all possible.

NidStyles's picture

It's not the trade and consumption system that is doing that. I wish kids would learn Economics, but most of you are too dense to grasp reality.

The Heart's picture

Much appreciation for your well valued contributions. This goes to everyone else here also!

Justa Messenjah here.

Dick Buttkiss's picture

How about a credit, TH, or are you quoting yourself, which I doubt.

The Heart's picture

Yes, credit the author, not the messenger.

One can only wonder if the rest of the story will come along.

Maybe the mass mind is still writing it?


fiftybagger's picture

Getting the heck outta dodge is looking more and more attractive.  Bangkok may not be cheap but northern Thailand still looks pretty good:

Cost of Living Comparison Between Washington, DC and Chiang Mai

This guy seems to be quite miserable paying 200 a month rent and 1 dollar meals:


50k investment will get you permanent residence in the Phillipines, as low as 10k for pensioners:


Cost of Living Comparison Between Washington, DC and Cebu

Silver For The People


RafterManFMJ's picture

Heh, yes it's chop good idea to be the only Whitey around after Amerika destroys the world economy.  Say, drink a bottle of sauce so you're pre-seasoned for the locals.

NidStyles's picture

You're ridiculous if you think those countries will stop functioning because the US screwed them.

RafterManFMJ's picture

And you're quite the nut if you think you won't be set upon and put in the stew. Or stocks.

Jendrzejczyk's picture

You're like a cute version of ZH original Mako.

robertocarlos's picture

I am one of the few who believes Mako is correct.

El Oregonian's picture

That is what pantries, smoke rooms, drying sheds, cold rooms, and nice gardens, chicken yards, rabbit pens, milk goat, sheep, on 4.75 Acres are for. A plus is if it's way off in the country... Going Galt, my friends...

beachdude's picture

Phrophets of Doom on the History Channel
First section on this topic with Dr. Nathan Hagens an eye opener.