James Turk who recommended betting against the housing bubble, on how the current money bubble is going to burst and the nature of the  tremendous volatility in the financial markets it is going to ignite

HardAssetsInvestor: Last year when I last spoke to you, we had an interesting conversation about your new book in which you discuss the money bubble. You talked about how the money bubble is going to burst, and it’s going to ignite tremendous volatility in the financial markets. Is that still your view?

James Turk: Yes, but the money bubble has not yet burst, although we’re getting close to that moment in time. We’re seeing some unusual events that have occurred over the past 12 months. 

For example, although interest rates have moved back up recently, a couple of weeks ago, people were paying money to have the German government take their money for 10 years. That’s a sign something is amiss. Capitalism doesn’t work that way. If you pay to have your money decrease over 10 years, you’re destroying capital. 

Still, we haven’t had the pop of the bubble yet, but we’re on a clear trend toward the bubble popping, which it will if we don’t go back to sound money policies. The popping of the bubble means that fiat currencies will no longer be used and trusted in commerce the way they are now because people will have lost confidence in them.

HAI: In that context, what do you make of the recent rally in the U.S. dollar? Is it just one fiat currency rising against other ones? Is it meaningless?

Turk: It’s basically meaningless in the sense that nothing fundamental has changed for the better for the dollar. The federal government is still running huge deficits. There’s still too much debt. There are still a lot of problems in the banking system. There’s just too much money-printing going on around the world. 

What’s happened is that for six months or so the dollar rallied because of all of the problems that were emerging in Japan and in the eurozone. The dollar jumped all the way up to 100 on the Dollar Index, but it was an emotional knee-jerk reaction. People were moving their money into the dollar to avoid the problems plaguing other currencies. They were also drawn to the dollar to try generating a rate of return, or if that was not possible, to at least avoid the negative interest rates in the euro, yen and Swiss franc.

…..read page 2 HERE

This is part 1 of our interview with James Turk. Click here to read part 2.

James Turk is the founder of GoldMoney.com, which is a European-based precious metals firm that presently safeguards $1.3 billion of precious metals assets owned by customers. He is a popular speaker at conferences as well as on radio and television. Turk’s 2004 book, “The Collapse of the Dollar,” recommended buying gold and betting against the housing bubble, which were two of the best investment ideas of the decade. His latest book is “The Money Bubble: What To Do Before It Pops.” HAI Managing Editor Sumit Roy caught up with Turk to discuss his current views on gold and the financial markets.