On the heels of continued trouble in the European banking system, today MEP Nigel Farage told King World News that people need to brace themselves because the banking crisis is about to accelerate. Farage also spoke about the new president of the European Commission and what investors should expect from the gold market since the banking crisis is only going to get worse from here.
Eric King: “Nigel, I have to start off asking you about your new leader who heads up the European Commission.”
Farage: “Yes. The European Commission has a new president. He is a man called Jean-Claude Juncker. He was for 19 years the Prime Minister of Luxembourg. This is the guy who David Cameron tried to oppose. But it was 26 votes to 2 amongst the Prime Minsters that Juncker should get the job.”
“We were told that it was a great day for democracy, but I pointed out to them that I couldn’t really see how it was a great day for democracy given that the number of candidates we were given to vote for was just one. (Laughter). Normally in a democracy you get a list of more than one, unless it’s the old Soviet Union. (Laughter continues).
And furthermore, and I thought extraordinarily, the 751 of us who are the elected bit of the European Union from across 28 member states, when we conducted the vote for our candidate it was done in secret. It was a secret ballot. And so I pointed out that the whole point of elected representatives is so that the voter can see how they vote, and yet the whole thing was hidden.”
Eric King: “Nigel, what about the reemergence of the banking crisis?”
Farage: “Well, everybody has been terribly complacent about this. The general view has been that the banking problem is out of the way, the eurozone debt crisis is finished, the existential crisis is over, and it’s all going to be fine. But we saw some really quite bad shudders down in Portugal last week. There were (also) some very serious concerns about one or two of the Austrian banks.
And what no one has noticed is (what’s happening in) these Mediterranean countries. We’ve seen the bailouts of course. We’ve seen the Greeks bailed out more than once. We’ve seen the Cypriots bailed out, Portugal, Spain. All of this stuff has been going on and (yet) we’ve been told the problems are over. And the reality is the banks are in as big a mess as they ever were. Actually, the national debt ratios of these countries that have been bailed out over the last couple of years has slowly but surely been increasing in every single (member) state. So we’ve seen a sudden sort of realization that this problem hasn’t gone away.”
Eric King: “Nigel, gold has quietly had a pretty good year so far. What are your thoughts on gold with all the trouble we are starting to see?
Farage: “Yes. It sort of feels like gold has bottomed out, doesn’t it? It’s kind of found it’s base. And whilst relatively short term investors may be disappointed with that base, if you take a longer, historical view of gold and look at the gold charts, you see that what gold has done is to form a significantly higher base than anything we have ever seen before in history.
So it looks to me like gold has bottomed out. And if I’m even half right about the situation with the banking crisis, about some of the real worries in the economic system, especially within the eurozone, then we will see times again, as we saw going back 3 years ago, when gold has a serious move on the upside.
What happened in 2008 was a terrible jolt and a terrible shock to the global economy, and to the stock markets. But the reality is, despite deleveraging and many things that have happened, this (crisis) has not gone away. This banking crisis will come back and bite us and bite us very hard.”