Tags: Wiedemer | Russias | Ukraine | gold

Wiedemer to Newsmax TV: Putin Stokes Gold's Rally

By    |   Monday, 03 March 2014 06:57 PM

The price of gold jumped more than 2 percent Monday in reaction to Russia's invasion of Ukraine, and the metal is poised to rise further, asserts Robert Wiedemer, co-author of "Aftershock: Protect Yourself and Profit in the Next Global Financial Meltdown" and a regular contributor to Newsmax's Financial Intelligence Report.

"Gold has been trending upward nicely for the last couple of months," he told John Bachman on "America's Forum" on Newsmax TV. 

"This is just the kind of thing to get the gold animal spirits going even further. . . . I know Russia's an unusual one, but it's just the kind of market that's been pushing gold up now for a couple of months. So it's just going to further what's already been pretty good momentum for gold this year."

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The conflict with Ukraine is a negative for Russia's economy, Wiedemer says. Ukraine is one of Russia's biggest trading partners. "If they start having problems there, that's going to be an issue for Russia," he said. 

"Russia's already been showing some of the weakest growth in years—less than 1 percent. . . .  Even their government's not predicting much growth over the next few years."

Editor's Note: Secret Wall Street Calendar Uses Strange ‘Crash Alert System,’ Gets 18.79% Annual Returns

As for possible trade sanctions, Russia imports many of its high-end consumer goods from the West, Wiedemer says. "So [sanctions would] . . . create some pain in Russia for a lot of the upper-middle class or upper-income people."

Oil prices already have been rising this year, but haven't had much impact on U.S. gasoline prices, Wiedemer says. So it's not clear that the United States will feel much quickly if crude prices rise further because of the Ukraine situation, he says.

To be sure, "that will change at some point," Wiedemer said.

Russia already has started raising interest rates to protect its currency, he says. "They're going to have to do what Turkey [and] Greece did and [what] other emerging markets that have had their currencies fall [did]," Wiedemer said.

"They're going to have to raise interest rates, which is certainly going to be a negative for their economy, just as it's been for the other economies. But, again, from a broader perspective, this is part of a general trend that's been happening for a couple of months now."

Of course, Russia could make things worse for itself through its actions in Ukraine, Wiedemer says. "Plus, remember that a fear of Russian markets is what kicked off the big collapse in 1998 with Long-Term Capital Management. So I'm sure some of that's on some people's minds as well."

He was referring to the hedge fund that went belly-up after Russia defaulted on its debt.

Editor's Note: Secret Wall Street Calendar Uses Strange ‘Crash Alert System,’ Gets 18.79% Annual Returns

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The price of gold jumped more than 2 percent Monday in reaction to Russia's invasion of Ukraine, and the metal is poised to rise further, asserts Robert Wiedemer, an author and a regular contributor to Newsmax's Financial Intelligence Report.
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2014-57-03
Monday, 03 March 2014 06:57 PM
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