Jim Walker: Deflation to Push Bernanke Out in 2011; Gold to Drop Before Continuing Growth (GLD, GDX)
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Jim Walker, founder of Asianomics, told CNBC on Friday that deflation in late 2011 my force the resignation of Federal Reserve Chairman Ben Bernanke, which may result in an temporary fall in the price of gold.
"Deflation is still going to be around in the U.S. and the credit contraction will continue, which will eventually lead to much lower growth," Walker said. "We're advising people to be long gold, I think that continues to go up, certainly through the first nine months of next year."
Walker said that the price of gold will fall on the back of news that Bernanke will resign, while the price of U.S. Treasury's will rise in 2011 on pressures of deflation.
Walker also sees the pressure from the European debt crisis will result in a exodus of countries from the euro.
"I think the euro is finished in its current form. I think there will be an exodus of countries from the euro that just can't stand the pain," Walker said. "They are democracies after all and people vote out governments that inflict pain on their population."
Walker does not state for certain that the euro will tumble in 2011, but he does see the austerity measures causing anger at the political leaders in suffering countries.
"Deflation is still going to be around in the U.S. and the credit contraction will continue, which will eventually lead to much lower growth," Walker said. "We're advising people to be long gold, I think that continues to go up, certainly through the first nine months of next year."
Walker said that the price of gold will fall on the back of news that Bernanke will resign, while the price of U.S. Treasury's will rise in 2011 on pressures of deflation.
Walker also sees the pressure from the European debt crisis will result in a exodus of countries from the euro.
"I think the euro is finished in its current form. I think there will be an exodus of countries from the euro that just can't stand the pain," Walker said. "They are democracies after all and people vote out governments that inflict pain on their population."
Walker does not state for certain that the euro will tumble in 2011, but he does see the austerity measures causing anger at the political leaders in suffering countries.
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