James Turk interviewed on Mineweb

Mineweb weekly podcast......listen here

By Geoff Candy:

As concerns about the state of the global economy grow, gold is going to continue to regain its position as money.

This is the view of Gold Money founder James Turk. Speaking on Mineweb.com's Gold Weekly Podcast, Turk says at the moment, " People are looking at the various currency problems around the world, and regardless of where you focus - Asia, Europe and even North America, the demand for physical metal remains quite strong."

The reason for this he says is that gold is a form of liquidity but, it differs from other types of money in that it has no counter-party risk.

"There is no default risk with gold and with all of the uncertainty that we have today with the banking system globally, all the uncertainty that we have with the sovereign debt risks and crisis really, that we're seeing globally - people are moving more and more into physical tangible assets."

Turk believes that this state of affairs is likely to continue because, from a big picture point of view, "It's becoming increasingly clear that the system is broken and the tools that central banks are using are not the right tools. When you have a broken system, you have to sort of step back and take a look at what's going on.

He adds, "From a longer-term point of view as well, you have to consider that for thousands of years gold has been the centre of global commerce. We've had four decades now where gold has certainly moved to the side - now are we going to deny thousands of years of history and say the four decades is really the basis for going forward, or are we going to say these four decades have been aberration and in fact are going to come back to gold as a centre of global commerce?

In Turk's view the answer is clearly the latter but he does admit that he does not know how all of these developments are going to unfold.

" I don't know what kind of events we face in the future that could trigger this increasing movement toward gold and out of paper, but clearly there's going to be a major shake-up and these things happen every several years - once you get off the basic fundamental principles and basic fundamental principle that we lost here or that we've lost recently is that money is a function of the market process, it's not something handed down by governments which people are supposed to use.

"If the market doesn't like the money that's coming out of governments, they're going to move to other alternatives and the natural place they will move is gold.

As for prices, Turk is maintaining his view of gold at between $1,800 to $2,000 although he does admit that it may be a little overoptimistic to expect it to get to that level by year end.

But, "whether we hit that $1,800 or $2,000 target this year or next year really doesn't matter. You're running a bull market and what people have to focus on is continue to accumulate gold because it's still relatively cheap and that's the key thing."