John Embry told King World News that a coming catastrophic loss of confidence will push gold and silver to price levels most investors can't even imagine. When you are running a pure fiat currency system, confidence is the only thing you have to keep things together.
December 24, 2012
King World News
Today John Embry told King World News that a coming catastrophic loss of confidence will push gold and silver to price levels that most investors can’t even fathom. He also spoke about what to expect in 2013. Here is what Embry, who is chief investment strategist at Sprott Asset Management, had to say: “I have been following the manipulation of the gold and silver markets for over 14 years now, and I can honestly say that I’m not sure I’ve seen a more blatant attempt to drive prices lower for no reason whatsoever.”
John Embry continues:
“There is no reason out there which could be used to explain why gold and silver prices would be under pressure. So I would love to know what the central planners are thinking here. I believe, and this might have been referred to in the interview you did with Gerald Celente, that this is all about confidence.
When you are running a pure fiat currency system, confidence is the only thing you have to keep things together....
“And if confidence in paper and bond markets is lost, then this is going turn into a total debacle.
The sad fact is they are doing QE all over the world and I don’t see how the central planners are going to be able to maintain confidence for much longer. But the reality is they attempt to kill the messenger, so they beat the hell out of gold and silver with paper shenanigans over the past month. This has been a brutal, deliberate, and obvious attack.
I’ve always told you that when there is a reasonable expansion of open interest I’m always concerned because they (the manipulators) have something to work with on the downside. But they haven’t been able to break the open interest in silver which has been very interesting.
Then, you superimpose those premiums that Andrew Maguire referred to in Shanghai and I think it probably tells you all you need to know about how tight the silver market is. So my longer-term view is simply strengthened that investors must own physical gold and silver.
The upside for both metals are totally intact and, if anything, the upside is greatly improved because of the large physical offtake on this recent smash. There are a zillion guys out there projecting what the gold and silver prices are going to do in the future.
All I’m telling you is that the currencies are going down and that’s what they are denominated in, so I think there is going to be an upward parabola in gold and silver that will only accelerate over time.”
When asked what to expect in 2013, Embry responded, “In terms of the economy, I don’t think there is any vitality in the world because we (the West) have infinitely too much debt. This debt is further levered by the derivatives, which are unfathomable in terms of scale.
This is why they have to keep creating more liquidity because as the derivatives go, the banking system goes with them. So we will continue to see increased liquidity, but it will have minimal, if any, impact on the economies which will be sluggish to put it politely.
But the key here is that at some point confidence will be lost in the paper markets. At that point gold and silver will be seen for what they are, the true safe havens. This catastrophic loss of confidence will be sufficient to push the prices to levels that most people can’t even fathom.”
Eric King: “John, in terms of the manipulation, Andrew Maguire said there are times where they push it a little too far. Did they push it too far this time?”
Embry: “Without question. I actually am amazed because I believe China as well as a number of Far-Eastern and Middle-Eastern operations, are looking to acquire as much gold as they can. The Western central planners are making a ghastly mistake. Brazil also just dramatically increased their gold reserves. It’s going on everywhere in the world outside of the West.
The question here is why are they doing this manipulation so blatantly? I believe these guys are trying to give the appearance that everything is fine in the short-term, but my instinct tells me things are far worse than anybody is letting on.
The bottom line is that the fundamentals for gold and silver are rock solid and they are manipulating the markets in an attempt to make people lose confidence in gold and silver, and abandon positions they’ve had for years or not enter the market at all. The reality here is people just need to focus on the fundamentals and dig in.”
Embry also added: “I think people who own gold and silver are going to have a great 2013, but I’m not sure it will be a good year for the vast majority of people and governments in the West. Regardless, I want to wish all KWN readers and listeners a Happy and prosperous New Year!”
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