With the price of gold and silver surging and global stock markets plunging, today a 50-year market veteran warned King World News that world markets are now more prone to total collapse than at any other time in his entire career. He also discussed what is about to hurtle the world into another financial crisis.
John Embry: “This is an extraordinarily risky situation that the world faces as global stock markets begin to tumble. When I look back at all my decades of being in the financial world, I can't remember a single time when world markets have been more prone to total collapse than they are today….
Continue reading the John Embry interview below…
“If you look at any rational metric, the U.S. stock market is seriously overvalued because of all the money central banks have been pumping into the markets. Now we have earnings under pressure because of the strong dollar and the weak economy.
Expect Panic And Chaos
The potential for something bad to happen here is extremely high right now. The reason there is such a high likelihood that we will see a downside disaster unfold in global stock markets is because we now have extreme overvaluation combined with bad fundamentals. That is a combination which often leads to panic and chaos.
As you know, Eric, I am one of the few people who has been negative on the prospects for the U.S. economy. The mainstream media continues to push the big lie that the U.S. economy is actually gaining strength and it’s going to continue to improve. This is pure propaganda — nothing could be further from the truth.
The numbers coming out with respect to important economic components like Durable Goods and Housing have been dismal. And now the oil business, which is where the vast majority of new, high-paying jobs have been created in the last 5 years, is in deep trouble.
To add to the many problems the U.S. now faces, the strong dollar is going to impede exports and encourage imports. This will have a further dampening effect on the economy. People are beginning to wake up to this harsh reality and that is contributing to the heavy selling in stocks today.
Europe's Turmoil To Hurtle World Into Another Financial Crisis
Events in Europe are also getting more dangerous by the day. In a mere 10-day period the Swiss abandoned their currency peg with the euro, which created enormous chaos, the ECB announced a major QE program, and the Greeks elected a government whose views are at distinct odds with their creditors at the ECB.
These are all extremely disruptive events on a continent whose economies are weak, whose banks are seriously over-leveraged, and where deflation is becoming a greater problem with each passing day. This is the perfect setup for the world to enter another massive financial crisis.
More Currency Turmoil
Just last week the Bank of Canada cut administered rates in response to the negative impact of the oil price collapse is having on the country. This came only weeks after the head of the bank boldly stated that the economy was doing well. As a result the Canadian dollar dropped sharply against its U.S. counterpart and it’s now trading at nearly a 20 percent discount, after being at a premium just a couple of years ago. These kind of currency moves are disruptive in an overleveraged financial system with hundreds of trillions of dollars of derivatives piled on top.
Geopolitically, they just overthrew the U.S. puppet in Yemen. We also just had the change in leadership in Saudi Arabia, and I see zero improvement in Iraq and Syria. This is adding further destabilization to that entire region. At the same time the Ukraine situation has taken a sharp turn for the worse and we now see heavy fighting going on in Ukraine.
Expect Panic Into Gold And Silver
On a day when stocks are plunging, we see see gold and silver acting as safe havens. Also, the mining sector continues to offer the best upside at the current time. All the gold and silver stocks in the world don’t even have a collective market capitalization of $500 billion. Well, the ECB is creating more than twice that amount out of thin air over the next year.
When people finally understand that the entire global financial system as it stands today is just one giant Ponzi scheme, all hell is going to break loose. Then you will see oceans of money panicking into physical gold and silver. The impact of this on the price of gold, silver, and the shares will shock market participants. In that environment gold and silver will break through their all-time highs in what will seem like the blink of an eye.” ***ALSO JUST RELEASED: The World Seems To Be Coming Unglued As Global Stock Markets Plunge CLICK HERE.
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The audio interviews with John Mauldin, Egon von Greyerz, Dr. Paul Craig Roberts, Gerald Celente, Lord Christopher Monckton, Michael Pento, Bill Fleckenstein, David Stockman, Dr. Philippa Malmgren, Stephen Leeb, Andrew Maguire, John Embry, Rick Rule, Rick Santell and Marc Faber are available now. Other recent KWN interviews include Jim Grant and Felix Zulauf — to listen CLICK HERE.