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Embry - System Wide Melt Down as US to Enter Hyperinflation
With continued volatility in gold and silver, today King World News interviewed John Embry, Chief Investment Strategist of the now $9 billion strong Sprott Asset Management. When asked about the US debt situation Embry replied, “They’ve got this market in a lockdown because they don’t have any answers to anything. So they’re just kicking the can down the road, but we’re getting close to when the can is going to hit the wall, then we’re going to have some action and I suspect that’s going to happen in the next two months.
I think that people are going to realize that the US doesn’t have any solutions to this issue about debt limits and QE2’s and QE3’s and QE6’s and that they’ve basically reached the point where they can’t put it off any longer. I think people will realize when they up the debt limit by two and a half trillion or so to get them through the election, how totally hopeless this situation is. It’s not one iota different than Greece.”
Embry continues:
When asked how the US debt will be resolved Embry stated, “It will either be inflated or defaulted, it will not be paid back under any circumstance. If I were emperor I would take the hit now and I would go through the deflation and destroy the debt and get rid of it so we could start over, the sooner the better. They will not do that because nobody wants to be in charge when the shit hits the fan. So consequently they will just kick the can down the road.
They will print and I agree with Jim Sinclair, I believe QE to infinity and this will lead to hyperinflation, and God knows what happens then. What happens every time I suppose, the whole system melts down. That is the route they will opt for given the alternative being a hard depression, a deflationary depression.
The two things you can be assured of: One is that the standard of living for the average person will be crushed, and two there will be some form of civil unrest because people confronted with this reality are going to become extraordinarily unhappy.”
When asked if we could have a situation where the stock market experiences a Weimar effect and just continues higher Embry replied, “Well that’s an excellent question because it all just depends on what the response of the authorities is and if the authorities do what I think they are going to do and that is resort to some new form of quantitive easing, irrespective of what they call it, then the stock market will I suspect reverse and it will rise again...
Continue reading the John Embry interview below...
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“A game of chicken is going on right now as far as I can see. The authorities are kind of challenging the people who are long the market and right now the market has been correcting fairly aggressively in the last couple of weeks. They better be careful is all I would say because if they lose it to the downside it could be really ugly because that is one of the few sources of confidence left amongst the public.”
When asked about the next few months in gold Embry remarked, “Well I’m in the minority view of a couple of guys, Jim Sinclair and James Turk who believe that this could be a very active summer in gold to the upside. I would agree with them because everybody keeps referring to the seasonality which has generally underwritten a soft summer. But I just think there is so much going on in the big picture and that gold demand is now driven by investment demand, and investment demand does not have seasons. I mean if things are deteriorating alarmingly in the big picture, people will buy gold.
When asked what could cause silver to turn up from current levels Embry responded, “For the same reason gold is going to go up because people are going to figure out the last thing you want to own are currencies. Why would anyone own a piece of US paper, certainly in the short market because you are getting return of zero on something that is being debased aggressively.
More and more people are going to see the light and realize that their protection is in hard assets. And when you put that in context of how small the sector is in reality to the amount of paper out there, the moves could be outsized. I would not be surprised at huge moves in gold and silver in the next three to six months. The story is very concise now, I mean the economy is in death throes and reality is going to intrude very quickly on this picture and when it does gold and silver will be the refuges.”
© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
Eric King
© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast,
rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
June 13, 2011
