John Embry continues:

“So I have no problem with a decent consolidation.  Now having said that, there still is so much counter-intuitive price action that you know the central banks are in there (manipulating gold).  There is no question that at the time of the Swiss franc devaluation, when gold dropped on either side of the devaluation by over $100, that was totally orchestrated because in a rational world the gold price, as the other safe haven, should have rocketed higher.

So it’s a healthy consolidation, but it’s also being helped by very aggressive central bank actions.  The bottom line is this is orchestrated volatility for the expressed purpose of frightening all of those who do not fully understand the gold market.  But if you understand it, you must use every bout of this weakness to continue to enhance your position, it’s a gift. 

We had the $200 takedown and once we absorbed that, gold went and rallied back to the high.  The (manipulators) are creating the image of a double top, leading people to believe that they can stop it at $1,900.  I don’t think it’s possible, gold will just work this off and then surge to new highs.” 

When asked what to expect in 2012 Embry responded, “I saw Jean Marie Eveillard’s King World News interview, it was a very good interview and I agreed with everything he said.  If you use the past as a guide we could see the level of pension fund ownership and institutional ownership of gold rise from the current .4% that Eveillard cited to as high as 5%.  

If history is any guide that will happen, and I would go so far as to say that conditions are infinitely more favorable to gold then they have ever been at any other time in history....

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“What could be most important going into next year will be the revelation that the paper gold market is a complete and utter fraud.  For every $100 of paper gold claims, there are probably only $1 or $2 worth of real gold backing it.  That could be the thing that basically blows the top off of the gold market.”

When asked about the mining shares specifically Embry replied, “I remain extraordinarily bullish on the mining shares.  The HUI has penetrated the 600 level to the upside, now it is pulling back to the 600 level.  The next move of any significance will be a dramatic rise and I would be disappointed if it (the HUI) didn’t rise at least 50% by year end.”

When asked about trouble in Europe Embry said, “Europe is the lynch pin right now.  The European problems are the only reason the US dollar has a firm bid in it.  The question is, ‘Can the European problems be solved?’  The depth of the issues are so profound and the person who is at the center of it all is Angela Merkel in Germany.  

She is worried about her party, and being elected again because if you put this to a vote in Germany amongst the German populace, they don’t want to bail out the rest of Europe.  The conditions in places like Greece are beyond horrific.  

The Greeks can’t possibly take the austerity that is being asked without a revolution taking place.  I think they are going to print as much money as they need, to keep this whole thing together and the German public be damned.”

© 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

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© 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.

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