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John Embry continues:


“Removing that much stimulus from the US economy right now would be unfathomable considering how weak it is.  Up until a decision is finalized, they are holding gold under $1,700 and silver below $33, but if you just stop and look at the fundamentals for silver, it’s preposterous silver is trading where it is.


Silver should be trading much higher than its current price, but it just shows the power of paper in the very short-term....


Continue reading the John Embry interview below...




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“Right now there is infinitely more demand than there is supply in the silver market.  I was just reading a study talking about how much the Chinese demand for silver has exploded in the last ten years.  Chinese demand for silver has literally skyrocketed.


When you put that together with everything else that’s been going on in the rest of the world, and the fact that inventories have declined dramatically, you can only arrive at one conclusion which is the supply of silver is really limited.  The question arises, where are they getting enough in the near-term to carry out their paper shenanigans?  That I can’t seem to answer.”


Embry added:  “I’m a very much dyed-in-the-wool Austrian economist and I believe we have reached the stage in this economic cycle, which is really just an extended credit cycle, that we can’t grow.  As you get deeper into a credit cycle you need more and more credit creation to get the same dollar of real GDP growth.  We already have far too much debt and we can’t possibly deal with the debt we already have.


So the idea we can start growing again is a lie.  The fact is what we are seeing is weak growth everywhere, but the prediction for next year is always better.  I am of the belief that next year will be more of the same and they will start revising their estimates lower next year.


To keep the whole thing going they will have to print more and more money, and eventually we are going to see the negative side of money printing.  So far, because money velocity has declined, you haven’t really seen bad inflation.  But that’s coming because there is no alternative but to keep printing to keep the system afloat.


For 2013 we will see continued disappointment, but the room for an accident, both economically and geopolitically, is massive.  You’ve got so many things that can go wrong, and not many that can go right.  Having said that, the one economy that looks promising is in China.  The Chinese might be able to get one more round of stimulus into their economy to keep it afloat, but the rest of the BRIC’s and the industrialized world look terrible.


So I don’t see anything changing the upward course of gold and silver, which I think are going to record highs early in 2013.  The tight physical markets will be what unleashes the price for both metals in 2013.  Every year with Eastern central banks buying more and more gold, by definition we are running out of available physical metal. 


Even more so I don’t think there are sufficient inventories in the silver market, so we will be running into shortages in that market because I see no reason for investment demand to flag in the least.  We will continue to see more money printing going forward, and therefore more continued demand for both physical gold and silver. 


The reality is this bull market in gold and silver has been about the slow destruction of fiat money.  Gold and silver have been constants for centuries.  So right now what we are witnessing is yet another failed monetary experiment, and this will ultimately be reflected in dramatically higher prices for gold and silver in terms of crumbling fiat paper money.”


The extraordinary audio interview with Rick Rule discussing how the world’s largest pools of capital are now entering the gold and silver markets has now been released and you can listen to it by CLICKING HERE. 


© 2012 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.


The interviews with Rick Rule, MEP Nigel Farage, Chris Powell, Bill Fleckenstein, Egon von Greyerz, John Hathaway and Ben Davies are available now.  Also, be sure to listen to the other recent KWN interviews which included Stephen Leeb, Eric Sprott, Gerald Celente, James Turk, and Wilbur Ross by CLICKING HERE.


Eric King

KingWorldNews.com

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