John Embry continues:

“All of the sudden you hear that the Germans are not too happy with this idea that the ECB is going to purchase sovereign debt, in an effort to bring down the rates in Italy and Spain.  At the same time some senior guy in the German establishment said, last week, ‘Greece cannot be saved.  That it is simple mathematics.’  Now I happen to agree with that, so I think he’s telling the truth.

What you see, on the flip side of that, is there has been this constant misinformation coming out of key entities in Europe....

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“The head guys out of Spain have been saying all along that ‘everything is going to be fine.’  Then they said they probably wouldn’t need the full 100 billion euro bank bailout they were going to be given.

Then, all of the sudden it comes out that they are looking at a full EU/IMF bailout which is in excess of 300 billion euros.  This is serious money and Spain is not that big of a country.  So I think these guys are totally out of ideas, and a cause for extreme worry is how this is all going to play out.  I just don’t believe they can keep kicking the can much longer.”

Embry also had these comments regarding gold, silver and the US:  “The action in gold and silver is starting to improve, but it is obviously still being repressed.  Just watch the trading patterns.  These trading patterns keep repeating themselves.  That’s not a real market, that’s interference.

I think it’s fascinating that the Hulbert survey came out last week and they said, with respect to gold sentiment, that it was in the lowest two and a half percentile in the last 15 years.  That’s going back to 1997.  You have to remember that gold was in a bear market back in ’97.

So the fact that gold sentiment is in it’s lowest two and a half percentile right now, with what’s going on and how cheap gold is, I just find it amazing.  So the sentiment backdrop is perfect for an explosion in both the gold and silver price. 

But the fact is that the interference is going to be overcome with a strong upward thrust in both gold and silver.  We may finally see some interesting revelations in the silver market in the month of August.  This could really light a fire under both gold and silver.

I would also add that there was a very interesting comment by Paul Volcker last week.  He basically said that American policymakers have exhausted fiscal and monetary policy remedies in their bid to cure the US economy’s growth blues.

Volcker  also said that there is no magic bullet in fiscal or monetary policy.  Volcker, as former head of the Fed, has been there and so he knows what is happening here.  He was the one that got us into this disinflationary period.  It can’t be done anymore and he knows it. 

The Dallas Fed also came out today and reported the biggest plunge in over 7 years.  This is significant because I think the economy is eroding everywhere in the world, but particularly in the United States.  The conclusion one arrives at, with everything I’ve just said, is there is only one solution to keep the game going, and that is to create as much money as is necessary to keep the system afloat.”

Embry also added:  “I think this rally we have seen in the US stock market is somewhat preposterous.  It’s all premised on more QE, and I don’t think QE is going to do anything for the state of the economy.  But it will eventually create a great deal more inflation.

I think at some point we will see a violent correction in the stock market.  A lot of people invest in the general stock market because they think everything is fine, but they will be disabused of that notion, and as I said, I think the correction could be violent.”

Embry had this to say regarding the mining shares:  “It was very interesting what came out last week when Barrick was forced to admit that all of the smoke they’ve been blowing at the markets was just that.  I mean that was a horrific announcement.

They are putting projects on hold and may even forestall organic growth at some of their existing mines.  They cut their production forecast from 9 million ounces per year, to 8 million ounces per year.  This is the biggest gold producer in the world and they are cutting production by one million ounces per year, that’s significant.

That’s wildly bullish for gold because they are not the only one having problems.  Some of these other big companies are having a ton of problems.  So I think your real value lies in some of the smaller companies that are in production. 

There is also great value in some of the ones that have well advanced ore bodies because I think that some of these seniors, if they can’t develop what they have, they are going to have to buy somebody else.”

The interviews with legendary Art Cashin ($612 billion UBS), Gerald Celente, Don Coxe ($538 billion BMO) and Eric Sprott are available now.  Also, be sure to listen to this week’s line-up of other KWN interviews which include MEP Nigel Farage, Peter Schiff, John Embry and Egon von Greyerz 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.

Eric King

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© 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.

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