John Embry continues:

“But the thing that’s the big problem, and question is, are the funders, Germany, Finland, the Netherlands, etc., do they have the balance sheets and the economic strength to bailout these peripherals in the South that are in horrific condition?

And even if they do, do they have the appetite to do it?  All I can tell you is that it’s an enormously serious problem.... 

Continue reading the John Embry interview below...


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“It will lead to one of two things, massive QE in Europe, or a splintering of the euro.  Either one of those things is going to be extraordinarily bullish for the precious metals.”

Embry had this to say regarding gold:  “I have been a long time proponent of the idea that we may very well be at peak gold production in the world.  We may have seen the peak.  The problem is that all of the low hanging fruit has long since been plucked.  The high grade ore bodies in geopolitically (friendly) places have (already) been mined and a lot of these open pits have been mined.  And they (open pits) have a very finite life.  Underground mines last forever (by comparison). 

But the fact is all of the easy stuff has been mined and where you are now finding anything of significance, it tends to be in geopolitically unattractive areas.  They are hard to mine and they are going to be extraordinarily expensive to mine.  As you saw with the Barrick announcement, the cost escalations on that development on the Argentine/Chilean border, which is at enormous altitude, have just gone through the roof.

That’s indicative of how it’s going to be for a lot of these companies, but it will all be compensated for, in their case, by much higher gold prices.  So I don’t worry too much about the fact that the production profile can’t grow that much because ultimately that will be extremely bullish for the gold price.

This is a classic supply/demand squeeze.  We know that demand is rising in many parts of the world, particularly in the East.  The central banks are buying, the public is buying it, and eventually the West is going to come to their senses and stop sending it over there.

As monetary debasement becomes apparent to more and more people, demand in the West is going to accelerate.  If there is no greater amount of gold coming out of the ground, the only thing that can arbitrate where the gold goes is price, and the price will go up a lot.  I think the gold price could go up to multiples of the current price.”

Embry also spoke about silver: “I have been of the long held opinion that if we get into a raging bull market, which we are going to in the two precious metals, that silver will head towards the low end of the gold/silver ratio, which is currently over 50.  In real bull markets, it will fall as low as 10 or 15 (to 1).

If that happens, silver will move up three times as fast as gold by the time this is all over.  And I think gold is going a long ways, so you can get really excited about the upside potential in silver.”

© 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.

This is a tremendous interview with John Embry.  He discusses Europe, the US, gold, silver, the mining shares and what KWN listeners should expect going forward.  The KWN interview with John Embry is available now and you can listen to it by CLICKING HERE.

The interviews with Egon von Greyerz, James Turk, Dr. Stephen Leeb, John Hathaway and legendary Art Cashin ($612 billion UBS) are available now.  Also, be sure to listen to last week’s line-up of other KWN interviews which include Gerald Celente, Don Coxe ($538 billion BMO) and Eric Sprott by CLICKING HERE.

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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