Embry:  “We are in a bottoming process in gold and silver.  The intensity of the takedown in gold has been incredible.  This was the largest smash in gold since it became freely traded in 1971.  Gold plunged roughly 25% during the last quarter.

The only potential negative for gold was this ridiculous suggestion of ‘tapering.’  I don’t think there is any possibility of that taking place.  If it were going to happen the stock market would have collapsed.  So this was an orchestrated takedown specifically in the gold market, and it’s been a violent takedown which has gone far further than it should have....

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“This has injured morale and even made some of the true believers wonder what is happening.  But this is how bottoms are made.  In the midst of all of this carnage, physical demand is incredibly strong and as a result you have more and more gold leaving the Western central bank vaults.

It’s also obvious that the commercials are in the process of getting long the gold market for the first time in over a decade.  I’ve always believed that when we saw the commercials move to the long side of the gold market that it would presage a major up-move. 

So the gold market is in the process of moving into a remarkable position right now, and I expect an explosive move higher in coming months.  There is nothing positive taking place in the global economy, and now we have this mess flaring up in Egypt which has the price of oil trading near $100.  That’s the last thing an already weak global economy needs to see.

The last thing the world needs at this point is a major geopolitical eruption with disastrous implications.  This would be coming at a time when the West can’t even deal with its own financial issues.” 

Embry also added: “KWN had a wonderful interview with Egon von Greyerz where he spoke about the potential losses in derivatives.  The frightening thing is that even if the losses are one-quarter or even one-tenth of what Egon was saying, it would wipe out the entire global banking system.

So I think there is no solution and as a result we are having massive market manipulation.  It is clear to most lucid observers that the actions of Western central planners are similar to those of a cornered rat.  This will all end very badly and when it does investors better be positioned in the right assets or they will be badly damaged financially. 

With all of this as the backdrop, I am very comfortable that we could see gold and silver challenging all-time highs in the next 12 months and maybe even by the end of this year.  I think the situation is that explosive because the West, in its desperate attempt to manipulate the price of gold, is losing far too much physical gold supply.

The supply/demand equation is becoming really stretched right now in favor of excess demand.  This will eventually have its impact on the market.  I firmly believe we are getting close to that point, but it sure is ugly going through the bottoming process.

I think investors have to keep in mind that this has been the largest takedown in any single quarter in the history of the supposedly free-trading gold market, and it’s going to go back violently the other way.  We are only going to see the currency wars intensify in the future.  And because the global economy is in shambles and countries are competing to debase their currencies in order to grab a share of what is continuing to become a shrinking economic pie, this means more and more money creation. 

This will lead to stagflation on steroids, and the stagflation of the 1970s created a 25-fold move in gold and a 38-fold move in silver.  The reality is that investors should expect at least those kinds of moves for gold and silver this time around if not more.”

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© 2013 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 audio interviews with Eric Sprott, Andrew Maguire, John Hathaway, Dr. Paul Craig Roberts, MEP Nigel Farage, Rob Arnott, Egon von Greyerz, Gerald Celente, Jim Grant and Art Cashin are available now.  Also, be sure to hear the other recent KWN interviews which include Marc Faber and Felix Zulauf by CLICKING HERE.

Eric King

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