Embry:  “We are seeing highly questionable data being released in the West right now, which is followed by market action that gives the appearance the data is in fact true.  I think the thing KWN readers have to realize is this is traditionally one of the quietest periods of the year.

Europe is essentially shut down in many places, particularly France.  Even in the United States and elsewhere around the world people take the month of August pretty lightly.  So if you are in there manipulating markets, you can get a heck of a lot more bang for your buck during the late-summer month of August, and that’s exactly what we are seeing right now....

Continue reading the John Embry interview below...


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“We are certainly seeing that in the gold market, which is getting pounded again.  This action is extremely counterintuitive when you look at the physical offtake and the gold lease rates.  So this is just more of the pain that is necessary to establish our bottom in gold.

I would dare say that when we look back 2-to-3 years from now we will probably be in awe of how frightened and ignorant most people were at this point.  Sentiment is out of control in terms of pessimism.  Against that backdrop, the world has an insoluble debt problem, which I thought was beautifully articulated by Egon von Greyerz in his KWN interview. 

And the fact is that the derivatives in the banking system are utterly toxic.  If the so-called economic strength is in fact real, and I don’t believe it is, but if it is real and the U.S. really does begin to ‘taper’ to any large degree, interest rates are going to go up sharply.  This will literally endanger the entire banking system because of the blowups that will begin to take place in the derivatives market which will be related to interest rates.

So the West is playing a really dangerous game here and it’s going to be fascinating to see how this next crisis unfolds.  We have never seen anything like this in history.  There are over one quadrillion dollars worth of derivatives out there and they are concentrated in the largest banks in the world. 

If things become really unsettled and chaotic in the interest rate world, I promise you there will be massive winners and massive losers in the derivatives game.  But the bottom line is the losers won’t be able to pay, so the winners can’t win.  So I just don’t see this ending well. 

But if I were investing in this market in traditional assets, I would be really, really careful because I don’t believe the West will be able to hold things together as the markets become increasingly volatile.  Ultimately, I believe the system will begin to crack in terms of the financial markets because there is infinitely too much leverage in the financial system.”

Embry also added:  “There are two assets in the world that you can sit tight with because they have always shined during periods of tremendous global turmoil, and these are physical gold and silver.  Both of them are now remarkably cheap in relation to the amount of money that has been created, particularly since they have come off of their previous peaks in 2011.  At the same time, I also stick to my firm belief that the gold and silver shares will be one of the greatest investments of all-time when this bull market fully expresses itself.”

Embry also warned about the mainstream media:  “When I look at all of the comments in the mainstream media about gold heading to $1,000, and silver going much lower than it is today, and then I look at the costs to actually mine gold and silver, it’s obvious that the mainstream media is putting out patently false propaganda in order to frighten people out of their positions.

When you look at the physical shortages we are currently seeing in both gold and silver, and then you watch the price action, it really is surreal.  This truly reminds of when gold was $250 and everybody was calling for $200 gold.  Well, that was the bottom, and I believe we are once again forming a bottom, but this time the upside is going to dwarf what we saw in terms of the advance in gold from the $250 level.”

© 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 James Turk, Hugo Salinas Price, Chris Powell, Bill Fleckenstein, Eric Sprott, Egon von Greyerz, David Stockman, Andrew Maguire, John Mauldin, Art Cashin, William Kaye and Marc Faber are available now. Also, other outstanding recent KWN interviews include Jim Grant and Felix Zulauf to listen CLICKING HERE.

Eric King

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