Embry:  “I sense a change in the tone of the gold market.  A lot of evidence is coming out about how tight the physical market is and how great the fundamentals are.  I thought the chart that Robert Fitzwilson featured in his KWN piece over the weekend was very indicative of the true fundamentals....

Continue reading the John Embry interview below...


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“Money is being debased like crazy, and the previous two times that ratio peaked, it led to massive gains in the price of gold.  But this one is way more extended, which suggests that the gain will be even more dramatic this time.  We are not debating what the outcome is going to be, to me that’s a given.  What we are debating is the timing of the outcome, and that’s been driving anybody who understands this whole situation nuts.

The mining shares have had the tar beaten out of them, but I follow a lot of these smaller companies and I’m actually encouraged.  I see big, rounding bottoms here, with some of them starting to break out on the right hand side of the chart.  As you know, my business partner, Eric Sprott, he thinks there are going to be all kinds of 30 and 40 baggers in this space (3,000% to 4,000% gains). 

The very fact that this sector is starting to percolate a bit is extremely bullish longer-term for gold, silver and the mining shares.  This morning we also had the announcement that Goldcorp is making a hostile bid for Osisko Mining.  Let’s face it, all of these gold stocks have been pounded down.  If you can buy them for some combination of shares plus cash, I think the buyer is getting a spectacular deal.

Quite frankly, my greatest fear with a number of quality smaller companies that I hold is that they would receive a stink-bid from a larger company which doesn’t have nearly the leverage on the upside, and they would not be able to withstand the bid.  So if I’m an Osisko shareholder here I’m a little uncomfortable because I don’t think it’s that strong a bid given how depressed the stocks are.”

Embry also spoke about phony government releases in the US:  “These jobs numbers coming out of the United States are the greatest fiction of mankind.  I sometimes wonder if they tailor a jobs number for a specific outcome that they want to achieve in the markets. 

As an example, recently the 10-Year yield was pushing up through 3%.  So they come out with a weak jobs number, and suddenly the yield on the 10-Year drops from 3% down to 2.87%.  To me that yield is preposterous.  The interest rates are far too low to begin with, and the fact that some fake jobs number would lead to that kind of move in the bonds is ridiculous.

But the real fiction is in the unemployment report.  Supposedly the US created 74,000 jobs.  So the unemployment rate fell.  But the reality is that more and more people are dropping out of the labor force.  If you put out a correct total of unemployment in the United States, the real number is well over 20%, and that is a disastrous number.

So this idea that there is going to be a recovery in the US is preposterous.  I think the US economy will be hard-pressed to move forward at all.  And if the numbers were being calculated correctly, I suspect the US is in a recession already.

But all of this money printing has fostered massive bubbles in stocks, bonds, and even urban real estate.  The fundamentals don’t support the price levels.  When sentiment in stocks is extremely bullish, which KWN has pointed out, fundamentals stink and there is overvaluation everywhere, that to me is an extremely risky situation.  I think it’s very important for investors to understand that.”

Embry added:  “Anybody who does not believe that the gold market has been interfered with for many years is mistaken.  If you read Dimitri Speck’s ‘The Gold Cartel,’ it’s hard going because it’s fairly technical but it explains perfectly well exactly what’s transpired over the last 20 years:  It’s been government intervention in the gold market, and what this has done is really help to spark mega-bubbles in all these other financial markets that I just alluded to.  And this manipulation has been intensified dramatically as the end game approaches.”

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The audio interviews with William Kaye, David Stockman, Rick Rule, John Mauldin, Bill Fleckenstein, Dr. Stephen Leeb, Egon von Greyerz, Art Cashin, James Turk, Dr. Paul Craig Roberts, Andrew Maguire, Dr. Marc Faber and Eric Sprott are available now. Other recent KWN interviews include Jim Grant and Felix Zulauf -- to listen CLICK HERE.

Eric King

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