Embry:  “I’m watching a number of things but first and foremost I’m focused on this Ukrainian situation.  I really don’t think there is anyone in the world dumb enough to start a world war but I do think we stand a very real probability of an economic war developing....

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“The United States is already going after Putin pretty hard with sanctions, and now they are rumored to be looking into his personal finances and trying to find out where his stash of billions is held in the West.  At some point Putin is going to have to respond because he can fight back economically.

Also, there was a fascinating article by Ambrose Evans Pritchard, for whom I used to have a fairly high regard until I read this article.  His article was titled, ‘America Has Conquered Its Debt Crisis With Incredible Speed.’  He then goes through all of these various arcane statistics. 

But he leaves out a lot of the important stuff which has to do with the imbedded debt and the fact that interest rates are hundreds of basis points too low.  So the idea that the U.S. has conquered its debt crisis is laughable.  But this is part of the propaganda in this developing economic war.

We also had the S&P downgrade of Russian debt, which I think was interesting because I went and looked at the Russian numbers.  The Russians have just north of a 10 percent imbedded debt/GDP ratio.  The U.S. is over 100 percent, and at the same time the United States has unfunded numbers that may be 4 to 5 times that figure.

So I would say from that measurement alone that Russia seems to be in infinitely better shape than the United States.  The Russians also have a massive trade surplus as well as a comfortable current account surplus, but the U.S. has remained in deficit on both of them for as long as I can remember.

So, the fact that the Russian debt has been downgraded to just above junk, what does that say about U.S. debt?  Nobody in the West talks about this.  But there is one way that Putin can strike back, and I’m going to give you a little history lesson here:  Back in 2005 I attended a GATA Conference.

It was a really good conference because it laid out the whole story about what was really going on in the gold market.  But interestingly enough there was an advisor to Russian President Vladimir Putin there who was taking in all of this information about Western central bank suppression of the gold market.

After the conference concluded, gold was trading at $436 an ounce, and nobody was looking for a big move in the mainstream world.  But over the next nine months the gold price soared $290.  That was almost a 70 percent increase in a space of only nine months, which was pretty impressive considering that no one expected it.

I honestly believe the move was a direct result of Russian activity in the gold market.  They just looked at the gold market and said, ‘This market is completely manipulated and there is a huge opportunity here for us.’  Again, they knew this because one of their representatives who attended that conference went straight back to Russia with that information.

Let’s flash forward 9 years:  I think it’s easy to say that the gold market is far more vulnerable today.  It’s become widely accepted now that there are 100 paper claims on every single ounce of gold available in the Western system.  Consequently, if someone decided to aggressively go against the Western entities who are paper manipulators in the gold market, it could become chaotic.  This could be something that Putin could do if he so desired because he understands perfectly well, as the Chinese do, what is going on in the gold market.”

Eric King:  “John, when you talk about the gold market becoming ‘chaotic,’ what would we be looking at if things started to come unglued for the West?”

Embry:  “If the gold and silver prices, which have been under extremely tight control, were to start to reflect reality, and I noticed Egon von Greyerz was talking to KWN about $10,000 gold which I agree with, then the whole paper Ponzi scheme in the gold market would be revealed. 

More importantly, I think that the interest rate environment would change dramatically.  And if the United States, with the debt load it’s carrying, was forced to pay market rates that reflected the risk of default and the risk of inflation that the West faces, that alone would really start bringing the Western financial system to its knees.

So this is a fight we now see unfolding involves the economic solvency of the West.  The West may get more than they bargained for if they keep going after Putin, and it would not surprise me if this blows up in the faces of Western central planners.  Meaning, Putin may be about to unleash economic terror on the West.  This is why gold, silver and the mining shares remain one of the great opportunities in financial history.”

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The audio interviews with Felix Zulauf, Michael Pento, James Turk, Victor Sperandeo, Dr. Philipa Malmgren, Grant Williams, Dr. Paul Craig Roberts, Bill Fleckenstein, Dr. Marc Faber, Egon von Greyerz, Ben Davies and Art Cashin are available now. Other recent KWN interviews include Eric Sprott and Jim Grant -- to listen CLICK HERE.

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