Today John Embry warned King World News that global money printing and credit creation has the world headed for a horrific collapse.
Be Patient
John Embry: “Eric, at the surface there appears to be little going on as the primary stock and bond markets are being manipulated by the usual suspects, to the point where volatility is hovering near historically low levels…
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John Embry continues: “Governments globally are continuing to issue blatantly false reports on the states of their economies. The Chinese are now as guilty if not more so than their Western counterparts at this stage.
However, there are increasing signs that the excess money and credit that has been created globally is influencing prices — leading to explosive moves in attractive real estate, collectibles, and stocks with cache like Amazon, Google, Apple, etc. That shouldn’t come as a surprise to anyone as the money and credit have to seek an outlet somewhere.
But in most instances the consumer is over indebted and thus constrained in their ability to take on more debt. This is being reflected in dismal consumer spending in most countries and generally poor overall economic performance. If one believes in Austrian Economics to the extent that I do, one realizes that in a debt-fueled economic expansion it takes ever greater quantities of debt to create the same amount of real economic growth as each cycle matures.
Globally we are already past the point of no return, and the ongoing increase in money and credit is having less and less impact on the real economy. Japan was at the forefront of this unfortunate trend and has been battling stagnation for nearly 3 decades. However, the other countries are rapidly catching up, with China leading the charge after a historic debt expansion in the wake of the 2007-2008 financial crisis.
Historically, without exception, these debt-fueled expansions end badly. And this one, which has truly global dimensions, will end even more disastrously. Financial innovation has allowed the introduction of heretofore unheard of leverage in the system, with algorithms, high-frequency trading, derivatives, etc, facilitating such a development.
I continue to believe real assets will become divorced from the eventual destruction of all pure fiat currency globally, and will eventually be the preferred assets. The explosion in the price of cryptocurrencies, art, diamonds, etc, will eventually lead to a dramatic price rise in gold and silver when they finally escape the shackles of Western central bank sponsored price suppression.
There is some initial evidence that the bullion banks are redressing their positions and are prepared for this development. However, investors won’t know for sure until gold and silver are enjoying price gains like those that were achieved recently by the cryptocurrencies. Very simply, gold and silver have been stores of values for thousands of years and they will soon reassert themselves, so be patient.”
KWN has just released the remarkable KWN audio interview with Egon von Greyerz and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
KWN has also released the powerful audio interview with Peter Boockvar and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***ALSO JUST RELEASED: An Extreme Is Developing That Is Impacting The Gold Sector CLICK HERE.
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