On the heels of some wild swings in global stock markets, today a 50-year veteran warned King World News that we are about to see catastrophic problems in the banking sector and the world financial system.  He also discussed a piece of propaganda issued by one of the major banks ahead of the coming turmoil.

John Embry:  “It’s clear to me that the usual suspects are getting very uncomfortable with the action in gold and silver.  They smashed both the XAU and the HUI mining indexes by 5 percent today, and this is with silver up about 50 cents and gold trading relatively flat.  This tells me they are desperately attempting to halt any excitement from building in the gold and silver space….

Continue reading the John Embry interview below…


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“The reality is that if gold, silver, and the shares continue their breakout and upside advance it will attract even more buying.  So I am really watching the action in the metals and the shares in the short-run because there is a real war going on there.

Having said that, I am very encouraged by the overall action in the metals, particularly because of the performance of the shares.  Stocks like Agnico Eagle, Goldcorp, and Golf Fields, have been sharply higher in the past month and the HUI has recently broken out above major resistance.  So this is very positive action.

Unholy Mess

However the powers that be, who have created this unholy mess in the world financial system, are capable of anything in the very short-term.  The bottom line is their gold price suppression scheme is doomed in the long-run and it will certainly end in disaster.  But the kind of crap that we have to put up with in the short-run is appalling.

I read this article that showed up on Kitco last week.  Kitco in my humble opinion is a very dubious gold website due to the fact that it carries a lot of anti-gold rhetoric, which is typical of stuff you read in the mainstream media.  However this article took the cake.  Deutsche Bank came out and said, ‘Gold is still not cheap.’

Now KWN readers around the world have to understand that Deutsche Bank is probably the most vulnerable major bank in the entire Western world.  They have massive derivative exposure and large positions in the debt of the essentially bankrupt peripheral European nations.  So Deutsche Bank is in horrendous financial condition.

Deutsche Bank Propaganda

But Deutsche Bank had the unmitigated gall to suggest that gold is not cheap.  They threw out non sequiturs like, ‘If we value gold in real terms, relative to income, relative to physical assets, and relative to the U.S. equity market, then on average gold prices should fall towards $905 per ounce.’  What absolute garbage.

The fact is that gold is now trading under what it costs the average company to dig it out of the ground.  And if you compare the last 3 1/2 years when the gold price has fallen from $1,900 to $1,225, in that period of time the amount of fiat currency that’s been created around the world is staggering.  So to say that gold is not cheap at these prices is simply preposterous.  It's also pure propaganda.

To sum it up, when you're Deutsche Bank and your next probable move is bankruptcy, you will say anything to stave off the inevitable.  So I just dismiss things that banks like this say.  It’s sickening that the public has to be exposed to this type of misinformation.”

Embry added:  “Right now there is a lot of noise concerning the oil market but I don’t anyone fully understands what is going on.  Any benefit that the consumer will experience is being more than offset by the volatility in derivatives in the oil patch.  It is also having an incredibly negative impact on the debt which has been issued in the sector in the last few years with oil at an elevated price.

This is adding even more vulnerability to a financial system that’s already stretched beyond any sustainable level.  So I am watching the action in the oil market with increasing trepidation because if they don’t reverse the price fairly quickly, we are about to see catastrophic problems manifest themselves in the banking sector and world financial system.”

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The audio interviews with Gerald Celente, Lord Christopher Monckton, Michael Pento, Bill Fleckenstein, David Stockman, Dr. Philippa Malmgren, Egon von Greyerz, Dr. Paul Craig Roberts, Stephen Leeb, Andrew Maguire, John Embry, Rick Rule,  Rick Santelli, John Mauldin and Marc Faber are available now. Other recent KWN interviews include Jim Grant and Felix Zulauf — to listen CLICK HERE.

Eric King