Gold and Silver • Embry – Gold To Spike As Physical Market Is Shockingly Tight
Embry – Gold To Spike As Physical Market Is Shockingly Tight
Today John Embry, who is Chief Investment Strategist of Sprott Asset Management, spoke with King World News about the shockingly tight physical gold market. He also discussed Europe, the United States, stocks and silver. Here is what he had to say: “The US stock market has been levitating over 13,000 for a bit, and I was struck by an article in the NY Times which featured Jack Bogle, who started Vanguard Funds. Jack said, ‘It’s urgent that people wake up because this is the worst time for investors that he’s ever seen, and he’s been in the business for more than 60 years.”
When you put what he said together with the fact that the VIX is at the lowest level since 2007, they contradict each other. But I would be inclined to go with Bogle. It’s my firm belief that the stock market is being supported by the PPT (Plunge Protection Team).
Right now I think the market is extraordinarily vulnerable to the realities of what’s going on in the world….
“Jack also pointed out you have to stick with your stocks because the alternatives are so bad in terms of the black swans. I totally agree with him on that.”
Embry had this to say regarding Europe: “Merkel is back from holiday and they are discussing whether Germany is going to back all of the necessary money for these Southern peripherals.
What’s fascinating is Italy’s debt load is moving to the front headlines because their debt is roughly $2 trillion. But what strikes me is the rapid acceleration that’s been going on in the Italian debt. In the last nine months, their debt has been growing at $10 billion per month. This is a dramatic acceleration in debt.
So people have been talking about Europe going through austerity, but in reality they are just having a debt orgy. People are still focused on Greece and Spain, but once they have gotten those two situations pacified for a short spell, they are going to have to turn right around and focus on the big problem that is Italy.
After that the focus will shift to France, so this thing is far from over. I agree with your friend Nigel Farage that the euro is going to be a major issue going forward. I can understand why the Europeans are so afraid, but the funny thing is everybody is short the euro.
So the short side of the euro is a very crowded trade, and when you have an overcrowded trade, the overcrowded side generally isn’t right. The question is, what would make that a bad bet? The only thing I can see is something going horribly wrong with the US dollar.”
Embry had this to say regarding gold and silver: “I think it’s clear there is a steady buyer in the market, but the price is being controlled in the paper market. The charts for both gold and silver are looking better and better with each passing day. It should look better because the fundamentals are spectacular.
It’s just a matter of time before gold and silver break out aggressively to the upside. The short-term price movements are being influenced by the paper pushers, but that has nothing to do with how these two metals will trade down the line.
I think there will be a major development somewhere in the world that will be construed as extremely negative. There will also be considerably more quantitative easing, even though it’s going on clandestinely every single day right now. But I think they are going to be forced to get it out in the open.
This additional QE will be extraordinarily positive for gold and silver because it’s extremely negative for currencies in general. I would be very surprised if we don’t see new highs in gold before the end of the year, which would mean well over $1,900.
Gold is so dramatically under-owned, that when it is finally seen as the best alternative, the amount of money that will pour into an already remarkably tight physical gold market, once this money gets unlocked, will cause the price of gold to literally soar. Once gold really gets moving, I think people will be amazed at how quickly and how far gold goes.”
Statistics: Posted by DIGGER DAN — Wed Aug 15, 2012 2:24 am
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