The Price Of Silver Is Set To Soar As Inventories Collapse
With continued volatility in global markets and oil still trading near the $106 level, today John Embry told King World News the price of silver is set to soar as inventories continue to collapse. Embry also spoke at length about the gold market. Below is what Embry had to say in this powerful interview.
I guess
price action is the thing that drives them crazy because people then
start to doubt the fundamentals. But what I see now is very
promising....
With continued volatility in global markets and oil still trading near the $106 level, today John Embry told King World News the price of silver is set to soar as inventories continue to collapse. Embry also spoke at length about the gold market. Below is what Embry had to say in this powerful interview.
Embry: “I
am becoming far more comfortable with the gold and silver markets after
what can only be construed as an extraordinarily ugly few months.
These violent takedowns in the paper market, which bore no relation to
what was going on fundamentally, have discouraged so many people.
“I see falling gold
inventories almost everywhere. We have seen how much gold has come out
of the ETFs, and how much the COMEX inventories have shrunk. And the
gold that JP Morgan holds for its customers in its own accounts has also
dwindled. All of this is a precursor to a much higher move in the gold
price.
At the
same time I am getting extremely excited about silver. Eric Sprott’s
revelation about all of the silver going into India because of the
difficulty in that country obtaining gold due to official impediments, I
think it’s a classic case of unintended consequences on the part of the
Indians. The last thing the silver market needs is a huge new demand
source in terms of trying to keep the price under control.
I am
also seeing that JP Morgan is feverishly trying to acquire as much
physical silver at the same time they are reducing their paper short
position. So I don’t think we have much longer to wait for a real
explosion in silver prices. And if I’m right on both gold and silver,
this will be seen as the single finest buying opportunity in the entire
bull market which is now in its 13th year.”
Embry also added: “On
the flip side of that, I look at what’s happening in the U.S. stock
market, and that market is rising on terrible volume, while true market
fundamentals continue to deteriorate underneath it. To me this is a
very dangerous bubble that is forming.
At some
point there will be a violent correction and I think it will be
resisted by the powers that be because the Dow Jones is considered one
of the underpinnings of the confidence of the public in the United
States. If the stock market begins to confirm the problems that exist
in the United States I think they will have a huge problem with the
consumer psychology.
I am
also really fascinated by the fact that anyone gives Ben Bernanke any
credence today. My attitude is that what he says is becoming
increasingly irrelevant, but what he does is the important issue. As
far as I can see, what he does is just keep printing money and buying
debt instruments, and I suspect this will remain the order of the day,
and it will probably accelerate in the future because the alternative is
too much for him to contemplate.
The
alternative is much higher interest rates and the financial and economic
chaos that will result from it. So I don’t see any real change in
course because I don’t think they can do it without a seriously adverse
outcome.”
Embry also discussed trouble in China: “The
other thing I’ve been looking at is this whole Chinese situation. With
great furor they reported 7.5% growth in the most recent quarter. But I
just look at their situation and I see a massive housing bubble which
may be the largest in world history when you compare the prices to the
underlying incomes.
I also
see excessive debt everywhere in the Chinese financial system. There is
also the problem of vast overcapacity with regards to manufacturing, as
a result of weakening exports, and to me I just don’t think that’s a
healthy situation.