Embry - Massive Silver Short Positions To Force COMEX Default

In a recent interview, John Embry said the silver market will be a "force majeure" on the COMEX due to massive short positions held by JP Morgan. In regards to gold, Embry stated that he believes gold is seeing downward pressure due to the Fed telling the public the economy isn't in bad shape when it really is and banks are repositioning themselves for the explosion in price that he believes we will see soon.

Eric King
March 6, 2013
King World News

Today John Embry told King World News that in the silver market there will be a force majeure on the COMEX because of the massive short positions held by JP Morgan. But first, here is what Embry, who is chief investment strategist at Sprott Asset Management, had to say regarding gold: “I’ve been following the gold scene for 30 years, and I believe it’s been subject to a suppression scheme for probably the last 25 years. But I have never seen anything quite like what’s gone on lately.”

John Embry continues:

“The question I ask myself is, ‘What is going on?’ The very same factors that have driven the Dow to all-time highs, which is basically just excess liquidity in the system, should, in a real world, have driven gold and silver to record highs.

Instead they are both under enormous downside pressure in the paper markets, despite the fact that the physical markets remain very firm....

“Then the question I ask myself is, ‘What is bothering the powers that be to the extent that they would do this, and become so blatant that anybody with an IQ over (that of) a geranium can see what’s going on?”

Eric King: “John, what do you think that reason is?”

Embry: “I think there are one of two reasons really. The pat reason is that the system is in such tough shape, and they are trying to sell the public on the fact that it isn’t. Therefore, the canaries in the coal mine, gold and silver, which basically tip the public off that things are bad if they are rising, they have to be kept under control.

But I think there is another factor: I do believe the powers that be are clever enough to know what’s coming and that is going to be a massive explosion in the gold and silver prices before this is over. And probably sooner rather than later.

So the people that have been front and center in the suppression, the bullion banks, I think are trying to position themselves differently so they are not going to be terribly vulnerable when the price explodes. And it’s working. You see the amazing shift in the Commitment of Traders Report, where more and more of the speculators are going short, and the commercials are getting the opportunity to cover. So I think that might be a motivation too.”

When asked about silver specifically, Embry responded, “I think silver is one of the most mispriced assets in the history of mankind. The very fact that it’s $29, given all of the fundamentals surrounding it, and it’s down $5 or $6 in the last couple of months is ridiculous.

The physical offtake in silver is enormous. Inventories in the world are minimal. This is all being done with paper, and the main culprit is JP Morgan with their massive short position. I don’t know how that’s going to work out, but I honestly think there is a very strong probability of some sort of force majeure on the COMEX before this is over.”

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