After half a century in the financial world, John Embry told King World News that silver will head hundreds of dollars higher than current levels and gold will skyrocket thousands of dollars higher as well. Embry believes we are going to pay an enormous price for all of the manipulation that is occurring in the markets.
Eric King
June 3, 2013
King World News
It is appropriate that with the price of gold and silver soaring, today marks John Embry’s 50th year in the business. After half a century in the financial world, Embry told King World News that silver will head hundreds of dollars higher than current levels, and gold will rocket thousands of dollar higher as well. Below is what Embry had to say as he celebrates 50 years in the business.
Embry: “I am focused on what is going on in the gold and silver space, and I am fascinated by what is happening with the Commitment of Traders Report (COT). There has been a dramatic change since this takedown of gold started late last year in terms of the exposure of what they call the commercials or the bullion banks.
The commercials were massively short when the last round of QE was announced. Since that time they have reduced their short positions dramatically if you can believe the COT numbers. I’m not always sure you can believe them, but if you can, I think this is a precursor to the fact that the commercials know perfectly well where gold and silver are going, which is dramatically higher....
“As these metals take off to the upside, these commercials, after having been on the short side, may now well be long so they won’t be at risk to an upside explosion in the price.”
Eric King: “Today celebrates half a century in the business for you. What are your thoughts at this point in the bull market because you have seen a great deal of market action in the last half a century in this business?”
Embry: “Everything is so different from when I first started that it’s like I’m on a different planet. What’s happened with respect to high frequency trading, algorithms, just overall manipulation, these markets aren’t anything like they were 20, 30, 50 years ago, and I don’t think it’s for the better.
I firmly believe we are going to pay an enormous price for what’s going on now because I don’t think there is any price discovery going on in these markets. It’s all being manipulated to the extent that they are trying to create an impression with the public that everything is alright, and as you know, everything is anything but alright.
If you look at the Chinese numbers with a real jaundiced eye, they don’t make sense. One of the concerning things is that they have been pouring debt into the system, and when you get well into a credit cycle you are not getting the same bang for your buck. So it’s taking more and more debt creation in China to get a dollar of GDP growth. That’s a bad sign. And I don’t believe they are growing at 7% or 8%. Look at what’s going on in Australia and a lot of their key markets. They have weakened.
I think they feel obligated to keep reporting these positive economic numbers in order to keep their public at bay, but if they are growing at half of what they say they are I would be surprised. I think this is hugely important because there is no other engine of growth in the world.”
Embry also added: “What is consuming me right now is the day-to-day price action in the gold and silver markets. Regardless of what the news background is, at 3 o’clock in the morning (EST) you can always be assured that the price of gold and silver will be driven south.
For anybody to suggest that there isn’t interference in this market is patently false. There is every reason for interference by the cartel because if the gold and silver prices truly reflected what’s going on in world monetary policy, interest rates would rise dramatically. And one thing that this system can’t handle is interest rates going higher.
I think $1,400 in gold and $23 silver has been a line in the sand, and they’ve fought these two things areas tooth and nail. I don’t know how much longer it will go on. It may go on through the summer, which could turn out to be a slow period. But I’m focused on the fact that there is hundreds of dollars higher coming in the price of silver and thousands of dollars higher still to come in the gold price.
The bottom line is there is minimal on the downside at this point and the probability of the upside occurring is 98%. So this is the end game, and I’m glad I’m playing my hand and not theirs because I firmly believe that our hand is the winning hand.”
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