John Embry - Physical Gold Demand Crushing Manipulators

The precious metals are moving up again as investors realize that only unprecedented money creation will resolve Europe's bankruptcy, Sprott Asset Management's John Embry tells King World News today.

October 25, 2011
Eric King
King World News

With gold and silver exploding to the upside, today King World News interviewed John Embry, Chief Investment Strategist of the $10 billion strong Sprott Asset Management. KWN mentioned to Embry that we could potentially add 30% more bulls to gold and 35% more bulls to silver before this rally ends. When asked about the tremendous pessimism regarding gold and silver, Embry replied, “The sentiment in the gold and silver markets is terrible. This is a combination of two things. First you have had bad price action prior to today and second you have amazingly negative press in the mainstream media, which is typical.”

John Embry continues:

“As a result people are discouraged and the public is out of the market. This is the exact backdrop you want if you are looking for a major move. These corrective phases are fabulous buying opportunities. The cartel insists on creating these buying opportunities and the people that understand and need to own this stuff are buying.

So there has been a great correction in gold and silver for no apparent reason other than central planners are trying to create a false impression. So be it, we will just have bigger gains going forward than if we would have started the next move from higher levels.”

When asked what spurred today’s surge in gold and silver, Embry responded, “To me the catalyst today is the issue that there is no solution to the European problem. All of the optimism that’s been out there has been based on the thought there was a solution and that the solution was going to be imminent. There are now clearly cracks in that facade and once again people are viewing gold as the ultimate safe haven and they know they better get some of it.

I think the reason gold has been under such enormous pressure from the manipulators has been the fact that central planners know the only solution to the European problem is massive quantitive easing in the trillions...

“This will obviously be viewed as bullish for gold and they wanted to start the next move higher in gold from a lower level. Finally the gold price, after a rough period, is having a wonderful day.

The move in silver is big because there is an option expiry tomorrow and I would have thought they would have been able to keep silver under $32. This is just proof positive of the underlying power of the physical demand of these two metals.

Right now we are in the throws of something similar to the old ‘London Gold Pool’ getting overrun. I remember the London Gold Pool situation quite well, you have to be old to remember it but I do. I see absolutely no difference this time except conditions are infinitely worse this time around and there is less central bank gold available for the manipulation.

So to me if the seventies were fantastic as a result of the London Gold Pool being broken, this one is going to be way better.”

Embry also brought up the Rick Rule comments regarding takeovers in the mining sector. He stated, “My business partner, Rick Rule, he makes some very good points in the earlier interview he did with you, this idea of a dramatic increase in takeovers. Some of these juniors with real properties and real prospects have been extraordinarily battered in terms of their share price.

These larger companies, with $30, $40 billion market caps, having trouble replacing some of their reserves, they can snap up some of these guys, with potentially 3 or 4 million ounces in the ground, for peanuts. They can do this using their paper (shares) as currency, I just can’t believe it hasn’t started yet.”

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