On the heels of Ben Bernanke signaling that the U.S. economy is weak and needs a highly accommodative Fed policy, today one of the top economists in the world said that despite the recent capping of gold at $1,300, gold is heading to new all-time highs. Michael Pento, founder of Pento Portfolio Strategies, wrote this piece for KWN.
Pento: “The prevailing mantra on Wall Street is that gold’s bull market is now over and it’s time to bury precious metals as an investment theme for the indefinite future. The rational for this is based on the belief that many investors held misguided fears during the credit crisis about a breakout of massive inflation and economic chaos, which drove gold to nearly $2,000 per ounce….
“Of course, (the perma-bulls on stocks claim) those worries have now completely failed to materialize and will never be a genuine risk in the future. This argument is patently false because it assumes that the final chapter has been written on the Great Recession and debt crisis that paralyzed the entire globe back in 2008.
The truth is the most pernicious effects of the devastating economic collapse that began five years ago have been merely held in abeyance due to record low interest rates and an aggressive expansion of central bank assets; which is being used to boost real estate values, equity prices and the economy.
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 silvermarkets 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 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….
“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.”
With continued uncertainty in the gold and silvermarkets, today a 58-year market veteran told King World News that silver will advance roughly 800% and gold is set to soar over $3,000 from current levels. Ron Rosen, who has been at this business for almost six decades, also spoke about the mining shares..
Eric King: “Ron, you’ve been doing this for 58 years, where are we right now as you see it in the gold and silver bull markets?”
Rosen: “We are on the verge of the biggest move in the history of the precious metals market, and it’s not far away from beginning. It’s going to be a monster move….
“What I don’t understand is why everybody doesn’t see it. There are so many analysts out there and if they just knew how to look at a monthly chart, and put it in a logarithmic form, they would see that gold and silver are going to explode.
This explosion higher in the price of gold and silver will just be Mother Nature at work, and there is nothing on the face of this Earth that can stop it — no individual, no central bank, no country, and no collection of countries.”
Eric King: “You went through the bull market of the 1970s. How do you think this market will compare to that one?”
Rosen: “It will outperform it to such an extent that it will almost be beyond belief. We are looking at a massive move in front of us that will top sometime in 2014. At that point there will be a correction. Then, a massive blowoff will take us probably into early 2016. People who have been tortured by this long corrective phase, they will be thrilled if they have the ability to hang on. They just need patience here.