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.”
On the heels of continued volatility in key global markets, the Godfather of newsletter writers, Richard Russell, discussed gold at length and also warned that the Federal Reserve has set America up for “disaster.” This is a fantastic piece where Russell notes the gold market may be ready to roar as physical gold is continuing to be drained from the COMEX.
Richard Russell: “Everybody knows that the US has an almost unsolvable problem with debt. Let’s call it a predicament, since there is no way of solving the debtproblem in an acceptable way (I mean in a politically acceptable way). Of course we could declare sovereign bankruptcy — or we could turn to hyperinflation and literally inflate our way out of the debt-trap. But neither would be acceptable or politically possible.
But before the predicted disaster, you can be certain that the coming trouble will be sensed and registered in the price of something. It will show in the price of stocks or gold or bonds or the dollar. In other words, it will show somewhere in price.
What about the bond market — isn’t the bond market now saying, “trouble ahead?” In my opinion, not yet. True, bonds have taken a beating in recent months, but I don’t call the decline in bonds, so far, a red-flag prediction of disaster … And the stock market continues to rise, probably based on the current ocean of liquidity.
How about gold? Ah, gold may be about to raise the red alarm-flag. But not quite yet. As a personal opinion, I believe gold has now put in a major bottom. Wait — what about price? Ah, there you’ve got me. Even if a bottom has been put in, we have not yet seen the “meat.” The price of gold has not yet started to boom. It’s one thing to say that you believe “the bottom is in,” but it’s another thing to see the item surge off its low.
Today one of the most respected institutional minds in the entire financial world told King World News that we are in the early stages of what will be a massive short squeeze in the gold market. John Hathaway, of Tocqueville Asset Management L.P., is one of the great original thinkers in the business, and his fund was awarded a coveted 5-star rating. Below is what Hathaway had to say about the developing massive short squeeze in gold.
Hathaway: “I think the story of the day is the disconnect between physical gold and paper. I just saw a note this morning about the most current drop in COMEX warehouse inventories. Brinks also reported this week that their inventories were down 55%….
“We also have what’s been happening with the gold lease rates. This is just another indication of how hard physical gold is to come by. Bernanke also basically made a U-turn on QE by essentially saying we are going to be in this easy money mode for a long, long time. He definitely backed away from ending QE in mid-2014.
I think the shorts had been ganging up on gold with the view that there would be some sort of exit, and now it’s nowhere in sight. So now some of the shorts are running for cover. But if I’m at the Fed, I am looking at a huge mess. We also know that Bernanke is on his way out.
I have a to-do list for the next chairman of the Fed. One would be to open a direct connection so the Treasury doesn’t have to issue bonds. The Fed just gives the Treasury money to fund whatever they need to fund. The other thing they may do is force tax-deferred retirement accounts to own 20% in a Treasury security that has an interest rate ceiling of say 2%. That’s how they are going to try to get out of QE, or the alternative is we are going to have incredible inflation.”