The Gold & Silver Takedown & A Major Geopolitical Eruption

With oil trading close breaching the critical $100 level, today John Embry told King World News, “The last thing the world needs at this point is a major geopolitical eruption with disastrous implications.”  Embry also spoke at length about the incredible events that are taking place in the gold and silver markets.  Below is what Embry had to say in this powerful interview.

Embry:  “We are in a bottoming process in gold and silver.  The intensity of the takedown in gold has been incredible.  This was the largest smash in gold since it became freely traded in 1971.  Gold plunged roughly 25% during the last quarter.

The only potential negative for gold was this ridiculous suggestion of ‘tapering.’  I don’t think there is any possibility of that taking place.  If it were going to happen the stock market would have collapsed.  So this was an orchestrated takedown specifically in the gold market, and it’s been a violent takedown which has gone far further than it should have….

“This has injured morale and even made some of the true believers wonder what is happening.  But this is how bottoms are made.  In the midst of all of this carnage, physical demand is incredibly strong and as a result you have more and more gold leaving the Western central bank vaults.

It’s also obvious that the commercials are in the process of getting long the gold market for the first time in over a decade.  I’ve always believed that when we saw the commercials move to the long side of the gold market that it would presage a major up-move.

So the gold market is in the process of moving into a remarkable position right now, and I expect an explosive move higher in coming months.  There is nothing positive taking place in the global economy, and now we have this mess flaring up in Egypt which has the price of oil trading near $100.  That’s the last thing an already weak global economy needs to see.


Two Gold Bulls Explain the Bottom Is Near, Heading to $7,000

Emotion is overshadowing fundamentals in gold right now and several factors point to a long-term bullish move in the metal, two gold bulls told “Squawk on the Street” Thursday.

“It all depends on Fed policy,” said James Rickards, managing director at Tangent Capital, who expects deflation fears to outweigh the Fed’s desire to taper. Right now, he said, the fact that real rates are above inflation is a bearish signal for gold, and expectations of continued policy tightening is also pushing down prices.

“The case for buying gold is that the Fed is going to back off,” he said. “They’re not going to taper later this year. They’ll actually going to increase asset purchases because deflation is winning the tug of war between deflation and inflation. Deflation is the Fed’s worst nightmare.”

“In the next two months, the Fed is going to make it clear that they will not taper,” he predicts. “That’s very bullish for gold.”

Aside from Fed policy, Rickards expects China to start buying gold at these low levels, up to perhaps 4,000 tons. “People will say ‘Why is China buying gold if it’s so worthless?’ ” he said.

Tom McClellan, editor of the McClellan Market Report newsletter, is also bullish on gold, comparing the technical level of the commodity to the 2009 bottom in the stock market.

“It’s the same emotional play that’s going on, people falling out of love with stocks back then, people falling out of love with gold now,” McClellan said. “We’re reaching the climax point equivalent for the March 2009 low for the stock market.”

“It’s a hugely bullish condition for gold and i’m expecting a really large rebound,” he said.

Rickards said that the destination for gold is $7,000 per ounce, although tightening of Fed policy could drive it down to $1,000 on the way there.

McClellan’s target is between $2,800 and $4,400, based on his own technical analysis, although he did not dismiss the $7,000 level. He said that we haven’t yet seen a “blow up moment” in the gold market yet.

“The moment that we see a major gold producer announcing that it’s curtailing production or it’s going out of business, that’ll be the moment that we mark the low in gold. I expect to have one of those announcements any minute.”


Global Chaos Signals World Currency System Will Be Recast

As the two-year cyclical bearish phase in the gold and silver markets is coming to an end, today John Embry told King World News increased global chaos now signals “the entire world currency system” will be recast. Embry also spoke with KWN about how Western propaganda is being used to paint a false picture about the harsh reality of what is really taking place around the world. Below is what Embry had to say in this powerful interview.

Embry: “What’s going on right now in gold and silver is preposterous. The gold price has been driven down roughly $600 from its peak in August of 2011. But if you really examine what’s unfolded in that ensuing period, there isn’t anything that would justify the gold price going down to any extent, let alone $600.

This has been a wonderfully orchestrated maneuver by the bullion banks, the Western governments, and their respective central banks. And it’s destroyed the psychology of most people that don’t understand the gold market extremely well….

“But what goes unremarked is that when gold was at its peak they used to talk about gold being in a bubble. That was ridiculous because if you looked at returns for capital that gold mining companies were getting, they were adequate at best. If you have a real bubble, the people that are benefitting from it will be making a fortune, but the gold companies most assuredly weren’t.

Now when you’ve got gold at $1,285 and everybody is bearish, the mining companies are being slaughtered. If this continues much longer some of them won’t exist. You see the write-downs that many large companies are taking in the billions of dollars, and Barrick laying off massive amounts of staff, it just illustrates this is clearly unsustainable.

So I think people should just relax and start buying because gold, silver and the quality mining shares are incredibly cheap.”

Embry also added: “The thing that is evident, and it’s been evident for a considerable period of time, is that QE has been non-stop virtually throughout the entire world. They keep coming out with this propaganda that they are going to be tapering it or cutting back, and yet they can’t.

You see more and more examples of this propaganda. Today we had the Chinese stock market in a state of collapse, so the Chinese had to come out and assure everybody they were going to provide enough liquidity to shore up their market.