What To Expect In 2013

Today John Embry spoke exclusively with King World News about his thoughts on what the future holds in 2013, and the catalyst which is going to get the velocity of money to accelerate.  Here is what Embry, who is chief investment strategist at Sprott Asset Management, had to say about about what is taking place:  “I think we will see the first manifestations of the negative aspect (of money printing in 2013).  To date, money velocity has been falling because even though all of this high powered money is being stuffed into the market by these central banks, the banks and the public really can’t seem to get the lending mechanism working.”

“The banks are afraid, and the public is over-indebted.  But I think that will just make them push QE even harder, and at some point there will be a collective realization from all these people that are holding bonds and cash, etc., that ‘My God, the money is being destroyed.  Get me out.’  

That’s what will get the velocity to change direction, and then you will see mounting inflation very quickly....

“It (rampant inflation) is going to start at some point.”

Embry also added: “It appears there was a little collusion between the (Japanese) Minister of Finance and their central bank, talking about the need for more money printing. 

Normally the central bank is supposed to be an independent entity, but I think things are sufficiently bad over there that the two of them are getting together.  I think it’s inevitable  that you are going to see massive QE in Japan because they have reached the point with their debt and their aging population that there really isn’t much else they can do.”

Embry also spoke about what he is looking for in 2013:  “I think it could be one of the ugliest years on record.  But on the other hand, that could be the backdrop for, finally, a wonderful market for gold.

Gold has been, through the whole 12-year bull market which it has risen it’s posted a higher close, but it’s been a very contained move because of all of the interference in the market.  There will come a time when the problems are sufficiently great that they cannot be contained.

That will be the year that gold will rise dramatically more than it ever has.  Gold has never been up more than 35% year-over-year in this 12-year bull market, and yet in that time gold has risen almost six-fold.  So I think we still have a big, big, parabolic move coming, and maybe it’s going to be as soon as 2013.”