“What really terrifies the central planners
is if gold and silver were to truly reflect what is really going on in
the financial system, interest rates would rise significantly. When this happens the debt load will be utterly unsustainable. That’s their greatest fear.
“There was a column yesterday in the New
York Times by Paul Krugman. It was astounding some of the assertions he
made in that piece. His title of the article was, ‘The Dwindling
Deficit.’ He goes on to say the deficit is far from the biggest problem
in the United States. He wrote, ‘The budget deficit isn’t our biggest
problem by a long-shot. Furthermore, it’s a problem that’s already to a
large degree solved.’
Now that is probably the
dumbest statement I have ever read. And Krugman never once mentions
interest rates. He just assumes growth is going to take care of
everything. Everyone that has any Austrian economic background realizes
the big problem here is there is infinitely too much debt, and creating more debt isn’t going to lead to any significant growth. So there is no way out of this problem.
When you’ve got a Nobel Prize
winning, New York Op-Ed professor making assertions like that, the
public hasn’t got a chance. I mean this guy has a reputation and
somebody would read that and think everything is all right, but it’s
preposterous. It’s just more propaganda and misinformation.”
Eric King: “King World
News has been reporting on silver shortages, John, and I’m wondering if
you could comment on that situation?”
Embry:
“I think what your guests have been saying is all true. One of the
things that I emphasized in my speech in Canada yesterday, Eric, was how
attractive silver is. I laid out a backdrop in my speech which
supported a huge move in precious metals, particularly silver.
I said, ‘The move in gold,
as much as I love gold, will be dwarfed by the move in silver. One of
the great things underwriting silver is the growing shortage as KWN has
been reporting. What people don’t seem to realize is the amount of
physical silver which has been consumed in the world in the last 40
years. There were massive above ground inventories, particularly in
China and the United States. It was a strategic stockpile in the
States. In China it was all left over because they used to use silver
to back their currency.
So the world chewed through
billions of ounces of silver. Now the inventories are way under one
billion ounces in the world, and almost all of that is in strong hands.
The world produces less than one billion ounces of silver each year
from mining and recycling, that’s less than $33 billion worth of
silver. It’s a rounding error. It’s 10 days worth of US budget
deficits.
When you realize the world
has chewed through all of the silver inventories, it’s obvious demand is
a lot bigger than the supply. The demand for silver, based on monetary
considerations, is continuing to accelerate, so silver is going to be a
huge home run.
I think the realization
that there is a shortage in silver will be what breaks the entire
precious metals complex sharply to the upside. The physical market will
takeover from the ridiculous paper markets.”
Embry also added:
“The reality here is we are in a situation of unprecedented global
money printing. I would like to add to that fabulous piece from Michael Pento yesterday.
I think what is going on in Japan is critical. For the longest time
the Japanese have sort of combated deflation, but they never went into
wild money creation.
This will put Japan’s bond
market under tremendous stress at some point. There isn’t any place in
the world where they are making any attempt to maintain the sanctity of
their paper money. This is the best argument for higher precious metals
prices because gold and silver are real money and the rest of this
stuff is rapidly turning into confetti.”
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