Because the two year cyclical bearish phase in the market of gold and silver coming to an end, John Embry says that the growing chaos in the world is a signal about the need to transform the world's monetary system. Embry also says that Western propaganda hides the harsh reality, falsely portraying what is happening in the world.
Embry: what is going on now with gold and silver, is absurd. The price of gold was crushed for about $600 after the peak in August 2011. But if you understand how that happened after this peak, there is no basis for any reduction in the price of gold, not to mention the decline of $600.
It was superbly planned maneuver of banks on operations with precious metals, Western governments and their respective Central banks. And it's devastating impact on the psychology of most people, not good understanding of the gold market...
But one thing I notice: when gold was at its peak, people were indoctrinated with the idea of the gold bubble. It's ridiculous, because if you look at the return on equity of gold mining companies, it was perfectly adequate. When there is truly a bubble, the people who profit from this and can make the condition, but this cannot be said about gold mining companies.
Now that gold is worth $1285 and the prevailing sentiment is bearish, gold miners killed. If this continues, most of them will cease to exist. Lower prices on the billions of dollars that make big companies and mass layoffs in the company Barrick said about the decline.
So I think people need to relax and start buying, because gold, silver and quality mining stocks are incredibly cheap.
For a long time already it is obvious that the quantitative stimulation occurred continuously all over the world. They constantly perform with their propaganda about the reduction or termination of the printing of money, but still can not make it happen.
Examples of such propaganda is becoming more. Today we watched the crisis on Chinese stock market, so the Chinese had to convince everyone that they will be able to provide the market with sufficient amounts of liquidity.
Refer to Japan. The Japanese experiment is a bad joke. Domestic debt is 250% of GDP, the population is aging and shrinking. They say that printing navigate your way out of a deflationary environment, but it's not working. This results in the complete destruction of their society.
As for Europe, I can see deep problems in Italy. This is not surprising as the problems are present throughout the European periphery, and they perform ritual dances to procrastinate and pretend that they will be able to come up with a solution. But again the reality is that there can be no solution.
In the United States, the center of the Western world, you can read a lot of propaganda that the situation is improving, but if you look at economic data, no significant improvements there. And if they didn't print $85 billion a month, the situation would have been much worse. So the idea of a gradual tapering of money creation in the near future makes no sense. If they reduce the volume of money creation, will begin debt deflation, and the 1930s will seem easy picnic.
Question: John, what do you think will be the starting point for changing the situation with precious metals?
Embry: I think right now two things happen. As you know, banks on operations with precious metals aware of the forthcoming like no other. They spent a short sale for most of the decade. They did it with a view to crush the gold price.
Now these banks know that the game is over and they are rapidly moving from the short deals with the metal to long. At the same time, the Chinese, Russians and others, accumulate physical gold, not going to wait for the imminent rise in gold if they can buy gold from the West for these bargain prices.
But when banks on operations with precious metals is right from their point of view position, and the Indians, the Chinese and Russians will understand that they can no longer get gold from the West at that price, then I think we will see a sharp increase in the price of gold.
Readers around the world need to understand: the world in crisis, the signs of which we saw recently, said about the need to transform the world's monetary system. And when that time comes, I think it will be a basket of currencies and the US dollar will lose its status as the world's reserve currency. The new system will be based on the firm's assets, one of which will certainly be gold, and gold price may be revised in this process overnight. The exact timing of all this is unknown, but it is inevitable. Therefore, no matter how upset people in the short-term price changes, this in no way should not distort their vision.
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