With near panic in the gold and silver markets, today King World News interviewed John Embry, Chief Investment Strategist of the $10 billion strong Sprott Asset Management to get his take on where he sees gold, silver and the mining shares headed. When asked about the action in gold, Embry said, “It’s disappointing in the sense that it shouldn’t be happening. I can’t say that I’m totally surprised, you are in the quietest period of the year. These guys (manipulators) are sociopaths. They’ve basically taken the opportunity here to just take gold and silver to the cleaners in the paper market in an extraordinarily quiet period.”

John Embry continues:

“A good friend of mine who has been long the paper market, on and off for the last 40 years, just sold his last contract, which tells you they are driving the paper boys out of the market. I think it’s clear the economic decay will accelerate and as a result, given the debt overload in the system, the only way that it can be supported without a total collapse, is by massive amounts of quantitative easing.

“As I mentioned to you earlier, I listened to your interview with Jim Sinclair the other day and I thought he did a brilliant job of describing the situation as it is and I concur with everything he said.”

When asked about the mining shares specifically, Embry replied, “As long as they can keep the bullion prices under pressure, the shares are going to be under pressure. But they are all so inter-linked that when the bullion prices achieve the levels I think are in store for next year, the slingshot effect it’s going to have in these undervalued shares is going to be remarkable.

The key all along, as I’ve always said, is, ‘Do not have any margin in this sector because it’s open to this sort of activity (manipulation). If you don’t have any margin you are still angry because you’ve lost money on paper, but you are still intact. And if you have some extra cash lying around, what a phenomenal buying opportunity in both the bullion and the shares.

I see absolutely no problem with the HUI (Gold Bugs Index), which is (trading) just under 500, I’ve maintained 800 is an easy call and I suspect it will be a lot more than that if the gold price is homing in on $2,500.

It’s interesting, I’ve just been writing something internally here for our people. It really focuses the mind when you have to put this down for posterity. I was just going over it and when you do that exercise, the fundamentals are so compelling for gold and silver going forward. It amazes me the degree of human stupidity here, that people are parting company with the one thing that is going to save them in the future.”

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Eric King


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