07/11/2012
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.”
John Embry continues:
“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.”
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