Exclusive: John Embry - What To Expect In 2013

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.”

Source: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/11/5_Exclusive__John_Embry_-_What_To_Expect_In_2013.html

Izzy Friedman: What Now For the Price of Silver?

Izzy Friedman: What Now For the Price of Silver?

19/10/2012

This is an excerpt from Ted Butler’s latest commentary to his premium newsletter subscribers - www.butlerresearch.com

It has been quite some time since my good friend and silver mentor, Izzy Friedman, has written something about silver. Devastated by the loss of his wonderful wife of 56 years, Gabriella, Izzy withdrew from his daily silver market observation and our telephone conversations in order to restructure his life around family and travel and contemplation. We have started to talk more frequently and he agreed to write something.

For those who may not be familiar with Izzy, it was a personal challenge from him to me almost 30 years ago that started me on my own silver journey. Back in 1985, Izzy asked me how it was possible for a commodity that was being consumed in greater quantities than was being produced could fail to rise in price, as was dictated by the law of supply and demand. There was no doubt that silver had been in a consumption deficit for decades, depleting world inventories all along, yet the price went nowhere. I could not answer his question, but was determined to do so. It took me a year to discover that the price was artificially depressed by excessive and concentrated short selling on the COMEX.

Once you are enlightened by the flame of knowledge, it doesn’t extinguish itself easily. My discovery of the silver manipulation, for better or worse, has been with me ever since. I have always felt in debt to Izzy for enabling me to see the silver manipulation, even when that knowledge seemed more like a curse, back in the 1990’s. The best part about Izzy was always his sound common sense and as the best sounding board possible. Even though he was skeptical of the silver manipulation at first, in reality he’s more responsible for today’s general knowledge and thinking on silver than any other single person. To this day, I remain convinced that his article back in 2007 on US Silver Eagles was the catalyst behind the surge in sales that began shortly after his article and continues to this day. 

http://www.investmentrarities.com/ted_butler_comentary/12-03-07.html 

Sales of Silver Eagles quickly doubled and tripled after his article and have never looked back. I do hope in his return that he intends to stick around for a spell.

What Now For the Price of Silver?  by Israel Freidman

Many years ago, when the price of silver was $4 to $5, Mr. Ted Butler and I wrote many articles in which we predicted that silver would be a great investment for the long term. Now that prices are 7 to 8 times higher, we can say that we were right. More importantly, the reason we were so bullish on silver had to do with supply and demand and nothing to do with inflation or the value of the dollar. I still feel that way. The only thing that has changed is the price and not the reality of supply and demand. Silver demand still is on a course to overwhelm silver supply and when that occurs in any commodity, look for higher prices.

We must first consider the state of the world today and into the future. The world population has just hit the 7 billion person mark, up from 6 billion twelve years ago. The world adds 75 million new souls each year. In addition to the greater numbers of new potential consumers, there is also a move to increased standards of living in places like India and China. Overall improvements in longevity mean that we have more people living and consuming longer than ever before. At the same time, the raw materials necessary for everyone to live better are getting harder and more expensive to produce. Will we have enough raw materials to sustain the march towards higher living standards? I say yes, but at what cost? Those necessary raw materials will not come to us cheaply. Therefore, it would seem wise to set aside and hold those raw materials which are destined to climb sharply in price.

The best raw material to hold in my opinion is silver. That’s what I felt 30 years ago and is what I feel today. Silver one of the very few commodities that the average person is capable of holding in his own possession. In particular, the US Mint makes the most beautiful and popular coin in the world in the form of the US Silver Eagle. So popular is this coin that I am still convinced that someday the US Mint will not be able to keep up with demand and the premiums on these coins will explode when the US Mint stops producing them. The way the world is going it appears that all the trends point towards greater silver demand. It looks to me that everything in the future will run on electricity, of which silver is the best conductor. Throw in the tremendous appeal and growth of solar panels and it’s hard to foresee how silver won’t be a raw material superstar. Because it is so easy for the average person to hold and so cheap compared to gold, one of the biggest demands for silver will be from investors. These investors will compete long term with the silver users who must have silver as a raw material. This is a potential buying combination that is not present in any other commodity. That’s what makes silver so special.

Naturally, if silver looks set to move sharply higher in price over the long run, it is normal to try to guess when and how high? I didn’t know the timing 30 or 10 years ago and still don’t know today, so the easiest thing to do is not to focus on the timing. Just don’t fool yourself into thinking the high price of silver will come when you want it to, as that is not how things usually work in life. The best thing to do is to only buy and hold silver with spare money and not to borrow money to buy it. This way you don’t create unnecessary pressures to sell along the way. It’s easier not to worry about an investment when you don’t owe money on it. This is especially important because it is clear that there are some big shorts that do nothing but try to knock the price down. Try to be prepared for sharp sell offs and use them to add positions at times when the price is down.

How high can the price of silver climb? Based upon its importance as a raw material, I still believe that silver will pass the price of gold which is not needed as an industrial material. Besides, I still believe that silver is much rarer than gold in above ground inventories and even my grandchildren know that the rarer item should be more valuable. While Mr. Butler is not quite this bullish, I remind him that if the shorts he always talks about are forced to buy back in a physical shortage that will add a lift to silver prices almost beyond our comprehension. I also remind him that because there are no big government stockpiles in silver (as there are in gold), no government can come to the aid of the shorts when the moment of truth arrives and there is not enough silver to go around. Since the world has never seen a real silver shortage, it hard to pick a precise price to reflect something that has never happened.

What I can tell you from my experience is that the most insane prices occur when there is a shortage. From the beginning 35 years ago, I have always expected a silver shortage to occur. That was the main reasoning behind my attraction to silver. I think the big increase of 7 to 8 times in price was due to the market sensing that a big silver shortage is developing, but there have been no signs of a big silver shortage that is clear to everyone. When the big silver shortage comes and everyone can see it in widespread delivery delays and force majeure, only then should the price be measured. A price can sound crazy-high in conditions we are familiar with, but not high at all in a true shortage where the only other choice is to do without and send factory workers home. Maybe you and I won’t buy at the high prices in a shortage, but an industrial user doesn’t have much choice to buy if he needs silver, the raw material. My goal is to sell when the shortage is at fever pitch. That’s why I don’t look at inflation or the dollar – I’m more interested in considering the silver shortage.

As time has passed, I am happy to have written about silver and how it has gone up and rewarded so many. I think the future will look the same way. This is the first article I have written since my beloved wife passed away and this is for her memory.

Source: http://goldsilverworlds.com/gold-silver-experts/izzy-friedman-what-now-for-the-price-of-silver/

Ben’s gold touch

148% rise on QE

• By JOHN AIDAN BYRNE
• Last Updated: 12:38 PM, October 14, 2012
• Posted: 10:20 PM, October 13, 2012

Ben Bernanke’s move in early July to begin a third round of quantitative easing, or so-called QE3, has done little for economic growth, according to latest figures, but it has benefited gold, silver and oil trading by cheapening the dollar, analysts say.

“The dollar is selling off compared to gold because of the market’s belief that the recent round of QE3 is going to cause a weaker dollar with investors bidding up gold prices,” Mark Martiak, senior wealth strategist at New York-based Premier Financial Advisors, told The Post.

And it’s not just gold. Since the Fed chief announced the latest round, unleashing $40 billion a month to purchase mortgage bonds, the greenback has depreciated 10 percent against the euro.

 

Bloomberg

INGOTS: Metal of honor

Gold has risen 13 percent, and silver has soared 26 percent, while crude oil rose 9.5 percent.

And if you expand your time horizon out to when the Fed began its easing operation in November 2008, gold has risen 148 percent, or more than $1,000 an ounce, as the Fed has added over $1.9 trillion to its balance sheet.

“Essentially, gold is a hedge against central-bank fiscal policy and against inflation,” Martiak said. “The market always disciplines politicians.”

According to Martiak, “Gold is a noncorrelated asset class and an inflation hedge for investors. The International Monetary Fund’s growth forecast is for slower growth, so while there was a dip [in gold prices], it had more to do with some market sentiment overall and not because investors are lacking confidence in gold as an asset class.”

Martiak thinks the Fed’s latest actions could support gold. He said that by historical standards, gold has been the biggest beneficiary of low real interest rates.

Gold bugs are not complaining. They see a rising asset class that could fatten portfolios hammered by poor returns elsewhere. Bernie Petit, a financial planner with Beacon Financial, sees renewed interest among his clients for the precious metal.

But he’s not buying into it. “When people call me to buy gold, I try to dissuade them from buying,” said Petit. “Some people mistakenly feel as though it is a safe investment, it is secure, and it is only going to go up — and I believe all of those things are wrong.”