The Gold Report Interviews John Embry

excerpt:
TGR: Are we in a situation where, if we really implemented austerity measures, we could avoid debt default and/or inflation? Or are we just too far down the line?

JE: I think we're way too far down the line. If you were to go into a real austerity program in the United States by raising taxes, cutting spending and having interest rates that reflect the reality of the situation, you would go into a hard deflationary depression. I don't see an alternative. I've said many times that the middle ground has long since been lost. We've just had the greatest credit cycle in history, and as a result we're going to pay a huge, huge price for it.

TGR: But if the austerity program would throw us into a deflationary depression, then more quantitative easing would ultimately end in a deflationary depression.

JE: In the end you will end up with a new currency system. And those who invest in the right assets will come out intact at the other end. Those who invest in paper assets of any description will be wiped out.

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John Embry is chief investment strategist at Sprott Asset Management and Sprott Gold and Precious Minerals Fund. He also co-chairs the Central GoldTrust Board of Trustees. An industry expert in precious metals, John's industry experience as a portfolio management specialist spans more than 45 years; he has simultaneously researched the gold sector for 30-plus of those years. He joined Sprott in 2003, after 15 years as vice-president of equities at RBC Global Investment.