Peter and Paul
As the headline of the following article indicates, U.S. Postal Service to Stop Paying Into Worker Pension Fund, the Postal Service is seeking to stop payments into the Worker Pension Fund. But buried further down in the article is this interesting statement:
"The service wants the authority to reduce pre-payment of health benefits for retirees and has said it will not be able to make a $5.5 billion payment due Sept. 30 for health benefits for future retirees."
What is the above telling us? The Postal Service has to contribute to two funds: the pension fund and the health care fund. Since it doesn't have the money to continue to fully fund the pension fund, it wants to stop contributing to the health care fund. This is the classic government "robbing from Peter to pay Paul" that has been going on for years.
Word to the wise: If you are planning on Social Security, Federal pension or any other type of government retirement plan to feed you when you retire, you are living in a dream world. You better start investing or find a job that you can do till you die.
I hear Wal-Mart is hiring greeters. (Or, you could just buy some gold.)
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Close Call For US Banks
Surprise!
The following excerpt is quite amusing in that the Fed admits the economy is slowing and doesn't know why. Surprise!
But, let's think through this thing one step further. If they are willing to publicly concede that the economy is in the tank, then how bad must things REALLY be? Obviously, if there were ANY hope for a recovery soon, they would not be admitting what those who have been paying attention already knows...... that it is going to get a lot worse before it gets better. Personally, I view the following article as simply an attempt by the powers-that-be to let the public down slowly to the realization that we are in the crapper. That being said, what do you think this will do to the price of gold as more and more Americans begin to convert their savings and investments away from economy related investments and into gold?
Federal Reserve admits US economy is struggling
The Federal Reserve has again cut its growth forecasts for the US economy and admitted that "longer-lasting" factors may help explain the current slowing in the recovery.
The latest evidence from manufacturing, the housing market and the consumer – still the engine of the economy – all suggest the deterioration that started in the first quarter of this year has extended into the second.
"Part of the slowdown is temporary, part of it may be longer lasting," said Fed chairman Ben Bernanke. "We don't have a precise reading on why this slower pace of growth is persisting."
The following excerpt is quite amusing in that the Fed admits the economy is slowing and doesn't know why. Surprise!
But, let's think through this thing one step further. If they are willing to publicly concede that the economy is in the tank, then how bad must things REALLY be? Obviously, if there were ANY hope for a recovery soon, they would not be admitting what those who have been paying attention already knows...... that it is going to get a lot worse before it gets better. Personally, I view the following article as simply an attempt by the powers-that-be to let the public down slowly to the realization that we are in the crapper. That being said, what do you think this will do to the price of gold as more and more Americans begin to convert their savings and investments away from economy related investments and into gold?
Federal Reserve admits US economy is struggling
The Federal Reserve has again cut its growth forecasts for the US economy and admitted that "longer-lasting" factors may help explain the current slowing in the recovery.
The latest evidence from manufacturing, the housing market and the consumer – still the engine of the economy – all suggest the deterioration that started in the first quarter of this year has extended into the second.
"Part of the slowdown is temporary, part of it may be longer lasting," said Fed chairman Ben Bernanke. "We don't have a precise reading on why this slower pace of growth is persisting."
An "Old-Fashioned" Investment
Hopefully, Americans are paying attention to the Greeks as they run for gold as the future of their paper money looks dim. This scene is guaranteed to replay itself in the US at some point in the future. In the meantime, slumbering Americans are missing the opportunity to purchase gold at the lowest prices they will ever see in their lifetimes as gold is just too "old-fashioned" from most "knowledgeable" US investors. LOL!
Greek savers rush for gold
By Kerin Hope
Financial Times, London
Tuesday, June 21, 2011
http://www.ft.com/intl/cms/s/0/c986823e-9bf8-11e0-bef9-00144feabdc0.html
ATHENS -- Greek citizens are emptying savings accounts and buying gold as they brace themselves for the possibility of a sovereign default and a run on the banks.
Pledges by socialist prime minister George Papandreou that his government would "save the country" have been widely discounted by the public. However, parliament gave him a vote of confidence late on Tuesday night. The socialists have a six-seat majority in the 300-member house.
Sales of gold coins have soared as savers seek a safer and fungible source of value.
"When the global financial crisis started, our sales of coins to investors overtook bullion for the first time," said Harry Krinakis, at Sepheriades, a Greek precious metals trader. "Now the sales ratio has reached five to one."
Tomas, a computer technician, has exchanged his euro savings for gold coins: "I keep them at home just like my grandmother did in the Second World War."
Monthly bank withdrawals were running at E1.5 billion-E2 billion in the first quarter. Last year, depositors withdrew E30 billion, equivalent to 12.3 per cent of total savings, according to the central bank. Greek deposits worth an estimated E8 billion were transferred to banks in Cyprus in 2010. But the flow has dried up this year amid fears that Cypriot banks could suffer contagion.
Andreas, a supermarket manager, transferred the family savings to Munich earlier this year. "The Swiss banks aren't interested unless you’ve got several hundred thousand euros," he said.
"We can't trust the politicians to get us out of this mess [and] have to protect our families," said Sakis, a garage owner, at an anti-austerity protest in Athens' Syntagma Square. "A bank collapse has got to be in the cards." He added he had withdrawn his savings and placed them in a bank safe deposit box "for security. Who cares about interest right now?"
Others put their savings into land when prices fell after Greece's first European Union-led rescue last year. Angelos, a software specialist, bought a neighbour's olive grove. "I grabbed the opportunity," he said. "A year ago I wouldn't have considered making such an old-fashioned investment."
Hopefully, Americans are paying attention to the Greeks as they run for gold as the future of their paper money looks dim. This scene is guaranteed to replay itself in the US at some point in the future. In the meantime, slumbering Americans are missing the opportunity to purchase gold at the lowest prices they will ever see in their lifetimes as gold is just too "old-fashioned" from most "knowledgeable" US investors. LOL!
Greek savers rush for gold
By Kerin Hope
Financial Times, London
Tuesday, June 21, 2011
http://www.ft.com/intl/cms/s/0/c986823e-9bf8-11e0-bef9-00144feabdc0.html
ATHENS -- Greek citizens are emptying savings accounts and buying gold as they brace themselves for the possibility of a sovereign default and a run on the banks.
Pledges by socialist prime minister George Papandreou that his government would "save the country" have been widely discounted by the public. However, parliament gave him a vote of confidence late on Tuesday night. The socialists have a six-seat majority in the 300-member house.
Sales of gold coins have soared as savers seek a safer and fungible source of value.
"When the global financial crisis started, our sales of coins to investors overtook bullion for the first time," said Harry Krinakis, at Sepheriades, a Greek precious metals trader. "Now the sales ratio has reached five to one."
Tomas, a computer technician, has exchanged his euro savings for gold coins: "I keep them at home just like my grandmother did in the Second World War."
Monthly bank withdrawals were running at E1.5 billion-E2 billion in the first quarter. Last year, depositors withdrew E30 billion, equivalent to 12.3 per cent of total savings, according to the central bank. Greek deposits worth an estimated E8 billion were transferred to banks in Cyprus in 2010. But the flow has dried up this year amid fears that Cypriot banks could suffer contagion.
Andreas, a supermarket manager, transferred the family savings to Munich earlier this year. "The Swiss banks aren't interested unless you’ve got several hundred thousand euros," he said.
"We can't trust the politicians to get us out of this mess [and] have to protect our families," said Sakis, a garage owner, at an anti-austerity protest in Athens' Syntagma Square. "A bank collapse has got to be in the cards." He added he had withdrawn his savings and placed them in a bank safe deposit box "for security. Who cares about interest right now?"
Others put their savings into land when prices fell after Greece's first European Union-led rescue last year. Angelos, a software specialist, bought a neighbour's olive grove. "I grabbed the opportunity," he said. "A year ago I wouldn't have considered making such an old-fashioned investment."
Richard Russell - Chinese Billionaires Buying Gold & Diamonds
With gold remaining strong and silver well off of its lows, the Godfather of newsletter writers Richard Russell had this to say in his latest commentary, “You've got a position in gold. How will it play out in the future, six months from now, a year from now, five years from now? A few things thing you know for certain. Gold will not go bankrupt. Gold will always have a market. All fiat money becomes worthless over time.
Gold is real tangible money, and it will be around when the last issue of fiat money is struggling to survive. Gold has a five thousand year history of representing wealth. No fiat money has ever lasted as long as a hundred years.”
Russell continues:
“So in managing risk, there is not a lot of risk to manage when you own gold. Or let me put it this way -- as far as money is concerned, the nearest thing to riskless money is gold.
Incidentally, in Sunday's New York Times there is an article about Graff, the diamond king. Graff is turning to China to sell his multi-million dollar diamonds. In China billionaires are multiplying in faster quantities than is occurring in the US or anywhere else.
All the major diamond dealers and upscale merchandisers are opening stores in China The Chinese love to flaunt it. Wealthy Chinese know the value of tangible items that are priced in the vicinity of hundreds of millions of dollars and that are portable. Damn clever, these Chinese.
(Stock market) I've posted a second chart of the Transports so that I can show the slow stochastic at the bottom of the chart. ...The slow stochastics have been very oversold and below 20. But they are now moving up, and this is a bullish development.
Thus, all around it seems that the Transports are not prepared to bearishly confirm the Industrials. I take this as a bullish omen, a situation that I place above all the advice and predictions of the "wise men" of the nation.”
With gold remaining strong and silver well off of its lows, the Godfather of newsletter writers Richard Russell had this to say in his latest commentary, “You've got a position in gold. How will it play out in the future, six months from now, a year from now, five years from now? A few things thing you know for certain. Gold will not go bankrupt. Gold will always have a market. All fiat money becomes worthless over time.
Gold is real tangible money, and it will be around when the last issue of fiat money is struggling to survive. Gold has a five thousand year history of representing wealth. No fiat money has ever lasted as long as a hundred years.”
Russell continues:
“So in managing risk, there is not a lot of risk to manage when you own gold. Or let me put it this way -- as far as money is concerned, the nearest thing to riskless money is gold.
Incidentally, in Sunday's New York Times there is an article about Graff, the diamond king. Graff is turning to China to sell his multi-million dollar diamonds. In China billionaires are multiplying in faster quantities than is occurring in the US or anywhere else.
All the major diamond dealers and upscale merchandisers are opening stores in China The Chinese love to flaunt it. Wealthy Chinese know the value of tangible items that are priced in the vicinity of hundreds of millions of dollars and that are portable. Damn clever, these Chinese.
(Stock market) I've posted a second chart of the Transports so that I can show the slow stochastic at the bottom of the chart. ...The slow stochastics have been very oversold and below 20. But they are now moving up, and this is a bullish development.
Thus, all around it seems that the Transports are not prepared to bearishly confirm the Industrials. I take this as a bullish omen, a situation that I place above all the advice and predictions of the "wise men" of the nation.”
Its Weight in Gold: The Real Prices of Things
By Charles Vollum, Casey Research
Fiat currencies the world over are being manipulated by central banks, which is distorting asset and commodity prices. Successful investing requires that investors have a good idea of what things cost and what they are really worth – and using the world's oldest and most stable form of money, gold, to compare prices is one way to get that insight.
To that end, below is a sampling of current prices measured in grams or milligrams of gold. Price comparisons are against prices as of June 10.
The month of May was rough for all the currencies, with the EUR and JPY making new all-time lows on the 24th and 25th, respectively, while the USD made a new all-time low on June 6th. Since then, they have all been struggling to regain the lost ground. Last week, the much-beleaguered euro made the most headway, followed by the JPY. All of the currencies are down significantly from their year-ago levels, but the USD has fared much worse than the others, down 20%.
U.S. Treasuries have been a terrible investment for at least the last eight years. Since 2002, shares of the ETF SHY have lost 76% of their value, despite an apparent increase of 29% when measured using dollars. The long bond ETF TLT is just as bad, down 70% since 2002, despite a smoke-and-mirrors “gain” of 66% when measured in dollars. While Treasuries ticked up about 1%, following the lead of the USD, they remain down about 19% from a year ago.
Major stock indices have been falling for the last ten years. The Dow, for instance, hit its all-time high around 1,400 gold grams in 1999. It has since lost over 80% of its value. For the last two years, major indices have been pretty flat after bouncing off their March 2009 lows. As with bonds, nominal prices have risen as currency values have fallen, leaving investors with lost purchasing power and huge tax liabilities.
Don't be fooled by bogus government currency shenanigans! Keep track of your investments' true values, using gold.
By Charles Vollum, Casey Research
Fiat currencies the world over are being manipulated by central banks, which is distorting asset and commodity prices. Successful investing requires that investors have a good idea of what things cost and what they are really worth – and using the world's oldest and most stable form of money, gold, to compare prices is one way to get that insight.
To that end, below is a sampling of current prices measured in grams or milligrams of gold. Price comparisons are against prices as of June 10.
The month of May was rough for all the currencies, with the EUR and JPY making new all-time lows on the 24th and 25th, respectively, while the USD made a new all-time low on June 6th. Since then, they have all been struggling to regain the lost ground. Last week, the much-beleaguered euro made the most headway, followed by the JPY. All of the currencies are down significantly from their year-ago levels, but the USD has fared much worse than the others, down 20%.
U.S. Treasuries have been a terrible investment for at least the last eight years. Since 2002, shares of the ETF SHY have lost 76% of their value, despite an apparent increase of 29% when measured using dollars. The long bond ETF TLT is just as bad, down 70% since 2002, despite a smoke-and-mirrors “gain” of 66% when measured in dollars. While Treasuries ticked up about 1%, following the lead of the USD, they remain down about 19% from a year ago.
Major stock indices have been falling for the last ten years. The Dow, for instance, hit its all-time high around 1,400 gold grams in 1999. It has since lost over 80% of its value. For the last two years, major indices have been pretty flat after bouncing off their March 2009 lows. As with bonds, nominal prices have risen as currency values have fallen, leaving investors with lost purchasing power and huge tax liabilities.
Don't be fooled by bogus government currency shenanigans! Keep track of your investments' true values, using gold.
Bad News For The Fed and IRS
The following article is from Robert Kiyosaki, author of Conspiracy of the Rich: The 8 New Rules of Money
Online Exclusive Update - #88
June 2, 2011
Online Exclusive Update #88 - Bad News For The Fed and IRS
This month, Utah became the first state in the country to legalize gold and silver coins as currency.
So what does this mean to you, me, the Fed, IRS, and the world? To understand the significance of Utah’s actions, you need to understand the definition of the word “currency.”
As strange as it may seem, governments determine what they think money is. For most of us, money or currency is the paper in our wallets. It only has value because governments have the power to declare paper to be money.
In 1933, President Franklin Roosevelt made owning gold illegal. The president declared that money now was paper. The key to this scheme working, is the government only accepts its own “paper” as money. You cannot pay your taxes with gold or silver…only official government paper.
To make sure we only used “paper” the government imposed a very high capital gains tax of 28% on gold and silver. That means, if you bought gold or silver for let’s say $10 and it increased in value by $10, the government would tax you $2.80 for your gains, even if you held the gold or silver for several years.
A 28% tax is nearly 100% higher than long-term capital gains tax of 15% in the US. For example, if I bought a stock for $10, held it for a year, and sold it for $20, my tax would be $1.50 on my gains.
The reason Utah’s actions are significant is because Utah is taking on the Federal Reserve Bank, IRS, and Washington, D.C.
The Utah state government is bypassing the Fed and the Treasury by accepting gold and silver as money, for example, allowing taxpayers to pay their taxes in gold and silver.
Let me explain further. Let’s say I bought gold in the year 2000 for $300 an ounce. In 2011, with gold at $1500 an ounce, if gold is now treated as money instead of being treated as an investment, I do not have to pay that 28% capital gains tax to the US Treasury.
In this example, of $300 per ounce to $1500 per ounce, a gain of $1200, I do not need to pay 28% of $1200, or $336 per ounce, in taxes to the US Treasury. On 1000 ounces, using the same buy and sell numbers, that is a savings of $336,000 in taxes, or $336,000 staying in my pocket for me to use. Thank you Utah. Tom Wheelwright adds that the change by Utah does not mean that gold will now be treated as money by the Federal government. It should mean that Utah will not tax it when used as money. It will be years before the courts decide whether this change means a change in how gold and silver are taxed.
Not only does this challenge the Fed, IRS, and the US government, it makes gold and silver more valuable. Using gold and silver as money, rather than a taxable investment like stocks, bonds, and real estate, makes gold and silver more desirable, at least in Utah.
One reason there is such a high tax, 28% on gold and silver is simply because the Fed and the tax department do not want us to hold gold and silver. By holding gold and silver, we pull their phony dollars out circulation and mock their corrupt system of counterfeit money.
Utah is truly a story of David taking on Goliath. Minnesota followed Utah later this month, taking a step closer to make gold and silver legal money. North Carolina, Idaho, and at least nine other states have similar bills being drafted. A Republican lawmaker has introduced a bill in Congress to explore the option for the entire US.
If the 28% tax on gold and silver is repealed, you may see a massive rush to own more gold and silver. Repealing the 28% tax is like a 28% increase in value. More importantly, it means 28% more money for those who have been following COR.
In many ways, history is only repeating itself. After all, gold and silver, especially silver, has been real money for thousands of years.
The following article is from Robert Kiyosaki, author of Conspiracy of the Rich: The 8 New Rules of Money
Online Exclusive Update - #88
June 2, 2011
Online Exclusive Update #88 - Bad News For The Fed and IRS
This month, Utah became the first state in the country to legalize gold and silver coins as currency.
So what does this mean to you, me, the Fed, IRS, and the world? To understand the significance of Utah’s actions, you need to understand the definition of the word “currency.”
As strange as it may seem, governments determine what they think money is. For most of us, money or currency is the paper in our wallets. It only has value because governments have the power to declare paper to be money.
In 1933, President Franklin Roosevelt made owning gold illegal. The president declared that money now was paper. The key to this scheme working, is the government only accepts its own “paper” as money. You cannot pay your taxes with gold or silver…only official government paper.
To make sure we only used “paper” the government imposed a very high capital gains tax of 28% on gold and silver. That means, if you bought gold or silver for let’s say $10 and it increased in value by $10, the government would tax you $2.80 for your gains, even if you held the gold or silver for several years.
A 28% tax is nearly 100% higher than long-term capital gains tax of 15% in the US. For example, if I bought a stock for $10, held it for a year, and sold it for $20, my tax would be $1.50 on my gains.
The reason Utah’s actions are significant is because Utah is taking on the Federal Reserve Bank, IRS, and Washington, D.C.
The Utah state government is bypassing the Fed and the Treasury by accepting gold and silver as money, for example, allowing taxpayers to pay their taxes in gold and silver.
Let me explain further. Let’s say I bought gold in the year 2000 for $300 an ounce. In 2011, with gold at $1500 an ounce, if gold is now treated as money instead of being treated as an investment, I do not have to pay that 28% capital gains tax to the US Treasury.
In this example, of $300 per ounce to $1500 per ounce, a gain of $1200, I do not need to pay 28% of $1200, or $336 per ounce, in taxes to the US Treasury. On 1000 ounces, using the same buy and sell numbers, that is a savings of $336,000 in taxes, or $336,000 staying in my pocket for me to use. Thank you Utah. Tom Wheelwright adds that the change by Utah does not mean that gold will now be treated as money by the Federal government. It should mean that Utah will not tax it when used as money. It will be years before the courts decide whether this change means a change in how gold and silver are taxed.
Not only does this challenge the Fed, IRS, and the US government, it makes gold and silver more valuable. Using gold and silver as money, rather than a taxable investment like stocks, bonds, and real estate, makes gold and silver more desirable, at least in Utah.
One reason there is such a high tax, 28% on gold and silver is simply because the Fed and the tax department do not want us to hold gold and silver. By holding gold and silver, we pull their phony dollars out circulation and mock their corrupt system of counterfeit money.
Utah is truly a story of David taking on Goliath. Minnesota followed Utah later this month, taking a step closer to make gold and silver legal money. North Carolina, Idaho, and at least nine other states have similar bills being drafted. A Republican lawmaker has introduced a bill in Congress to explore the option for the entire US.
If the 28% tax on gold and silver is repealed, you may see a massive rush to own more gold and silver. Repealing the 28% tax is like a 28% increase in value. More importantly, it means 28% more money for those who have been following COR.
In many ways, history is only repeating itself. After all, gold and silver, especially silver, has been real money for thousands of years.
Gold Bubble Still Years Away
The following is an excerpt from Investment Legends: “Dollar Collapse Inevitable”
Dr. Krassimir Petrov is an Austrian economist and holds a Ph.D. in economics from Ohio State University. He was assistant professor in economics at the American University in Bulgaria, then an associate professor in finance at Prince Sultan University in Riyadh, Saudi Arabia. He is currently an associate professor at Ahlia University in Manama, Bahrain. He’s been a contributing editor for Agora Financial and Casey Research.
BIG GOLD: Gold has risen 10 years in a row, so some are calling it a bubble, yet it's roughly $1,000 below its inflation-adjusted high. What's your outlook for the metal in 2011?
Krassimir Petrov: Gold still has outstanding fundamentals. I believe that over the course of 2010, the fundamentals have strengthened significantly: (1) "No Exit [Strategy] for Ben" as he unleashed QE2, and will likely unleash QE3, QE4, etc., (2) no more central bank selling of gold, (3) more central banks become buyers of gold, and (4) trial balloons for a global gold-backed currency.
I have no idea how people could even claim that gold is in a bubble – barely 1 out of 100 people have any idea about investing in gold. During the real estate bubble, every second person was involved in it. Maria "Money Honey" Bartiromo has yet to report from the COMEX gold pits; gold fund managers and analysts have yet to obtain rock-star status; and glamorous models are not yet dating the gold guys. Who is the Henry Blodget [co-host of Tech Ticker] of the gold sector, do we have one yet?
Yes, gold will eventually become a bubble, but that feels 5-8 years away.
The following is an excerpt from Investment Legends: “Dollar Collapse Inevitable”
Dr. Krassimir Petrov is an Austrian economist and holds a Ph.D. in economics from Ohio State University. He was assistant professor in economics at the American University in Bulgaria, then an associate professor in finance at Prince Sultan University in Riyadh, Saudi Arabia. He is currently an associate professor at Ahlia University in Manama, Bahrain. He’s been a contributing editor for Agora Financial and Casey Research.
BIG GOLD: Gold has risen 10 years in a row, so some are calling it a bubble, yet it's roughly $1,000 below its inflation-adjusted high. What's your outlook for the metal in 2011?
Krassimir Petrov: Gold still has outstanding fundamentals. I believe that over the course of 2010, the fundamentals have strengthened significantly: (1) "No Exit [Strategy] for Ben" as he unleashed QE2, and will likely unleash QE3, QE4, etc., (2) no more central bank selling of gold, (3) more central banks become buyers of gold, and (4) trial balloons for a global gold-backed currency.
I have no idea how people could even claim that gold is in a bubble – barely 1 out of 100 people have any idea about investing in gold. During the real estate bubble, every second person was involved in it. Maria "Money Honey" Bartiromo has yet to report from the COMEX gold pits; gold fund managers and analysts have yet to obtain rock-star status; and glamorous models are not yet dating the gold guys. Who is the Henry Blodget [co-host of Tech Ticker] of the gold sector, do we have one yet?
Yes, gold will eventually become a bubble, but that feels 5-8 years away.
Buying the Dips
Gold, meanwhile, is showing an increasing aversion to going down in US Dollar terms. Every time it "trespasses" below the $US 1500 level, it bounces straight back up again. And every time Gold does temporarily slide, the demand for the physical metal - as distinct for the paper claims on sale in the futures markets - grows apace. Over the first two weeks of May, the US Mint sold 85,000 ounces of American Eagle Gold coins. The last time volume reached that level, the $US Gold price rose 21 percent in the ensuing year. Physical demand in China and in India is surging. South African sales have reached their highest level in almost a year. The list goes on. -
Bill Buckler, Gold This Week...21 May 2011
Gold, meanwhile, is showing an increasing aversion to going down in US Dollar terms. Every time it "trespasses" below the $US 1500 level, it bounces straight back up again. And every time Gold does temporarily slide, the demand for the physical metal - as distinct for the paper claims on sale in the futures markets - grows apace. Over the first two weeks of May, the US Mint sold 85,000 ounces of American Eagle Gold coins. The last time volume reached that level, the $US Gold price rose 21 percent in the ensuing year. Physical demand in China and in India is surging. South African sales have reached their highest level in almost a year. The list goes on. -
Bill Buckler, Gold This Week...21 May 2011
Embry - Silver Market Extraordinarily Tight, Look for $125
With gold and silver on the rebound, today King World News interviewed John Embry, Chief Investment Strategist of the now $9 billion strong Sprott Asset Management. When asked about gold breaking out in Euros and the Pound Embry stated, “I think it’s very significant. I mean the fact that they held it (gold) in Euros there for weeks, but now I think the problems in Europe, in the periphery are becoming so apparent and the anger is starting to really rise to the surface, they are basically spurring buying in these countries.”
Embry continues:
“People are feeling more comfortable protecting themselves with things like gold. I think it is significant that it (gold) has broken out here in Euros and in the English Pound and I think it will break out to new highs against the US dollar before this move is over.”
When asked about the action in silver specifically Embry remarked, “Let’s face it, silver needed a correction because it had gone up in almost a straight line and people were talking about parabolas and what have you. But the correction was amplified by the CFTC allowing or sponsoring five margin hikes in eight days. Every time the price was getting pounded they put in another margin hike, so anybody that was long and didn’t have extraordinarily deep pockets had to puke the position.
But I think the most interesting comment someone said was, ‘You know in the long-term move in silver this will look like the blip in the ’87 stock market crash.’ Then, as you know, they killed it (stocks) in ’87 and the stock market proceeded to go up 5 or 6 fold. I think silver will do exactly the same thing. It’s irritating if you’re long on margin because you are going to get kicked out of the position, but if you know the game, it was just another opportunity to get some cheap silver.”
When asked if there was still tightness in the silver market Embry replied, “As far as what we look at, my partner Eric Sprott, he thinks the market is extraordinarily tight. I think one thing people are underestimating is the investment demand. This is being triggered by the high gold price which is driving the little guy into silver for the simple reason that he can’t handle how much it costs to get an exposure in gold, so he buys silver.
So I think this will be an ongoing phenomena and when you put that together with the strong industrial demand, the two together will drive silver much higher. I think the optimists that are talking about the gold/silver ratio declining to historical lows of 10 to 15 times could well be right, and given where I think gold is going, I mean that has an enormous upside potential for silver.
...Well let’s say gold goes to $2,500 which I don’t think is an outrageous statement in the face of what is going on, and the gold silver ratio falls to 20 to 1, well that puts silver at $125...People that were top-calling in silver and gloating when it got taken to the cleaners, I don’t really think they really understand the dynamics of the market.”
When asked if he thought James Turk was correct in his KWN interview where he discussed this summer possibly being a repeat of 29 years ago when gold had a massive upside move Embry said, “Absolutely, and the fact that everybody is sort of trying to put a seasonal spin on this that gold is sort of weak...I think they could get blindsided and that James Turk could be very right on that call.”
With gold and silver on the rebound, today King World News interviewed John Embry, Chief Investment Strategist of the now $9 billion strong Sprott Asset Management. When asked about gold breaking out in Euros and the Pound Embry stated, “I think it’s very significant. I mean the fact that they held it (gold) in Euros there for weeks, but now I think the problems in Europe, in the periphery are becoming so apparent and the anger is starting to really rise to the surface, they are basically spurring buying in these countries.”
Embry continues:
“People are feeling more comfortable protecting themselves with things like gold. I think it is significant that it (gold) has broken out here in Euros and in the English Pound and I think it will break out to new highs against the US dollar before this move is over.”
When asked about the action in silver specifically Embry remarked, “Let’s face it, silver needed a correction because it had gone up in almost a straight line and people were talking about parabolas and what have you. But the correction was amplified by the CFTC allowing or sponsoring five margin hikes in eight days. Every time the price was getting pounded they put in another margin hike, so anybody that was long and didn’t have extraordinarily deep pockets had to puke the position.
But I think the most interesting comment someone said was, ‘You know in the long-term move in silver this will look like the blip in the ’87 stock market crash.’ Then, as you know, they killed it (stocks) in ’87 and the stock market proceeded to go up 5 or 6 fold. I think silver will do exactly the same thing. It’s irritating if you’re long on margin because you are going to get kicked out of the position, but if you know the game, it was just another opportunity to get some cheap silver.”
When asked if there was still tightness in the silver market Embry replied, “As far as what we look at, my partner Eric Sprott, he thinks the market is extraordinarily tight. I think one thing people are underestimating is the investment demand. This is being triggered by the high gold price which is driving the little guy into silver for the simple reason that he can’t handle how much it costs to get an exposure in gold, so he buys silver.
So I think this will be an ongoing phenomena and when you put that together with the strong industrial demand, the two together will drive silver much higher. I think the optimists that are talking about the gold/silver ratio declining to historical lows of 10 to 15 times could well be right, and given where I think gold is going, I mean that has an enormous upside potential for silver.
...Well let’s say gold goes to $2,500 which I don’t think is an outrageous statement in the face of what is going on, and the gold silver ratio falls to 20 to 1, well that puts silver at $125...People that were top-calling in silver and gloating when it got taken to the cleaners, I don’t really think they really understand the dynamics of the market.”
When asked if he thought James Turk was correct in his KWN interview where he discussed this summer possibly being a repeat of 29 years ago when gold had a massive upside move Embry said, “Absolutely, and the fact that everybody is sort of trying to put a seasonal spin on this that gold is sort of weak...I think they could get blindsided and that James Turk could be very right on that call.”
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