Is This The Most Terrifying Danger Facing The World Today?

John Embry: “I think things are finally starting to unfold exactly as we have anticipated. The central banks, who have hijacked markets for far longer than I thought possible, are finally running out of ammunition…

Continue reading the John Embry interview below…

John Embry continues: “Every time in the past 30 years that there has been a crisis, the response has been for the central banks to respond with easing. But most importantly, they have not allowed anything to clear the malinvestment and bad debt because the banking industry would be seen for the cesspool it has become.

Is This The Most Terrifying Danger Facing The World Today?

However, after the stock market crash in 1987, the broken tech bubble in 2000, and the 2007 – 2009 global financial crisis, each was met with larger and larger liquidity injections and lower and lower interest rates. But I’m telling you now, Eric, that the outer limits of have of this unholy monetary experiment have finally been reached.

We are now talking about negative interest rates being implemented in most industrialized nations. This is applicable to tens of trillions of dollars of debt, which will ultimately either be defaulted on or hyperinflated into worthlessness. Who in their right mind wants to own this paper garbage that is being issued in order to support the Ponzi scheme that we now call the global financial system?

Junk bonds have already unraveled, corporates are starting to follow in their wake, but the crisis really intensifies when sovereign debt is seen for what it really is. I noticed that a shrewd observer recently stated that the period of 2016 – 2020 will be seen as the era of the sovereign debt default. I agree with that sentiment entirely.

The U.S., as an example, has over $19 trillion in debt and at least $6 trillion off-balance sheet, and roughly $100 trillion in unfunded liabilities, making it the most indebted nation in the world per capita. Well, that represents the world’s reserve currency and at this point the world’s strongest fiat currency. However, some investors appear to finally be waking up to this reality, and real money — gold and silver– are being bought aggressively.

Last Friday was interesting. In the wake of the U.S. Jobs Report, the price of gold was smashed down on the Comex roughly $15. But this time gold rallied $30 before the day was out and the strength continued through Monday and part of today. I think this represents a change in both market action and sentiment. More importantly, the HUI gold share index exploded more than 50 percent in a little more than two weeks.

As you know, Eric, I managed precious metals funds for years when I was younger, and I had my fund up well over 100 percent in less than one year on more than a few occasions. But this recent surge may be the most explosive action I have seen. As I have emphasized on many occasions, the shares have never been cheaper in relation to gold than they were at the start of this rally, so there is still a lot more room on the upside. There will obviously be corrections in gold, silver and the shares, but from here on out they must be bought.”

John Embry
KWN
February 09, 2016