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« Agnico-Eagle Mines Limited: Up 6.96% Today | Main | EU turning the screws on Greece »
Thursday
Feb162012

“The Current Financial System Will Be Totally Destroyed“

In this mornings mail bag we have this missive from Egon Von Greyerz of Matterhorn Asset Management, an interview with John Embry of Sprott Asset Management

“Gold is about the furthest thing from a bubble that I can think of.“

We are very fortunate to feature my very good friend John Embry in this month’s Matterhorn Interview. John who knows more about the gold market than probably anyone I know, talks about the “chicanery” in the gold market and why.

He also explains why he is so bullish about silver, about the possible demise of paper money and much, much more.

Egon von greyerz

THE MATTERHORN INTERVIEW – February 2012

John Embry, the chief investment strategist at Sprott Asset Management, talks in this exclusive interview about the motives and the means of certain interests to prevent a free gold market; tells the reason why the gold price will remain high; shows the opportunities in silver; and explains: “Gold is about the furthest thing from a bubble that I can think of.“

By Lars Schall

Mr. Embry, the perhaps best report I have ever read on the gold market was “Not Free, Not Fair: The Long-Term Manipulation of the Gold Price,” written by Andrew Hepburn and you. (1) I would like to talk with you at the beginning about the findings of that report. First of all, why do you think it is relevant whether the gold price is free or not?

John Embry: Thank you for the very generous compliment. It is essential that the gold market be free. It functions as the so called “canary in the coal mine” and its price should be allowed to reflect excesses in a pure fiat monetary system. The continued suppression of the gold price was a key factor in the many financial bubbles which have essentially wrecked the monetary system as we know it.

What has the evidence been that the gold market isn’t a free market?

John Embry: Our report which was written 7 ½ years ago revealed all sorts of chicanery in the gold market and we only used evidence which could be corroborated. Considerable additional evidence has piled up subsequently but two smoking guns are the repetitive counter intuitive price action and evidence of widespread clandestine leasing of western central bank gold.

Who are the ones that don’t like a free gold market and which objectives do they have in mind by preventing a free gold market?

John Embry: The western governments, their central banks and the allied bullion banks are the culprits. They view gold as a mortal enemy of the fiat currency system. Gold has been real money for centuries and every paper money system in history has ultimately collapsed. This drives them to continuously denigrate and manipulate gold.

Through which tools is the gold price “managed“?

John Embry: The worst damage occurs in the so-called paper gold market where derivatives, naked shorting, vicious margin hikes, etc. are employed to fleece the long side who don’t have as deep pockets. In addition, the western central banks have supplied the physical gold necessary to effect the plan through their leasing.

Recently, I was told by a former chairman of the Federal Reserve, Paul A. Volcker, that to his best knowledge “the U.S. has not intervened in the gold market for more than 40 years.“ (2) Do you think Mr. Volcker has the truth on his side?

John Embry: Mr. Volcker admitted that the U.S. had made a mistake by not intervening at one point in the gold market some 40 years, so to think that nothing has happened subsequently is extremely naïve. Technically he might be correct in the sense that swaps could have been employed and the intervention using U.S. gold could have been conducted by another party. Recently retired Fed Governor Kevin Warsh acknowledged U.S. gold swaps in correspondence with GATA just last year. (3)

Furthermore, Mr. Volcker seemed to suggest that central banks have some interest in the price of gold because of its effect on the currency markets. (4) What kind of relationship does exist between gold and the currency markets which are much bigger than the gold market?

John Embry: Very simple. Gold is a currency. Arguably it is the ultimate currency and the central bankers are acutely aware of this fact. Gold’s role as currency is once again coming to the  fore and the central bankers hate that fact.

Are gold swap arrangements between central banks a) important for the “management“ of the gold price, and b) do they represent a means of intervention in the gold market?

John Embry: They are most certainly important because it allows central bankers to technically tell the truth because it is always another central bank that is utilizing the swapped gold to intervene in the market.  It is a subterfuge.

Do you think the Western central banks have as much gold as they claim they have?

To read this article in full please click this link.

You may also wish to bookmark this site and drop by now and again as it does make for some very interesting reading.

Regarding www.skoptionstrading.com. We are off to a good start this year closing two trades in January, the first gave us a profit of 71.58% and the second gave us a profit of 33.97%.

It was nice to bag a couple of winners before January ended and hopefully 2012 will continue in a successful manner. We do have a number of ideas on the drawing board which we are looking to execute shortly, but only when the risk/reward environment is firmly in our favour.

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    Response: dads blog
    Gold Prices - Gold Prices - �The Current Financial System Will Be Totally Destroyed�

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