With continued volatility in global markets and oil still trading well above $100 level, today John Embry warned King World News about what will destroy the financial system as we know it. Embry also spoke at length about the the gold and silver markets. Below is what Embry had to say in this powerful interview.
Embry: “We are finally putting in place a bottom in gold and silver. This process has been really ugly, and it’s gone beyond any rational action in terms of price. People are finally beginning to acknowledge that the gold and silver miners, particularly pure silver miners, are operating way below their cost level.
This situation is totally unsustainable. But having said that, the thing I am really focused on is the bond market. This is the one thing that will really destroy the financial system as we know it….
“It’s interesting that every time we get a positive economic number the bond market shivers. Similarly, when the Fed talks about tapering the bond market also tanks. So technically the bond market is starting to look weaker and weaker. The reality is that if the Fed wasn’t in there supporting the bond market, the bond market would plunge and interest rates would rise.
Even with the Fed aggressively buying up bonds. interest rates are still rising. The fact is that if anyone buys a bond they are at risk of a default or hyperinflation. The bottom line is I think the bond market is in serious trouble and it will only get worse over time.”
Embry also added: “As I mentioned earlier, I think the gold and silver markets are bottoming. I strongly believe we will come off of the bottom in a very strong manner because the price has been depressed far too aggressively, and when it turns it will explode higher. The bullion banks are exiting more short positions and may well be long. That is a pre-condition for better gold and silver markets.