Today a man who has been involved in the financial markets for 50 years spoke with King World News about the shocking reason why gold may quickly hit $2,000. Below is what John Embry, who is business partners with billionaire Eric Sprott, had to say in this powerful interview.
Embry: “We are at a major inflection point. After more than 3 years for silver and almost 3 years for gold being under continuous pressure on the downside, the bottom is clearly in and we are going to have an explosive upside move very shortly.”
“I thought it was very instructive what happened on Friday. On Friday the bullion banks attempted to drive the price of both gold and silver lower and they shot straight back up against them. They were pushing prices lower so the call options would expire worthless. They’ve been ripping the public off for years doing this.
But last Friday the normal script did not apply because both metals turned around and took off to the upside. I consider that action extremely bullish and I think that’s indicative of what’s coming down the pipe. So I was very impressed by Friday’s price action in the metals.
I also want to add that I have an enormous respect for Andrew Maguire, and I had the great opportunity of meeting him over in London some time ago. I have a great regard for his insider’s view on the metals markets. KWN had an incredibly powerful interview with Maguire and Maguire is right, the physical market has gotten really tight.
The reason that the margins were dropped a couple of weeks ago was for the express purpose of letting the bullion banks lever up even more on the short side in order to drive the prices lower. But I think it’s all coming together now for the bulls and we are going to see a really explosive back half of this year for gold and silver.
I have said for some time that gold might reach as high as $2,000 this year. That sounds extreme now with gold near the $1,300 level, but when gold starts to move it will move very violently to the upside. And If the bullion banks lose control of the market, I could see $100 upside days coming.
So as outrageous as it sounds at this point, I still believe $2,000 could happen very quickly, and I think it would be accompanied by these violent moves to the upside. There is a very strong probability of this happening because of the physical shortages, massive short positions, and the overpoweringly positive fundamentals.
One of the greatest fundamentals for gold, and it’s coming like a freight train, is the eventual destruction of the U.S. dollar. I’ve talked about the bankruptcy of the United States, but the problem is everybody else is also bankrupt, so that doesn’t destroy the dollar by itself.
The driving factor of the destruction of the U.S. dollar is the continuous announcements by other countries that they are removing the U.S. dollar from their day-to-day transactions. The U.S. has had this enormous privilege for the last 70 years that everything is transacted internationally in U.S. dollars. So all other nations have had to essentially pay a tribute to the United States in order to transact in dollars.
But this is going to change dramatically in the next several years. The fact that China, Russia, and everybody other nation seems to be talking openly about doing deals without using the U.S. dollar is a truly astounding development. And when it actually takes hold, the demand for U.S. dollars will fall because other countries won’t need them anymore.
As this really starts to unfold this is going to be devastating for the United States in the sense that the standard of living will drop precipitously. But this will also be very bullish for everything else that is being valued in terms of U.S. dollars. As the dollar plunges, these other hard assets are going to go up in price, and I think we are just now on the cusp of that really starting to pick up steam.”