From King World News
Today a man who has been involved in the financial markets for 50 years spoke with King World News about the gold and silver takedown this week, and why the banking system will collapse. John Embry, who is business partners with billionaire Eric Sprott, also included a discussion about an article in the Globe and Mail this week.
Embry: “As you know, there has been a vicious takedown in gold this week. But I can honestly say that I’m not surprised because September has traditionally been the strongest month for gold. So the central planners, who run the Western banks, had to defuse this potential enthusiasm, and that’s what they have done with yet another high-frequency driven, algorithm attack….
“I’m sure that inspired the more than $20 takedown we saw in a single day earlier in the week, and it’s why this takedown has continued through today. Silver, as usual, accompanied gold lower.
But it was also instructive that the gold open interest on Comex rose by 6,400 contracts. So what we have seen up to now hasn’t necessarily been long liquidation, but rather a bear raid by the usual suspects. Essentially the open interest rose by more than 3-times the amount of gold which is dug out of the ground each day. So, again, this has just been the paper guys operating as they always do.
The question is, why are the central planners being this overt? I strongly believe it’s because if gold and silver were allowed to freely trade and truly reflect what is really going on with monetary policy and the latent inflation and possibly hyperinflation which is bubbling under the surface, interest rates would rise precipitously — long rates in particular. In that event the banking system would totally implode because of the banks’ massive interest rate sensitive derivatives exposure.
So this is basically a battle to the finish for the central planners, who are desperately trying to hold off normal market forces, but they are going to lose this battle in the long-run. Also, right as the gold and silver smash was taking place earlier this week I saw the Globe and Mail published a blistering attack on gold. They utilized dubious statistics regarding demand and cherry-picked anything that was remotely negative on gold.
Their argument made no sense at all. The Globe and Mail claimed an ounce of gold still ‘costs far too much.’ What? There aren’t many gold companies in existence today who, when accurately accounting for the true cost of producing an ounce of gold, are not losing money at the current prices. So the idea that gold still costs ‘far too much’ is absolutely preposterous.
Well, I was so fascinated by the Globe and Mail article that I looked into the author of this piece of drivel. His name was Ian Campbell. At one stage of his career he was actually Chief Economist for emerging markets at none other than ABN ARMO Bank. Now ABN AMRO is the very same bank which just last year stiffed their own clients with respect to their allocated gold by saying they couldn’t have it and instead it would have to be settled for cash.
So the mainstream media is in the hip pocket of the central banks and the financial establishment, and together they are orchestrating one of the greatest Ponzi schemes in the gold and silver markets. But when it ends, you better be long and you better make sure you own physical gold and silver outside of the banking system because when gold and silver prices really skyrocket it will expose the fact that the entire banking system is insolvent and it will simply collapse.”