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John Embry Sees Hyperinflation If Fed Continues On QE Path, Expects Silver At $50

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Tyler Durden
Zero Hedge
Friday, October 29, 2010

Veteran PM expert, Sprott’s John Embry, whose observations on the lack of a bubble in precious metals we posted recently, and which came just before the CFTC’s own disclosure that there may be extensive manipulation in the silver market, as well as a lawsuit filed against JPM and HSBC for silver price manipulation, shares his latest thoughts with Eric King in a traditionally contrarian insightful interview. In a nutshell, Embry is confident the current Fed policy will lead to hyperinflation, and that he would not be surprised if silver hit $50 within the next few months.

Full interview can be heard here.

When asked about Art Cashin’s comments on hyperinflation Embry replied:

“I’m another person that worries hugely about hyperinflation, I mean the monetary path that they appear to be following, I guarantee you will lead to hyperinflation.

Regarding gold:

I think we are still on track post the US elections and the next FOMC meeting, if we get some indication of considerable QE on the horizon, I think that will be fuel again to send the gold price up from here  and to get it to 30%+ return for the year.

On a gold squeeze:

  • A d v e r t i s e m e n t

I think it could very well happen this time because the physical market is robust, and I’m told there’s not a lot of physical gold available right now…We could very easily overrun the shorts at Comex and force them to cover, even though they have extraordinarily deep pockets.  If that happens, we are going to see some really spectacular price moves as a result….I think that’s why when these things move, all the gold stocks, I think you’re going to feel like your hair’s on fire they’re going to move so fast.”


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On Precious Metal manipulation:

“GATA has been getting a terrible abuse for their views on this subject. I’ve always believed they were dead right, that there is abundant evidence that on the whole the markets are manipulated. And now that this is starting to become maybe more common knowledge I think it could have an outsized impact on the price of these things, because if these guys can’t continue to play the game they played, I think the prices could go crazy.”

Regarding the US dollar:

“What it’s really going to collapse against is hard assets…I really don’t think people have any idea the extent to which the standard of living can fall in North America, particularly in the United States. I mean when a currency collapses against everything else, basically that is saying that the standard of living is going to fall. In fact, it could fall by 30, 40 or 50% just to pick some wild numbers, is not out of the question.  Things have been pretty good for the last 60, 70 years in North America, and they think they’ll be good forever.  It isn’t going to happen that way.”

Regarding the economy:

“We’ve got false hope here because of this paper generated recovery, but it’s unsustaintable because we haven’t dealt with any of the underlying issues. When this thing starts to implode again it’s going to get very unpleasant.”

As a reminder, John Embry has been in the business for 48 years.  At the beginning of the secular bull market in gold, John was the only mainstream (RBC Capital at the time) institutional individual to proclaim the bull market in gold.  RBC was saying that’s not the message of the bank, so John was taking a lot of heat for his stance.  Fortunately for all of us Eric Sprott hired John out of the mainstream and the rest is history.

Again link to full interview here

This article was posted: Friday, October 29, 2010 at 9:16 am

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