Physical Gold & Silver Now In Shocking Short Supply .. May 29, 2013-- PART 1
Today John Embry told King World News that physical gold and silver are in shocking short supply. Embry also spoke about the massive global demand for both metals. Below is what Embry, who is chief investment strategist at Sprott Asset Management, had to say in this outstanding interview:
Embry: “When you look at the physical gold and silver offtake in the face of this vicious takedown in the paper market, it is all part of the process of changing the pricing mechanism from the paper market, which is utterly fraudulent, to the physical market, which is in shocking short supply.
The people in the Far-East understand perfectly well what’s going on in the United States, and they are delighted the gold and silver prices are down because they are buying as much as they can as quickly as they can from the West
“The minute this process is over and the West doesn’t have any more gold to send to the East, that is when the price is going to get marked up dramatically.”
Embry had this to say regarding silver: “I think there is a chronic shortage of silver because of the fact that the industrial uses are growing. At the same time, there are a great many physical silver buyers around the world that are faithfully accumulating the metal and the number of buyers will only increase over time.
When you superimpose that on top of the existing industrial demand, the only outcome is going to be ongoing shortages and this will ultimately be reflected in a big way in the price. I have no problem with the gold/silver ratio declining dramatically from 62/1 as the bull market resumes, and I think at worst the bull market bull market will resume in the fall if not sooner.”
Embry also added: “When I was over in Europe last week I picked up a copy of USA Today to keep up with what was happening in the US. There was this headline article on the front page, ‘US Consumers On The Cusp Of A Buying Explosion.’
So I read the article and the theory was that consumer confidence numbers had risen quite sharply and so people were lining up to spend like crazy. I think those numbers are phony to begin with, but the fact is that if you look at the fundamentals there is no real job creation.
Real disposable income in the US is falling and if you take the top 1% or 2% out I think it’s falling quite rapidly for the average citizen. But savings rates have come way down as well. So the consumer may have a great pent-up demand, but they have no ability to carry it out. It’s this mainstream media propaganda that drives me nuts. It creates a totally false picture of reality.”
Embry also added: “I was reading a fascinating article in the Economist this week and what struck me was that a Japanese clothing manufacturer said they were moving their facilities from China to Myanmar. The reason they were doing that was because of the high cost of labor in China.
The labor in China was costing them $400 per month, compared to only $100 per month in Myanmar. I thought that was fascinating because minimum wage jobs in the United States probably cost four times that of China, and closer to fifteen times that of Myanmar.
This helps explain why 56,000 manufacturing facilities in the United States have closed since the turn of the century. That’s a staggering number. In many ways the US has been seriously hollowed out. So with all of the US debt, and the fact that the high paying US jobs have been lost, this is going to have a horrendous long-term effect and we are just in the middle of seeing the impact of it right now.”