John Embry Discusses Gold and Silver with James Turk

In this video, John Embry – Chief Investment Strategist at the Canadian firm Sprott Asset Management – discusses the recent correction in the silver price with James Turk, Director of the GoldMoney Foundation. 

John argues that long-term savers and investors in precious metals should not panic in the face of such corrections, and also discusses the growing divergence between the paper and the physical silver market, and how we are in the early stages of a big rise in precious metals prices.

Embry also argues how the gold-silver price ratio is likely to move back in favour of silver. He is surprised by how bearish the mainstream media is in its assessment of silver. John and James also comment on the consistent purchasing power of precious metals, in contrast to the ever-diminishing purchasing power of paper money.

They also discuss the worsening fiscal position of the US government. In John’s view, America is likely heading for hyperinflation thanks to the current fiscal policies of the Federal Reserve. John and James notice the growing problem of rising prices, and how the US authorities remain determined not to notice growing inflationary pressures.

Furthermore they talk about the problems that still exist in the international banking system. Given the astonishing quadrillion-dollars worth of OTC derivatives still lying on banks’ balance sheets, in Embry’s view, quantitative easing was implemented primarily in order to ease the pressure on banks. As he points out though, the derivatives problem has not been solved

They also talk about the reasons for the relative underperformance of shares in gold and silver mining companies versus the performance of the metals, and offer some reasons for why this has been the case. John and James address how “hot money” flows into commodity producing nations are driving up the value of currencies like the Australian and Canadian dollars, resulting in booming housing markets in these countries.

At the end, they talk about the recent Canadian election that saw Prime Minister Stephen Harper’s Conservative Party triumphant. James quizzes John about the likely trajectory of Canadian politics and whether or not anti-government Tea Party-style politics is gaining a foothold in Canada.

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