Silver to 100 Dollars within ‘Reasonable Timeframe:’ John Embry

Montreal-Canada (Feb 11)  John Sprott believes gold and silver will move big as weakness in the economy and financial system comes to light. I got on the phone with Mr. Embry for a follow-up on his ideas and predictions…

Hello again John. The last time we talked, you said gold and silver were at ‘historic undervaluation.’ What’s on your mind now?

Well, my main concern today is that the economy is really much worse than most people are prepared to admit. And this will have significant ramifications on various markets. Obviously, the one market we are particularly interested in is gold and silver. Both of them, as I said before, are considerably undervalued. They are under-owned too. I still think that the fundamentals look better than ever. And I still think there is an explosive move coming in 2014.

Of course, be careful what you wish for because this is suggesting an economic event with some very negative societal impacts. With the amount of leverage that exists in the financial system today, a heroic upwards charge of the precious metals would expose the policies of zero-based interest rates as an utter fraud. If interest rates rose sharply as a result, it would bring the banking system to its knees. That would have a very negative impact on society as a whole.

A lot of it has to do with the law of unintended consequences. The heavy-handed actions of the Feds in the financial system will likely lead to negative unforeseen consequences.

As an analyst, I look at the current situation and try to figure out what might happen, but that does not mean I want it to happen.

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