OI interest in silver remains extremely strong. Not a good sign for the shorts. Some big buyers want settlement in physical. I fully expect to see a spike in the price of silver in the coming weeks. Hang on to your UC shares. They may very well be trading at multiples of the current SP this winter. Ivana
Silver Market Is Nearing A Commercial Signal Failure
February 4, 2013
Today John Embry told KWN that the silver market is getting very close to a commercial signal failure. Embry, who is Chief Investment Strategist at Sprott Asset Management, also spoke about global stock markets, gold, mining shares, and the global economy. Here is what Embry had to say in this exclusive interview:“It appears that Europe is unraveling once again. I was really irritated with the level of enthusiasm that had developed in Europe because of the bond purchase program, which caused the interest rate picture to improve.”
“I didn’t believe that the lowering of interest rates had one iota of reality with regards to what was going to happen on the ground with the economy. Now that the fraud in Spain has been revealed, spreads are starting to widen again and the European stock markets are getting kicked around.
I think the reality is that Europe will face a tough road going forward....
“There is no easy answer in Europe in terms of holding the eurozone together or getting any kind of sustainable recovery going.
When you turn to the East and look at Japan, we are now almost at a record high gold price as measured in Japanese yen. I think that tells you all you have to know about where the whole world is going in terms of the gold price. The Japanese are being so overt about their intent to debase the yen that it’s being reflected in the gold price over there.
That’s coming to America, Europe, and the rest of the world, where we see the same type of debasement going on, it’s just being masked a little bit. So I think it’s very significant that gold priced in Japanese yen is on the cusp of an all-time historic high.
The reality is that the intermediate-term for gold is spectacular. The most obvious thing to watch is the continued transfer of Western gold to the East. China is buying more and more gold, and it seems to be more and more accepted that the Chinese are going to back the yuan with gold, thus becoming the world’s reserve currency before this cycle ends.
I’m really amazed at the stupidity of the Western leaders. I think the Chinese are picking our pockets, and as a really committed Westerner, I don’t know if they have even calculated an end game for the West, but it sure doesn’t look very bright if they have one.
We are also seeing the relentless suppression of the gold price. It seems like every single trading day at around 3 AM Eastern Standard Time the price of gold gets forced down. This is just unnatural trading, and at some point it will come to a violent end. But for now it’s a great opportunity to buy physical gold.”
Embry had this to say regarding silver: “The open interest in silver continues to amaze. We are just not seeing a clean out in the open interest in the silver market, even when the price is driven lower.
I believe we may be finally approaching a commercial signal failure where the shorts get overrun. This is a moment all of the silver bulls have waited for, and even though it hasn’t happened yet, I think we are setting up the pre-conditions for just such an event.”
Embry also added: “I think the rise in global stock markets has been a reaction to the availability of money. The US stock market is interfered with constantly and great pains were taken to get the Dow over 14,000 for the weekend because that’s all anybody was talking about.
If you look at the underlying fundamentals, earnings, economic growth, etc., there is nothing supporting higher equity prices other than money printing. If money printing was truly reflected in all markets, gold and silver should be going through the roof.
So I’m actually quite bearish longer-term on the US and global stock markets. I think there will be potential flash-crash in the future. The reality is the West cannot have sustainable growth until the debt is cleaned out of the system, and the cleaning out of the debt is going to be very disruptive.
So the central planners are moving Heaven and Earth to get this economy moving forward. With the amount of money being printed, interest rates being kept at zero, and the deficits they are running, if the economy were the least bit healthy it would be going through the roof.
As it stands right now they can barely get ahead, and in some places economic activity is already receding. The resolution will ultimately be to the downside in the economy, and that will come as a great shock to all of the people believing the mainstream media hype.
For what it’s worth, myself, Eric Sprott, and Rick Rule will be doing a webcast on February 12th at noon EST. We will be covering some of these topics in that webcast with a moderator.”
Embry had this to say regarding the mining shares: “The shares have been kicked around. When the gold and silver prices finally breakout, this is going to be the best buying opportunity investors will have ever seen in gold and silver shares.
But until that moment, you are going to be frustrated as hell and that’s what they want. Some investors are capitulating and that’s just creating an even better buying opportunity.”