With bonds tumbling once again and continued uncertainty around the world, one of the greats in the business just warned that the uninformed public will be horrified by what is about to unfold.
John Embry: “Eric, I would like to open the conversation by complimenting you on some of the outstanding interviews and pieces that have appeared on your site in the last few weeks. I’ve known John Hathaway for a long time, and remember his prescience when gold was trading in the high-$200s at the turn of the century…
John Embry continues: “John’s write-ups then correctly foresaw the explosion higher in the gold price that was coming. I think his commentary on your site last week was another precursor to a dramatic higher in the price of gold and silver at this juncture. His analysis was spot on.
Then Andrew Maguire did his usual wonderful commentary on the chicanery that has been ongoing in the paper gold market for at least two decades, and which has actually intensified since the Trump presidential win.
Finally, Egon von Greyerz did his usual remarkable job at explaining the shocking overvaluation of traditional assets — bonds, stocks, and real estate — and the resulting historic undervaluation of gold and silver.
Uninformed Public Will Be Horrified By What Unfolds
I would strongly recommend that the KWN readers and listeners re-read these pieces because they perfectly explain the reality of today’s situation, which is obscured by mainstream media fake news, manipulated markets, blatant propaganda, and falsified government statistics. Thus the uninformed public is going to be horrified when reality intrudes. As Frank Zappa warned:
“The illusion of freedom will continue as long as it’s profitable to continue the illusion. At the point where the illusion becomes too expensive to maintain, they will just take down the scenery, they will pull back the curtains, they will move the tables and chairs out of the way and you will see the brick wall at the back of the theater.”
Switching to geopolitics, which are tenuous today to say the least, I don’t think the incoming president is helping the situation by constantly berating both allies and supposed enemies. This is a very complex and interrelated world today, and so I think diplomacy is an infinitely better course of action.
On the economic front, I see nothing that dissuades me from my long-term view that no sustainable growth can occur globally until the debt issue is addressed. Recent U.S. economic numbers are certainly not impressive, and the important retail sector appears to have had a very poor Christmas season. And although I would love to believe Trump can resuscitate the U.S. economy by erecting aggressive trade barriers to improve manufacturing conditions in the United States, there is no historical president to suggest that this will work. And in the global economy that exists today, it could in fact be very detrimental.
Be Very Careful
To close, I don’t think investors can be careful enough at this juncture, and would be well-served by increasing their exposure to physical gold and silver as well as the precious metals stocks. The latter, despite a sharp correction in the second half of last year, was still the best performing category for the full year.
My expectation is that they will easily exceed that performance in 2017 in an environment of rising gold and silver prices that will be fueled by intensifying economic and financial problems.”