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Sprott's John Embry:“The Current Financial System Will Be Totally Destroyed“

Tyler Durden's picture


Sprott strategist John Embry has never been a fan of the existing financial system. Today, he makes that once again quite clear in this interview with Egon von Grayerz' Matterhorn Asset Management in which he says: "I think that the current financial system, as we know it, will be totally destroyed, probably sooner rather than later. The next system will require gold backing to have any legitimacy. This has happened many times in history." Needless to say, he proceeds to explain why a monetary system based on gold, one in which one, gasp, lives according to one's means, is better. Logically, he also explains why the status quo, whose insolvent welfare world has nearly a third of a quadrillion in the form of unfunded future liabilities, will never let this happen. Much more inside.

From Matterhorn Asset Management

“The Current Financial System Will Be Totally Destroyed“

John Embry, the chief investment strategist at Sprott Asset Management, talks in this exclusive interview about the motives and the means of certain interests to prevent a free gold market; tells the reason why the gold price will remain high; shows the opportunities in silver; and explains: “Gold is about the furthest thing from a bubble that I can think of.“
By Lars Schall
An industry expert in precious metals, his experience as a portfolio management specialist spans more than 45 years: John Embry, the chief investment strategist at Sprott Asset Management. He began his investment career as a Stock Selection Analyst and Portfolio Manager at Great West Life. Mr. Embry then became a Vice President of Pension Investments for the entire firm. After 23 years with the firm, he became a Partner at United Bond and Share, the investment counseling firm acquired by Royal Bank in 1987. Afterwards he was named Vice-President, Equities and Portfolio Manager at RBC Global Investment Management, a $33 billion organization where he oversaw $5 billion in assets, including the Royal Canadian Equity Fund and the Royal Precious Metals Fund. In March 2003 Mr. Embry joined  Sprott Asset Management with focus on the Sprott Gold and Precious Minerals Fund and the Sprott Strategic Offshore Gold Fund Ltd. He plays an instrumental role in the corporate and investment policy of the firm.

Mr. Embry, the perhaps best report I have ever read on the gold market was “Not Free, Not Fair: The Long-Term Manipulation of the Gold Price,” written by Andrew Hepburn and you. (1) I would like to talk with you at the beginning about the findings of that report. First of all, why do you think it is relevant whether the gold price is free or not?

John Embry: Thank you for the very generous compliment. It is essential that the gold market be free. It functions as the so called “canary in the coal mine” and its price should be allowed to reflect excesses in a pure fiat monetary system. The continued suppression of the gold price was a key factor in the many financial bubbles which have essentially wrecked the monetary system as we know it.

What has the evidence been that the gold market isn’t a free market?

John Embry: Our report which was written 7 ½ years ago revealed all sorts of chicanery in the gold market and we only used evidence which could be corroborated. Considerable additional evidence has piled up subsequently but two smoking guns are the repetitive counter intuitive price action and evidence of widespread clandestine leasing of western central bank gold.

Who are the ones that don’t like a free gold market and which objectives do they have in mind by preventing a free gold market?

John Embry: The western governments, their central banks and the allied bullion banks are the culprits. They view gold as a mortal enemy of the fiat currency system. Gold has been real money for centuries and every paper money system in history has ultimately collapsed. This drives them to continuously denigrate and manipulate gold.

Through which tools is the gold price “managed“?

John Embry: The worst damage occurs in the so-called paper gold market where derivatives, naked shorting, vicious margin hikes, etc. are employed to fleece the long side who don’t have as deep pockets. In addition, the western central banks have supplied the physical gold necessary to effect the plan through their leasing.

Recently, I was told by a former chairman of the Federal Reserve, Paul A. Volcker, that to his best knowledge “the U.S. has not intervened in the gold market for more than 40 years.“ (2) Do you think Mr. Volcker has the truth on his side?

John Embry: Mr. Volcker admitted that the U.S. had made a mistake by not intervening at one point in the gold market some 40 years, so to think that nothing has happened subsequently is extremely naïve. Technically he might be correct in the sense that swaps could have been employed and the intervention using U.S. gold could have been conducted by another party. Recently retired Fed Governor Kevin Warsh acknowledged U.S. gold swaps in correspondence with GATA just last year. (3)

Furthermore, Mr. Volcker seemed to suggest that central banks have some interest in the price of gold because of its effect on the currency markets. (4) What kind of relationship does exist between gold and the currency markets which are much bigger than the gold market?

John Embry: Very simple. Gold is a currency. Arguably it is the ultimate currency and the central bankers are acutely aware of this fact. Gold’s role as currency is once again coming to the  fore and the central bankers hate that fact.

Are gold swap arrangements between central banks a) important for the “management“ of the gold price, and b) do they represent a means of intervention in the gold market?

John Embry: They are most certainly important because it allows central bankers to technically tell the truth because it is always another central bank that is utilizing the swapped gold to intervene in the market.  It is a subterfuge.

Do you think the Western central banks have as much gold as they claim they have?

John Embry: I strongly suspect that they have materially less than they try to represent. The IMF permits a one line entry on their balance sheets which aggregates physical gold with gold receivables. That’s ridiculous and it is done to deceive analysts. For example, if the Americans had the 8,161 tonnes that they say they have, they would be delighted to submit to an outside audit and shut their detractors up. However, they stonewall all requests.

With its “QE to infinity“ program: would you say the Fed has exposed itself in a way as a hardcore goldbug entity?

John Embry: I believe they are fully aware of the extent to which they are debasing their money. We, the public, have to be the hardcore gold bugs to protect our wealth from their depredations.

It seems as if more and more gold is moving towards certain central banks and not away from them.  Is this a solid assurance that the gold price will remain high?

John Embry: I believe so. The eastern central banks (China, Russia, et al) have accumulated a lot of dollars and realize they are at risk. Ergo, they buy gold. At the same time, I think the western central banks have run their inventories down to levels beyond which they won’t go. Thus, I think central banks collective gold buying will have a salutary impact on the price going forward.

In the event of another market meltdown, which seems rather likely, do you expect a sell-off in gold?

John Embry: There could be a minor sell-off just because there are so many algorhythyms influencing the market.  It would be short lived because big money in the world now knows they need gold for protection.

Gold is in a bull market for ten years now. So an increasing number of people say it is in a bubble. Why would you say, in Gershwin’s words, “it ain’t necessarily so“?

John Embry: Gold’s price is directly related to the constant debasement of the currencies in which it is denominated. The creation of new paper money is dwarfing the amount of gold available. Gold is about the furthest thing from a bubble that I can think of.

What do you think in particular about Warren Buffett’s constant “Gold is in a bubble, I go for stocks“ talk? Does he serve here as an influential opinion maker in a specific role because he gets a lot of public attention? In other words: is he a fool or does he only act like a fool? (5)

John Embry: Warren Buffet sold out a long time ago. It’s too bad because he was a great stock picker once. Now he owns insurance companies, Wells Fargo and was a buyer of Goldman Sachs and G.E. in the global financial crisis. He is a member of the American establishment and has a lot to lose. He should have listened to his father Howard Buffett who was a U.S. Congressman and a true “hard money” advocate.

In your view, gold will gain in importance as a monetary asset in the years ahead, likely regaining an official role in the world’s financial system. Why do you think so?

John Embry: I think that the current financial system, as we know it, will be totally destroyed, probably sooner rather than later. The next system will require gold backing to have any legitimacy. This has happened many times in history.

The mining stocks both in gold and silver seem to me extremely undervalued. Do you agree?

John Embry: They are indeed, and they are being heavily manipulated by the same entities active in suppressing the gold price. In addition, many nefarious hedge funds now are active on the short side. The U.S. financial scene has become a  total cesspool.

Are there key levels in the XAU and HUI that one should pay attention to as starting points of a mining stock rally?

John Embry: I tend to pay more attention to the HUI because it is the pure gold index.  When the HUI takes out the 555 level with gusto, I think we are away to the races. However, this level is being aggressively defended by the bad guys. A higher gold price (through $2000 per oz.) will rectify this issue.

Why are you at Sprott Asset MGMT so very bullish related to silver?

John Embry: We think the supply-demand equation is ultimately better than even that of gold. New industrial and medical uses are exploding and because silver is “poor man’s gold,” investment demand for silver will go crazy when gold gets priced out of the average citizen’s capacity to buy. Given the small size of the market and very limited inventory, the price should go ballistic.

For your physical silver ETF you want to re-acquire physical silver in a big way. Do you think you could be pioneers (for other fund managers) in direct engagement with mines through direct and forward transactions, instead of going to the Comex? You certainly don’t want to “whoop” the silver price by your own buying, correct?

John Embry: I think that is a potential avenue particularly when the supply-demand equation gets progressively tighter in the future.

Is the silver market also subject of surreptitious interventions?

John Embry: Without question. In many ways it may be worse because it is a smaller market and J.P. Morgan Chase’s activities have been egregious. The fact that the CFTC has been investigating this for nearly four years without resolution is one of the great jokes of all time.

What is your information: to which extent the US silver ETFs are short and how many stocks of those have been used for covering future short contracts?

John Embry: I believe that they are but I can’t provide any information on the extent. When the very same organizations that have manipulated the market for years act as custodians for the ETF’s, it would be wise to be wary.

One highly interesting issue for me personally is the point in time when the Middle East countries will no longer sell their oil and natural gas for paper money. When do you think  they will be paid for it with precious metals?

John Embry: I suspect this whole phenomenon could occur very quickly. When confidence in paper money is lost and I think we are rapidly approaching that moment, something like that would undoubtedly come to pass.

How do you think about the conflict around Iran viewed from a perspective of the petrodollar?

John Embry: The whole Iranian issue is very disturbing and I think the U.S ‘s motives might have more to do with the petrodollar than Iran’s nuclear ambitions.

One final question. IF the financial system goes under, one can expect massive supply shortfalls and disruptions in goods and services, particularly in the energy sector. Would you recommend to our readers to take precautions for such a scenario instead of hoping for the best outcome of the global financial crisis?

John Embry: Unfortunately yes. I am a great believer in cognitive dissonance. Most individuals don’t want to face the truth, particularly if it is very unpleasant. Those that do not suffer from this condition should take precautions because the world situation is presently very dangerous.

Thank you very much for taking your time, Mr. Embry!


(1) John Embry / Andrew Hepburn: “Not Free, Not Fair: The Long-Term Manipulation of the Gold Price”, published by Sprott Asset Management in August 2004 under:

(2) See Rob Kirby: “Manifest Destiny Derailed: Treason from Within“, published at Goldseek on January 31, 2012 under:

(3) Compare

The relevant passage of Mr. Warsh’s letter to GATA said:

“In connection with your appeal, I have confirmed that the information withheld under Exemption 4? — that’s Exemption 4 of the Freedom of Information Act — “consists of confidential commercial or financial information relating to the operations of the Federal Reserve Banks that was obtained within the meaning of Exemption 4. This includes information relating to swap arrangements with foreign banks on behalf of the Federal Reserve System and is not the type of information that is customarily disclosed to the public. This information was properly withheld from you.”

(4) See Rob Kirby: “Manifest Destiny Derailed: Treason from Within,“ Footnote 2.

(5) Compare for example in this context what Marshall Auerback has said in an interview about the supression of the silver price:

“It’s in contrast to the gold suppression, which is a central-bank orchestrated scheme. You’ve got a situation now where it seems to be being done amongst the banking community, but I have no doubt that it has being done with official encouragement, explicit or implicit. To give you an example, 10 years ago Warren Buffet bought a silver position, and he liquidated it a few months later. The story I heard from one of his dealers was that he basically told them, “Boys, it’s not politically correct to speculate in silver.” Now who told him that I don’t actually know; I suspect it came from government sources. More interesting to me is that he had had a significant position, and it was liquidated with a great degree of ease with a loss at time when it wasn’t easy to do. This suggests that there was an external agency involved. I have no doubt that there is some degree of government involvement as well, but the primary agents are the investment banks, the commercial banks here.”



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Thu, 02/16/2012 - 20:10 | 2167767 NotApplicable
NotApplicable's picture

"There is not enough gold to support World trade."


Why do people have such a hard time understanding that a gold standard is a standard of measurement?

Geez, go read some Rothbard, and get a fucking clue, already.

Thu, 02/16/2012 - 22:04 | 2168044 hamurobby
hamurobby's picture

250k per oz or so, and there will be enough.

Thu, 02/16/2012 - 23:57 | 2168358 Socratic Dog
Socratic Dog's picture

Yep.  What's your point?

Thu, 02/16/2012 - 18:43 | 2167527 bob_dabolina
bob_dabolina's picture

When this guy buys PMs does he go to the coin shop and pay 6% over spot, or to the futures market and take physical delivery?

Thu, 02/16/2012 - 19:21 | 2167623 HurricaneSeason
HurricaneSeason's picture

I bought his course. He buys teeth at Detroit pawn shops.

Thu, 02/16/2012 - 19:32 | 2167666 ChrisFromMorningside
ChrisFromMorningside's picture

It's amazing to see that turning in gold to get some paper in return is now a major industry in America. Individuals on here warn of gold confiscation ... Why do they need to confiscate gold when millions are willing to voluntarily turn it in for soon-to-be-worthless paper?

Be afraid. Be very afraid.

Thu, 02/16/2012 - 20:26 | 2167811 HurricaneSeason
HurricaneSeason's picture

Gold has never been that popular. Why would you buy gold when you can go to the bank and have them wave their magic wand and let you spend 10 or 20 times as much through a low interest, low deposit loan? Now, foreclosure victims might buy gold to protect their wealth and avoid their bank accounts being confiscated from foreclosures or student loans and the like. The current system and industries haven't been around that long. Cash For Gold is a short term thing and I predict you'll see them start closing down. I like the new buffalo coin with 14 MILLIGRAMS of gold(probably 18K gold LOL). Yeah, Americans aren't too well at math, but the Asians and Europeans and Arabs will pick up the slack soon.

Fri, 02/17/2012 - 00:06 | 2168388 Socratic Dog
Socratic Dog's picture

14 mg of gold?  A troy ounce is 31,103 mg.  Sure you don't mean 14 grams?

Fri, 02/17/2012 - 10:15 | 2169190 GeezerGeek
GeezerGeek's picture

Buy the gold-clad buffalo coins to give the Feds when they come knocking...keep the real stuff for yourself.

Thu, 02/16/2012 - 21:16 | 2167912 smiler03
smiler03's picture

Why do they need to confiscate gold when millions are willing to voluntarily turn it in for soon-to-be-worthless paper?

It is very simple and clearly beyond your comprehension. They have no money they do have gold. Now do they continue to live, or die?



Fri, 02/17/2012 - 08:36 | 2168913 Quinvarius
Quinvarius's picture

He goes directly to miners and refiners.  The people at Sprott are not screwing around.

Thu, 02/16/2012 - 18:44 | 2167530 rsnoble
rsnoble's picture

Well im to fkn poor to buy pm's having gone from a good job to nothing and no prospects. I have a paid off house and a few acres to grow food that's it.  Not sure if the paid off part is any good or not, if the whole thing crashes not very many people are going to be sending a mortgage payment. I'm starting to think paying it off was a bad idea.

I really wasn't wanting to see this shit transpire in my lifetime but it almost looks inevitable. I'd just assume deal with it now while I have a chance vs being 60 years old and get my ass beat. Which could still happen anyhow lmao.

Thu, 02/16/2012 - 19:26 | 2167638 ChrisFromMorningside
ChrisFromMorningside's picture

>>Well im to fkn poor to buy pm's having gone from a good job to nothing and no prospects.

I feel you. Silver is not too expensive though. If you can hustle yourself an income, even a meager one, you can probably buy a few coins here and there.

>>I have a paid off house and a few acres to grow food that's it.

That's far more than what millions of urbanites have, so you're already better off than a huge swath of our national population. Start working the land now, before it's too late. Don't give up yet.

>>I'd just assume deal with it now while I have a chance vs being 60 years old and get my ass beat.

+1. The baby boomers and old-timers I know in real life all seem dejected, resigned and defeated. It's sad. What a way to go out, eh? Knowing your generation ruined things for your children and grandchildren, in large part due to the unwavering greed and narcissism many i that generation embraced. I'm glad I'm facing this crisis when I still have my vitality and fighting spirit. I'm hoping that once we go through this madness I'll be able to spend the latter part of my adult life in a far more peaceful, sane world with a sound economy. That would be nice.

Thu, 02/16/2012 - 20:20 | 2167796 rsnoble
rsnoble's picture


Thu, 02/16/2012 - 20:43 | 2167842 delacroix
delacroix's picture

rent a room out. share utilities

Thu, 02/16/2012 - 18:47 | 2167534 falak pema
falak pema's picture

Reports say India pays Iran in gold bullion. But how much gold bullion is there to buy Oil at 150$/bbl?

China buys 5 million bbl/d = 250 Million T/yr. = 273 billion$/y. 

At todays price of 1700 $/oz = 4600 tons of gold.

Total world supply of gold is = 168 000 Tons; less than 36 years supply of oil for a country like China.

It limits the role of gold as direct payment medium. We need some paper currency to back it. 

Thu, 02/16/2012 - 18:51 | 2167550 rsnoble
rsnoble's picture

Right. I thought about that also. Either paper money or barter for other stuff.  Not sure if the barter system would fully work either? How many tons of rice can you have?


Thu, 02/16/2012 - 18:57 | 2167563 DoChenRollingBearing
DoChenRollingBearing's picture

India would be stupid to pay for oil with their gold.  Not until the price goes MUCH higher.

Thu, 02/16/2012 - 20:07 | 2167760 Big Corked Boots
Big Corked Boots's picture

Just thinking out loud, but, could it be that the only thing propping the dollar up is the fact that gold is continuously manipulated down? In other words, why not buy oil in useless paper when you can get a lot more of it for your gold much later?

Fri, 02/17/2012 - 09:27 | 2169038 ParkAveFlasher
ParkAveFlasher's picture

Gold doesn't have to 100% fill the currency basket, it just has to weigh it down to earth. 

And, I like your math but I don't think a China/anyone has to pay for 36 years, just long enough to manuever away from dollar assets.  That's what threatens dollar hegemony.

Thu, 02/16/2012 - 18:47 | 2167536 eddiebe
eddiebe's picture

Here is what you do. You look for a piece of property with a house and a couple of outbuildings, maybe a couple of acres enough for a good garden and bearing trees. In the mid west where property values are now rock bottom. It's a buyers market biiig time. There are properties galore for around 50 grand. You pay minimum down and finance the rest on a 30 year fixed mortgage.     This will run you roughly $250. a month.

 As inflation starts to go ballistic, those $250. a month will cost you about $25. a month and if the world keeps printing the way they do in 20 years that payment will be half that.

Other than buying gold and silver this is one of the only ways to personally profit from the scam that we are subjected to by our lords. 

they are showering us with gifts. Don't whine about them, use them. 

Thu, 02/16/2012 - 18:59 | 2167570 rsnoble
rsnoble's picture

Problem is will wages increase?  What if you still only make $300wk and inflation makes everything go up 50x? It would be hard to make a $250month payment when your income hasn't risen and gas is $20gallon would it not? Not trying to argue just wondering about this.

Thu, 02/16/2012 - 19:15 | 2167607 Rubbish
Rubbish's picture

Not a good plan, money and credit are contracting, only expanding for the upper 1/2%. Tell me why a rich guy wants your run down oasis in middle America?

Thu, 02/16/2012 - 19:47 | 2167704 eddiebe
eddiebe's picture

Well personally I don't want to live with the 1/2% anyway.

Thu, 02/16/2012 - 19:24 | 2167629 DosZap
DosZap's picture


In the mid west where property values are now rock bottom.


Care to elaborate on where in the Midwest?.

There are smokin deals in Detroit,but too damn cold, and dark.

Ferrriners are buying up Fla coastal RE.

Thu, 02/16/2012 - 19:41 | 2167683 eddiebe
eddiebe's picture

Very serious! Look at Missouri or Arkansas, if you like it mild. Iowa Ohio Indiana etc are colder in the winter but there is plenty of hardwoods to be had for that wood stove. Plus if you wish, look near Amish or Mennonite settlements so your food source is reasonably safe. If you want to get into a real house in the upper penisula of michigan you don't have to look far to find something for 20 grand, and I don't mean a fixer upper, but then yeah, you will be feeding the stove for 7 months a year. Of course you won't find a job working for IBM in any of those areas, but if you have a bit of a nest egg, you could do worse than investing in a place to call home at some time while the gettin's good. I'm not just talking, I've been there and checked it out!

Thu, 02/16/2012 - 20:01 | 2167735 Rubbish
Rubbish's picture

My family has owned property in Arkansas for 30 yrs., it doesn't really go up. Commercial somewhat, depends, location location location.

Thu, 02/16/2012 - 20:05 | 2167749 eddiebe
eddiebe's picture

I think we are fast approaching the time when preservation of whatever capital you may have becomes supremely important. Of course if you want to gamble, well there are plenty of 'sure things' out there like maybe U.S. IOU's.

Thu, 02/16/2012 - 20:14 | 2167780 Rubbish
Rubbish's picture

I think for the most part were in lock set. 40 yrs ago I used to think this all couldn't last and knew savings wasn't the way and you should hock yourself to the gills and invest with other peoples money since that was the only way to beat inflation. Today seems different and I only preach survival methods to my kids.

I was a registered independent in 1973 and have been since. Now that its cool to be one, I think I'll go cave dweller soon.

Thu, 02/16/2012 - 20:33 | 2167827 Lndmvr
Lndmvr's picture

Red Oak, IA here. Uncles farm just sold in November . Farmland is 7000 to 14,000 an acre. He was almost 96, bought for 100 acre and used horses to plow when he started.  Left it to his only daughter. They knew best to get the hell out of Iowa.

Thu, 02/16/2012 - 18:47 | 2167538 Crimedog
Crimedog's picture

There is no way that we are ever going back to the gold standard.  Not gonna happen.  You really think we can afford to go back to living within our means?  You think we are going to let future expansion of credit and growth be decided by how much additional gold we can extract from the earth?  This is just wishful thinking of goldbugs.

Thu, 02/16/2012 - 19:20 | 2167621 Temporalist
Temporalist's picture

It is a control mechanism, the credit derived, the derivatives, will be kept in check and only when necessary will someone actually demand the gold as payment.  The problem is that demand function has been manipulated into seeming useless in recent history, also at the behest of the fiat money masters, which is why people like Jeffrey Christian will get away with admitting there are 100 to 1 or more ounces of paper gold than physical and nobody seems to care. Could that be done with oil or cattle or soybeans when people are actually taking delivery?

Gold is the ultimate payment that is all. If it were more understood most of these problems would not have come about. There already is a defacto gold standard now which is why central banks are buying and countries are willing to trade in it.

The miners are fools for not listening to Sprott and Embry who are trying to wake them up to the fact they are not just selling pretty rocks but the most valuable means of valuation and trade the world has known.

Thu, 02/16/2012 - 19:28 | 2167647 HurricaneSeason
HurricaneSeason's picture

It'll be a 2 tier system. China will sell their rare earth minerals for gold and Iran will sell their oil for gold, but a gallon of milk will still be a bunch of pictures of dead presidents. China already hads the full collection, but the farmer doesn't.

Thu, 02/16/2012 - 19:29 | 2167655 LynRobison
LynRobison's picture

So, do you really believe that everyone can live beyond their means forever? Not gonna happen. 


We might not go back to the gold standard. We might go back to good old fashioned chaos instead.

Thu, 02/16/2012 - 18:48 | 2167542 rsnoble
rsnoble's picture

BTW im still not convinced gold is the answer. Don't get me wrong if I had the $ id buy some for sure just in case.  Does anyone really see the US gov't saying ok we're screwed. We'll just step aside. Do what you want. Ha. Yeah right.  I could see them outlawing gold, giving us some new currency etc.  For things to transpire to the point people running around paying for shit with gold rocks would equate to total collapse in which millions will die regardless.  I suppose a quadrillion in derivatives could support such a thing.  Personally I see massive wars as a result. In any case yeah I think we're screwed.

Thu, 02/16/2012 - 18:50 | 2167549 The Watchman
The Watchman's picture

Gold smold - this is just another jackass with a stack of it that he doesn't want to see be worthless soon. There is nowhere to hide from the tsunami coming. Silver coins maybe, but Gold is a fantasy.

Thu, 02/16/2012 - 20:15 | 2167782 NotApplicable
NotApplicable's picture

Sayeth the man with his ass in his hand.

Gold bashers are out in full force today, I see.

Thu, 02/16/2012 - 18:52 | 2167554 Zeff
Zeff's picture

More like a 21st century Book of revelation. 

Thu, 02/16/2012 - 19:01 | 2167576 Yen Cross
Yen Cross's picture

GREAT QUOTE! I'm not Catholic. Well done+1

Thu, 02/16/2012 - 18:54 | 2167558 rsnoble
rsnoble's picture

This could be the beer talking but is there a possibility that the current world couldn't survive on a system of real assets since we have taken it to this height with phony bologna bullshit? Not sure what im trying to say.  I guess that if the endless supply of digital zeros that are required to sustain life disappeared would that = death?  I need another cold one.

Thu, 02/16/2012 - 18:59 | 2167572 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1

Yes, another cold beer is the answer.  But, don't neglect "Solid Beer": GOLD!

Thu, 02/16/2012 - 19:20 | 2167622 Cheesy Bastard
Cheesy Bastard's picture


Thu, 02/16/2012 - 19:28 | 2167650 Yen Cross
Yen Cross's picture


Fri, 02/17/2012 - 00:14 | 2168413 Socratic Dog
Socratic Dog's picture

Look, it's not money we can't survive without, and it's not beer (close), it's CHEAP OIL.  7 billion people cannot live on this earth without CHEAP OIL.  That's the bottom line.  EVERYTHING we have and take for granted is based on a neverending supply of CHEAP OIL.  Don't forget it.

Fri, 02/17/2012 - 06:32 | 2168828 UP Forester
UP Forester's picture

Build a gasifier, fueled with wood.

Thu, 02/16/2012 - 19:25 | 2167639 Temporalist
Temporalist's picture

To answer your question, when people travel abroad can they get accustomed to the change in monetary systems and valuation of goods and services?


Yes people could become accustomed to making half or less their salaries...if it bought twice or more the goods and services they pay for.

A simpler way to put it is would people like paying $0.30 for a coffee insead of $3 and would they get used to it?  

Thu, 02/16/2012 - 18:58 | 2167566 SillySalesmanQu...
SillySalesmanQuestion's picture

Banks manipulating gold...banks manipulating silver...nah...can't be true.

Thu, 02/16/2012 - 19:02 | 2167581 RobotTrader
RobotTrader's picture

Embry and many other KWN "Experts" have been dead wrong.


Gold will skyrocket only when the stock market makes new highs.

Any "Endgame" or "Financial Market Destruction" will send gold into a tailspin and it will go down at least 2x faster than the NY Composite.  And gold equities will go down 3x faster, and gold juniors will go down 4x faster.

When stocks go up, gold and the gold equities are dragged up kicking and screaming for the ride.

If the gold equities go up even faster, then that is going to slingshot the NY Composite Index to the moon on a "Weimar Run".

Cheerleading a "collapse" is the absolute worst thing that a gold bug could do.

They should be cheering for:

- Biggest consumer spending boom of all time.

- Outright monetization of stock index ETF's

- Infinite number of bailouts and rescues for all lending institutions

- Heaping Helpings of LTRO's for all sovereign countries with liquidity problems

- Bigger expansion of Fractional Reserve Banking

- Bigger OTC Derivative expansion

Why these guys can't get it through their thick skulls is beyond me....

Thu, 02/16/2012 - 19:24 | 2167632 falak pema
falak pema's picture

you must believe the bankruptcy of Law was a fairy tale, the tulip bubble never occured, and 1929 was when they held the great Charleston contest; during the greatest "candy for a baby" type stock asset expansion of all time that never went bang and WW2 never resulted. 

Auschwitz never existed and oil is unlimited. The world is one big happy family and world population is around 1 billion. 


Thu, 02/16/2012 - 19:32 | 2167648 DavidPierre
DavidPierre's picture

Listen Up... CockSucker!

"I'm going to take this place down ... like Gomorrah"

Thu, 02/16/2012 - 19:34 | 2167670 HurricaneSeason
HurricaneSeason's picture

We would already have the derivatives and fractional reserve banking as x goes to infinity if it weren't for the gosh darn Germans. Timmy has been trying to tell them how it works. The Germans should watch how we do it the next time we hit our debt ceiling.

Thu, 02/16/2012 - 21:09 | 2167897 Dr. Gonzo
Dr. Gonzo's picture

Does the stock market drag oil up with it kicking and screaming too in your bizzaro world? 

Thu, 02/16/2012 - 23:19 | 2168278 fuu
fuu's picture

"Cheerleading a "collapse" is the absolute worst thing that a gold bug could do.

They should be cheering for:

- Biggest consumer spending boom of all time.

- Outright monetization of stock index ETF's

- Infinite number of bailouts and rescues for all lending institutions

- Heaping Helpings of LTRO's for all sovereign countries with liquidity problems

- Bigger expansion of Fractional Reserve Banking

- Bigger OTC Derivative expansion"


That all sounds like a collapse to me.

Thu, 02/16/2012 - 19:05 | 2167590 flying dutchmen
flying dutchmen's picture

Gold is just another asset. thats it.  Everyone is allways talking up their book.  I dont see gold making a huge run unless everyone starts hitting hte printing press a little harder.  Plenty of stocks out there that trade at reasonable cash flow valuations.  There you at least have something that is producing something.  This is if managment is not raping a pillaging with huge salaries and options.

Thu, 02/16/2012 - 19:05 | 2167591 fonzannoon
fonzannoon's picture

If nobody owns equities anymore and the few remaining people who do choose not to sell how would there be a crash?

Thu, 02/16/2012 - 19:07 | 2167593 flying dutchmen
flying dutchmen's picture

Top in the gold market-- Now Remember back in 1995-98 all the central backs were unloading their golds holding. well they are now buying it back. which to me means that we are a lot closer to the top than the bottom..

Thu, 02/16/2012 - 19:39 | 2167676 Temporalist
Temporalist's picture

The central banks have just started buying.  They aren't even close to full buying mode yet.  They just gobbled up the IMF supply and if the IMF isn't selling who is?  And if the CBs and sovereigns aren't getting their physical they aren't buying.  

The pension funds have not really jumped onboard yet either but as the public has been buying, and the price rising, the pension managers are going to have to justify not participating in the longest and continuing bull market of the young millennium in prescious metals which means they will have to compete with CBs for supply of physical only.  If the pensions funds aren't providing this to their clients they will just drive more people to invest in gold independently.  That also applies to mining stocks if they start to skyrocket the pension funds will all move fast for fear of missing a mega parabolic move.

Additionally during the past, at nearly any reference point you will choose, China was not buying (nor Russia to a lesser extent) and the U.S. and London were the only sources for trading.  That has changed rapidly in the past decade if not just the past year to the present.

You just front ran yourself right out of a good thing.

Thu, 02/16/2012 - 19:41 | 2167685 DosZap
DosZap's picture

flying dutchmen said:

which to me means that we are a lot closer to the top than the bottom..

We're not even 5' off the starting line, the GP( USA) has not started buying, and at approx 2% general pop holding phys..........the race has not even begun, in the US.

The near TOP will be when you cannot get anyone to sell you an ounce for any price that is not ridiculous.(fiat paper zero valued)

When J6Pack starts hitting the coin shops, and lines form for a shot to get ANY...........then it will be time to dump it, and get into tangible assets,like properties,and anything you can barter,sell for far more than its ever been worth.Once we jump that $2,500.00 barrier...................the jig is up,we are off to Alf's#, and likely beyond( $4,500.00).

CB's are not stupid, they KNOW, and have always known what REAL money is, Au/Aug, always has been, always will be.

IF GOLD were not the ultimate form of money WHY are they hoarding it???...................doesn't take a rocket scientist.

Thu, 02/16/2012 - 23:06 | 2168235 DoChenRollingBearing
DoChenRollingBearing's picture

@ Temporalist and DosZap above

+ 1 to each.  Who is red arrowing common sense?

Thu, 02/16/2012 - 19:08 | 2167596 Fedaykinx
Fedaykinx's picture

silver and brass, bitchez

Thu, 02/16/2012 - 19:09 | 2167598 eddiebe
eddiebe's picture

One more time this thought:

 If we were one world government then I would say all you nay saying gold and silver could be right, but we are not. Gold and silver will have it's monetary place again because of a lack of trust amongst sovereigns be they countries or corporations. With all the presses running overtime and nobody able to trust the other to slow them down, they will be forced to link.

 Even if you reduce this scenario to 5 families, say, the cosa nostra and the R's and maybe the vatican and some jews or arabs, doesnt matter. Even they will have to have real money as in something solid amongst them to play their power games.

 One of the definitions of money is a store of value, which fiat by definition certainly isn't. So all of you bowing before the printing press better beware and think this through very carefully and thoroughly, because this is at the very bottom of the issue of our time: Fraud. The pm's force us to be honest amongst each other, at least fiscaly.

Thu, 02/16/2012 - 19:10 | 2167601 Crimedog
Crimedog's picture

Here are the scenarios that most of the ZH doomsayers hope occur in the near future:


1)  Economic collapse, massive devaluation of the dollar and most other fiat currencies - however, society maintains relatively in tact.

As an average person, do you really think you will be able to cash in with your gold which has now skyrocketed in price?  In the interview, Embry says the current market is heavily manipulated, which he has no actual evidence to support, but if it was the case, wouldn't this suggest that in any post-collapse scenario, the price will be manipulated even more so?  In this scenario, the government will screw you over and do what it deems necessary.  You will not become an overnight king because of your gold holdings.


2)  Total collapse of society - the Mad Max scenario.


In this scenario, why would I give a crap that you have a shiny piece of metal?  What utility do I get from this piece of metal?  I guess I could fashion it into a weapon of some sort, but really, I could do the same thing with any rock.  The only thing that matters in this scenario is guns, ammo, and street smarts.


Thu, 02/16/2012 - 19:25 | 2167635 Black Forest
Black Forest's picture

"The only thing that matters in this scenario is guns, ammo, and street smarts."

You are a bank employee, aren't you?

Thu, 02/16/2012 - 19:27 | 2167643 Yen Cross
Yen Cross's picture

Pissant Porches work?

Thu, 02/16/2012 - 19:31 | 2167662 Black Forest
Black Forest's picture


Thu, 02/16/2012 - 19:43 | 2167696 Yen Cross
Yen Cross's picture

 For What? You knew the game. Move foreward and use your resources.

Thu, 02/16/2012 - 19:44 | 2167699 jomama
jomama's picture

i can't speak for everyone, although you have no problem doing so, but...  

i definitely hope for a collapse of the illusion that has allowed the scum at the top to reap all the productivity of the globe, while everyone at the bottom suffers at a near expontial rate.  their vehicle is a fiat based, heavily manipulated medium that favors the 'haves' much more so than the 'have nots'.

my stash is not to make me a king, it is to preserve what wealth i have earned, because it is being stolen everyday otherwise.

additionally, i don't hope for a mad max scenario, because without people working to cool those 440+ nuclear reactors around the world, no one will be long for this planet anyway.

Thu, 02/16/2012 - 20:34 | 2167829 Crimedog
Crimedog's picture

C'mon man, I read ZH almost everyday, and it's easy to see the slant of ZH towards doomsayers and gold/silver bugs.  Every day there is a guest article predicting the end of the world, which is a fairly easy thing to do when you don't attach a date or timeframe for it.  Like the ZH motto in the upper right goes...


Also, I'm not going to argue with what you said, as I agree that this game has long been rigged to benefit a few at the cost of many.  I just don't see how a gold standard would solve this.  The paradigm 'haves' and 'have nots' has always existed throughout history and will continue to exist, no matter the standard of currency.





Thu, 02/16/2012 - 21:00 | 2167873 jomama
jomama's picture

and i'm not going to argue that a gold standard will solve this.  the truth of the matter is that the game as it is cannot continue for much longer in its broken form.  it may have to come to civil war for a solution, but i still don't count on becoming a king with my stash.  for me, it's about survivability and longevity of my already earned wealth. a return to sustainability is going to take a lot more than just a gold standard.

Thu, 02/16/2012 - 20:42 | 2167841 Rubbish
Rubbish's picture

Exactly, they may live underground for a few years but sooner or later the're coming up like cockroaches only to die of radiation sickness within a few more years.

Fri, 02/17/2012 - 04:25 | 2168738 honestann
honestann's picture

To help you understand:  We convert our fiat into gold, silver and other precious metals because they are real.  They do not become worth less or worthless when predators play their word games, mind games, language games and power games.

You might ask, why not convert our fiat into other real, physical goods.  Answer:  some of us do.  But many goods degrade over time.  However, any real, physical, durable basic good is just as good as gold or silver in most ways, and we fully understand and freely admit this.  So, why do we seem to prefer gold and silver to other real, physical goods?  Answer: Because they are compact and nicely divided into units of modest value.

But most of all we hold gold, silver and other PMs because we are very, very, very aware that the form the coming chaos takes is difficult to predict.  Frankly, most of us believe fertile land, self-sufficient physical plant equipment and equipment to produce food on land is better than gold... theoretically.

Our problem is, we're not sure whether any one specific self-sufficient farm will end up being more valuable and secure than the gold we hold.  What I mean is, buying any real farm and equipment ties us to exactly one situation - that farm.  But we cannot be certain what actions the governments near that farm might take, what hordes of people near that farm might take, and so forth.  Can we defend our productive farm?  In my particular case, I actually enjoy living in extremely remote boonies, where probably such a self-sufficient operation will be secure.  However, most people are overly intimidated living in extremely remote places, and therefore anywhere they set up their self-sufficient life leaves them significantly at risk when the SHTF.

And they know this, subconsciously if not consciously.  And THIS is why so many prefer to keep their savings in the form of some "generalized value" like gold.  Once the SHTF and they can see the trends (where is relatively safe and secure), you can bet many if not most of them will convert their gold to land, dwellings and equipment in those locations.  In other words, the point of gold, silver and precious metals is a form of the cliche, "keep your powder dry"... wait until you know where you're spending your savings wisely.

When the collapse comes, fiat will be worthless.  However, the entire mindset of human beings for many thousand years is... gold and silver are the ultimate asset for barter.  They will again be universally accepted, because barter of random goods for random goods is simply too difficult and inefficient.  If you have eggs and you need lumber, locating barter in the quantities you require is extremely difficult and inefficient.  But if you exchange your eggs for gold, you will have no problem exchanging your gold for the lumber you need.

And PS:  Almost zero of us expects to become rich because we hold gold and silver.  We simply expect to retain the value of our assets.  Yes, the exchange value of gold versus other goods may well rise modestly when fiat collapses, but that's just a side benefit, not the point.  And very few of us even think about that side benefit either.

Thu, 02/16/2012 - 19:31 | 2167656 linrom
linrom's picture

There was this hapless chap on another thread that was telling me that US Elites and their useful idiots in the middle class won't attempt to blame the fiscal mess on safety nets.  The noise to cut entitlements is going to be deafening. And the chameleons who run ZH are promoting this.

Any money that won't be paid out in entitlements will be paid out as interest on Public Debt and repayment of Private Debt. Cuts to entitlements will not reduce debt.

According to Martin Armstrong over 80% of National Debt is accumulated interest. Excess Social Security payments subsidized Regan and Bush eras tax cuts? What's more, budgets were never balanced. Instead government deficit spending ballooned to create millionaires out of government contractors and lobbyists while all along the well to do elites and upper classes collected interest income on national debt and paid little in taxes.

If US was to eliminate all entitlement spending and correspondingly eliminate all the Payroll Taxes, the revenue available to US would be about $1.4 T. That is barely enough to fund the military, VA, military retirements, Dept of Energy nuclear arsenal etc. The so called entitlements also pay for disability income of military personnel and all the perks that military receives such as educational benefits, sign up bonuses etc. 

Entitlement spending did not cause  the 2008 crash, bankers and their counterparts in the industry did.

The total Private debt currently stands at $43 Trillion. Bankers and CEOs will never repay this debt. They will however attempt to to steal all your future benefits.

Think for yourself, and DO NOT assume that the bloggers on ZH advocate anything other than think-tank elitist agenda.

Thu, 02/16/2012 - 22:10 | 2168058 John_Coltrane
John_Coltrane's picture

"Entitlement spending did not cause  the 2008 crash, bankers and their counterparts in the industry did."

No we ZHer's all understand what caused the so-called crash:  too much debt.  And how do we fund "entitlements"?  By creating more fake wealth, also known as debt-a lien on the future.  Real wealth requires reducing the entropy (i.e disorder) in the system, which always requires work, which always requires energy.  Energy, like gold, is finite and very valuable but fractional reserve fiat sytems backed by the "full faith of governments" are fake, fake, fake!

By the way, your numbers are phony;  here's the real entitlement (i.e. mandatory) spending for FY11, (source wikipedia) :

Medicare and medicaid:  $825B

Social Security: $725B

other Mandatory: $465$

Defense: $700B

So, entitlement spending is $2T or 2/3.5 = 57% of the current budget.  So, as we Zher's know government is all about income redistribution, not wealth creation.  It is a parasitic entity.



Thu, 02/16/2012 - 23:17 | 2168265 linrom
linrom's picture

Market crashes are caused by Ponzi speculation. Too much debt leads to depressions because reduction in debt causes fall in aggregate demand, which then leads to debt default; falling prices and deflation.

My numbers are not phony. US revenues from sources other than Social Security and Payroll taxes have been running at about $1.3-1.4 Trillion of which defense spending has been running in excess of $1 Trillion.

The war organist entitlements is a war against Social Security, bank on this.

Government is a parasitic entity because it redistributes income from the poor to the rich. In case you don't know this, the economy redistributes income from the poor to the rich too; that's why, debt accumulates until it don't.

Ok, I know that you won't understand this.

Thu, 02/16/2012 - 19:33 | 2167667 EndTheMedia
EndTheMedia's picture

Has anyone ever stopped to ask the question why a home’s value should ever go up?

Thu, 02/16/2012 - 19:37 | 2167682 Rudolph Steiner
Rudolph Steiner's picture

Meet The Fungibles

Gold, like the fruit bearing part of a plant, which, like a global network of latent and potential mushrooms, rests always at the ready alert in the ancient financial DNA mycelium of our specie(s), substrates the globe like a Jungian subconscious, like Twitter feeds on the web or the miraculous nature of the universality of a McChicken experience; one called from the subconscious mycelium kitchens of global commerce by uniformed keepers of the McChicken oracle. This is the hologram of fungibility, the definition of a thing readily exchanged for the same, elsewhere, through a communication of deliverability, and the promise to do so. This conceit underlies the credit system we have come to observe in these times.

Back in the early days of this sort of indirect exchange, Knights Templar issued letters of credit which served as the telex, the Internet memo of title, to certain types of chattel, gold and silver most often, deposited at the Templars on their departure. A kind of travelers check for the 11th century. These letters of credit served as documents against which one might draw againsti initial deposits at Templar banking and trade outposts (think Mickey D’s) along the way to Jerusalem, redemption and Heaven ~ what one did with one’s free time at the cusp of 2nd millennium Christian Europe (before golf courses and x-box amusements were a physical or ethical-moral option for entry to one’s cloud nestled day planner ... before Norman Rockwell and Cable TV, Adele and this barren Arab Spring).

In light of this point of view, concerning the core nature of fungibility, and the catalogue of simulacra derivatives thereof (which mark the face of the moon yet are not the moon itself), which have developed into custom in this most recent past millennium, I came across this paragraph earlier today, here at the ZH in Tyler Durden’s offering of Keith Weiner’s submission to the ZH, which may possibly have been originally entitled Stocks vs. Flows. And I quote:

Many today propose that banks must back their reserves with 100% gold. They envision a vaulting and payment processing system only. But without realizing it (or in some cases deliberately), this policy rules out credit. Perhaps it is based on this view, that detractors of the gold standard say that there is not enough gold for modern production and trade.

Hmmm. Where I am familiar with points and the vig, the tip and the fee, others might imagine a world of a certain percentage of participation of an enterprise yielded to the investor in exchange for advancing credit for, or direct capitol to, the principal attending the enterprise, or, in an alternative to points, the amount of interest agreed to return against the loan, often based on amount and duration of that which has been considered by the advancing party. At times the agreement, points or the vig, in lieu of the common fungible of cash or credit, might instead include a reference of trade or services. And that, Ladies and Gentleman, pretty much sums up the core nature finance as far as we need to know it.

While there are bookmakers in Vegas, always willing to take your money in an AIG setup of long odds and assumed disproportionate advantage to the outcome which you seek to derive profit from, as we have come to know at a moments notice your derivative position in an outcome can be MF’d, deregulated, remargined or otherwise unbound from what might have been misconstrued as a contract in these times misty in the gloaming twilight of promises. And, while the Knights Templar letters of credit for the issuance of which pilgrims were charged a fee, a gift to the Templars, which pilgrims were only too glad to part with because the value of Templar security of the promise exchanged for the chattel was sound, the letters of credit, the credit itself, was based on tangibles promised against the letter. Credit must needs regain it’s rightful place as liquid promise against tangibles.

This is the presumed foundation of any gold standard. And, while soothsayers are busy forecasting what fiat script will be included in a basket of commodity and other tangiblely supported SDR’s, and there are those of course who imagine a future world where all exchange is 100% backed by gold, they are all, in my delirium of being one born out of step with my time, sort of missing something fundamental.

As long as anyone can bank on the value of the derivative of a thing, swear it as collateral for cash or as offer for some sort of liquidity, and get away with it on a Templar level of trust like bank or nation, the system will fail. It is baseless. The key word is tangible, the promise of something real in exchange for the trust of that fungible liquidity the Templar mediator can participate in as a middle man. Something which does not exist in the finance of these times.

The Templar makes the judgement as to the fungibility or implied liquidity brought by a thing to an exchange based on factors satisfactory to common or unique knowledge of the market, like the pawn broker we have today or the small town mortgage issuer of yesteryear, the grain elevator operator advance, but judgements are the responsibility of the Templar... were. Something tangible was put up to collateralize the exchange.

And it is all a sort of comeuppance we observe in these times. While most of the great banking families and Templars of a millennium ago all ended up succumbing to the profligacy of nations, today the nations appear to be succumbing to the will of the Templar’s bastard children of the derivative Corn who pretend to a Banking “system”, like a cancer we have brought upon our selves from smoking 2 packs a day for the past thousand years.

So, as to the conceit that a 100% gold backed system of exchange rules out the possibility of credit, I say that this statement is incorrect. I would offer that any system that does not assume tangible, derivative-less, collateral, supported points and a simple vig(a gift), will not endure, regardless of the historical precedents of psychological-legalese or implied value of a thing, unless the dross of promise can be purified, and the actual thing assigned can be physically held. We may very well need an interregnum between the demise of sociopathic banking, psychopathic national governments and shark infested oceans of broken contracts our lives tread water in now. We need to start ... well... sort of from scratch. Wake me when the tides turn and the harbor is flushed clean, once more ... in the spring of 2022.... I’ll Templar my goods and sail away, to a new Jerusalem of equity and fair play, a place in the true light of day.

Thank you John Embry. Babysteps, one at a time, like finding seashells on tsunami beach. We will all smell the smoke miles before the fire is in sight.

Thu, 02/16/2012 - 19:40 | 2167686 crash_davis
crash_davis's picture

I just clicked on the main stream media's nightly news and the first story is that the bailout of gm was awesome and they made a ton of money last year. Then the next story was that the dow finished just shy of 13,000 today. unemployment levels lowest in years. I guess everything is ok, the economy is fixed and we all our getting a new unicorn courtesy of the govt.

Thu, 02/16/2012 - 20:05 | 2167751 Incubus
Incubus's picture

My unicorn better be financed for 150 years  and shit the latest model iphone.

Thu, 02/16/2012 - 19:49 | 2167707 engineertheeconomy
engineertheeconomy's picture

Just bought a ranch/farm for a handful of gold coins. It has orchards, crops, a good size pond with fish and several head of cattle. Good fences, some pasture, some forest, and stream withcrayfish and trout. Sand and gravel for building walls as well as timber for replacing beams, bridge, etc. Several buildings, wood stoves, hand grinders, kerosine lamps, etc. Even came with several thousand gallons of diesel and a couple bulldozers. Those old gold coins were ones I picked up for a couple weeks worth of work when I was a kid. Hell, the diesel alone was worth that.

Thu, 02/16/2012 - 19:50 | 2167710 eddiebe
eddiebe's picture

Good for you. I'm glad you're making out!

Thu, 02/16/2012 - 20:02 | 2167741 steveo
steveo's picture


Fri, 02/17/2012 - 01:48 | 2168618 Harbanger
Harbanger's picture

"as well as timber for replacing beams, bridge, etc."

Keyword: Bridge

A handful of coins is what 20 max? That won't buy you a pickup truck. 

Thu, 02/16/2012 - 21:46 | 2167988 smiler03
smiler03's picture

Must have been a hell of a "couple weeks worth of work".

Thu, 02/16/2012 - 21:54 | 2168026 vamoose1
vamoose1's picture

thats awesome,   you  the  man

Thu, 02/16/2012 - 19:51 | 2167713 Yen Cross
Yen Cross's picture

 Some one just administered the ( Blue Pill)

Thu, 02/16/2012 - 19:59 | 2167731 walküre
walküre's picture

As if it really needs to be explained again.

Ok, here goes.

Banks are underfunded because money has been taken out. CBs are doing everything they can to refund the banks. Demand for cash is huge. That's why the system is crashing.

Where do y'all think this money is going?

Just ask the gold miners who is buying their products by the tons.

Think of it this way. The banks, the CBs and so on are like the Village of Potemkin. There's nothing behind it. Account holders have withdrawn billions of cash over the last few years. Governments are acting out of despair and urging their CBs to pump liquity into the banks like there's no tomorrow. In the meantime, revenues are declining and governments are struggling to meet their budgets and their obligations. Nothing is moving in large volume. Real estate is dead. Stocks are dead. Yet, pension funds are required to liquidate ongoing to meet their payments. Again, CBs coming to the rescue and injecting liquidity. Nothing is backing this liquidity.

Smart money has cashed in their chips, taken the money off the table and walked out of the casino years ago. Their money is buying real hard tangible and untraceable assets like gold.

Don't matter how many times Rearviewtrader wants to sell you ever higher highs on NFLX or LULU today or tomorrow. You'd be paying for their CEOs and other insiders new house, furniture, Ferraris and so on. Do you want to be NFLX CEOs bitch?

Thu, 02/16/2012 - 20:02 | 2167744 steveo
steveo's picture

BPT trade results.
Lots of trade ideas this last month from BPT. 

82% success rate, your mileage may vary.   Average win 9.2%.   Many of these trades are very fast like a day or 3, sometimes a month.

I usually move my stop up to breakeven fairly quickly, and the net result is I get stopped out more often.

The alternate reality is that I also don't experience the larger losses.

It ain't exactly "printing money" but its pretty close.

There are alot more ideas posting intraday on their paid blog, sign up using link on the right...they credit me a month of membership, which helps.

Thu, 02/16/2012 - 20:07 | 2167753 Yen Cross
Yen Cross's picture

 I Huff and Puff, and take a nap.  Welcome fall in the south.

Thu, 02/16/2012 - 20:06 | 2167754 diogeneslaertius
diogeneslaertius's picture


Thu, 02/16/2012 - 20:12 | 2167771 Segestan
Segestan's picture

Calm down little people. The NWO will be owned lock stock and barrel by the same lot that has owned you're ass' since 1200 AD.

Thu, 02/16/2012 - 20:14 | 2167779 woggie
woggie's picture

and why not? courupt to core world, u.s. leave conventional remedies hopeless.

Thu, 02/16/2012 - 20:14 | 2167781 bugs_
bugs_'s picture

I am DEEEEEEstroyed!!  .... no wait ... i'm ok.

Thu, 02/16/2012 - 20:20 | 2167794 Yen Cross
Yen Cross's picture

 Come on Girls. I have NEVER CHEATED ON A WOMAN!  I don't want you. I have had the best of you!

   Beautiful Women are HARD to come in contact with, sort of.  My Father CHEATED!

Thu, 02/16/2012 - 20:24 | 2167805 Snakeeyes
Snakeeyes's picture

Fork in the road, Chris Whalen, Alan Boyce, Chris Mayer and Glenn Hubbard (Romney's advisor) think all of the mortgage refi plans will save the housing market and the economy.

Or will it clobber banks, pension funds and taxpayers?

I am leary of big government interventions since ... they caused the problem in the first place and have a political motivation to redistribute wealth.

Thu, 02/16/2012 - 20:24 | 2167806 Yen Cross
Yen Cross's picture

 It's the Italian DEBT  bid /cover coming up.

Thu, 02/16/2012 - 20:29 | 2167816 Yen Cross
Yen Cross's picture

 usd/jpy looks like a good intraday short.

Thu, 02/16/2012 - 20:35 | 2167831 non_anon
non_anon's picture

which will fail first, the corrupt system or the compliant citizenry?

Thu, 02/16/2012 - 20:45 | 2167846 Black Forest
Black Forest's picture


Thu, 02/16/2012 - 20:38 | 2167836 non_anon
non_anon's picture

[glitched post]which will fail first, the corrupt system or the compliant citizenry?

Thu, 02/16/2012 - 20:45 | 2167844 steve from virginia
steve from virginia's picture

More same ol' same ol': " a monetary system based on gold, one in which one, gasp, lives according to one's means, is better."

Fine! Let's live within our means, no more credit.

Industrial economies are the children of credit, industrialization does not exist without credit.

I'm fine with living within (resource) means. One way or the other we will do it.

Thu, 02/16/2012 - 20:58 | 2167850 Yen Cross
Yen Cross's picture

 The Petro Dollar rinc/se wash is happening as we speak!

Thu, 02/16/2012 - 20:54 | 2167863 thursday0451
thursday0451's picture

Do JP Morgan, Barclays, Commerzbank and Deutsche Bank all possess a document with an explicit timeline for a Greek default on March 23rd?

Thu, 02/16/2012 - 21:23 | 2167930 kevinearick
kevinearick's picture

Drilling Diversity

So, civilian authority will make a bad choice very time, to be expedient, because it is a least common denominator function. It is blind to the future. By design, it is a derivative of derivatives, which means that the military must be a greatest common denominator function, to maintain the future as the heading. Net, the military may only give civilian authority good choices. Once it proffers a bad choice and civilian authority chooses it, military reorganization must begin.

The looking glass between military and civil authority in all such organizations is THE IMPERATIVE. If this country is to stand another election as a world leader, the most important decision of the next presidential nexus is who will be chosen to stand on the neck of military Family Law, to weed it out, root and all. That’s the point of the pentagon, a limited place to keep all the weeds.

We’ll get to a practical solution to the looking glass, prisoners dilemma, in short order. It turns out that the people who love children the most are also the most dedicated to country, not that the majority would recognize them as such, though they stand in plain sight to intelligent kids.

Big government, like any regrettable affair, begins with a careless act and becomes a thicket of omissions. Accordingly, a constitution is a leap of faith against every known constant. Governments are captives of time. The fusion/fission reactor can begin with any set of rules, so long as it has a positive feedback loop, moderated by a negative feedback loop, but it must remain elastic. Multiple constitutions, markets, require unique angles of incidence, which is why each bridge abutment begins after the local experience of despotism, when arbitrary and natural law is clearest to the participants.

When empire measured achievement gaps are tied to early childhood empire education, in a positive feedback loop, reward to risk is maximized in preparation. Waiting until a constitution is required to prepare is a critical failure. The cost and risk of sailing increases exponentially as it is automated because controls operate behind the curve. Automation only makes sense when a CONSTANT favorable breeze may be reliably expected for an extended period of time. That’s not life.

They can’t even get the boat out of the harbor in this storm, let alone get in front of the oncoming hurricane, because they pay themselves to “fix” the consequences. The closer that hurricane gets, the greater the premium on intelligent labor, which gets scarce to non-existent.

Why would you stand in that harbor, arguing with one group of idiots that refuses to recognize the hurricane’s source, trading ignorance, and another arguing for cheaper labor to clean up the mess, hammers all, looking at you like a nail, when the only available workforce is similarly hiding from itself, hoping to capitalize on the work of others. That would be pretty damn stupid, unless your crew was already out ahead of the hurricane, before the system went bankrupt, with nothing but bad choices to show for its economic activity, “best being the enemy of better.” That is a stupid f***ing mentality. How does German Trust ingenuity look now?

You have a fulcrum of fulcrums, which is a hurricane, which is a drill, tapping the relativity circuit as it drills. The direction is set by felling it, changing the direction of incidence / torque in an aggregate dimensional weave. When government gets out of the way, what remains is bit operation.

Lasting constitutions are not formed by international consensus, with best government practice, as suggested by the Justices. They are formed in the crucible of despotism’s fire, by the people doing the work. It is quite democratic in that participation is at will, but the majority never has the will when it is required.

Concerning the Law, the Justices wouldn’t know natural law if it bit them in the face, because they are chosen by the same university distillation process that wrought P Obama, having never once been subjected to full extent of the law themselves. Take one of those jailhouse lawyers that beat the appellate process filter, or choose the lawyer in the law library that tells all the other lawyers what to think, and you might come up with a Justice of the Peace.

Effective parents are the tip of the spear, always have been, always will be. That’s natural selection. When America had surplus power, its navy did not tolerate the tenets of Family Law, so the feed was equal opportunity, and you just did not f*** with other people’s family expecting a happy outcome. Back then, intelligent kids had their run of the bases, because they could readily differentiate between doers and talkers. They are an excellent source of counter-intelligence, with automatic replacement, as age, time, works them out and on to the event horizons like flux.

Every military outfit is told that it is the tip of the spear, which comes down from Congress, which thinks it is the tip, in best practice replication. That’s not to say that you could not take a few commanders, with INTEGRITY, and rebuild the military, which is exactly what must be done. A new economy must always be grown from the shell of the old.

NASA is FUBAR, a rat hole full of rats, not that it’s their fault; the space program scared the hell out of the energy trusts owned by legacy families. Under a functional constitution, government works for the majority; the majority doesn’t work for the government. Congress now sees only a reflection of its own legacy, which is a reflection of shadow government, from Wall Street to Main Street, which is what you hear every time a corporate boss opens his mouth.

Get rid of Family Law recognition in the military and replace its political brothers and sisters with their intelligent brothers and sisters as officers, and you will fix most of what is wrong with the military. Then take the intelligent kids of intelligent military officers and put them through intensive navigation and sailing education, along with all the new kids coming into the military family, and you will fix most of what is wrong with this country. Civilian authority always seeks equal outcomes for the masses, in a fixed lottery economy on the other side.

What the empire fears is intelligent military education of children because it only takes a small squadron to tip the balance of power. If you look, you will see Civil Family Law engage at peak earning potential with young children, to feed the empire’s early education program coming out of the churn pool.

Above all, get the empire mentality out of the military. That’s for the 2-yr-olds that always crawl their way up to the top of civil administration. That happens because less capable military officers go corporate, creating a feedback loop shorting out the looking glass, resulting in promotion based upon political reflection, the military intelligence oxymoron, instead of military skill.

That is what the Affies understand, from experience, which is why they routinely bury empires, with nothing more than a prevent defense. There is no person on the planet more powerful than an intelligent military parent, which an empire cannot tolerate in peace, which is why being an empire is stupid, unless you understand looking glass operation. Let the chair-side administrators aspire to be emperors; just don’t give them a loaded gun.

Stupid replicates exponentially. As soon as it sets foot outside of its jurisdiction, deploying Family Law in the military, you have to stop the assembly line. A constitution is like a big red switch/button with the word STOP on it, but when successful future generations fail to recognize it and allow government to wire it for increased torque to the motor, losses are recognized as gains, treating debt as asset. You’ll have that with 2-yr-olds. All kids go through a stage where they think their life was unfair. Some get over it, some don’t. The latter always chooses the gun and badge.

Why is China importing agriculture from Iowa and exporting Apples to California, where they are theoretically designed? If the price of gas goes up to further extend California credit, what happens to the overall tax base? Stupidity begets stupidity, and no one can f*** you like family. That is the point of a constitution, distilling diversity across a looking glass, built for the occasion. A global economy must be a reactor of reactors, not replication of a reactor in a race to the least common denominator bottom, which always ends in a bang.

Thu, 02/16/2012 - 21:27 | 2167937 jm
jm's picture

It depends on what you mean by "totally destroyed", I guess.


Thu, 02/16/2012 - 21:34 | 2167959 earleflorida
earleflorida's picture

Volcker; no manipulation, eh, please  define manipulation? 

Typical Tall-Paul forgetfulness,... kinda gives ya second thoughts about the "Grandiose Volcker Rule"

Barsky and Summers "White Paper - Gibson's Paradox" __ 2/15/2002

Thu, 02/16/2012 - 22:09 | 2168055 MFL8240
MFL8240's picture

Not gonna happen till the Jewish bankers are removed from the purse strings

Thu, 02/16/2012 - 22:54 | 2168203 Dermasolarapate...
Dermasolarapaterraphatrima's picture

Embry uses the future tense, "will be destroyed."


"...endless bailouts and economic stimulus for the unproductive at the expense of the most productive...."

Thu, 02/16/2012 - 23:58 | 2168361 ebworthen
ebworthen's picture

Currency debasement is a shadow tax.  The currency can be debauched in the blink of an eye or slowly with "CTRL-$" keystrokes and some printing.  It can be further debauched with levered instruments such as CDS's and MBS's in a sleight of hand kind of way.

Sooner or later, the game will end and tangilbles such as Gold and Silver will be NEEDED to set true values.

Even with huge societal disruptions, we are not so far gone that barter and exchange of precious metals is passe.

Centers of exchange can very quickly adapt to societal changes.  A partial collapse or large collapse would still have and require centers of exchange.  If the paper currency and the trust behind it is debased, precious metals will have universal value.  Add liquor, tobacco, guns, ammo, potable water, food, and fuel.  However, a readily accepted medium of exchange used by all is required.  This has always been precious metals.  They are dense, immutable, testable, universal.

If you believe your Debit ATM card will get you something out of your database account in event of a sub-orbital Electro-Magnetic "event" I wish you luck.

Either way you would be a fool not to diversify into precious metals and the like.

Fri, 02/17/2012 - 01:07 | 2168552 Aquarius
Aquarius's picture

I will try to be succinct:

The current financial, economic and monetary systems are totally ind intentionally fraudulent beyond the pale.

Economics, the profession, with all its Economic Theories, is fraudulous and intentionally disengenuous, profession wide.

The last number of Gold Standards were also intentionally designed for political experiency and were subsequently fraudulant; It was these Gold Standards that Keynes refered to as "barbarous relics" and not as commonly quoted as Gold itself.

Any, and all new Economic Orders, Economic Theories, Gold Standards and whatever, ad anuseum, will be manipulated, contorted, distored and biased, etc., in the same manner and for the same reasons that all Laws and Regulations are twisted to satisfy "insider" preferences disguised as other essential provisions. For example - one can see that the US Constitution, a truly magnificent document lasted less than a week before the man induced rot ws introduced by the "lawmakers". The same with the introduction of the Federal Reserve Act, etc.

It can be easily shown and will soon be made public, the reality of the current global "economic" system is a 5000 year old relic brought down from the abuse of ancient population for the centralizing of the wealth of productivity of the masses by the asute and miserable opportunists that consider themselves pure and elite by self proclamation but indeeed are no more than consensual low class theves, murderers, looters, posturers and intellectual dolts.

The problem lies in a solution to bring the status quo down peacefully with minimum harm to the unwashed masses. You could say use the Law, but this has been totally usurped and soon the US will be in total domestic arrestation and I believe that the Internet will be totally shut down. 

The "leadership"s real enemy today, is a knowledgeable and aware public and the Internet is the instruct that is creating this awareness.

Today the socio-economic system of the World is nothing more than a permanet blood transfusion of the gullible and trusting as was expressed in the Movie Matrix.



Fri, 02/17/2012 - 06:01 | 2168807 JOYFUL
JOYFUL's picture

There's a sense of unreality to any discussion of 'free gold' and the mechanics of it's manipulation which ignores the fact that the biggest 'gold miner' in the world is a laundry shop for a cabal of black ops ex-spooks, arms dealers, bnai-brith honchos & Saudis whose investments included the flight school where Mohammed Atta learned skills in directing large commercial airplanes far beyond those available to working pilots.

As much as any of us libertarian gold bugs are sympathetic to the notion that large financial players use paper gold to force market prices down, the more salient truth is that the main pressure against gold's upward trajectory comes from the introduction onto the market of stolen 'black gold' that Bush 41 & associates liberated from Marcos in exchange for the soft landing in Hawaii. Revelation of these well-hidden(in plain daylight) scams would make MFG seems like a tempest in a tea cup. As Canadians, Sprott and Embry are, I suspect, both well aware of the real players and the real plays behind the scenes, but appear to need to stay mum in order to continue to scoop in the sandbox.

Peter Munk, another George Soros-like scion of Hungarian diaspora refugees was recovered from the wreckage of an insider-trading scandal to front this new trading mechanism, Barrick, which unlike that other Canadian off shore gold play, Bre-X, suffers from no shortage of actual gold, merely a lack of transparency as to it's source. After all is said and done, one has a better chance of solving "the Mystery of Oak Island" than of getting to the bottom of what is really keeping gold from finding it's 'natural' level.

The huge supply of illicit gold stockpiled by Bush & "The Enterprise" can only be pushed onto the market in dribs & drabs, less the source be revealed, and only through means of a seemingly legitimate outfit like Barrick, which has the political and legal resources at it's disposal to engineer paper trails which make it seem like actual mined gold is taken out of actual gold mines. The beauty of the scam is of course that some gold actually is mined, in places like Tanzania and New Guinea...but not nearly the amount supposed. ["Interestingly, Barrick, which has no mining operations in Europe, uses two refineries in Switzerland: MKS Finance S.A. and Argor-Heraeus S.A. – both on the Italian border near Milan, a few hours away from the gold depository in Zurich. The question that Barrick and other banks needed to avoid answering is: what gold was Barrick refining in Switzerland, as they have no mines in that region?"- my favorite quote from Murdering Liberty, Killing Hope by Jeff Prager!]

As with many mysteries, including the notorious 'stand down' of the protective air shield over the east coast on Sept 11 2001, the answers will ultimately trace back to certain offices in Montreal with a proud heritage of abiding control over the fortunes of the large but unruly Republic to the south.



Fri, 02/17/2012 - 08:53 | 2168946 Quinvarius
Quinvarius's picture

There is no mystery gold hoard.  If Barrick had gold, they would have delivered on their hedges instead of covering them and losing billions.  You are right that there is a problem with a lot large miners not being what they appear.  Carlos Slim's non existant operation is the same thing.  They are fronts for trading futures because as a miner/producer/hedger you get better rates on margins.  And maybe you might be able to deliver to cover some of your losses with real metal if you actually mine some.

Fri, 02/17/2012 - 12:15 | 2169859 JOYFUL
JOYFUL's picture

I would hesitate to conclusively disagree with you about "mystery gold" as I cannot personally attest to it's existence. That said, there is little reason for me to suppose that Barrick's dehedging is any proof of the matter one way or the other.  The circumstances of that were as murky and convoluted as the rest of this ongoing story

12:24a ET Saturday, November 22, 2003

Dear Friend of GATA and Gold:

Something really strange is going on with Barrick Gold.

Thursday at a financial conference in London, Barrick
Chairman Peter Munk made what MineWeb called a
"spirited" defense of the company's policy of selling
so much of its gold in advance of its production. But
today Munk told news reporters at the same conference
that Barrick won't be doing any more hedging.

Why such a public and humiliating reversal? (A GATA
agent at the conference who heard Munk's presentation
Thursday and read Munk's remarks today thought the
guy had gone crazy overnight.)

Why make such a gold-bullish declaration on the eve of
contract expirations on the Comex, where the shorts
with whom Barrick long has been allied are struggling
desperately to keep gold below $400?

And why (as MineWeb's Ken Gooding reported) did
Barrick President Greg Wilkins have to excuse
himself from the London conference to rush off to an
urgent meeting in New Orleans?

All this has prompted a lot of speculation: That Barrick's bankers have pulled the plug on the company
because the gold price has increased the debt of
Barrick's hedge book too much; that Barrick heard
something Thursday evening about gold's future and
wanted to reposition itself quickly; and that Barrick
has realized that its share price is doomed unless
it changes its image in the market, among other


The subsequent out of court settlement between Blanchard and Barrick was sealed, and little has come to light in the meanwhile. It seems to me to be plausible that the 'billions' Barrick lost in that reversal were a small part of what was at stake for the company which was the admitted agent of central banks at the time for manipulations of the gold market. 

I would be curious to know your reasons(besides the one you posited) for being sure that the Marcos gold does not exist.

Fri, 02/17/2012 - 08:29 | 2168899 dcb
dcb's picture

except he's  wrong, the current system should be destroyed, but as a papaer whowed here on zh banker pay, and those whose pay is based on credit seee log increases in incomes, they buy the political process with that log increase, and they control the fed. to alter the system would estroy their advantage. asking them to shoot their own foot. only going to happen at the point of a gun.

Fri, 02/17/2012 - 08:45 | 2168932 Quinvarius
Quinvarius's picture

The pro-paper fiat camp also has two conflicting groups.  The first knows that if gold were correctly priced much higher, the world would not be in the trouble it is in now.  Everyone woudl have the asset required to back their debt and take more debt out.  They know it would fix the system.  The other group in the pro-paper fiat group are the ones who are heavily buried in gold shorts and schemes who would be destroyed if gold were priced correctly.  These are the Madoff's and Ponzi masters out there.

But reality will win in the end either way.  Once people start demanding gold instead of infinitely printed paper, and they always do, gold will revalue much migher, and much faster.  They can either let it support the existing system, or they can be stupid and let it end the current system.  I suspect it will be option two based on my observations.  The Madoff Ponzi gold hater crew, while consistantly wrong, want everything their way.  They are all take with no give.  So they will drag us all down with them. 

Fri, 02/17/2012 - 09:20 | 2169016 boogey_bank
boogey_bank's picture

one innocent question: why there is no silver on cb balance sheets?

Fri, 02/17/2012 - 13:21 | 2170190 Freegold
Freegold's picture

I´ts amazing hearing this nonsens time after time if gold gets "too expensive" people will buy silver. As long as you think gold will hold it´s value or increase what´s the problem? The amount of saved labour is the same in both cases. You can buy one gram of gold now and if that is to expensive I think maybe gold is not what you need. I´m sure silver will have it´s run but when the ponzie dies it will leave silver in the dust.

It´s still on sale

Mon, 02/27/2012 - 23:16 | 2202541 pain_and_soros
pain_and_soros's picture

Great interview... Embry has been around & knows his stuff.

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