John Embry: We could be in a multi-decade depression

John Embry is the Chief Investment Strategist for Sprott Gold & Precious Minerals Fund. He spoke to Eric King last Friday about quantitative easing; hyperinflation for the dollar; gold and silver; and the general conditions of the US trading markets. With 48 years of experience, much of what he had to say was worth listening to:

Embry thinks that we’re only in the beginnings of the downward loop of a large Austrian credit cycle, and that dealing with the problems caused by “too much debt and currency” by issuing “more debt and currency” is preposterous. The underlying issues must be dealt with first, he says, and unless they are, we could be looking at a depression with a resolution somewhere in the middle of the 2020s when we finally are forced to adapt to survive.

With a constriction in the supply of physical gold and silver (as opposed to paper metal), Embry also thinks it a possibility that silver may hit $50 dollars an ounce within a few months (currently $24 dollars), particularly due to the corrections caused by the revealed corruptions in the manipulated silver markets.

Embry also believes that the US dollar’s collapse against hard assets is inevitable — though it won’t be a straight line down — as from his perspective, the US government appears to be doing everything it can to generate hyperinflation.

[That could be an interesting playoff-challenge at a pub quiz night. What more could the US government do, if it really was trying to deliberately create dollar hyperinflation? Discuss.]

There are only two routes out for the US government with their debt problems, thinks Embry, and one is default and the other is massive inflation, crudely disguised as quantitative easing. Although he is against it, he thinks they will choose the more cowardly and easier route of quantitative easing.

In the final part of the interview, Embry comments upon the recent negative prognostications by Warren Buffett on the investment potential of gold.