Zeev's Turnips Patch-No Politics (ZEEV)

[basserdan]

*** John Embry on gold manipulation ***

Audio of Embry interview @
http://north.cbc.ca/clips/North/ram-audio/embrey-gold.ram

Thanks to GATA's friend Mark Webber for transcribing Tuesday's Canadian Broadcasting Corp. interview from the Gold Rush 21 conference in Dawson, Yukon, with Sprott Asset Management's John Embry. The text is appended.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

***

Host: Manipulating the price of gold. Whose responsible for his, in your view?

Embry: I think it's the world central banks led by the United States working with their associates, their bullion banks: the Goldman Sachs, the Citigroups, etc.

Host: Now why would they do such a thing?

Embry: "It's two-fold. First, gold, as I like to say, is the canary in the coal mine when it comes to determining the health of the financial system. And as there's been an enormous amount of liquidity created, I think they want to mask that, and one of the ways of doing it is keeping the gold price under control. It's not too difficult to do these days with the derivatives at hand and the availability of central bank gold that can be dumped into the market at appropriate times to keep the price under control.

Host: Explain us in layman's terms how they do it.

Embry: There are two markets for gold. There's a physical market where you actually buy and sell gold for jewellery, etc. And then there is the paper market which takes place primarily on Comex in the United States, the commodity exchange. Basically those trades are done with paper. If people are going long on one side by buying futures, other people are shorting gold to them. And that is where the primary manipulation takes place.

The Achilles heel to it is that you may run out of physical gold because the price may be kept too low and therefore the people who are consuming physical gold for jewellery or for hoarding as an alternative to currency may take advantage. And the people suppressing the price will find out that they don't have enough gold to continue. This is exactly what happened back at the beginning of the 1970s before gold went from $35 an ounce up to $800.

This time they have been holding it very steady here over the last few months between $400 and $450. And I suspect that central bank gold supplies are dwindling. It virtually insures at some point in the not too distant future that the price is going to get out to the upside. We await that development.

Host: And when that development comes, what do you think the price of gold will climb to?

Embry: Over the next three or four years, most probably it will get to four figures. I think a thousand dollars is not beyond reality.

Host: Obviously this is something that would be of great interest to a lot of placer miners and people in the place you find yourself right now in, Dawson City. But what about the rest of the world? Why should the rest of the world care about the price of gold and why it is being manipulated?

Embry: "There are a number of places that gold is important to. Northern communities in Canada certainly. But just as importantly, a lot of the places in West Africa, and in these places where starvation is taking place, gold is a fairly significant industry to them. If the gold price were where it should be, they would be doing a lot more gold mining and making a lot more money, more taxes for the government and what-have-you. And basically I just believe in free markets. I think that if you are manipulating the price of something to create a false impression, it can be creating all sorts of difficulties. It's all linked into keeping interest rates low,
which has led to this housing bubble. The magnitude of this is far larger than people realize.

Host: What do you hope to accomplish by taking part in this conference in Dawson?

Embry: It is an educational process, really. I think the evidence GATA has gathered is absolutely overwhelming. My associate and I wrote a paper on this a year ago and it was well documented, we believe, as to what was going on. It was interesting that it was met with total silence. No one who didn't want to go along with it said a thing, which confirmed to me that the points we were making were correct. So what we want to do is to get these points more widely known so people at least know exactly what's going on.

Host: Why do you think that people ignored your findings?

Embry: Because I don't think they want to deal with them. The establishment essentially is a lot of people who would be disadvantaged by this, because it will have an impact on the financial markets, for the simple reason that interest rates, in my opinion, are far too low for the situation we are in and inflation is far higher than anybody acknowledges. Those are things that they do NOT want revealed.

Host: Well, Mr. Embry, interesting stuff. Thank you for your time this morning."

Embry: "Mr. White, my pleasure."

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