Comments from an interview with John Embry, of Sprott Asset Management:

With tremendous volatility in gold and silver, and oil holding well above the $103 level, King World News interviewed John Embry, Chief Investment Strategist of the $10 billion strong Sprott Asset Management. Embry told KWN that bullion dealers are telling him phones are ring off the hook and demand is incredible. But first, here is what Embry had to say about recent events and what is happening in the gold market: “I think perhaps the most bullish thing I saw yesterday was that Dennis Gartman has pronounced the end of the gold bull market as a result of the Fed’s actions. Nothing could be further from the truth. Given Dennis’s unbelievably inept record at calling the gold price, in both directions, I regard this event as wildly bullish.”

“You also had CNBC, which to me is a propaganda machine, when they are out slamming gold and silver after they have experienced major corrections in ongoing bull markets, again, this is wildly bullish for both metals. I really am intrigued at what is taking place because I think the other side, the manipulators, are seriously over-playing their hand here. The interpretation of the FOMC minutes that there would be no more QE is preposterous.

Last year, when they had about $1.5 trillion in budget deficits, they monetized some 61% of it. I think the budget deficit will be equally as large going forward and there are less and less buyers. So, the idea that there is no QE coming, only a moron would believe that.

With regards to the gold market, the paper guys have basically had their way. Gold bulls were trying to make a stand up at $1,680 a few days ago, and then, just like February 29th, the market was flushed again.

The only difference this time is the gold market was flushed from a much lower open interest position. This means it has a limited shelf life. Physical demand is firm.... “ I was talking to a major dealer today and he said, ‘The phone is ringing off the hook. Everybody wants gold at these prices.’

The stupidity of the American authorities and the bullion banks, is just playing right into the hands of the physical buyers. This includes not only the retail buyers, but the Russians, Chinese and the Indians as well. In the case of the Russians and the Chinese, they don’t like us anyways.

In the short-run, because of the power of the paper market, it’s difficult to know what short-term movement will be. But I will stand by what I said in one of our previous conversations, Eric. I stated, when gold was $1,650, ‘There is $50 on the downside, and thousands of dollars on the upside.’ I’ll continue to stand by that.”

Embry also added: “In the end, I have a huge problem with what’s happening here. The powers that be are forcing the public to do the wrong thing. As a result, in the fullness of time, the average person who is investing conventionally in the stock market is going to be crushed. It’s morally wrong what central planners are doing, I think it’s pathological.”

When asked about silver, Embry stated, “Silver is just like a smaller version of gold and when gold gets kicked around, they go after silver. Back on February 29th, when silver was breaking out over $37, that’s when they had the real ‘Leap Day Massacre.’

That was a totally orchestrated thing because they knew gold and silver were starting to get away and this was their worst nightmare. They were keenly aware of the fact that the breakout was going to reveal to people that there was going to be monetary easing forever, until such time as we have hyperinflation.”

When asked about the mining shares, Embry responded, “The mining shares seem to get worse and worse. There has been a lot of algorithm trading, there has been a lot of naked shorting and the natural buyers have been absolutely devastated.

The ones that are holding on to the shares feel sick and the other people can’t stand it anymore, they are selling. The fact is these things are reaching valuation levels like they were back in 2008. That was during a liquidity driven event. This most assuredly isn’t liquidity driven. This is short selling and sentiment driven.

When gold and silver perform the way I believe they will, which is to go up dramatically, the bounce-back in these mining stocks is going to be something to behold. Yesterday, when the mining shares were under pressure, somebody pointed out to me that Newmont Mining basically traded down to a 3% yield.

Now think about that. The US’s largest gold company trading at a higher yield than a 10-Year Treasury. That is amazing. This is just the nature of markets. As the old saying goes, ‘Markets can remain irrational longer than you can remain solvent.’ We are seeing a classic example of that right here.”