Real Wealth #320 12/19/2012
Outlook For Silver in China Excellent as Demand Increases
John Embry, Chief Investment Strategist for Sprott Asset Management, recently confirmed in an interview with King World News that the outlook for silver in China is excellent. According to Embry, the demand for silver in this country has increased over the past ten years. In addition to discussing silver, he briefly discussed gold and the impact he expects both silver and gold to have on the world. According to Embry, if what we are currently experiencing goes beyond the “fiscal cliff” the results could be catastrophic. However, he indicated that he believes that action will be taken to prevent that from happening.
The Demand For Silver Has Increased All Over the World
Embry is very concerned on how much of an impact stimulus removal would have on the United States economy. Currently, the price of silver is approximately $1,650 less than gold. In Embry’s opinion, the price for silver is too low and should definitely be much more than what it is traded for now. He believes that the price of silver should be higher because there is such a great demand for silver around the world.
According to Embry, the demand for silver has increased around the world. In China alone, the demand for silver has dramatically increased in just the past ten years. In addition to China, Embry also indicates that there is a tremendous demand for silver in other parts of the world as the supplies of this precious metal have diminished over the years. As such, the price for this precious metal should be more than what it currently is.
The Demand For Silver May Have an Impact on Our Economy
With the demand much greater than the supply, Embry just is not certain how this can hold up on paper much longer. He hopes that will there be enough of this precious metal available to meet the demand in the future. However, that remains to be seen. Embry expects this to lead to additional problems.
Current Trends Indicate We Should Expect More Debt and Problems
He believes that what we are currently experiencing is an extended credit cycle. According to Embry, as we continue to rely on credit to get out of trouble we are having problems handling all of the debt that is currently in existence. As this vicious cycle continues, Embry truly believes that economic growth will be sluggish. He expects to see the some of the same recurring trends next year as estimates are expected to be lower in the coming year. He predicts this vicious cycle will ultimately lead to more money being printed simply to keep the whole system flowing.
Our Economy May be in Jeopardy
Embry has indicated that everyone should expect to see more of the same in 2013. However, in 2013 there is a strong possibility that something can go wrong. He believes that there is more room for a geopolitical or economic disaster in 2013. However, China is expected to experience some growth in 2013.
Outlook For Economic Growth in China Looks Good
Although the outlook may not be so great in other parts of the world, Embry has confirmed that the outlook for China is good. Unlike other countries that continue to struggle, he believes that China will be able sustain its own economy simply by injecting additional stimulus into its economy. Unfortunately, the same will not be true for every other country facing the same dilemma.
Gold and Silver Going to Peak in 2013
While things are expected to remain the same for both silver and gold, Embry did suggest that he believes that the price of silver and gold is going to be the highest it has ever been in 2013. He suggested that the price will be at record highs because the demand for these precious metals is increasing worldwide. As the banks in the East continue to buy gold, our supplies of this precious metal are dwindling. Embry also expects the demand for silver to increase on the home front as well. He predicts this will all lead to more money being printed.
The Demand For Silver and Gold Will Have an Impact on Paper Money
Ultimately, Embry predicts that the demand for silver and gold will lead to the obliteration of paper money. Since silver and gold was always the preferred currency for hundreds of years, paper money may just be running its course and at the end of its natural life expectancy. Ultimately, Embry expects the deterioration of paper money to lead to an increase in the price of both silver and gold.
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