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Murphy''s ''Midas'' commentary reports on Gold Rush 21
12:09a ET Wednesday, August 10, 2005
Dear Friend of GATA and Gold:
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.
* * *
CBC Interviews John Embry
at Gold Rush 21 in Dawson
http://north.cbc.ca/clips/North/ram-audio/embrey-gold.ram
John Embry speaks with CBC Yukon morning show host Dave White about
his gold-price theories...
Host: Manipulating the price of gold. Whose responsible for this, 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 to 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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