Today John Embry told King World News, when referring to what is needed to bail out Europe, “All I know is that these numbers are staggering ... We are on the edge of collapse. We’ve run out of time.” Embry, who is Chief Investment Strategist of the $10 billion strong Sprott Asset Management, also told KWN that if the euro does split apart, it “will be extraordinarily chaotic.” Here is what Embry had to say about the crisis: “We’ve got to focus on what’s coming up in the short-run with regards to the European situation. It’s going to be an extremely interesting summit they are hosting this Thursday and Friday. The problems are piling up at such an enormous rate they can’t be ignored anymore.”
John Embry continues:
“There was this amazing back and forth today, where Merkel said, ‘There would not be euro bonds as as long as she was alive.’ Then, not longer after, Monti, the Prime Minister of Italy, came out and said that if there weren’t euro bonds, he was going to resign.
So this is turning into a comedy, even though it’s a tragedy....
“The only way this can be dealt with, in the short-run, is by enormous monetary creation. If Merkel and the Germans want to block that because they don’t want to give the ECB that power, the euro is going to split apart and that will be extraordinarily chaotic.
If the euro doesn’t split apart and they do create the money, it will ultimately be very inflationary. So the Germans are caught between a rock and a hard place. You’ve got to remember that the Germans have seen their currency destroyed twice in the last century. The know full well that if you go too far down this path, you are headed towards hyperinflation. They have been there.
I think the money will be created. I was very intrigued by Don Coxe’s fantastic interview with you earlier today. He outlined the degree to which the European banking system is impaired. He used the number $2 trillion. To me, once you get into those numbers, it’s open-ended.
All I know is that these numbers are staggering. It wasn’t even that long ago that one trillion was a number that we couldn’t even fathom. Now they throw it around as though we’ll just print it up tomorrow.
For what it’s worth, if the euro were to break-up and the Germans were to introduce their own currency, that currency would go to the moon relative to most of the others. This would make them uncompetitive in many ways. The Germans have a lot on the line here, so I think they print.
In the very short-run, if they create enormous amounts of money, it could buoy markets a bit, but it doesn’t solve anything. The fact is the system needs unlimited liquidity just to keep floating all of the boats.”
Embry also warned: “We are on the edge of collapse, it’s imminent. We’ve run out of time. If they don’t take action, continue to play this brinksmanship, and this thing gets away on the downside, when you get a hard deflation going, it’s really difficult to reverse.
I don‘t think you can say anything with total assurance, for the simple reason that we have never, ever been remotely in a condition like this in all of world history. So the only things that I am comfortable in at this moment are physical gold and silver and gold and silver shares.”
