John Embry: I’ve Never Seen This In My 40+ Years In The Investment Business – Audio Interview

by Tekoa Da Silva, Sprott Global While precious metals and their corresponding equities continue to work through a multi-year painful correction, John Embry, Chief Portfolio Strategist at Sprott Asset Management, was kind enough to share a few comments. Speaking to the abysmal sentiment toward the sector, John explained that, “I’ve seen this sort of ‘bearishness at the bottom’ phenomenon many times …There was a really ugly bear period between ’74 and ’76 which I remember really well…” LISTEN HERE Further describing that period, John noted, “When [gold] was down to $102, off the high of [near] $200, a lot of people were calling for it to go back to $35 again… in ’76 it turned around and started to move higher and then it just went nuts at the end of the 70s…and got up to $850-$875, which completed about a 25-fold move.” John emphasizes the belief that this period parallels the mid-70s bull market correction, and when asked about the depth of the current sell-off, noted that, “I don’t think I’ve ever seen, in the 40 plus years I’ve been following the sector, the shares cheaper in relation to the price of bullion as they are now.” The level of current pricing combined with sentiment, sets up, “An historic opportunity,” in high-quality mining shares, John further added. “[So] few people own them today. They don’t even talk about [them]…Bonds and stocks are grotesquely overpriced and I think gold and silver and the mining shares in particular are ridiculously underpriced. Those who figure that out when the inflection point [arrives] are going to make a fortune.” LISTEN HERE Here are his full interview comments with Sprott Global Resource Investment’s Tekoa Da Silva: Tekoa Da Silva: John, your career from what I understand has spanned over 30 years, dealing with precious metals and specifically gold. I’m interested in your observations on the longer bear market periods you’ve experienced during those years, and any similarities you see when comparing them to today. John Embry: Actually I’m getting older, so it’s over 40 years now. I was around when the London Gold Pool was in effect in the late 1960s and the price was being maintained at $35 an ounce but that was fine because that was an official price and they were fully entitled to do that. But then it started to break away as the Europeans tired of basically the Americans spreading large deficits. We thought there was a big upside move coming around 1968-1969, but it was aborted and it didn’t happen until about ’71. So there was a rough period in there between’68, ’69 and ’71 for gold enthusiasts and then as you know Nixon officially delinked the U.S. dollar from gold in August of ’71 and that kicked off a really spectacular bull market that lasted until about ’74. At that point, we had sort of a recessionary environment development. They actually pounded gold down from $200 to $100 and there was selling by the IMF, but I thought that the reaction was overdone. But when it was down to $102, I think, off the high of near $200, a lot of people were calling for it to go back to $35. So I’ve seen this sort of “bearishness at the bottom” phenomenon many times and that was a particularly bad case. In ’76 it turned around and started to move higher and then it just went nuts at the end of the 70s, as you know, and got up to $850-$875, which completed about a 25-fold move. But in the middle of that move, there was a really ugly bear period between ’74 and ’76 which I remember really well. Following that, we basically went through another horrible period in gold. It was in a bear market through the 80s and 90s, and it got killed in the post Bre-X period when they drove the price down to about $252. LISTEN HERE Continue Reading>>>

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