Embry: China To Import A Staggering 775 Tons of Gold In 2012

繼續儲實金實銀, 但本人就唔會買金礦股啦 !

kingworldnews.com

Today John Embry spoke with King World News about the staggering pace of Chinese gold imports, Western central bank dishoarding of gold, the imploding global economy, which country will hyperinflate first, and mining shares.  Here is what Embry, who is chief investment strategist at Sprott Asset Management, had to say:  “I’m very encouraged by the continued flow of the world’s gold into China through Hong Kong.  The Chinese were essentially accumulating their gold by purchasing all of their domestic production, and now they are the largest domestic producer in the world.”

John Embry continues:

“But now they are buying the world’s gold at an ever-increasing rate.  At this point, based on the imports through the first nine months of the year, if you pro-rated for the last three months, they would for the full year have imported a staggering 775 tons of gold.

Well, if you take that as a percentage of the non-Chinese production, that’s about 1/3 of the non-Chinese mine production that’s going into China.  This wasn’t happening two years ago.  So my question is, where is the gold coming from?....

“After Chinese imports are subtracted from yearly production totals, that only leaves about 1,500 to 1,700 tons of gold for the rest of the world, and there is way more demand than that in the rest of the world.  So I continue to believe there is Western government dishoarding of gold, but that has a finite life span because I think the physical shortages are intensifying.”

Embry also added: “I continue to look at the shocking condition of the world and the deceleration of the global economy.  The Japanese quarterly number which was released this morning was awful.  I was intrigued by the comments of Egon von Greyerz on Friday about how dreadful the Japanese situation is. 

I believe that the situation in Japan is reaching a very critical stage and I was delighted to see a guy as smart as Egon bringing this to light because I believe that implicitly and I was glad to see him going down the same path.  Japan is now trapped into printing money because they have a debt-to-GDP ratio that is so far out of line with the rest of the world that it’s almost unfathomable. 

When you put that into context with an aging population which owns all of these bonds, but they are not in a position to continue buying them, they have no alternative other than to keep printing.

The Indian industrial production, which was supposed to be positive like much of the rest of the world, has lapsed into negativity.  Chinese lending was not as robust in the most recent month, and these numbers were coming from what was supposed to be the good parts of the world.

There isn’t much that is positive which can be said about Europe.  I mean Europe is in dreadful shape.  The area that is deteriorating the most but the focus hasn’t hit it yet is France.  I think this guy Hollande is a disaster.  He’s taxing the rich to excess and the economy is buckling.

We all know the problems in Italy and Spain, Greece, etc., but I think the one people should be paying more attention to is France because it’s the second biggest economy in Europe and it’s in dreadful shape.

The US is in terrible shape as well.  Then you have the fiscal cliff issue in the US, and these guys can’t kick the can any longer.  They have to deal with it.  I don’t think the US economy is strong enough to remove the tax cuts, and put in place the mandated spending cuts. 

Given the vulnerability of the US economy, that could be devastating.  So I’m of the mind that the US will up the debt limit and pay lip service to the issues, but nothing of significance will be done.

It is going to be a race to see which country hyperinflates first, but I think the world in general is headed in that direction.  Who gets to the finish line first, I’m not sure, but I think the Japanese have the recipe to be at the front of the race.”

Embry had this to say regarding the mining shares:  “I was just chatting with a very disaffected mining share holder who has been getting killed in these things, and he just can’t believe how badly they have performed as a group.

I think there has been interference in that market as well, for the express purpose of keeping the public away.  At the same time, the hedge funds have seen easy money so they have been working the short side of the market.  You have had a perfect negative storm for the mining shares.

So the shares remain amazingly cheap, even though there is some interest in the larger vehicles.  But the juniors, by and large, continue to languish.  I believe I will be proven correct on the gold bullion price.  When gold moves up sharply in the next 12 months, that will finally unleash the gold shares. 

The shares are way behind the bullion and they will play catch up.  Traditionally, in a gold bull market, the share prices move at three times the speed of the gold price rise.  This time they are starting from a much lower level, so I’m very optimistic these things are going to be terrific investments, and nobody owns them anymore.”