John Embry – Chief Investment Strategist at the Canadian firm Sprott Asset Management – discusses the recent correction in the silver price with James Turk.

John argues that long-term investors and savers of the physical metals silver and gold should not panic in the face of the downward trends that these markets will see from time to time and in fact should take these temporary downward moves as an open opportunity to acquire more of the physical. Embry also discusses the growing divergence between the paper and the physical silver market, and how we are in the early stages of a big rise in precious metals prices.

Over the past few months we have seen the silver to gold ratio drop from around 70:1 down to the low 30:1 ratio and Embry points out that the gold to silver price ratio is likely to move back in favour of silver, even with the slight variations from time to time to end up around the 15:1 or even the 10:1 mark.

Embry notes that he is not really surprised at this point in time as to how bearish the mainstream media is in its assessment of silver. Both John and James also make reference and comment on the consistent and reliable purchasing power ability of precious metals, in contrast to the ever-diminishing purchasing power of paper money.

With the ever worsening fiscal position of the US government John’s view is that America is likely heading for hyperinflation and fast, thanks to the current fiscal policies of the Federal Reserve. Both men point out very clearly that they and the many of the people around them who are paying attention are noticing the growing problem of rising prices due to current inflationary pressures, and how the US authorities remain determined not to mention to the public through deception and outright fraud that these growing inflationary pressures actually exist and are now entering a state where the issue cannot be fixed even with large continuing quantitative easing policies in place.

Furthermore John and James discuss the problems that still exist in the international banking system. Given the astonishing quadrillion-dollars  worth of Over The Counter (OTC) derivatives still lying on banks’ balance sheets, in Embry’s view, quantitative easing was implemented primarily in order to ease the pressure on banks. As he points out though, the derivatives problem has not been solved and has only been increased since the last Global Financial Collapse (GFC) with more derivatives being created every day.