John Embry Just Warned Global Shock Is Near As Cracks Begin To Appear

 “Eric, the central bank fueled financial asset inflation has continued to bubble in to the new year, with many stock indices around the globe reaching new record levels day-after-day…

Global Shock Near As Cracks Begin To Appear

John Embry continues:  “The powers that be would have you believe that this reflects the growing strength in the global economy.  However, whatever growth there is, and I think it is being seriously overstated by significantly understating the inflation component of nominal GDP, is going to prove to be short-lived.  The essential problem is revealed by the School of Austrian Economics, which correctly asserts that as a debt-driven economic cycle matures, it takes ever greater debt creation to generate the same amount of real GDP growth.  This has certainly been evident in the economic recovery following the 2008 financial crisis.  Debt has exploded globally and is now thought to exceed $225 trillion, which is more than 3-times global GDP.

But cracks in the global financial system are now beginning to appear. So the notion that central banks are going to tighten noticeably and raise interest rates is absurd.  I suspect the money printing will continue until hyperinflation overtakes the entire global system.

As an aside, I was fascinated by the recent Stephen Leeb interview on KWN, where he expects the Chinese to reintroduce gold into the global financial system in the not-too-distant future.  This would just be icing on the cake for the precious metals, which already have extremely positive supply/demand fundamentals in the physical markets.
 
At this point, all investors should have exposure to gold and silver bullion and the companies that mine them.  However, few investors do, which just enhances the ultimate upside.  Gold and silver did well in the first two weeks of 2018, despite massive shorting of paper gold on the Comex by the usual suspects.  Regardless, gold and silver remain by far the most significant havens in the coming financial storm.”

January 16 (King World News)