by Eric King
August 20, 2013
On the heels of a tremendous rally in gold and
silver, today a man who has been involved in the financial markets for 50
years shocked King World News when he said that we are on the verge
of a historic and catastrophic global financial ďmeltdown.Ē
He also spoke about events that are unfolding
behind the scenes at the White House right now.
This is without question one of
John Embryís most powerful interviews
ďI guess Iím always unnerved as a result of
what happened in April, the last time the President of the United States
had a meeting with all of the bank heads, and two days later the price
of gold was smashed for over $200.
Now, the President is meeting with all of
the heads of the various agencies, institutions, the Fed, and all of the
other key money entities in the United States today. Whatís that all
But clearly if the President is having this meeting, there is a crisis
unfolding somewhere in the background, and it could very well relate to
the dollar, interest rates, and the massive derivatives market
associated with interest rates...
ďRising interest rates are a killer in an over-levered economy, and
thatís exactly what weíve been seeing in the United States.
This surge in interest rates may have already seriously destabilized the
entire financial system, and thatís why there is this meeting taking
place in the White House today. The fact is that the vast majority of
derivatives in the global financial system are related to interest
Now, the entire financial system may be on the precipice of some sort of
catastrophic event unfolding because of what we have already seen in the
bond market, and how the derivatives are so heavily intertwined.
Meaning, we may be on the verge of another disastrous derivatives
We have an unbelievable amount of interest rate derivatives in the
financial system. So the winners theoretically take the profits on them,
and the losers simply misprice them on their books. But as you get
higher interest rates it becomes even more destabilizing.
I firmly believe the reason the President has called this meeting today
is because if interest rates in the U.S. continue to rise, it could
really unleash something disastrous.
We are talking here about the possibility of
a meltdown. Itís interesting that the President would call in that many
big hitters, the head of every significant financial agency in the
United States, as well as the Fed and the Comptroller of the Currency,
etc -- this is a very large meeting today.
Iíve always believed that the global financial crisis of 2008 was just
the opener. We have now bought the better part of 5 years through
unlimited money creation. But as we head into this next massive, and
what I believe will be a larger round of destabilization, I want KWN
readers around the world to understand that the central planners donít
have the same weapons to fight this global financial crisis.
This is why I believe they are desperately
attempting right now, today in this meeting, to stave off this crisis.Ē
Embry also added:
ďWhen you have a vastly over-levered
economy, higher interest rates suck money out of the system, and you
have to remember that the system is already struggling.
So we may well be looking at something
catastrophic unfolding right now. As I said, this could be destabilizing
the entire financial system.
The mainstream media continues to put out propaganda about a so-called
economic recovery thatís going on. Even the Economist put out a piece
essentially saying that the Western world economic recovery is going to
be driven by the United States, which is the strongest entity in the
Western industrialized world.
If the U.S. is your strongest entity, then youíve got huge problems. I
believe that if inflation were correctly accounted for in the United
States, instead of these bogus numbers they come out with, then the
deflator in the nominal GDP would be materially higher. This means that
real growth would be materially lower.
Itís the split between real growth and inflation that determines what
the real growth number is. And if inflation is understated, and I
believe they have just manipulated the hell out of the inflation rate,
then I donít really think there is much recovery, if any, going on in
the United States.
All of this is in the face of $85 billion
each month being pumped in by the Fed, and interest rates near
But now we are beginning to see U.S. interest rates climbing inexorably,
at the same time that the oil price is remaining elevated, those are two
major factors in determining the future of the economy. If rates go up
and the oil price is very high, that just knocks the struts out from
under the consumer.
When you look at the oil price, just when you think it canít get worse,
the situation in the Middle-East deteriorates even further. Itís
becoming a battlefield with Russia and China basically lined up against
Western interests. So Iím extremely worried about the overall picture.
When I look at what is unfolding right now in Europe, markets are
clearly unsettled over there. I also see the German Finance Minister has
come out and said that Greece is going to need a third bailout. So the
idea that anything is getting better in Europe is preposterous.
So, when watching currencies, the only thing I am interested in is the
price of gold and silver, which is real money. Gold and silver are
putting in a better performance, although they are still being
restrained. The fact is that they are building a super-base, and thatís
what the central planners should really be afraid of, the U.S. dollar
collapsing against gold and silver.
I said it last week and I will say it again, we will now see historic
and catastrophic wealth destruction. Itís going to be something to
behold, and investors who want to survive this financial holocaust had
better be properly positioned.Ē
Audio interviews with,
James Dines, William Kaye, Grant Williams,
Dr. Paul Craig Roberts, Gerald Celente, Hugo Salinas Price, Chris
Powell, Eric Sprott, David Stockman, Art Cashin and Marc Faber,
...are available now (some below).
Dr. Paul Craig Roberts
Also, other outstanding recent KWN interviews
include Jim Grant: