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John Embry: 'When the Gold's All Gone, the Market Will Go Nuts'

In paper money economies, price collapses spreads very rapidly to all kinds of assets. When individuals owe more on an asset than it can be sold for they rush to sell other assets to raise money to make the next mortgage or food or car or dental bill payment.

The huge number of indebted asset owners assets for sale swamps the market for each item and forces all prices lower on all asset classes in paper currency terms.

That is where we are now. As all asset prices fall in terms of the paper currency more and more assets must be sold to make set amounts of paper debt payments. Welcome to the 1930's.

The beauty of paper currency is that it permits infinite expansion in asset prices followed by infinite collapse in asset prices and of course a complete collapse in the economy.

Today's real financiers know this. Today's economist are all on government payrolls and know nothing but to praise the governments every action..