While gold has fallen significantly since hitting a peak in September last year, according to Sprott asset management's chief investment strategist, John Embry, nothing in this period has been "gold unfriendly".
Indeed, Embry believes that there has been a great deal of interference within the market with a lot of people trying to make the global economic picture look better than it actually is. And, as a result, at current levels, gold represents "one of the finest opportunities if not the finest in the entire bull market which is now in its 12th year."
Embry is nothing if not bullish about the price of gold. Speaking on Mineweb.com's Gold Weekly podcast, he said, "I think gold is going to $10,000 at some point and it's going to have nothing to do with the cost to dig it out of the ground, it's going to have everything to do with the fact that people just don't think their money is going to be worth anything."
To back up his claim he says one just needs to look at the state of global budget deficits.
"They're out of control and they [politicians] are not going to get them back in control because austerity just makes budget deficits bigger. So, I think you're waiting for that moment of recognition when people realize 'Oh my God this paper currency that I've just clung to for the last 40 years isn't going to buy me a loaf of bread in two years.'"
He adds, "Gold is the mortal enemy of the fiat paper currency system that we are operating and have been operating for 40 years. People are beginning to realize that this money is going to be turned into confetti and the authorities are scared to death that they are going to make the connection that gold is a good idea. . .People aren't making the correct connection that gold is what you should be holding in this environment—that will change."
For Embry, one of the major problems is that while, understandably, a great deal of attention is being currently focused on Europe, the situation in the US is equally as dire.
"I spent a lot of time studying the real U.S. economic statistics and I don't think there's any recovery of any substance whatsoever. . .I think the most shocking statistic that has come out in the last nine months is the fact that last year the U.S. monetized 61% of its budget deficit. That's staggering. I can't even conceive of that, yet they did it and no one seems to care."
But, he does agree with other commentators, such as Ian McAvity, that if Europe were to implode or if the banking system got into a great deal of difficulty, it would go viral around the whole world almost immediately and no one would be immune.
"The majority view, which is propounded by the U.S. and a lot of the European countries, will prevail and austerity will go by the boards and essentially we will refinance the European banks and it will be wildly inflationary," he says.