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Eric Sprott: "Paper Markets Are A Joke: Prepare For Bullion Prices To Go Supernova"
Exclusive Interview by Chris Martenson
Eric Sprott - Paper Markets Are A Joke: Prepare for Bullion Prices to Go Supernova
"I think that the prices will continue higher. I mean the amount of money printing is unbelievable. I just think you have to take that initial stand in terms of buying it. I use the James Turk analogy: just keep dollar averaging. We have gone up eleven years in a row, this year it looks like it will be no exception; I would certainly think next year will be no exception. If we ever have QE3 announced, I think gold and silver will just go absolutely bonkers here. And so I just think you have got to step in there and own it; we’ve had these fears all the way along. You know, $400, and $500 and $700 and $800 dollar gold, everyone was afraid it was a one-time thing. I don’t think it is a one-time thing, I think it is a secular thing. It’s going to carry on for quite a while here until we find some resolution of these problems. And the resolution probably will be some form of default where people just have to expunge debts that cannot be repaid. So, you have got to be in some asset which will not be affected by that."
So predicts Eric Sprott, founder of Sprott Asset Management and famed investor. In this wide-ranging interview, he shares his insights on the precious metals markets - specifically what investors need to be aware of in terms of the way the markets are currently managed (manipulated), the macro outlook for the economy (grim) and the true value of gold and silver (very underpriced; particularly silver).
Eric sees the current "extend and pretend" intervention by world governments and central banks to prop of a fundamentally flawed baking system, particularly the vast money printing efforts of the past few years, as a ruse that is losing it's influence. Once enough people ask "Why have your money in a bank earning nothing? Why not have it in something that might at least maintain it’s purchasing power?”, the capital flows into the precious metals will dwarf current levels, sending bullion prices much higher.
Those interested in hearing Eric's insights on:
- why we're in a global secular bear market for most assets classes
- what the safest investment options are
- how much precious metals exposure investors should have
- the key factors that will drive PM prices much higher
- the mindboggling supply shortage and manipulation within the silver market
- why there may eventually be two prices for bullion: one for paper and (a much higher one) for physical & how high Eric thinks prices could go
should click here to listen to Chris' interview with Eric Sprott (runtime 38m:01s):
Or start reading the transcript below:
Chris Martenson: Welcome Eric, it's a real pleasure to have you today.
Eric Sprott: Chris, good to be here and thank you for all the work you are doing in apprising your investors of what's really going on in the world.
Chris Martenson: Oh thank you. We’ve been at it many years and unfortunately much of what I think both you and I saw coming - though unfortunately not enough others along the way - is really coming to pass. If I could, let’s start with your views. You have been advocating and creating investment vehicles for people to own gold and silver for a long time. How did you get to that position and what are your views on owning gold and silver at this point?
Eric Sprott: Sure. Well it all started, Chris, with our studies back in 2001 where we were entering into a secular bear market and wondering how you deal with that. And a typical response would be to own gold and silver, which is what we decided to do. I think the one thing that really tipped us into it was an analysis of the physical supply and demand for gold and some work by Frank Veneroso that suggested things would have to change dramatically in the physical gold market because the central banks were selling four to five hundred tons a year. And as you know, here we are eleven years later and now they are buying four hundred tons a year on balance, and this is in a market where the mines supply only twenty-six hundred tons a year. So that is a huge change that had to take place that Frank identified back then. He also identified that the gold companies would stop hedging. We’ve had the ETF’s come along. So we have had a lot of dramatic changes in the physical balance between supply and demand in gold. And that is really what took us there in 2000; to get actively involved in that particular market.
Chris Martenson: And looking at it today, has anything changed in that analysis? You mentioned a secular bear market, are we still in one and also has anything changed in the fundamental supply/demand equation that has actually tipped it one way or the other, further or less, since the initial analysis you looked at?
Eric Sprott: Sure. Well I do think we are still in the secular bear market and basically what people describe with the phrase “extend and pretend”. And we had the zero interest rate policy, the housing boom, the lending boom, TARP and TALF and all those things which try to delay what naturally should happen. When I look at the headwinds for gold and silver, I really believe that we have been aided and abetted by a lot of these policies, particularly QE1 and QE2 and the various printing mechanisms of the ECB and the Japanese government and almost all governments in the world. So as much as I would not have anticipated those types of developments happening, they have happened and they provide an even stronger headwind for people realizing that currencies are not going to survive and to maintain your purchasing power you have to own precious metals.
Chris Martenson: You know, I too have been surprised by how long all of this has stretched out. If you had told me five years ago - Eric if you had said “Chris, the Federal Government in the U.S. is going to be running a $1.6 trillion dollar deficit and the Federal Reserve is going to monetizing 75% of that and the bond markets will be relatively tame and the dollar will still be roughly where it is at”; I would have said you’re nuts. But here we are. And my view on this is that what we are kicking the can down the road. We have bought some time, - which I am thankful for personally - however the risks are now increasing. And the risk that I have identified that concerns me a lot is that, sooner or later, much is happening in Greece right now where suddenly the world wakes up and says “Hey, wait a minute. They can’t possibly pay that back. And at 22% interest rates on 2-year paper, they really can’t pay that back.” So suddenly the illusion is lifted. We have collectively suddenly gone, “Greece is not solvent. Oh, that’s terrible.” And now we are grappling with that. But that same dynamic can be extended to, I think, any of the governments that you just mentioned. It varies across Europe somewhat, but in Japan and the U.S. there certainly are fundamental mismatches between current productive economic output and the levels of indebtedness. We are printing our way to that. Is there a way that you can see that this could actually be turned around where it all sort of pencils out? Is there a solution to this that does not have to pass through a fiscal crisis and possibly a currency crisis?
Eric Sprott: Well Chris, it is very hard to imagine that happening. And then I look at really what has happened over the last eleven years since we hit the high in that, we basically created a problem in the world of banking business and I always think of banks as being levered 20 to 1. And when your paper assets start to decline, of course it does not take much of a decline to get rid of all the capital. And we have seen that in so many instances whether it is Iceland or Ireland or now the Greek banks. And all the moves that have happened so far, really have been in response to the problems in the banking system. That is why you have TARP and TALF and all those things because the banks basically were losing deposits and somebody had to come in and support them. That is what happened in the UK, it happened in Iceland, it happened in Ireland, it’s happening in Greece as is transpiring right now. And I think the big fear is that you cannot let one banking system go down without an impact on all the other banking systems. So collectively everyone is trying to support the banking system and I think people see through the ruse. And the natural reaction is “Well, why have your money in a bank when you earn nothing, why not have it in something that might at least maintain it’s purchasing power?”
Click here to read the rest of the transcript.
Note: listeners interested in the conclusions expressed within this interview will also want to read Chris' recent report on The Screaming Fundamentals For Owning Gold And Silver, which takes a deep dive into the data behind the supply and demand imbalances in the bullion markets.
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paper is.. paper.
stack metal and get ready for the end of fiat again.
Watch – Fiat Money & Inflation in France
The real money is not where everybody is looking for it!
Paging Mr. Methman:
Do not invoke the name of the Cursed One!
Well then, Sprott must be "the annointed one" - though perhaps in a paralel, timeless universe: Sprott predicted in fall of 2009 and January 2010 that gold would double or tripple or quadrouple "very, very soon". Perhaps years pass in split seconds in Sprott World, or perhaps timing is secondary to overall sentiment. From my perspective all asset classes are elevators going up and down in interrelated, yet fundmentally speaking insane patterns; investors therefore, by definition, are mad dogs, whatever asset they "believe in, for whatever time duration. Personally, I place my peace in productive and creative labors - i.e. real assets, which no one else controls; the "market" is not my God. Fuck the market and sleep well.
Prepare for confiscation. One thing you can be 100% sure is that the Mafia, uhhh I mean US government, always kicks the table when their ordinary shenanigans no longer work.
They can try - but who'll 'give it up'? You think people will meekly comply like in the 1933? No chance. And if the "Gestapo Pigs" try to find it....people will just hide it that much better. They'll NEVER attempt confiscation - that would be an admission that their system they've set up has failed, and gold really is worth something. This is why hardly any 'Boobus Americanus' owns any: they still believe the claptrap that "gold is just a commodity" which has been taught for nearly 100 years.
I pretty much agree with you, inebriatedsot.
First off, there was NO "confiscation" of gold back in 1933-34 --- it was a call-in and voluntary surrender of gold instead. Sure, the federal fascists made the possession and sale of gold illegal, but there were absolutely no door-to-door searches, or any draconian actions of the sort, to grab gold from individuals. And even in that naively law-abiding era, only 20 to 25% of all the outstanding US gold coins were turned in to the government --- does anyone REALLY believe that the percentage would be higher, or even close to that, today?
Second, having stated the above, I can easily imagine our current federal jackbooted thugs attacking the personal possession of gold (and silver) once again, via either onerous transaction taxes (exempting "legitimate users" of course --- bullion banks, hint hint), or else by outright prohibiting the purchase of precious metals by the public, while still allowing them to hold what they own, or to sell it to dealers, but not to other individuals. But I think any such measures would be short-lived, as such desperation would probably merely mark the death throes of the current fiat monetary paradigm, and quite possibly the power of the federal government itself.
"...outright prohibiting the purchase of precious metals by the public, while still allowing them to hold what they own, or to sell it to dealers, but not to other individuals."
I would guess that silver and gold become the money of the underground or "gray" market at that point in time.
Also, I completely agree with you that there will be two levels of law for gold and silver ownership if it comes to that point; one law for the elites and one, more prohibiting, law for the serfs. My guess is they will wrap the law in the flag and add plenty of fear about terr'rism so most peasants will bow down with their usual unquestioning compliance for such a tyranical law. If so it may finally show some folks that the sheople's compliance is as much a part of the problem as as the tyrants. We can only hope.
I am actually rather surprised that we have not by this point seen some much-hyped interception of "terrorists" being apprehended while "smuggling" gold as an integral part of their devious evil-doing --- along with the concurrent demonization of the sale or mere possession of physical gold, and the linking of it to "financial terrorism". Just wait for it, though.
They've thought of this ploy; they haven't needed to employ it yet.
Sometimes I feel like a FOFOA lackey.....but hey, he is the nuts on gold :)
http://fofoa.blogspot.com/2009/08/confiscation-anatomy-different-view.html
http://fofoa.blogspot.com/2010/08/confiscation-anatomy-part-2.html
The msn was practically touting Libyan gold as terror funding. They could not sterilise Qaddafi's gold like they could Libyas deposits in the banking system.
Certainly John Law paid the price for his scheme. It's hard to imagine a "place" as France was "at war continuously" for the entirety of Louis XIV's (was it 70 year?) reign. By today's standards we would call the 30 years war "total war" for sure, although it's hard not to call the entire age for all intents and purposes "total war." The irony of course is that it ultimately led to Napoleon. Of all lessons in history i still believe this is a most fundamental one. But first!....
And Germany's hyperinflation led to Hitler. Is there a trend forming here..?
And we have been at war since 1945, if you count the cold war, which cost the same as a real war. Thats 66 years.
Hmmmmmmmm.....
Another key 66th anniversary, one we should be paying real attention to, is 16th july, Trinity...
It's still with us.....
ORI
http://aadivaahan.wordpress.com/2011/07/04/a-year-and-a-day-later/
Hi-ho silver away!!!
paper = physical a hundred to one. always has, always will.
fixed it
Repost: paper = physical. Always has, always will.
The only thing going supernova is the hype from the Sprott crew.
Beat it troll. Your shilling for the bankster elite is pathetically laughable.
just giving you the truth, Akak
That's spelled "trollth".
Not to be confused with "trololo":
http://trololololololololololo.com/
Akak - Can you explain to me how the recent change in SIFO rates supports the silver shortage hysteria?
WilliamtheRedneckRepugnicantGunslinger,
Can you explain to me why gold AND silver are both up over 400% in the last decade, when the stock market has been flat during that same period (and falling in real terms)?
Wow. Answering a question with another question! Are you a politician?
It's ok if you don't know that answer - I already know you don't. You're just another bitter, goofy, doomer bobble-head who is only capable of puking up the same tired catch-phrases as 95% of the other ZH doomer goons. You bring nothing but ants to the picnic.
And we all already know that you are the same vicious, dishonest, malicious troll who has been discredited, banned, and returned under yet another new alias here more times than I can count.
Fuck you.
repost: paper = physical a hundred to one. always has, always will.
fixed it again
Lead ='s whatever I want it too!
BrianOTrollAgain,
You're funny when you're an idiot.
But it is always entertaining to see desperate pro-Establishment sheep such as you rage and flail when confronted with the imminent collapse of their beloved status-quo paradigms.
Sing, O Muse, of the agony of the Great Troll!
Hey akak,
Speaking of trolls, our guy Jeff Christian was on BNN today. Here's what I posted over @ Turd's site after watching him,
Well, he didn't disappoint on his perma bearish stance. He said gold should top out at 1520-25 (July-August), then go down to 1440-1460, but could "easily go down to 1380". His "ceiling" for gold was 1540 with a possible "spike" to 1600.
LOL. Keep up the good work Jeff. You've been dead wrong for ten years, so why change now?
Why this guy gets interviewed at all is beyond me.
Because Christian and the MSM don't understand why Gold is at $1,500 or ask what is stopping it from going to $10,000. They don't understand fundamentals. They don't understand supply and demand. They sure as hell don't understand the signs of a dying currency!
Well, Douggie Kass gets interviewed too, and his predictions regarding gold make those of Christian appear almost reasonable, even though they still fall short of the threshold of sensibility.
They don't understand that, even though they think they're insiders, they're in line to be shorn along with the rest of the sheep.
(They also don't understand that a squid eating dough in a polyethylene bag is fast and bulbous. Got me?)
Thanks for the update BoP!
Yes, as bad as Jeff "100:1" Christian is in his so-called analyses, his record of disingenuous bullshit and outrageously incorrect and misleading disinformation can't hold oa candle to that of Jon "Gold is in a bubble but NOT in a bull market!" Nadler. ANYONE who dares quote or interview him, at this point in the game, automatically proves themselves to be either part of the Empire of Darkness, or merely an incredibly naive and ignorant idiot.
It is incredible how so many people simply hate metals. Kind of reminds me of "trader dude" douchinger.
"Because gold is honest money, it is disliked by dishonest men."
- Ron Paul
Exactly! and the dishonest men in DC are like a bunch of drunk sailors on liberty!
In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. - Alan Greenspan
as I recall there were many sellers of silver pretty much right at the high. Wasn't Eric Sprott one of them?
Yes, and he took that money (profits) and reinvested in what? Oh, that's right, silver miners.
This Sprott bashing is absurd.
Trolololo....
He went from one high beta silver-related investment to a higher beta silver-related investment.
"as I recall there were many sellers of silver pretty much right at the high."
Yep. There are those that can see an intermediate top in the market, and are smart enough to act on it. It doesn't mean that they have abondoned PM's, but why begrudge someone some profit taking?
Hell, even RoboTrader was offering a monster box of Silver at $49 to $50!
please give me the expected date of that collapse so I can mark it on my calendar. I'll add it to the long list of failed prophecies from the professional fear mongers.
Ah yes, the oft-repeated Center-Thinkers' Creed:
"It hasn't happened yet, therefore it will never happen at all."
One would think that all of the previously-considered "can't happen" events of the last few years would have cured you center-thinkers of your innate, ignorant and total faith in the status-quo power structure and its associated paradigms. But alas, center-thinking is almost invariably a terminal illness.
Keep the faith, oh loyal silver parishioners...
Likea 9.0 earthquake hitting japan causing a tidal wave that knocks out a nuclear plant...causing a meltdown. No way. I would never happen!
Housing never goes down.
The US will never default.
The U$S will always be the reserve currency.
Stocks for the long haul.
The Thousand-Year Reich.
The sun never sets on the British Empire.
Japan has never been defeated by foreigners.
The unsinkable Titanic.
If man were meant to fly, he'd have wings.
Constantinople is impregnable.
Rome is forever.
Center-thinking through the ages.
Well played sir...
Yes, gold and silver have been terrible investments over the past, oh, 10 years. The stock market's done way better... /s
Oh, that's easy little troll!
The Collapse began in August of 2008.
I'm game. End of July starts the serious (non)fun. The dollar first spikes as the stuff comes flying off the fan, then as everyone realizes the threat, it crashes back down. When the autumn leaves are falling the S&P will be sub 1000 and threatening to drop like a stone. So man-up or troll-up and give us your rosy prediction and by Thankgiving we see who did better, or didn't they give you any training like that in troll school? The train wreck is coming, the only questions are when, how big and how do we help the survivors.
As we debate the dollar is in a state of collapse. The date and the hour are now.
March 15 or 16th 2012. Put it in your calendar
The difference between paper trusts, and physical, in principle really only is about control and trust: With an ETF, someone else controls that which is actually valueable (NOT the piece of paper, but what it supposedly represents). And if you buy an ETF, you trust the issuer, that the paper does actually represent, what he claims (backing in physical).
The problem with paper is, that besides of perhaps people like Sprott, it is highly mismanaged to the point, where the issuers do not deserve trust, but actually mistrust, and where their practices show quite clearly, that you have no control over what you supposedly own.
Since we cannot just create our own ETF out of thin air (and if we would do, it would be kinda pointless: If you already own the physical, what do you need a piece of paper for anymore?)... since that is so, the only trustworthy alternative where one has a significant degree of control, is owning physical.
So, fundamentally this isn't about paper vs physical.... what it is about, is that the issuers of the paper are not trustworthy.
fair point - if one does not trust paper, then by all means, buy the physical and bury it in your back yard. The tradeoff though is no leverage, low liquidity and a wide bid/ask.
People around here do not buy to trade. Wrong audience. People around here buy physical as longterm wealth storage, not for playing in that rigged casino that is called the "market".
people here buy physical because they believe by doing so they can bring down the financial and political system they hate so much. Silver, much more so than gold, is a political movement, a religion - not an investment.
Gee, tell me more about myself BrianOTrollAgain!
Actually, you are full of shit, as usual --- only a small percentage of PM holders believe in what you claim. But holding PMs has become an implicitly political movement, or at least an anti-Establishment one --- and you can thank your overreaching and sociopathic political masters and central banksters for having created the conditions to make it so.
So, even though "full of shit", you just agreed with me. At least we're making some progress here.
Yes, I agree with you too. You are full of shit.
I have a simple question. Why do you so staunchly defend Bankster and political corruption and totally manipulated and broken markets?
Jeebus, you and akak are so fucking touchy and defensive. Any time anyone recognizes the way things are, the reality of what is going on today, and makes a comment based on reality, you guys naturally assume that person supports it. I recognize that the game is rigged, the banksters make the rules and change them to suit their needs, but it doesn't mean I support it.
A few weeks back I made the case for deflation before hyperinflation, and that PM prices will deflate along with just about every other asset class, except the dollar. Fucking akak jumped all over me and accused me of being everything wrong with the world today, when I was actually agreeing with him in principle. We just had a different vision of the path we'll take to get to the ultimate collapse. I think akak still believes I'm a card-carrying disciple of Hopey the Clown. Couldn't be further from the truth.
You guys should read for context rather than key words, and maybe you won't foolishly attack people who actually share your principles.
Was I talking to you? No, I wasn't. I have no argument with you.
Context? Reality? WTF? Did you read what he wrote? This Oflanagan character never answers these questions when I ask him what his motivation is in defending the status quo in the PM's sector (Fraud and manipulation/corruption of the COMEX, SEC, CFTC, SLV, GLD, etc...)
Let him answer for himself. My guess is he won't.
the answer is that there is very little fraud/manipulation/corruption on Comex, the CFTC and I see no reall issues with SLV or GLD.
I make my living trading futures, if I had a problem with the futures market, I wouldn't be in it.
I also trade physical gold, just in case I'm wrong.
Just LOL.
+1 Rynak
No doubt. And we're supposed to give this douchebag a pass on that kind of comment?
Beyond Thunderdome.
And shove it up your ass Wonder Dawg while I'm at it. Don't defend these trolls unless you want a beatdown too.
BOFlMAO
Please BOFl, just stop. I think I just lauged up a kidney. What freaking role are you trying to convince us you're playing anyway, Bart Chilton's gopher? Kid Dynamite's dynamite?
"...the answer is that there is very little fraud/manipulation/corruption on Comex, the CFTC and I see no reall issues with SLV or GLD"
You'll have to forgive me if I refuse to take your word for it and just run with all the evidence to the contrary piling up under the ol' glazzies.
If you trade futures you simply have to know how to read the manipulation playbook to be successful, which means that you know full well it's going on. So it follows that you must be lying about one thing or the other, BOFl.
I've been staying out of this until this jewel hit the board:
That's like an atheist praying for salvation... just in case.
The major mistake that you make about others here is that you assume we "trade" PMs for profit. Most of us don't trade. We accumulate. Therein lies your misunderstanding.
Sorry but I'm NOT playing the trading game, therefore your rules/notions do NOT apply to me.
Actually, that deflation will happen before hyper-stagflation is allowed, is pretty much common consensus around here. Maybe ak indeed jumped to false conclusions, but i would put higher probability on you having worded your stance pretty bad.
I'm making controversial posts around here regularily. I get about 1-5 junks for it sometimes, but actual hostile replies to them, that are not from zombie camp-fanboys, are rare. And that IMO is, because i tend to explain my stance in detail, and take care of balancing keywords and signals.
It won't help against campers, but it does certainly avoid people mis-identifying you with the troll-plague.
Bottom line: It's not enough to MEAN something that makes sense. It also matters how you express it, and the context which you choose to bring it up
(for example: I fully agree with brian, that physical is much less liquid than paper (or rather, digital), because you cannot just easily transfer it internationally. This for example is why physical-only cannot replace the entire monetary system - you need something like trusts, to be able to do digital bank transfers - just as the "digital fiat trusts", that are current bank-accounts. HOWEVER, the context in which he did bring up that point, is highly suspect)
Thanks for the tip, Rynak, but I express myself pretty well and my posts are not vague or subject to misinterpretation by anyone who is capable of understanding a well-stated argument in plain English.
Also, I think the crowd is pretty evenly divided on the deflation-inflation argument. I don't get the impression that the consensus is deflation before hyper-stagflation at all.
Well, it is (the) tyler(s) stance, and he for "some reason" has pretty big influence around here.
Well, evidently it isn't akak's stance, and he's the one who reacted like my stance was some bankster, status-quo loving fantasy.
While I do remember us arguing, I don't precisely remember what it was over (nor do I care at this point).
I do believe, however, that the idea of a fiat currency deflation is just a chimera, a smokescreen and a bankster-inspired lie, without any historical precedent or real-world basis to fear. The inevitable outcome of the chronic overspending of EVERY government that has been in the position which ours are in today, with exponentially growing and soon-to-be-unserviceable debt, has been a severe devaluation or outright collapse of its currency --- that is the only point that I have ever tried to make here. You can call anything and everything that might happen prior to, concurrent with or subsequent to that currency collapse as "deflation" if you want, but the fact of the matter is that we are facing the imminent threat of most people's savings being wiped out, and most people's standards of living falling significantly, NOT an appreciating (fiat) currency as deflation is commonly and historically (if sloppily) defined.
You can call anything and everything that might happen prior to, concurrent to or subsequent to that currency collapse as "deflation" all you want...
This is where we (sort of) disagree, which I have no problem with, I don't expect to agree with everyone. But the timing matters, and because I put forth a sequence of events (deflation prior to hyperinflation) you had a hissy fit without seeking to understand my reasons, just started calling me names and slinging insults, which were amusing more than anything, because they were so far from the truth. No one can say with certainty that they know the exact sequence and timing of future events, all we can do is gather and analyze information, form our own conclusions, and place our bets. I'm interested in hearing arguments and conclusions of others, not attacking them because their vision of the way things will unfold differs from mine.
Fair enough.
let me get this straight....so if a bunch of half-wits reach "consensus" on something, that means it's going to happen??
The hubris of it all...
No, it just means that popular opinion is different than an individual person perceives it, you fucking idiot.
It changes nothing about "truth", except of the truth about popular opinion.
Anything may possibly happen completely different than people thought - doesn't change anything however, about how people thought it would happen. And THAT was the original argument, you dumbass.
EDIT: Want to start a truthful argument? Then don't base in on sophism, but nothing but the truth - which in this case is: (The) tyler(s) have an exceptionally strong influence on popular opinion around here - and it may make sense to logically check it (instead of just blindly accepting/rejecting it), to counter potential manipulation.
Two half-wits equal a whole-wit. Therefore, a valid argument!
BOF, your icon is all wrong. Change that Northeast Bullion to Northeast Bullshit.
fixed - my company name changed
Actually, the silverbugs among us buy physical as a means of protection from the "financial and political system" that is trying to bring us down. There is no way we could ever crash the system via buying a few more SAEs, but the fiat monster is going to die its own slow death, and PMs are one way to help hedge one's wealth against the fallout.
I gave a macroeconomics dissertation to a class last Autumn, and some people scoffed at the notion of hyperinflation and/or sovereign nations imploding. And yet as I write this, Belarus and Greece are writhing in those very throes.
Silver is not the single magic bullet that will protect your wealth all by itself. But, Flanny my boy, I'd rather hold a portion of my money in PMs instead of relying on the "safety" of our fiat any day.
Quoth BrianOFlanagan:
Perhaps a few do, but I think most are perceptive enough to see that the corrupt financial and political system is collapsing well enough on its own. There was so much crap in the system that the 2008 flush didn't get rid of it all. It might take another flush or two, but the floaters like JPM, Goldman Sachs, et al., are circling the bowl toward their inevitable fate. If your last name isn't Rockefeller or Rothschild, the only thing you can do about it is just sit back and watch the show.
Hacked Economy:
Five years ago those same people would have scoffed at the notions that Phoney Mae / Fraudie Mac were insolvent, housing prices would fall for 5+ years, and treasuries with negative real yield would have buyers. Some people have only their self-deception to cling to.
TROLOLOLOLOL
United States Constitution, Article I, Section 10 suggests that gold and silver are much more than you suggest. They are the money of the people of the United States.
Section 10 - Powers prohibited of States
No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.
No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it's inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Controul of the Congress.
No State shall, without the Consent of Congress, lay any duty of Tonnage, keep Troops, or Ships of War in time of Peace, enter into any Agreement or Compact with another State, or with a foreign Power, or engage in War, unless actually invaded, or in such imminent Danger as will not admit of delay.
http://www.usconstitution.net/const.htm
l
Ask Bernard von NotHaus how that's working for him.
You dont know shit. You are ignorant of history and you obviously dont know PM investors. The political-financial system is bringing itself down like every paper currency and ponzi banking scheme in history. Go read, educate yourself a bit before telling others why they are doing what they are doing, you presumptuous asshore.
When paper fails, you will see leverage when gold seeks its true market price, something it has not been allowed to do for many, many years.
Not true.
Gold was allowed to reach it's true market price not long ago: during Weimar Germany.
So where can I trade my dollars for silver at a rate of $35 per ounce?
Oh, that's right, you can't. Because paper !=physical. If the US government can default on an obligation like that, why the fuck do you think a bunch of shady bankrupt companies somehow can't?
you won't find any silver @ $35 per ounce because spot is higher than that at the moment. If you own a 5,000oz contract though, you can do an EFP and get physical at $0.03 above spot without having to go through Comex.
This is 1 oz $1.99 over spot
http://www.apmex.com/Product/27024/1_oz_APMEX_Silver_Round_999_Fine_.aspx
Here is 100oz $.99 over spot
http://www.apmex.com/Product/35629/100_oz_New_Johnson_Matthey_Silver_Bar_999_Fine_.aspx
Here is Scotia Mocatta with roughly $2-$3 over spot in the 1 oz range.
https://www.scotiamocatta-estore.scotiabank.com/stores/scotiamocatta/catalog/catalog.aspx?nst=pprbihlm92sPEsG3SAczPxXStbR43vSOzQZJCMimV30%3d
And if you're buying in bulk you can get it for a couple dimes over spot.
If you're smart you'll buy this shit and hock it on e-bay. There are idiots that will buy for $10 over spot so it's a risk free trade.
And you're a tard!
...
BrianO
"paper = physical"
Really?
Like Confederate paper?
Like GM and WaMu "Senior" "Bond" holders?
like "love and marriage". You can't have one without the...other.
Oh really?
So silver and gold would have no value without Ponzi paper shenanigans to back them up?
REALLY?
there are no ponzi paper shenanigans. The two markets are highly interconnected, kept together through arbitrage. Without the ability to quickly and cheaply hedge, finance and transfer physical positions through the paper market, the physical market would collapse.
Wow
"Apres nous Banksters, le deluge!"
The depths of your total indoctrination and blind faith in the corrupt and sociopathic games of the financial and bankster elites leaves me in total awe. And disgust.
the market is free, it is of course your choice to participate or not. I find the gold market to be highly efficient.
And with NO governmental involvement or central bank manipulation of its price, right? All the evidence, and even admissions of political leaders and central bankers going back at least several decades to the contrary?
Stop insulting us.
Did anyone ever tell you that even as a troll, you suck?
every effort at manipulation of any asset in the past has always failed. History has shown that manipulating gold over any material period of time is impossible. The market always wins.
I wish there were more attempted manipulation of the gold market - one would be able to make outsized returns fading it. But as of this moment, there is nothing that indicates any central bank activity in the gold market.
Certainly none in the silver market - central banks do not care in the slightest about silver as it is completely insignificant in the global financial market.
Well, maybe they don't OPENLY care, or care directly .... but the long-standing and grossly concentrated short positions in silver of two well-known and TBTF financial houses (at the obvious behest of even larger powers), along with the unprecedentedly market suppressive, rapid-fire and radically manipulative recent margin changes in silver futures by the CME --- among much other evidence --- argue otherwise.
How WONDERFUL that the precious metals markets, uniquely in all the world, are utterly free of any surreptitious interference or manipulation (least of all by those whose power and political agendas could be and are being threatened by the ongoing rise in the prices of the precious metals), and are perfectly honest and transparent! Glory Glory Halleluja!
Really, is your middle name "Pollyanna", and just how heavy is that rose-colored-tinting in your glasses anyway? And do you use a shovel, or do you need a bulldozer to pile the shit that thick?
Akak
You're good with vulgarities, conspiracies and doomer dogma, but totally off the mark with facts.
In 2008, when LIBOR began to blow out, liquidity began to vanish and pianos began to rain on the financial system, silver took its rightful place into irrelevance. When the SHTF and financial armageddon is upon us, gold is the only metal to have.
When the system was wobbling off its axis at various points in 2008, SIFO rates rose faster than LIBOR which led to negative lease rates. Gold forward rates, on the other hand, fell. Why? Because gold was being hoarded and accepted as collateral in the interbank markets, while silver was not.
This simple distinction is where all the difference between gold and silver is revealed. When the system begins to unbuckle, silver becomes just another commodity while gold becomes real bankable collateral.
And by the way, if you want to find the truth about silver shortages and the Comex imploding, look no further than LBMA SIFO rates. On July 4th, 12-month SIFO rates went positive which is the first time since April 21. The 1-month as been positive since early June.
http://www.lbma.org.uk/pages/?page_id=56&title=silver_forwards&show=2011
If the silver default threat was real, SIFO wouldn't be improving. Silver is going to $25 - sorry.
All your prior PM predictions have been wildly off the mark, WilliamtheBastard/RedneckRepugnicant/TexasGunslinger/18otheraliases, so why should I put any credence in your anti-liberty, pro-Establishment propaganda now?
And as much as it irks your statist soul, silver IS being remonetized, just as gold is --- perhaps not as quickly, nor to quite the same extent, but the process is ongoing and inevitable. Just the fact that the gold:silver ratio has been on a downward trend for most of the last decade, in the face of a concurrent and steady rise in the price AND VALUE of gold, is proof enough of that.
That's an incredibly dumb answer.
The gold:AAPL ratio has been on a downward trend, too.
Pick a handle here and stick with it for more than three weeks before slinking away and changing it for the 19th time after being thoroughly discredited and/or banned (and how many times has that happened already?), and then maybe I will deign to give you a modicum of respect and answer any honest question that you might post.
I won't be holding my breath waiting for any of that to happen, though.
Bye bye.
No ponzi paper?
It is held together through arbitrage?
ROFLMFAO!!!
You are making my point for me.
Anything else to add?
ehhmm here's someone that disagrees with that:
Source: http://www.ipe.com/news/financial-system-a-ponzi-scheme-says-former-pres...
Wow. This guy is actually a teenager.
Ooopsie, forgot the .gov on your handle again.
Don't you feel naked short without it???
Metal is Shinny!
I Love My Silver.. or.. maybe there are to many boxes to carry out to get rid of! I want a Ton of Silver! a Ton of Monter Boxes!
Yeah!
I love my GOLD! I want a ton of it! Better yet: a tonne!
Shiney physical precious metals, bitchez!
Standing by! While we wait: http://www.youtube.com/watch?v=g3C7DECI0jU
Great song and a better condition to be in during this cluster fuck.
Also from 1996 http://www.youtube.com/watch?v=dPH-vhpEnaI
Banks are NOT Leveraged 20 X 1..
Banks are Leveraged .04 and .40 by everyone who is Not JP Morgue!
But but but... Robo said we would be slaughtered!
Eric Sprott is correct. Buy the physical at these bargin prices and hold!
Leo should go out to lunch with Eric sometimes.......:)
I would pay big money to be seated at the next table over, if only to see Eric throw his glass of wine in leo's smug and ignorantly smirking face.
Gee Akak, do you think reality would hit the Greek boy in the face?
No --- I suspect that he would just summon up some soft-core porn image on his laptop and thrust it into Eric's face by way of response.
Hey Mr. Akak,
Leo is an intellectual slop pail. When is employment insurance runs out, he'll be out looking for a real job... if anyone will hire him that is. All he'll have to do is mention his blog and HR will disqualify him within minutes.
If he weren't such a smug and arrogant prick, I might actually feel sorry for him.
As things stand, I consider him nothing but a waste of space and oxygen.
I just heard a story on NPR. A law exists that a one dollar coin must be created for every 10 dollars that are printed. The mint has ONE MILLION dollar coins, and working toward printing ONE BILLION of them.
It is all bullshit. So when do you think the super hyper inflation is going to hit?
And suppose it is.
There is still way more buyers waving money in various forms that needs to go to those who sell silver and gold bullion. Never enough to go round.
That will drive prices up. It has to.
$50.00 is the mother of all barriers that need breaking pernamently like a virgin's hymen in Silver.
I just bought some new uncirculated Zimbabwean coins denominated from 1 cent up to $25. At that point, their hyperinflation was really gaining steam, so they abandoned coin production and put the printers into full throttle. I also got a $1 ZD bill, a $1 million ZD bill, a $1 billion ZD bill, and of course the grand-daddy of them all, the famous $100 trillion bill from 2008. I got them to show (in tangible terms) to my future students how hyperinflation REALLY does happen, and how fast it can take off once it hits the tipping point.
Wouldn't it be interesting if the U.S. came out with a $10 coin or some-such, instead of the many-times-failed $1 coin(s)?
I agree with Sprott.
Silver will be the best investment of this decade.
I would agree that silver will have greater swing trading potential and it will have a better future as a trading medium. But CBs do not hold silver and for good reason. I'm in the camp that gold will decouple from its Ag brother when it is eventually allowed to freely find price discovery.
I really like my bright shiny silver (does Gollum impression .... "my...precious!"), but if the PMs skyrocket and the silver/gold ration falls to 15:1 or less, then I'll finally let go of the silver stuff and trade for the yellow stuff.
Sell silver when it overshoots that traditional ratio all the way up to about 5::1.
But don't hurry -- I think it will take at least a generation for it to drift back down to 15::1.
( This advice may rob you of a factor of 5 according to some people -- but hey. It's free advice. )
@ Hacked,
I have noticed several people here at ZH say they will eventually trade their silver in for gold at the "right time" (ratio gets down 15:1, or whatever).
I have seen only ONE who will sell his gold for silver...
My point? Which is the one people REALLY want? They want gold.
---
"All else will be left behind when the Gold Mothership takes off."
ZH-er Gordon_Gekko
So true DC.
i am getting ready for a big purchase of physical.
the time is almost right...
it will be before the big indian festivals of late august which always give a spike to the price!
I just decided I am off to UBS right now to score an oz of shiny Swiss gold.
.....and I reckon a cheeky oz or two of palladium and platinum will look just grrrrrrrrrrreat in the retirement fund safebox too :)
while i won't disagree if stocks rally strongly into the fall and without the requisite inflation "it could be a question of timing." which of course is a good thing, oui, oui?
Did you still think stocks were cheap when the S&P rose above 900? I certainly didn't. Once we blew past 900 I knew a stock market bubble was well underway.
Current stock valuations are pricing industrial revolution esque growth over the next decade which we all know will never come to fruition with the historic amount of debt and malinvestment in the system.
Gold has already reclaimed it's role as the international reserve currency, IMHO. With the amount of demand for precious metals in the east, the growing support in the states (like Utah) and politicians continuing to support endless run-away deficits... It is very safe to say both gold & silver will play a fundamental role in the successor to today's world fiat fractional-reserve monetary system
Pretty brave call. I guess we'll check back with you in 2020.
Silver may triple within 36 months. Just a little hip-tip from your old friend connytriptwos.
As the Great One would say:
To da moon, Alice!
What do you think, is silver or gold the better purchase at this time? Also, can anyone recommend an honest silver and gold dealer?
Watch the silver to gold ratio. It moves up and down. When it's up, sell gold and buy silver, when it is down, sell the silver and buy gold.
apmex.com has high premiums, but they are easy to work with and are a large internet dealer.
tulving.com has better prices but larger minimum purchases.
Do NOT use Northwest Territorial Mint.
My experience with them went as follows (about 8 months ago, Nov '10)
- contacted over email, said i was interested in purchase (not disclosing amount, but it was healthy), left my info
- received a call within 2 hours, spoke w/the guy for a while, great customer service and he disclosed excellent info about their inventory flucuation
- ended up convincing me to purchase online instead of driving the ~90mi to their Federal Way store
I realized before I made the purchase the details (90 days to deliver, etc.) but it was interesting to watch silver go up for the next 2.5 months, and then the middle of Jan when it corrected to my purchasing price they suddenly shipped the order.
Can't say I had a bad experience, but I was disappointed in how long it took to receive the silver. I would say if I had purchashed in person I probably would have only good things to say about NWTM.
Anyway, do your research, there are many stories from customers about length of delivery and moderately questionable ethics.
Consider a long established coin shop in your city, especially if your purchases will less than, say, $5000 per transaction.
I have been buying gold & silver for over 25 years from local coin shops, only once did I buy on-line (and that was for hard to find platinum).
I won both gold and silver. Twice as many ounces of silver vs. gold. But over 10 times the value is in gold.
what you buy depends on your own particulars, but tulving is probably the best dealer in the US. APMEX is good, their spreads are wider than tulving's but they are also no nonsense, ive done plenty of business with both over the years. If you're in europe, most banks will buy and sell over the counter, if you happen to be in germany or switzerland, pro aurum generally has better spreads than the banks.
Check out your local coin dealer(s) first. You never know, he might end up being a good guy, and its nice to have something local, too. especially for smaller quantities, youll pay similar spreads with a decent dealer in person, and you'll build a relationship with a human being.
of course, the guy who had a coin shop in my town (long since retired) never sent me popcorn for christmas ;)
What do you think, is silver or gold the better purchase at this time? Also, can anyone recommend an honest silver and gold dealer?
Better in appreciation & divisability, Silver, in stability, Gold. Physical? Go to a local coin shop. Physical option, buy PSLV and PHYS
TD says "Eric sees the current "extend and pretend" intervention by world governments and central banks to prop of a fundamentally flawed baking system"
I ask: WHAT IN THE HELL IS WRONG WITH OUR BAKING SYSTEM???? HAVE YOU SEEN THE BREAD AT CARNEGIE DELI??? HAVE I BEEN FOOLED THIS WHOLE TIME????? AAAAAAHHHHHHHH!!!!!!!!!!!!!!!!!!!!!
That helps explain the travesty of WonderBread too!
And why nobody ever has enough dough!
And why pundits keep telling us that "inflation is baked into the cake"!
And why the West is falling, while the Yeast is rising!
It all makes sense now.
What do you think, is silver or gold the better purchase at this time? Also, can anyone recommend an honest silver and gold dealer?
Well APMEX will sell it to you and thier legit, but the premiums are plenty high