Tuesday, July 5, 2011

Two Silver items from Sprott

As you know, we have been blogging recently about the disconnect between paper prices for Silver and Gold and the physical market.

Coincidentally Eric Sprott was interviewed by blogger Chris Martenson on the topic of bullion prices today.

And Sprott makes it clear what is building in the precious metals market.
  • "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."
Sprott says he thinks the current markets are highly manipulated and that the wider outlook for the economy is grim.  In this environment the true value of Gold and Silver are highly underpriced; particularly Silver. 

There is more and you can click the link above for more info. A full transcript of the interview can be read here.

There was another item in the news today from Sprott Asset Management.

David Franklin, the chief executive officer of Sprott Private Wealth, was on BNN today (hattip to JK).

And while he echo's Eric Sprott's main message that the bull market in gold and silver has a long way to run, he tells BNN the best way to play the precious metals sector is to buying stock in miners - something this blog also believes.

You can see his appearance on BNN by clicking this link:

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