Saturday, September 10, 2011

Eric Sprott: Silver to hit $1,200 an ounce

Many of you already know about Eric Sprott.

A chartered chartered accountant who entered the investment industry as a research analyst at Merrill Lynch. In 1981, he founded Sprott Securities (now called Cormark Securities Inc.), which today is one of Canada's largest independently owned securities firms. After establishing Sprott Asset Management Inc. in December 2001 as a separate entity, Eric divested his entire ownership of Sprott Securities to its employees.

Sprott is a huge Silver bull and we have profiled his thoughs numerous times before.

And he remains resolute in his views on Silver which he reiterated yesterday:
  • “It could be a wild ride here. As you know there are groups that are short silver and they’ve lost a lot of money already. I think they are very active in the market and create these days where there are sudden downdrafts, but sure enough silver always comes back. The physical buyers always wear down the paper pushers.”

    “I think silver will outperform gold in the next decade. If silver should trade at a 16 to 1 ratio (to gold), it will probably trade at 10 to 1 because things tend to overshoot. Let’s use Jim Sinclair’s $12,000 target, that would suggest $1,200 silver, which is a thirty bagger from here.”

    “The outlook for gold stocks is particularly exciting right now. I think we can get a 50% move out of the gold stocks between now and December 31st. And of course if gold and silver really get lit up here, I mean who knows? We could go up hundreds of percent in these gold stocks in the next eighteen months.”

    “It could be very explosive as more and more people worry about (1) fiat currencies, (2) sovereign debt and (3) bank deposits. It would take very little to spill into gold to make a dramatic difference in where the price will be.”
Sprott's comments are particularly poignant in light of yesterday's G7 announcement.

The G7 is in full panic mode. It is now certain that the G7 will attempt some major intervention over the next 48 hours to inject a last dose of hope into capital markets to avoid Monday becoming an epic collapse.

To that end the G7 issued a statement titled Tackling Slowdown, Supporting Banks
  • “Monetary policies will maintain price stability and continue to support economic recovery. Central Banks stand ready to provide liquidity to banks as required... We will take all necessary actions to ensure the resilience of banking systems and financial markets. In this context we reaffirm our commitment to implement fully Basel III. We reaffirmed our shared interest in a strong and stable international financial system, and our support for market- determined exchange rates. Excess volatility and disorderly movements in exchange rates have adverse implications for economic and financial stability. We will consult closely in regard to actions in exchange markets and will cooperate as appropriate.
As we have said numerous times... not only is QE3 assured. So is QE4, 5 and 6.


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  1. Jim Sinclair says; "QE to infinity". The banking system is bankrupt and those in charge of the repairs are not only incompetent, since they created the mess, they are also criminals who lied to their clients by selling them CDO's and other worthless financial instruments, which they themselves described as shit.
    What coming is neither a recession or depression. It is the greater depression and has the potential to go Mad Max. Too many people are broke, have no skills and are on drugs. In addition, there is little self reliance with few living on farms like in the last depression.