Text of Eric Sprott interview
With silver blasting off to the upside and gold attacking the $1,440 area, today King World News interviewed Eric Sprott Chairman and CEO of the now $9 billion strong Sprott Asset Management. When asked about the metals Sprott stated,
"I’ve obviously been a bull for quite a while on both metals, I mean it goes back to the bottom in 2000. More recently in the last 15 months or so I’ve come to the belief that silver would significantly outperform gold, notwithstanding our loving gold, and sure enough it (silver) seems to be leading the parade here.
When we were selling the physical silver trust at the time, I was suggesting when silver went through $24 that I thought it would get to $50 within a very short time like 4 to 6 months. We didn’t quite make it but the trend is there and it’s exhibiting all of the signs of going higher. So needless to say we are quite elated with the performance of both metals.”
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When asked about shortages in silver Sprott responded, “Of course physical shortage is a key item. The one thing I like to focus in on is just to watch the buying of silver for investment purposes. As we’ve discussed before I think the people who were supposedly experts on silver have massively understated the investment demand for silver.
As an example when I look at the US mint...people are buying silver at the same dollar rate as they are buying gold which is a stunning comparison when you realize that the availability of gold for sale for investment purposes each year vs silver that’s available for investment is probably a ratio of something like 8 or 10 to one.
There’s 8 to 10 times more gold available to buy. As an example one of your guests James Turk who runs GoldMoney, I think he sells more dollars of silver than he does gold now per month. At SprottMoney we sell way more dollars worth of silver than gold. So I just see people coming in here with their wallets, voting on the metals and I think the vote is overwhelmingly in favor of silver.”
When asked about the paper silver market Sprott remarked, “Well, you know what goes on on the Comex is never easy to understand. Every day we trade something like 350 million ounces of silver on the Comex. 350 million ounces when we produce something like 900 million a year and there’s only one thing you can conclude from that, the people trading it have no interest whatsoever in physical silver because it’s just way bigger than the market needs to be. Who the hell would be trading that amount of silver other than somebody working in the trading room in the sky?
So I think the people who trade the paper trade so much more than is produced every day that they were so far able to contort the market, and it looks like the physical buying is now going to upset that former control they had over things.”
