By Peter B. Meyer – June 20, 2012
Central bankers around the world hold their hands on the print button of their presses. So it’s easy to predict a rise in precious metal prices over the next 2 years. It is similar to what happened many times over in the past. After 2008’s market meltdown, central bank action sent precious metals soaring. For instance, gold jumped 25% in 2009. But in a good year for gold, silver can do even better. In 2009 while gold jumped 25% the price of silver jumped over 50% from $11 to $17 per ounce.
Now is the time to look at silver again. Sprott the largest commodities trader on the globe, says: “The €100 billion the European Union granted to Spanish banks last week is just the beginning… The problem is much bigger than Central Bankers and Governments can deal with – the whole banking system is much larger than the countries involved.”
All sovereigns have large deficits; they lack excess funds to bailout their banks, as their own credit worthiness is under water. With continued European bailouts and strong demand for precious metals, gold and silver prices should soar, after their recent floundering. Sprott thinks the recent ‘low’ gold and silver price is originated by the central banks that are controlling the prices for precious metals, because a high gold price indicates the central banks performance is lousy.
Sprott says: “All of the data is incredibly positive for precious metals. I focus on gold because the silver data is so poor that we get, but when you see China buying 100 tons of gold in April, Iran’s buying, Turkey’s buying… Kazakhstan announces they’re going to go from 12% of reserves in gold to 15% - all of the data speaks to HUGE VOLUMES OF PHYSICAL GOLD BEING ABSORBED… way beyond the ability of the miners to provide that gold. Which makes me think the central banks are continuing to lease or to supply the gold into the market somehow.”
In addition to ongoing problems with Europe's financial system and growing demand for metals, there's another reason, metals - in particular silver- will soar. In short, the world is out of silver.
Sprott says, “Aggregate investment demand for silver between 2000 and 2009 was 293.8 million ounces (according to the GFMS, the world's foremost precious metals consultancy). Using his own numbers, Sprott compiles the silver holdings for seven large investors, including himself, iShares, Silver Trust, ZKB, GoldMoney, etc. Just those seven entities own 519.6 million ounces of silver… That's 225.8 million missing ounces. And again… That's only seven investors. It doesn't include central banks, individuals, hedge funds, etc.“
It's obvious, as Sprott notes, silver data has been "very, very misstated." Sprott ends his speech saying, "There's $22 billion of silver available in the world, of which the ETFs already own half, and between you guys and us we probably own the other half... Which means there's nothing left."
Sprott states, the world's silver supply would be gone "in a nanosecond" once the people realize there isn't as much metal as we believe, "because it's a very small amount of money." He also noted, there's a shortfall in the world's gold supply.
The message is clear: Buy gold and silver coins and bullion now, for as much as you’ve liquidity available and keep doing so till the prices escalate.
Central bankers around the world hold their hands on the print button of their presses. So it’s easy to predict a rise in precious metal prices over the next 2 years. It is similar to what happened many times over in the past. After 2008’s market meltdown, central bank action sent precious metals soaring. For instance, gold jumped 25% in 2009. But in a good year for gold, silver can do even better. In 2009 while gold jumped 25% the price of silver jumped over 50% from $11 to $17 per ounce.
Now is the time to look at silver again. Sprott the largest commodities trader on the globe, says: “The €100 billion the European Union granted to Spanish banks last week is just the beginning… The problem is much bigger than Central Bankers and Governments can deal with – the whole banking system is much larger than the countries involved.”
All sovereigns have large deficits; they lack excess funds to bailout their banks, as their own credit worthiness is under water. With continued European bailouts and strong demand for precious metals, gold and silver prices should soar, after their recent floundering. Sprott thinks the recent ‘low’ gold and silver price is originated by the central banks that are controlling the prices for precious metals, because a high gold price indicates the central banks performance is lousy.
Sprott says: “All of the data is incredibly positive for precious metals. I focus on gold because the silver data is so poor that we get, but when you see China buying 100 tons of gold in April, Iran’s buying, Turkey’s buying… Kazakhstan announces they’re going to go from 12% of reserves in gold to 15% - all of the data speaks to HUGE VOLUMES OF PHYSICAL GOLD BEING ABSORBED… way beyond the ability of the miners to provide that gold. Which makes me think the central banks are continuing to lease or to supply the gold into the market somehow.”
In addition to ongoing problems with Europe's financial system and growing demand for metals, there's another reason, metals - in particular silver- will soar. In short, the world is out of silver.
Sprott says, “Aggregate investment demand for silver between 2000 and 2009 was 293.8 million ounces (according to the GFMS, the world's foremost precious metals consultancy). Using his own numbers, Sprott compiles the silver holdings for seven large investors, including himself, iShares, Silver Trust, ZKB, GoldMoney, etc. Just those seven entities own 519.6 million ounces of silver… That's 225.8 million missing ounces. And again… That's only seven investors. It doesn't include central banks, individuals, hedge funds, etc.“
It's obvious, as Sprott notes, silver data has been "very, very misstated." Sprott ends his speech saying, "There's $22 billion of silver available in the world, of which the ETFs already own half, and between you guys and us we probably own the other half... Which means there's nothing left."
Sprott states, the world's silver supply would be gone "in a nanosecond" once the people realize there isn't as much metal as we believe, "because it's a very small amount of money." He also noted, there's a shortfall in the world's gold supply.
The message is clear: Buy gold and silver coins and bullion now, for as much as you’ve liquidity available and keep doing so till the prices escalate.
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