Eric Sprott and James Turk talk about how there isn’t enough silver in the silver market to back existing “paper silver” commitments. Sprott thinks that “silver will be the investment of this decade”.
They talk about the dynamics of the gold market and how it has entered the second phase of its bull market. They look at ETF, central bank and coin demand. They also look at the huge paper-to-physical mismatch. Eric calculates that only 0.75% of financial assets are currently in gold.
They discuss the importance of owning physical, not paper gold, and keeping it yourself or with a trustworthy company that gives you direct access to it. They talk about GATA and the significance of the work they do. They also talk about Sprott PHYS and PSLV and how they allow holders the option to redeem their physical metal, unlike most other ETFs.
They talk about fiat currencies and their flaws. The dollar, the euro and how bank leverage has built up since the Fed was established in 1913, setting the stage for a huge crash. Eric talks about bank failure Friday, the numbers released by the FDIC and all the signs pointing to the coming train wreck.
They talk about the attempts to prevent liquidation of bad assets and how governments are throwing good money after bad. Eric then talks about the 3 conditions that he thinks are necessary to see gold as overvalued, and how we are very far from that point at this stage. Both James and Eric see gold as reaching a parabolic phase before the bull market runs its course. They also comment on how little confidence most mining companies have in gold. This interview was recorded on August 4 2011 in London.