Thursday, December 27, 2012

Eric Sprott's Forecast for Gold and Silver in 2013

"I must admit that for the longest time, and for many years now, I have always asked how long can this system hold together? I never would have imagined that the market would buy into printing money, but I guess the market bought into printing money as some great salvation, even though it's caused nothing to happen economically. Here we are in 2012, and we might very well have a worldwide recession after years and years of money printing. So it is very difficult to forecast where it is going to go. Some of the people that I rely on suggest that you're either going to have hyper-inflation or defaults. It's going to be tough to imagine defaults if the central banks just say, 'Well, we'll basically buy everything out there,' which means the more likely thing you're going to end up with will be some kind of hyper-inflation.

Some of the people I rely on suggest there is about a 40% chance of hyper-inflation starting in 2013 and about a 90% of it starting in 2014, so that's what I would imagine happens. We have all this silly printing and supporting of financial markets, and then we are going to find out that there is inflation in the system where gold and silver will be the telling of it. Once it gets ingrained that the currency is being devalued, then I think that precious metals will just continue to move forward. Stocks can go up in a hyper-inflationary environment, but it certainly wouldn't be your first priority. The first priority would be to own gold and silver. I think we will see signs of that next year. I don't necessarily see any great economic strength because everything it's done so far has been to support the financial system, not the economy. I think we are looking for lethargic growth next year and the biggest element yet again will be the action in the precious metals."

- Source, Seeking Alpha:

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