Eric Sprott, Financial Sense News Hour - 27 July 2011

Sprott Prices PHYS Follow On Offering, Raises $266 Million, To Buy Over 5 Tonnes Of Physical Gold

As was announced before, Sprott's PHYS fund (which previously had not disclosed terms of its offering) has just priced 19 million units at $14.00/unit for a total raise of $266 million, all of which will go to removing another 5 tonnes of physical gold out of the broader lendable circulation.


Read the full story at Zerohedge here:


http://www.zerohedge.com/article/sprott-prices-phys-follow-offering-raises-266-million-buy-over-5-tonnes-physical-gold

Eric Sprott: SILVER TO GO SUPERNOVA, PAPER MARKETS ARE A JOKE!

Eric Sprott - Paper Markets Are A Joke: Prepare for Bullion Prices to Go Supernova.

Sprott Physical Gold Trust Announces Follow-on Offering of Trust Units

Sprott Physical Gold Trust (the "Trust") (TSX: PHY.U)(NYSE: PHYS), a trust created to invest and hold substantially all of its assets in physical gold bullion and managed by Sprott Asset Management LP, announced today that it has launched a follow-on offering (the "Offering") of transferable, redeemable units of the Trust ("Units").


The Trust will use the net proceeds of this Offering to acquire physical gold bullion in accordance with the Trust's objective and subject to the Trust's investment and operating restrictions described in the prospectus related to this Offering. Under the trust agreement governing the Trust, the net proceeds of the Offering per unit must be not less than 100% of the most recently calculated net asset value per Unit of the Trust prior to, or upon determination of, pricing of the offering. 

http://www.sprottphysicalgoldtrust.com/Investors/Press-Releases/Press-Release-Details/2011/Sprott-Physical-Gold-Trust-Announces-Follow-on-Offering-of-Trust-Units1125973/default.aspx

STUNNING DEVELOPMENTS IN SILVER, PRICE TO EXPLODE: Eric Sprott

Paper Markets Are A Joke. Prepare for Bullion Prices to Go Supernova!

SILVER GURUS Paper to Physical Ratio of 25, 100, 500 to 1 Eric Sprott, Martenson, Bix Weir

"This is a long overdue precious metals update discussing the massive paper manipulation of the silver market. Featuring Eric Sprott, Chris Martenson and by phone, Bix Weir."

-SGTBull007

Eric Sprott: "Paper Markets Are A Joke: Prepare For Bullion Prices To Go Supernova"

"I think that the prices will continue higher. I mean the amount of money printing is unbelievable. I just think you have to take that initial stand in terms of buying it. I use the James Turk analogy: just keep dollar averaging. We have gone up eleven years in a row, this year it looks like it will be no exception; I would certainly think next year will be no exception. If we ever have QE3 announced, I think gold and silver will just go absolutely bonkers here. And so I just think you have got to step in there and own it; we’ve had these fears all the way along. You know, $400, and $500 and $700 and $800 dollar gold, everyone was afraid it was a one-time thing. I don’t think it is a one-time thing, I think it is a secular thing. It’s going to carry on for quite a while here until we find some resolution of these problems. And the resolution probably will be some form of default where people just have to expunge debts that cannot be repaid. So, you have got to be in some asset which will not be affected by that." So predicts Eric Sprott, founder of Sprott Asset Management and famed investor. In this wide-ranging interview, he shares his insights on the precious metals markets - specifically what investors need to be aware of in terms of the way the markets are currently managed (manipulated), the macro outlook for the economy (grim) and the true value of gold and silver (very underpriced; particularly silver). 

Read the full article at ZeroHedge here:


http://www.zerohedge.com/article/eric-sprott-paper-markets-are-joke-prepare-bullion-prices-go-supernova

Caveat Venditor!

There is no doubt that speculative dollars have been flowing into the silver market. We note that in April record trading volumes were registered in the SLV, Comex futures, LBMA transfers, and the Shanghai Gold Exchange futures. In fact, converting the average daily trading volume in the aforementioned silver instruments to the amount of ounces of silver they are supposed to represent, there were on average, over 1.1 billion ounces worth of silver traded every day in the month of April. Truly a staggering number when contrasted against the actual amount of silver available for investment. To wit, the world will only supply about 979 million ounces this year from mine and recycling of scrap, of which it is estimated that 657 million ounces will be used up for non-investment purposes. So in effect, that leaves roughly only 322 million ounces available this year for investment purposes. Converting to days (recall that at least 1.1 billion ounces traded each day) it leaves only about 1.3 million ounces per trading day of available supply. So, we are essentially trading the amount of physical silver actually available for investment, 891 times over each day! It really begs the question; just what are people trading in these markets?

Consider the largest and most prominent of those markets - the Comex, which we believe has owned an effective monopoly on silver price discovery for decades. In fact, the Comex churned over 800 million ounces of silver futures and options on average each day in April. Indeed, notwithstanding the massive but very opaque over-the-counter silver derivatives market, trading on the Comex dwarfs both the physical and the other (known) paper silver markets, combined. Despite its dynamics being relatively complex and generally not well understood by most, the world’s financial community continues to view trading on the Comex as representative of the fundamentals for the physical silver markets. A market built on a high amount of leverage, both the buyers and sellers of Comex futures and options contracts are able to establish a position in "silver" with pennies on the dollar in collateral and even more astonishingly, no physical silver backing the contracts at all. The following charts illustrate just how unreal these markets have become.

Read Eric Sprotts latest article here:

http://www.industrymailout.com/Industry/Home/5274/22439/images/0611%20Caveat%20Venditor.pdf