Friday, December 14, 2012

Silver to Outshine Gold as the Investment of this Decade

"Today news headlines proclaimed "Gold rises" due to Italian Prime Minister Mario Monti's plans to resign, while CNBC cited expectations of future Federal Reserve easing. Regardless of the reason, Gold was barely up, trading just a little above 1,710 dollars an ounce, the lower end of its 30 day trading range. In the summer of 2011, during the US debt ceiling debate and credit downgrade, gold topped 1900 dollars an ounce. However, since then the price has dropped, despite the types of news events that usually drive investors to gold. Plus, according to the World Gold Council, central banks will buy more than 500 tons of gold this year, up from 465 tons in 2011, a new high. Why has the yellow metal been trading sideways for the past year and a half as the S&P 500 has gained a very respectable 25 percent? We talk to commodities legend Eric Sprott about gold and silver, and where he sees prices headed over the next decade.

And despite the recent stagnation in the price of gold, the metal has been in a bull market for more than a decade. But how much of the run-up in gold is driven by factors we talk about every day (such as QE and debt downgrades), and how much is driven by issues such as the 20-year bear market in gold that preceded the recent run, as structural supply changes forced the inevitable price adjustment that we see today? We talk to Eric Sprott, CEO of Sprott Asset Management, about how he has weighed these factors over the years.

Plus, US and UK regulators have published a joint paper about plans to deal with failing global banks. Martin Gruenberg, chairman of the FDIC, and Paul Tucker, deputy governor of the Bank of England, wrote an article in the op-ed pages of the Financial Times stating that the plans are the first steps to ending the global problem of "too big to fail." The paper outlines a strategy which includes losses for shareholders, removing senior management, and converting debt into equity in order to provide capital. Capital is one solution to mitigate the liability of massive credit expansion...if only we had hard money...Lauren breaks it down in Word of the Day.

And, have you ever wondered what 315 billion dollars in gold bullion looks like? Chemistry professor Martyn Poliakoff visited the gold vault at the Bank of England to find out. Lauren and Demetri discuss the insides of the gold vault in today's Loose Change."

- Source, RT News, Capital Account: