Is Canada Safe From the Next Financial Crisis?

We’re in way better shape. We have a pension plan. We have a pay as you go healthcare plan. We don’t have the amount of unfunded obligations that the US has, although we have unfunded obligations. We won’t be as badly off as the US will be, because they’re just not dealing with issues down there, because of the political quagmire they have.

But it’s not saying that we’re going to have a problem; we’re always the tail that’s wagged by the dog. But on a relevant basis, we’re going to be better off. I think we’ve got a better banking system. We have better budgetary controls, although some provinces seem to be out of control. I don’t think we have quite the same issues with the municipalities. We have more natural resources per capita. So, we’re definitely going to be better off, but that’s not to say we’re going to be unscathed.

If it’s all just a big Ponzi scheme, we all just print money as all these major capitalist countries are doing, there’s an unintended consequence of it. I don’t know whether it’s going to be inflation or massive deflation, but there will be something come out of it, because the life and the place we’re living today is not normal. I’m talking about the financial area for now, and there’ll be consequences for that. I don’t think it’ll be as bad here but that’s not something that says we won’t have to endure some pain.

- Source, Ask the Expert Sprott Money

Taper was Just Talk

I've always believed that the Fed is in a very difficult situation and the ‘taper’ was just talk. And we’ll see whether they ‘walk the walk’ or just ‘talk the talk.’ As you know, Eric, yields have doubled over the last 12 months, and in particular with the reintroduction of the taper talk.

We know that there is massive selling of bonds, whether it’s the Chinese, or the Japanese, and I would imagine a lot of the emerging countries are now selling US bonds....

- Eric Sprott via a recent King World News interview:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/9/13_Billionaire_Sprott_Issues_Warning_To_Western_Central_Planners.html

China is Importing Over 100 Tons of Gold Per Month

What is China doing? Now, we have one data point on China and one only, and that’s exports from Hong Kong into mainland China. But I can assure you there are exports (of gold) from places different than Hong Kong, into China, but we don’t get to see the numbers.

So I can imagine (the immense) gold flows from Geneva to Shanghai, or London to Beijing, or New York to Shanghai, but the Chinese don’t publish that data. But the data (which is published) shows that China is (now) importing over 100 tons (of gold) each month.

- Eric Sprott via King World News, see the full interview here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/9/12_Billionaire_Sprott_-_Metals_Smashed_As_West_Hemorrhages_Gold.html

Bull Market in Silver

“I think the most important thing that your listeners (and readers) would want to understand is that we have a bull market in silver stocks -- they are up about 50%, we've got a bull market in gold stocks -- they are up something approaching 30%, we have a bull market in silver -- it’s up over 20%.

We don’t have a bull market confirmed in gold yet, but it’s my expectation that this will happen forthwith..."

- Eric Sprott via King World News:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/8/23_Billionaire_Sprott_-_How_Investors_Can_Make_3,000_In_1_Year%21.html

How Investors Can Make 3,000% In 1 Year!

"As I look at the landscape and see all of the obvious things that indicate a shortage of gold, and a lot of demand for silver, it would seem to me that we are going to see some serious price spikes here.

I’m suggesting that within the next year we would see something like $2,400 (for gold). What all of that implies is the opportunity in the equity side (mining stocks) is spectacular ... There will be some (companies) that will go up 10, 20, and 30 times (in price) within a year.

To me, those are opportunities that rarely present themselves, and I've been in this business a long, long time. I don’t even think I’ve seen an opportunity where you could imagine that within a year you could make 3,000% on something. So I think it’s a great opportunity for people."

- Eric Sprott via King World News, read the full article here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/8/23_Billionaire_Sprott_-_How_Investors_Can_Make_3,000_In_1_Year%21.html

Continue to Own Hard Assets

“Currencies are collapsing. So there’s trouble out there, all over the place, which of course would suggest that owning hard assets continues to be the thing you should do.”

- Source, JB Investment:

http://www.johnbudden.com/the-latest/audio/eric-sprott-5.html

COMEX Inventories Are Going Down

We see all of these weird things like this gold leaving London to go to Switzerland. I mean that’s a serious amount of gold -- almost 800 tons in six months. 800 tons is about 1/3 of (annual) mine supply, in half a year. If it kept going at that pace it would total 2/3 of (annual) mine supply for a whole year.

So there are all of these things going on in the gold market that tell you there is a shortage. Our own analysis of the supply/demand (also) tells us there is a shortage. The GOFO rate being negative, backwardation in gold, COMEX inventories going down, shipments from London to Asia, the activity on the Shanghai Gold Exchange, they are all saying the same thing (that there is a shortage of available physical gold).

- Eric Sprott via King World News, read the full interview here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/8/25_Eric_Sprott__This_Will_Shock_Investors_%26_Send_Gold_Skyrocketing.html

I Take a Big Macro View of Gold

As you know, Eric, I take a big macro view of gold here, and what I sense all along is that the Western central banks must really be running on fumes when it comes to (physical) gold. I must say that I am never disappointed by the data points that I see in physical gold.

For example, I just saw the Perth Mint, their gold sales were up 50% and the silver sales are up 70%. The Bank of England, the Royal Canadian Mint, all of the sales are up and getting into seriously high numbers. All the while, this is all predicated on the gold and silver supplies hardly going up at all.

In fact, I think the gold supply will be down this year from maybe even back to (the year) 2000....

- Eric Sprott via King World News, read the full interview here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/9/12_Billionaire_Sprott_-_Metals_Smashed_As_West_Hemorrhages_Gold.html

There is No Way Out

In the care of Detroit, what made them go bankrupt? They couldn't write the cheque. That’s essentially what happened. They ran out of money, and they had to declare bankruptcy. They didn't have a choice.

In the case of the United States, they can keep writing cheques because they can just print money. But it’s when you have to keep printing more, and more, and more. You know, if your obligations, because some of these obligations become cash obligations in due course, because as people retire and as more people over 65 get Medicare and Medicaid, there’s a real cost to this stuff. And in order to write that kind of cheque, you have to print more and more money all the time, because it just goes onto the budget instead of not being on the budget.

So, that day is going to come when your deficit goes from a trillion to a trillion and a half, to two trillion, to two and a half trillion. Then everybody’s going to know this is ridiculous, and try to finance it in the market, i.e. if you asked real bond holders to buy those things, what would interest rates be when you have such a low grade credit when looked at in the true light of day. I mean the interest rates could be substantial, which would just cause an even worse deficit.

There’s no way out, as far as I'm concerned. We’re all just living through it here, just as we did with Detroit. There was no way out. There’s no way out for the US, in my mind, and many other governments and states and cities and the whole bunch. I don’t know the day, but I know it’s going to happen.

- Source, Sprott Money Ask the Expert

The FED Has NO Exit

I think we all know the Fed’s irresponsible. Zero interest rates and printing money. I mean, everybody on the planet Earth knows it’s irresponsible. Lots of people are prepared to fade the Fed, and play the game and all that.

So the Fed, from time to time, has to appear like they’re acting more responsibly. That’s why they keep coming out with this chatter in the minutes of the meeting and things like that. “Well, we could plan an exit from the bond strategy after QE1 and QE2.” Of course, there never was an exit, by the way, but you got to keep saying it to make everyone think that you’re being responsible.

Because, you know what, there are not just people in the Western capitalist area that watch what’s going on in the United States of America. There’s the Chinese, and the Russians, and the non-aligned people who are looking in and saying, “Oh my god, what are those people doing printing all that money and having zero interest rates? Maybe I don’t want to own these dollars.”

So, they have to, from time to time, appear to be responsible. I think that’s what they use the minutes of the meeting for. Never, of course, the real action, but the talk is what they use to try to persuade people that they’re being somewhat reasonable, even though when they start the actual activity, they don’t change anything. They talk the talk. They don’t walk the walk.

- Source: Sprott Money Ask the Expert

The United States is Broke

“Well, Eric, I guess I would start out with my fundamental conclusion about the financial system in the world. It’s obvious to me that the U.S. government is broke. That’s the easiest calculation in the world to make…

That’s what I fear is going to happen in the U.S. — that we keep delaying, and delaying the obvious, and then someday there is going to be something that happens, and of course the cuts that people with have to exist with in Medicare, social security, government pension checks, will be way bigger than it had to be because nobody did anything about it in the meantime.”

- Source:

http://www.sprottmoney.com/news/eric-sprott-make-3000-in-one-year-coming-collapse-gold-silver-more-king-world-news

Sprott Precious Metals Round Table

The Fed taper. Turmoil in the Middle East. 

Selloff in Emerging Markets. 

What does it all mean for precious metals?

To find out, join our webcast on September 24, 2013 for a round table discussion with Eric Sprott, Marc Faber, Rick Rule and John Embry.

You can register for this round table by clicking here.

Gold Could be $5000 to $10000

I'm only looking at 1 year in this conversation, but 4 years from now you could be somewhere in the $5,000 to $10,000 range with the amount of printing and debasement that’s going on.
And of course this financial situation that all of these governments find themselves in -- they are essentially broke. And if governments are broke, then you don’t want to have your money in a bank. So you've got to put it in gold. You could imagine where you get this tidal wave of interest in gold, which we already have by the way -- certainly in China and India. I can (also) sense that there are a lot of people refocusing on gold and silver today, which is manifesting itself in the prices. 

So it’s not too hard to imagine there could be a situation where there is a great run on gold. I've said many times that I think there is a shortage of gold, and there has been a shortage of gold for a long time. This got particularly acute late last year and early this year, which I think is what caused the raid. Of course it (the raid on gold) totally backfired as demand just sky-rocketed.

- Source, Eric Sprott via King World News:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/8/25_Eric_Sprott__This_Will_Shock_Investors_%26_Send_Gold_Skyrocketing.html

A Return to Fundamentals

Daily paper volumes are many times larger than annual mine production. I believe that the return to fundamentals driving gold prices will be triggered by a shortage of physical gold and ultimately, a failure to deliver. We already see signs of physical gold shortages, as evidenced by the negative Gold Forward Offered Rates (GOFO) rates, record low physical inventories and backwardation in the futures market.

- Source, Eric Sprott via the Globe Investor:

http://www.theglobeandmail.com/globe-investor/inside-the-market/qa-eric-sprott-on-gold-and-why-its-heading-to-2400-in-1-year/article13765335/