Part 2: The Solution... Is the Problem

"When we wrote Part I of this paper in June 2009, the total U.S. public debt was just north of $10 trillion. Since then, that figure has increased by more than 50% to almost $16 trillion, thanks largely to unprecedented levels of government intervention.

Once the exclusive domain of central bankers and policy makers, acronyms such as QE, LTRO, SMP, TWIST, TARP, TALF have found their way into the mainstream. With the aim of providing stimulus to the economy, central planners of all stripes have both increased spending and reduced taxes in most rich countries. But do these fiscal and monetary measures really increase economic activity or do they have other perverse effects?

In today’s overleveraged world, greater deficits and government spending, financed by an expansion of public debt and the monetary base (“the printing press”), are not the answer to our economic woes. In fact, these policies have been proven to have a negative impact on growth.

While it hasn’t received much attention in recent years, a wide body of economic theory suggests that government policies and their size relative to the total economy can have a significant detrimental impact on economic growth. A recent paper from the Stockholm Research Institute of Industrial Economics compiles evidence from numerous empirical studies and finds that, for rich countries, there is overwhelming evidence of a negative relationship between a large government (either through taxes and/or spending as a share of GDP) and economic growth. All else being equal, countries where government plays a large role in the economy tend to experience lower GDP growth.

Of course, correlation does not imply causation. While the literature is not definitive on causation, it still provides strong evidence that more taxes and government spending as a share of GDP (except for productive investments such as education) is associated with lower growth.

One exception to these findings is the experience of Scandinavian countries. They have both high taxes and high government spending as a share of GDP but have experienced relatively rapid growth over the past 20 years. However, a significant share of their spending goes to education, which has been found to foster growth. They also counterbalance the large role of the state with very liberal, pro-market reforms and low levels of public debt."

- Read the full article by Eric Sprott & Etienne Bordeleau at Sprott asset management, here:

http://www.sprott.com/markets-at-a-glance/the-solution%E2%80%A6is-the-problem,-part-ii/

Silver Would be $150 if Not Suppressed

"Eric Sprott has $10 billion under management, and it's no secret Mr. Sprott is a long term bull on physical gold and silver. He says, "I can make a compelling case the price has been suppressed." If it wasn't, Sprott says, "Gold would be $2,500, and if the ratio was 15 to 1, the price of silver would be $150 an ounce." Mr. Sprott also says, "The economy is already taking a cliff dive and that is before we hit the cliff. . . . It's hard to imagine anyone being optimistic going forward here." If there is war in the Middle East, Sprott says, "Oil would go crazy, gold would go crazy, anything physically real would be in demand." Greg Hunter goes One-on-One with Eric Sprott of Sprott Asset Management."

- Source:

http://usawatchdog.com/one-on-one-with-eric-sprott/

Stimulus Policies Won't Help and the US is in a Recession

“The world is hoping for some monetary stimulus from the G6 countries. I would not be surprised at all that some Sunday night we’ll get some announcement that all governments are going to buy more of their government bonds, maybe some organized action by the G6, which I think will just send gold moving significantly higher. I’m pretty convinced it will be at new highs before the end of the year. It’s not even that relevant to me what it is exactly at the end of the year”

- Source:

http://www.moneynews.com/Economy/Sprott-Recession-economy-gold/2012/07/30/id/446971

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Hecla Mining Makes Hostile Bid for U.S Silver

"The head of Sprott Asset Management, Eric Sprott, was keeping his cards close to his chest after Hecla Mining made a hostile C$111-million cash offer to buy U.S. Silver that would derail a Sprott-backed plan to merge U.S. Silver with RX Gold & Silver.

Sprott is a key shareholder of both U.S. Silver and RX Gold & Silver, holding 14 percent and 8 percent of each company respectively, and now with the Hecla bid, as reported by Dorothy Kosich early on Thursday, it faces an interesting dilemma. Does it support a premium bid for U.S. Silver, but in so doing give up on the RX Gold & Silver merger, a combination in which it would be a top shareholder, or does it stick with the merger, arguing as it did last month that the combo would unlock shareholder value?

So far there is no official indication as to what Sprott will decide. A spokesperson for Mr. Sprott said on Thursday he had no comment on the Hecla bid."

- Read the full article here:

http://www.mineweb.com/mineweb/view/mineweb/en/page32?oid=155906&sn=Detail&pid=102055

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Sprotts Comments on the Latest "Sprott Silver Trust" Offering

“We thought the timing was good in the sense that the silver price has been in the doldrums and there would be some underlying interest in the metal. We were happy the announced offering reached the target of $200 million because the issuing market is not very robust these days.

So we were quite happy with the results. And initially it will allow us to buy seven million odd ounces of silver, which we haven’t bought yet, but it will certainly help the silver market.”

Read the full article at King World News here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/7/21_Sprott_-_The_Frightening_Black_Swan_Nobody_Is_Talking_About.html

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The Great Black Swan

Eric Sprott was recently interviewed by King World News. In which he gave another powerful interview. Topics of this interview were the current state of the European financial crisis, gold, silver and what Eric perceives as the greatest black swan out there.

Listen to the full interview here:

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2012/7/22_Eric_Sprott.html

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My Biggest Worry

“My biggest black swan, Eric, is that I think I’ll be right one day. My worry is that one day they just shut everything down. They say, ‘You know what, we just can’t keep this up anymore, the whole Ponzi (scheme), we just can’t do it and we shut it down.’ All of the markets freeze, and the stocks that you are short are never allowed to go where they were.

They might cease gold trading, in the normal sense, or maybe they will even outlaw gold trading. But that’s my biggest worry. Because everything else, everything that one would theorize and watch, in practical terms, all (of it) argues for gold and silver to win the day. So just stay the course.”

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

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/7/21_Sprott_-_The_Frightening_Black_Swan_Nobody_Is_Talking_About.html

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Eric Sprott Answers Your Questions

Sprott Money has released a new series of videos. In these videos Eric Sprott answers readers questions and gives his candid opinion. Major topics are of course, Gold, Silver and the destruction of the dollar.

Part 1:



Part 2:



Part 3:



Part 4:




- Source:

http://www.sprottmoney.com/news/ask-the-expert-eric-sprott-sprott-money?utm_source=Sprott+Money+Newsletter&utm_campaign=3d244a355e-Sprott_Money_Newsletter_July_16_20122_16_2012&utm_medium=email

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This Would Suggest That all of the Available Silver Was Traded Before Lunchtime.

“Eric Sprott has pointed out that on a daily basis, the paper markets (futures markets) in silver trade about 100 million ounces, while the physical market produces less than 3 million ounces each day. That’s an indicated 97 million ounce shortfall on a daily trading basis.

I would also like to add that 90 to 120 days ago, Eric Sprott was saying to me that the amount of silver available for good delivery, on the various metals exchanges in the world, was about 40 million ounces. So if you think about the fact that there were 40 million ounces available for good delivery, but 100 million ounces a day are traded, this would suggest that all of the available silver was traded before lunchtime.

I would also say that if this market begins to move to the upside, it would appear from the disparity of silver available to trade and the amount that actually does trade, that there is the strong case for some very substantial upside.”

- Rick Rule, a member of Sprott Asset Management, speaking about the Silver market and Eric Sprott. Read the full interview at King World News here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/7/17_Rule_-_The_Physical_Silver_Market_Is_Getting_Dangerously_Tight.html

Mixed Pre-1965 US Silver Coins

Patrick MontesDeOca Interviews Eric Sprott

Part 1:



Part 2:




Source:
http://cmt-group.com/

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There is No Solution to the Problem

"I’ve been asked before, is there a solution to the problem? There isn’t a solution to the problem. There’s things that might happen. There’s a default that could happen. There’s hyperinflation that could happen, but none of those would be deemed as solutions to the problem. But one or the other or both is going to happen.

People should, rightly, have fear of having their money in paper instruments, whether it’s in a bank account or a bond. If they had any sense they would be buying (physical) gold and/or silver. That’s the only way to maintain your purchasing power."

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

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/6/29_Sprott_-_Were_Being_Lied_To,_Even_The_1_Is_Having_Problems.html

One of His Greatest Interviews Ever

Eric Sprott, was recently interviewed by King World News. Topics such as gold, silver and the ongoing depression are discussed. Eric King calls this "one of his greatest in depth interviews ever". 

Listen to the full interview here:

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2012/7/1_Eric_Sprott.html