InvestorMind

“Sooner or later,” said Eric Sprott last week in Toronto, to a room full of investors, “the physical markets will defeat the paper markets.” Mr. Sprott, who founded and runs Canada’s Sprott Asset Management Co., was on a roll. His argument was, basically, that the stock markets of the world are gamed by the traders and eventually it’ll all fall apart. One major piece of evidence for the gaming is that most of the daily volume anymore seems to be computerized trading. People (and computers) trade for the sake of trading. There’s neither rhyme nor reason based on fundamentals, let alone the nature of the company whose shares are under the gun. Mr. Sprott is also concerned at mushrooming growth of derivatives. This part of modern finance is based purely on financial vaporware. There’s no relation to creating underlying wealth. For example, one company might have a trading program with a slightly positive bias, and so buys and sells accordingly. Another has a trading program with a s...

2012 is proving to be the 'Year of the Central Bank'. It is an exciting celebration of all the wonderful maneuvers central banks can employ to keep the system from falling apart. Western central banks have gone into complete overdrive since last November, convening, colluding and printing their way out of the mess that is the Eurozone. The scale and frequency of their maneuvering seems to increase with every passing week, and speaks to the desperate fragility that continues to define much of the financial system today. The first major maneuver took place on November 30, 2011, when the world's G6 central banks (the Federal Reserve, the Bank of England, the Bank of Japan, the European Central Bank [ECB], the Swiss National Bank, and the Bank of Canada) announced "coordinated actions to enhance their capacity to provide liquidity support to the global financial system".1 Long story short, in an effort to avert a total collapse in the European banking system, the US...

TORONTO (Commodity Online): Sprott Asset Management will launch of three new precious metals-related funds on February 28, 2012. Sprott Silver Equities Class is the first fund of its kind in Canada, while Sprott Silver Bullion Class is the first silver bullion fund to be offered within a mutual fund corporation structure. Sprott Gold Bullion Class is also being launched to provide investors with greater investment choice within Sprott Corporate Class Inc. ("Corporate Class"), a mutual fund corporation designed to provide greater tax-efficiency for investors. With the addition of these three funds, Corporate Class now offers eleven different share classes for investors to switch between without triggering an immediate taxable event. "We are pleased to build on our leadership position in the precious metals category", said James Fox, President of Sprott. "With the launch of these new funds, we continue to demonstrate our commitment to developing innovative ne...

Sprott Asset Management chief Eric Sprott lays out the supply demand case for silver at the Casey Research “When Money Dies” Conference last October. We suggest our favorite physical metal product right after the video. We can do without the unnecessary disparagement of the ETFs, but understand that Mr. Sprott runs a competing family of products, most with higher fees or premiums or both. But we definitely do appreciate Mr. Sprott's dedication to the silver bull case and do indeed agree with his view about the market fundamentals – about the structural and significant changes in the supply and demand recently - about the money flow into silver being roughly equal to gold although the gold/silver ratio is still in the 50s – which augers well for silver bulls and suggests the GSR is likely to fall looking ahead. Read more

Sprott Asset Management has filed to launch a physical platinum and palladium exchange traded fund, adding to its stable of precious metals ETFs. The Canadian firm manages Sprott Physical Gold Trust (NYSEArca: PHYS) and Sprott Physical Silver Trust (NYSEArca: PSLV), which are listed on the New York Stock Exchange. The funds are different from other precious metal ETFs in that investors can redeem large blocks of shares for physical delivery of the bullion. However, the closed-end funds can trade at premiums or discounts to net asset value. [Sprott Physical Silver Trust Trades at Premium] For example, Sprott Physical Silver Trust is trading at a premium of more than 20% to NAV, according to the company’s website. The silver fund holds nearly $700 million while Sprott Physical Gold Trust has over $2 billion. The new ETF will invest in platinum and palladium bullion. The proposed value of the ETF is $115 million, according to the Sprott filing, while the management fee wil...

By: Eric Sprott and David Baker As we approach the end of 2011, the silver spot price has admittedly endured a tougher road than we would have expected. And let’s be honest – what investment firm on earth has pounded the table on silver harder than we have? After the orchestrated silver sell-off in May 2011 (please see June 2011 MAAG article entitled, "Caveat Venditor"), silver promptly rose back to US$40/oz where it consolidated nicely, only to drop back below US$30 within a two week span in late September. 1 The September sell-off was partly due to the market’s disappointment over Bernanke’s Operation Twist, which sounded interesting but didn’t involve any real money printing. Like the May sell-off before it, however, it was also exacerbated by a seemingly needless 21% margin rate hike by the CME on September 23rd, followed by a 20% margin hike by the Shanghai Gold Exchange – the CME’s counterpart in China, three days later. The paper markets still dictate th...

Eric Sprott, the Canadian Hedge Fund manager who runs Sprott Asset Management has recently filed a prospectus for a new offering of up to $1.5 billion of new Physical Silver Trust. This is a huge buy and could huge for silver investors. Although it cannot be directly proven, the last time Sprott bought a lot of silver for the trust, the price of silver went from $18 to $50 in 5 months. Here's the Globe and Mail article .

Patrick MontesDeOca : Mr. Sprott, can you please give us the current situation in terms of price in the silver market? What you might see in the short term as it unfolds in the next six to twelve months, what is your forecast? Eric Sprott: Sure, I take a longer term view than six to twelve months. I’ve been involved in silver for about probably almost ten years now and of course the price of silver has done wonderful things in that time period even though recently it has come under a lot of pressure. My thesis being that even though the last decade has been the decade of gold, this decade will be the decade of silver. I can only imagine that it will go back to its historical relationship to gold of 16 to one in term of price. And as an example of 16 to one, with gold at $1600 it would suggest that the silver price should be $100. And most of the data that I look at certainly as it pertains to day to day markets, and I don’t mean the Comex, we're not talking about th...

Eric Sprott speaks at the Casey Research/Sprott Summit When Money Dies.

In this video, recorded August 4 2011, Eric Sprott, Chairman of Sprott Asset Management, and James Turk, Director of the GoldMoney Foundation, talk about how there isn't enough silver in the silver market to back existing "paper silver" commitments. Sprott thinks that "silver will be the investment of this decade". Stay tuned to GoldMoney Research for the rest of James Turk's interview with Eric Sprott, which will be released shortly.

Interview with Eric Sprott regarding the raid on silver prices in early May 2011.