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Recently, news surfaced that Eric Sprott, Canadian billionaire and entrepreneur, was cited in the news for planning a rather large, albeit quiet, investment in silver.

November 30, 2011 – Recently, news surfaced that Eric Sprott, Canadian billionaire and entrepreneur, was cited in the news for planning a rather large, albeit quiet, investment in silver. Sprott, who recently announced that this will be the decade for silver, ordered an additional $1.5 billion of silver bullion.

Because Sprott today represents half the size of the Hunt brother’s buying power in their attempts to corner the silver market of 1979-1980, people are taking notice and the silver market is reacting. The last time Sprott’s Physical Silver Issue made the news was because of a $580 million order that helped propel the price of silver from $18 to $50 in five months.

Sprott has a very impressive record when it comes to buying silver at the proper times, but it must also be considered that he is such a significantly large buyer, and is buying in such significantly large quantities, that his activity itself will affect the prices in the silver market. Recently, Sprot has said that the paper market is totally disengaged from the physical market, with physical gold and silver trading on factors other than the physical. This would hamper, to an extent, the effect such significant purchases have on the prices in the paper market, but physical supply will be definitely affected.

John Embry, Chief Investment Strategist of Sprott Asset Management, sees current trends as the establishment of the fundamentals needed for the next wave up. The May correction in silver has pretty well established a good buying opportunity and Sprott is walking his talk. The investment house sees silver rising over a $100 an ounce in the coming year. Sprott himself has said that the price of silver will go much higher.

Compared to the action of markets, these fundamentals are promising. Embry compares it to “1981, after those huge interest rates, a lot of smart guys positioned themselves in the futures market for big move in the bond market. Just before it started there was a huge counter-trend rise.” The bond market, for example, can and has exhibited much more unpredictability and violence. The lesson is clear that precious metals are more fundamentally tied to a physical production that keeps them in line with sensible trends.

Gold and silver investment is widely regarded as a sane place to be in this market, considering the economic problems threatening institutions here and abroad. Given the activities of players as big as Sprott Asset Management, gold and silver as investments are not only the sane place to be, they are the smart place to be right now.

Shannon King

Senior Staff Writer – GoldSilver.org

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