U.S. Government is Insolvent-Eric Sprott

Gold and Silver Expert Eric Sprott: Fed Lost Control of the Bond MarketBy Greg Hunter’s USAWatchdog.com  

Money manager Eric Sprott was not surprised by the Fed announcement to keep printing $85 billion a month.  Don’t expect the money printing to end anytime soon because Sprott predicts, “If my forecast for the U.S. economy is true, they will be doing it forever.”  When the Fed first started talking about cutting the money printing, Sprott points out, “It was a great excuse to bomb gold, and now that’s off the table.  I think we will see people moving into gold (and silver) . . . The U.S. dollar is under incredible pressure here.”   Sprott, who manages $8 billion in precious metal investments, goes on to say, “I can guarantee you the U.S. government is insolvent today, but they’re just not doing anything about it.  So, when they finally do something about it, instead of cutting entitlements 25% or 40%, just like Detroit, it will be 75%.”  Sprott goes on to say, “ We’re buying more bonds on a daily basis, and rates still went higher,  which is why I can definitively say the Fed lost control of the bond market.  That is why they could not ‘taper’ because who’s going to buy all the bonds?  Bonds are for losers.”  Join Greg Hunter as he goes One-on One with the CEO of Sprott Asset Management, Eric Sprott

Comments
  1. Rodster

    Thanks Greg, I was looking forward to this interview. It did not disappoint.

    • Greg

      Thank you Rodster.
      Greg

  2. dane

    Unreal. but not surprising. we need conversations like this to be household topics. ohh wait its football season, nm.

  3. Pirate George

    Mr. Hunter,

    You should have this man (link below) on as a guest – the writer of the following article. I don’t know if he speaks English, but this is an excellent article. The translation of the article isn’t perfect, but it’s not too bad.

    The article really tells about what is happening from the perspective of a non “Westerner” (the guy is Russian). The article really makes me think that Jim Willie is spot on! They don’t like how America is ****ing them over, and they want to dump the dollar.

    I greatly respect this man (Eric Sprot) too. Intelligent and respectful. If all the rich guys in the world could be like him! I think Eric should read this too (although it’s probably nothing he doesn’t already know). Thank You for having Eric on. He and Jim Willie are the best. Regards, Pirate George

    http://english.pravda.ru/business/finance/11-09-2013/125621-dollar_era-0/

    Also, another great article from the same site -

    http://english.pravda.ru/business/finance/19-09-2013/125708-almighty_dollar-0/

  4. mohammad

    Greg,
    Wow!!
    Here we have Eric Sprott who has been issuing paper silver backed by physical silver and that what made him distinct from SLV and other papers that do not have the backing of physical the way he does, and NOW HE IS LIQUIDATING THE PHYSICLAL TO GET INTO EQUITY??????/
    WOW!
    How come you did not pick on this with him Greg?
    You should of squeezed him on that matter.
    If I was holding Sprott paper I should be worried now.
    What does he know that we do not?

    • Greg

      Mohammad,
      I did pick up on it. He did not say he was liquidating all his physical silver just some to buy the miners.
      Greg

      • mohammad

        We all know Greg what “some” can potentially mean.
        He is selling “some” of the very reason that makes his paper powerful, he is leveraging, and that is disturbing if i was holding his paper, because the only person who knows what in Eric Sprott’s books is Eric himself.

        • Greg

          Mohammad,
          Sprott is very forthcoming and he has a sterling reputation. You know he has to disclose all the moves and weights of assets he holds under management don’t you. Sprott still has and will continue to have a fund with physical backing. We are talking about a public fund with SEC rules and oversight. I’d be worried about mine confiscation but what do I know.
          Greg

          • Oracle 911

            Well if he sold paper silver instead of, physical silver then he made a great deal (assuming he bought paper ones-in a way what he said would be true), if he sold some of physical gold, well that would be not that great deal in short therms.

  5. Anne Elliott

    Mr. Sprott is so right when he said they knew Detroit was bankrupt for 10 years and did nothing; I think they knew the US was going to be bankrupt Ever since NAFTA was implemented, and have been shoring it up ever since. The fact that we can print our own money and that we’ve been the world reserve currency has been our only saving grace, but even that won’t help us for much longer once the BRICS get their new trading system fully implemented. It’s just a matter of time before we’ll have to start over… But it still may take another few years of a crumbling system here before Americans realize their way of life and hope for a better future are gone forever.

  6. art barnes

    Greg, the “collapse” will look more like a banana type republic with a big stick and there in lies the real problem; war! Money can keep being printed by the government and the bonds purchased by the FED for sometime as it takes a long time to destroy a once strong currency. However, we have had about 40 or more years of it now so we really are at the end game, about 80 percent there. I wish all good Americans could come out west here and and look around at the poverty, homelessness, low paying jobs, the unemployed, etc., and then explain to me how we are recovering instead of slipping on down to that “banana republic” mentioned above. If they did they would discover they probably are just a little be behind us as the signs are everywhere, the poverty class, working poor, etc. are growing with no end in sight.

  7. Jerry

    Greg this was a great interview. Mr. Sprott only supports what we already knew. All four engines of the U.S. economy are out, and that we are gliding with QE printing. The $50. question is how long can this go on before we nose dive? At some point the other countries are going to bail out and abandon the dollar. I personally think the Central Planners are busy setting up a new global banking system, and when they’re finished they will pull the plug on the bond market. Bankers historically don’t care about collateral damage. They never have. As long as they get what they want.

    Have you heard of the Golden Rule? He who has the Gold, not paper makes the rule. Historically empires have fallen because they are not only fiscally broke, but morally bankrupt as well. We are there my friend.

    Greg thanks again for your classic interviews. I hope you are keeping a video journal somewhere. History is being made, and you are recording it.

    • Anne Elliott

      Well said Jerry! Well said!!

  8. Samantha in Tucson

    Wondering what Bill Gross at Pimco is thinking these days? Good interview, Greg, with Eric Sprott.

    Watched an interesting interview on Moyers (PBS) over the weekend; Robert Reich was interviewed. Funny how he didn’t attribute NAFTA (or any other out-sourcing policies) to the decline of the middle class. Moyers FINALLY asked him the question, but he skirted around it (a true politician).

    I recall a day when a middle class factory job supported an entire family; mom could stay home. Boy…the good old days are gone!

    • art barnes

      Yea, when Nixon took us off the gold standard that was was end of one factory job taking care of a family financially with mother staying home and taking care of the other needs of the family.

      • Galaxy 500

        I doubt Nixon had a choice. USA was bleeding gold due to reckless spending. Real value of gold was $40 oz when it was fixed at $35 oz. Arbitrage was depleting Fort Knox.

  9. John

    Great as always. It would be interesting to have a Jim Willie and Eric Sprott type combination interviewed at the same time to get similar but different positions. Thanks again

  10. John

    How can the US economy be getting stronger when the US just had a record trade deficit with China for the month of July of just over $30 billion? For all the talk of a manufacturing renaissance and recovering economy, it’s not showing up yet with respect to the trade deficit with China.

  11. Brian

    The elephant in the room is when you asked if he was worried about mines being nationalized and Eric’s response was that the folks in power tend to do what they can to stay in power……….man oh man isn’t that the truth, and it forms the dark background upon which this economic collapse is going to unfold.

    If we can be sure of one thing, it is that those in charge and those currently manipulating the markets and committing a vast and dizzying array of crimes are not going to just step aside and say, “okay, it was fun, we made our bucks and had our laughs so lets call it a night.”.

    The fact that those in charge are willing to hemorrhage gold into the free market in order to suppress supply betrays the notion that there are other cards in their hand they are willing to play, or else they would not just give their gold away at a discount rate to anyone bold enough to call their bluff and thus challenge their power and authority (forgive me if that sounds a bit too dramatic).

    I do not have a crystal ball, but I am literate enough to read the writing on the wall. This collapse we are in the midst of is more than just a redefinition of money and in the end will probably deeply affect the way we look at just about everything.

  12. Ugly

    The only ‘good’ investments in today’s economy are:

    1. Debt reduction.
    2. Home ownership (if you are close, if not then don’t pay it).
    3. Cash in hand.
    4. PMs in hand.
    5. Food storage.
    6. Knowledge of agriculture, gardening, and natural food in the wild.
    7. Friends and bartering.
    8. Defense
    9. Water
    10. Most importantly, trust in the Spirit above (divine guidance).

  13. Rick up north

    Greg A cave in Sri Lanka I found myself outside giggling like a 12 year old schoolgirl.As fore Mr Sprott what a down to earth guy.I have always enjoyed listening to his wisdom.Thanks fore having in on.

  14. Art

    Always good to hear from a true market warrior. Thanks, Greg.

  15. Derrick Michael Reid

    What wrong with caves in Srilanka?
    Monkey and Liermer are good eating.
    When collapse comes, cave rents will skyrocker.

  16. Bill Joines

    Your guest is a salesman, full of bunk. And you cater to conspiracy theorists.
    Sad really!

    • Greg

      Bill Joines,

      So what should we all be investing in? Make us all happy. By the way, please post your credentials and track record. Another thing, and let me get this straight, you don’t think smart rich people don’t get together and plan things? You think the bond market, stock market, gold market, silver market and housing market are all just naturally occurring events? No manipulation there? Really? Right. Your comment is what is “sad.”

      Greg

      • Tom

        No Greg.

        What is sad is that you don’t accept the fact that the
        stock market is just another Ponzi scheme run
        by criminal banksters and the FED.

        Eric Sprott has NOT been short gold/silver since
        September 2011, has he?
        Ergo, NO CREDIBILITY!
        He only buys and predicts the collapse of the US$.
        C$ has also been going down since 2011
        and Sprott, as a Canadian, holds C$!

        These games have been going on for decades and will continue for more centuries, as the US$ is protected by the US military!?

        Greg, welcome to Planet Earth!

        • mohammad

          [quote]He only buys and predicts the collapse of the US$.[/quote]
          Do not rush it Tom…..It is coming!

  17. Arizona

    ALL the gold and silver in the world,AIN’T WORTH NOTHING,if you have nothing to eat and your children are starving because you didn’t stock up enought food ,water,and AMMO,and the only cash will be AMMO,other wise you have nothing to trade,REALLY, I wouldn’t give you a bag of beans for a wheelbarrel full of gold,and ITS about to happen,you will cast your gold and silver into the street,it’ll be to heavy to carry and no one will want it………………..

    • art barnes

      Yea, gold will not feed a starving family but a tomato will, just trying raising some gold and see how long it takes to produce some table-fare. My prediction is that there are going to be a lot of skinny people out there with safes full of gold & silver.

    • mike gunther

      Arizona, Your comment reminds me of the 70′s Charleton Heston Movie “Omega Man”. The opening sequence where he blows a tire because a armored car is in the street wrecked and gold is laying everywhere in the street but its worth nothing.

      • Greg

        Mike,
        I guess then, lead will be priceless.
        Greg

  18. Alan

    Greg, I keep up to date on all of your interviews with all the great minds that you have on your show. I am a a young entrepreneur living in Florida, and I invest in physical gold and silver bullion. I am very optimistic about the over all future, provided people are invested in the right asset classes. I am considering relocating outside of the U.S, specifically Canada. I haven’t heard any one mentioning that leaving would be a wise idea. I am interested in hearing what you think about relocating? Do you and your family plan on staying here? The reason I am asking is because you have spoken to personally with all the great minds who know what is going on. I just don’t want to be a sitting duck here, that’s all. I appreciate all of your shows. Thanks again.

    • Anne Elliott

      Just curious to know why you want to move to Canada? Isn’t that just another dim reflection of the US? Jim Willie lives in South America, Eric Sprott in Sri Lanka, Gregory Mannerinno in Mexico, and Jim Rogers and Marc Faber in southeast Asia… If you’re looking for reasons to move, I think those people’s actions (who are ‘in the know’) would be it. None are in the US or Europe… To me, that says a lot.

  19. John

    Good interview Greg, as i don’t mind listening to Sprott and often read his reviews elsewhere. I think we are in the wait and see game now as we all know the truth but governments around the world have a few more games to play as does the fed. I am looking at your monetary system from the outside being in the UK, but i know we are all linked when the fall comes.

  20. Rick up north

    Greg When can one expect an indepth with DR Ron Paul ?

    • Greg

      Working on it. Takes time Rick. Good idea, on it. Thank you man.
      Greg

  21. Oracle 911

    Greg
    Eric Sprott sounded like he was under water.

    Another thing, the European part of the collapse already started: http://www.zerohedge.com/news/2013-09-23/it-begins-monte-paschi-bails-bondholders-halts-650-million-coupon-payments

    and http://www.zerohedge.com/news/2013-09-23/iceland-borrows-european-template-removes-large-deposit-guarantees

    My point is, the charade with name “the USA is safe heaven”, will continue for 2-3 years, which will worsen the outcome for the majority of US population. I mean lot of money will flow in (one way or another) into USA, Asia and in to BRICS. BRICS will be islands of stabilities.

    The silver line for this situation, Europe will have a huge clean up and wake up, for the rest of the world.

    About the interview, great article, almost my words.

    What do you think Greg?

  22. Jerry

    Bill Joines.
    I have a question for you. I’ve asked it before. So far none of the experts like yourself have answered it. How do we get out of a 125 Trillion (total) debt bubble without a collapse? If you can answer that, I will agree that Sprott is a hustler and never come to Greg’s site again.
    Alan
    Like Greg has said multiple times, this is a global collapse and its going to be felt in Biblical proportions. Unless you are in a remote area, it won’t matter which country you are in. They are all going to fall like domino’s. This is a historical event. It has never happened before to this scale. This is the end of the fiat system as we know it. People say PM is the safest place to be. But who really knows? Some say bartering. Again who knows? Non one alive has ever been through this before . In my mind unless you have a 18 month food supply and water it won’t matter where you are anyway. That’s my opinion for whatever its worth.

    By the way. Anyone that says don’t worry, God will take care of you hasn’t read their Bible. Historically Christians have not fared well under a totalitarian government. The arena’s in Rome were filled with Christians being sacrificed to please the masses that were in denial of their economic collapse.

    • Allen Ols

      I concur

    • Galaxy 500

      GOD helps those that help themselves.

  23. jane

    If US defaulted on only domestic obligations would there still be a reset? And what exactly is a reset?

  24. cpgone1

    Ponder long and before silver or any miners.
    If by some miracle you get a profit in a miner . TAKE THE PROFIT.
    Sprott pumping his book?

  25. Donna

    Alan,

    I am in touch with a gentleman that just moved his family to Costa Rica. He was doing all the prepping and stocking food, medicine, water…etc. He realized the need was to get out of the US. His name is Ray Gano. Look him up…………..

  26. Derrick Michael Reid

    Mr Hunter, this should be enlighting. Yours

    FED QE to Infinity and required Gold Price Suppression

    Clearly, the FED is trapped, QE to infinity, kicking the can, or pull QE and immediate economic Depression and fiscal deficits rocket higher. To keep the QE game alive, the FED/BIS directs bullion banks to manipulate the bullion market keeping the price of gold and silver low, as gold/silver is the canary in the coalmine, to make the dollar appear better than it is, for as soon as QE is pulled, bond market collapses, fiscal deficient skyrocket as unservicable, the dollar sinks into oblivion, hyper-inflation ravages the people, and the resulting wide spread economic depression. But until then, the middle and poor classes are sucked dry, as the banks manipulate all markets using ZIRP free money, as the rich get much much richer, and hence, the unlikeliness that QE will be pulled.

    The FED/BIS by directing the bullion banks (eg GS JPM) to short bullion, to give the false appearance that the dollar is sound, reduce the price of bullion, so that smarter eastern country, read Russia China et al, can buy bullion on the cheap, thus transfer gold/silver from west to each, yet bullion in the US is that last ditch defense to the inevitable collapse of the paper currency dollar, and thus, the FED is committing regular TREASON against the people of the US, so that the banksters and greedsters (bullion banks) can profit on the backs of the middle class and poor, and so that eastern countries can get their fill of bullion, and hence, acquire long term economic and military power adverse to the US. TREASON and GREED rule the FED bank and bullion banks, that unduely influence the US government, in a totalitarian fascist corrupt system, destroying the middle class, sucking the country dry of wealth, to enrich the 1% and the banksters, leading to economic depression and hyperinflation, without a last ditch defense to monetary failure.

    http://www.youtube.com/watch?v=QkTb8FrQ9ow
    Keiser Report: Banksters’ God Complex (E501)

    The conclusion was make early on, that the yakity yak gold bugs do not cross dimension in necessary and indispensable thinking, and that AM (Andrew Maguire) was going down the wrong procedural route, to stop the manipulation. Well well, another turth brought to light and now admitted, publicly on Keiser. But, you all will get there, maybe not soon, but eventually, as I have faith in your persistence, and may be there are some real smart guys, just maybe, who will finally get there, who do more than yakity yak and complain, who will take a serous 2nd look at the proposal to end bullion manipulation, set forth and published for all to see, but such real smart guys would first have to understand the totality of AM’s broadcast, then realize the that government agencies and coastal US district courts suffer from undue influence, then realize that yakity yak gets no where, and then finally realize that that plan is the only way to bust the con game here and now. May be there are some real smart guys out there, just maybe. The gold community and whistle blowers can blow hard all they want, and do the Kesier rant, and of course, get no where, unless someone steps up and fund the plan, and until then, you all should just kick it, and ride the ride, and complain to high heaven, and sell subscriptions, or glorify your angry bad selves on KWN, or just yakity yak till the cows come home, as that has been the only sure loser method going on 15 years now. You can lead horses and gold bugs and yakity yak cows to water, but you cant make them act.

    The plan is there, to rob the goons, of their cozy con game, and we can rob the goons, anytime, but the gold bugs need to act, but that is unlikely, so, in time, well maybe.

    the google cache is still available.

    http://webcache.googleusercontent.com/search?q=cache:RoCssAXjD5sJ:totalcontrol.blogtownhall.com/2013/08/23/proposal_to_end_bullion_manipulation.thtml+&cd=1&hl=en&ct=clnk&gl=us

  27. Russ Smith, Caliornia

    Hi!, Patrons Of USAWATCHDOG.COM Et Al:

    Who was it that brought gold, frankinsense & mehr to the baby Jesus but the WISE MEN? How many years ago was that anyway and as yet that gold isn’t lying about in some street somewhere is it? What would a baby do with either of the 3 but all 3 transended his age as a baby until he could reach manhood and know what to do with them as an adult. When it comes to sound economics today we have too many people who have decided to remain children regards this subject instead of allowing themselves to grow into aulthood. The same can not be said about OUR savior whose adulthood stood out among his piers then and also today. Remember the widow who cleaned her entire house, in order to find her lost silver coin and, when she’d found it, rejoiced and threw a party with her friends etc.? How many naysayers here have actually eitehr panned or dug for real gold and, after having found some finally thought of it as worthless? How many of U who are married will tell your wives to throw their gold wedding rings into the streets as worthless; after U paid big bucks to purchase it and adorn her with it? How many of U would throw Ur gold watches into the streets with joy? Probably most of U naysayers are like OUR present government whom we watch to see what they do; as opposed to what they say they are going to do; similar to Helicopter Ben who promised to taper but didn’t? Adults face realities/responsibilities and do their best to overcome unregulated fantasies whenever and wherever they can ASAP. Grow up naysayers and join them in the adult world today!!

    RUSS SMITH, CA. (One Of Our Broke Fiat Money States)
    resmith@wcisp.com

    resmith@wcisp.com

  28. Liquid Motion

    Hi Greg,

    Great stuff once again.

    Whilst I have every bit of respect for Eric Sprott the man, billionaire entrepreneur and statesman, I wish more emphasis was placed on some items briefly mentioned and less regurgitation of the same data points with an almost unrelenting familiarity. Do we need reminding about:- Tapering/QE , Insolvency of US Govt. ,End Game, Lack of acceptable solution.

    Nevertheless we should be thankful for his time (and yours) and sincerity in sharing his wisdom.

    The most prescient point at this juncture is IMHO, the matter concerning the monetary system.
    Do we need reminding that the ‘System” is theirs (the BANKERS). They own it. They created it….AND they have screwed it up by losing control. We merely have the privilege of using the system (to avoid using and carrying pm – coin)for settlement.
    It is indeed unfortunate in this day and age where risk and reward are synonymous with greed and power.
    It wasn’t enough for them to enjoy unbridled debt leverage and asset price inflation. When the numbers weren’t generating the profits that were expected, they went up another notch. They fabricated another financial instrument which gave them exponential leverage and reward (OTC).
    The system we know and accept for now, is well past its use by date..(probably by more than a decade ago).
    To understand that it is their game and their system helps to understand how to extricate oneself from the trap that lies in waiting.
    Knowing full well that sound monetary systems are the crux of stability and equality, one has to align oneself with what the expected direction of the moral compass shows and signifies. Moreover the central planners have no desire to ensure that the greater population is attracted to precious metals before the due date (after which the reset occurs where gold vaults to unprecedented levels). Maybe also Sprott is hinting that precious metals prices can be restrained for some time to come (hence his action to seek leverage in mining stocks).
    To assume that fiat money(debt) will survive this decade is IMO a fools errand. The game only continues until the players leave or lose or both. Then the next game starts afresh.
    BTW…The Chinese and Russians aren’t waiting around for the LBMA /Comex to fail. They are taking action by dealing/buying direct. Just like creating a facility to trade Renminbi internationally to avoid USD settlement. Small steps in the bigger scheme of a new monetary system.
    Solution to the Banksters and Corrupt Governments of the western world…take away their privately controlled fiat money systems and ability to print ad infinitum. That must be the focus going forward unless we have another wasted decade and untold more suffering.

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