Bail-ins-The Ultimate Win for Precious Metals-Eric Sprott
By Greg Hunter’s USAWatchdog.com
Money manager Eric Sprott isn’t worried about the heat he’s taken in the past few years over the declining price of precious metals. Sprott contends, “You get a lot of criticism because people think you’ve lost your marbles . . . our views will be proven to be correct. We intensely analyze the gold and silver market, and we think both will hit new highs at the end of the year or early next year.” Bank depositors are at extreme risk. Sprott says, “The shocking thing to me is, obviously, most governments now have put into place legislation or rules in their banking systems for bail-ins . . . . And the fact that all these countries are doing this means . . . this is what’s going to happen.” Sprott goes on to say, “That is the ultimate win for precious metals, and God knows what the price would be if it turns some of those depositors into people who need to own gold and silver.” Sprott says extreme physical demand for gold and silver is draining supplies. Sprott predicts, “Somebody is going to fail here. All the data I look at says the Western central banks . . . that have been selling gold are running on fumes now . . . so, it’s very close at hand.” Join Greg Hunter as he goes One-on-One with Eric Sprott, President and CEO of Sprott Asset Management.
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About the Author
Greg Hunter
Greg is the producer and creator of USAWatchdog.com. The site’s slogan is “analyzing the news to give you a clear picture of what’s really going on.” The site will keep an eye on the government, your financial interests and cut through the media spin. USAWatchdog.com is neither Democrat nor Republican, Liberal or Conservative. Before creating and producing the site, Greg spent nearly 9 years as a network and investigative correspondent. He worked for ABC News and Good Morning America for nearly 6 years. Most recently, Greg worked for CNN for shows such as Paula Zahn Now, American Morning and various CNN business shows.
Hey Greg,
“The Western Central Banks… are running on fumes.” THAT’S pretty clear; from a guy that is hard to doubt. Let me join some of the others who will confirm that this interview is some of your best work. Thanks and congratulations.
Charles H.
Sprott is the star here and he was not afraid to answer the tough question about the suppressed price of silver right off the bat. Hats off to him and to you my friend!
Greg
Greg,
Always a pleasure to listen to Eric. Such a font of knowledge.
Some issue that concern me…perhaps for further discussion or analysis with either Eric or another guest:
1) Price of Gold vs enormous retail sales (records) and participation.
Safe to assume that the public is actively buying ( to what degree (how broad) I don’t know) but nonetheless the buying of late is off the scales (both Gold and Silver). Surely those 1% ‘ers (of the population) buying, would not constitute the majority of the “buying”. I have a suspicion that we have a greater “public” participation than what was previously been considered to be insignificant. We have been constantly reminded that “when” the public wakes up and start buying PM’s that the price will skyrocket. So there are really two points here. Why haven’t we seen the price of both metals take off and what level of public participation do we really have (are we assuming that the bulk of the public have no idea)? Not so sure about that. Perhaps a poll of your followers might give some indication.
2) You talked about the inadequate bank insurance for deposits ($33:$10000). Valid point yes indeed. But lets take a couple of steps back and just analyse the circumstances. Why is there a sudden concern by western governments over “Bail Ins”. The trigger = Cyprus….NO. The trigger is the insolvency of the banking system. The CB’s were beaten to the trigger (Cyprus was not a test case it was an accident because it pre-empted the plan to have a world wide Capital repossession via broad spectrum bail ins). The CB’s have unwittingly let the cat out of the bag. Recent comments by the IMF/BIS about inadequate Capital held by the Banking fraternity is a cause for concern (especially given their levels of leverage). Concurrently the CB’s are aware of the mammoth task they face (particularly the FED) with regard the OTC Derivatives that total to some QUADRILLION $$$ 1.2-1.5. Not even the FED can provide enough “insurance” for that ticking time bomb. TBTF is no longer the modus operandi of the CB’s. The evil game is turning into one of self destruction. To print to save… or to have the last alternative of repossession of the public’s funds…they choose the latter.
The technical default of the ABN Amro bank in regard to supply of Gold in settlement of claims for physical delivery is exactly the issue of lack of capital…or…in this case Gold. Everything has been leveraged at 50-100%. Where is the collateral one might well ask. Who actually owns it all…someone/somebody has to ??
3) Interest rates will be forced higher by the bond holders. This process has already commenced. We are now facing a 20-30 year bear market in Bonds. Not to worry …the FED will just print more money….to pay the increasing (by virtue of int. rates and quantum of debt) debt obligations. How long can this continue. As long as they want….with the proviso that they don’t destroy the Dollar. How can they avoid that…..well we all know about currency wars don’t we !!! The system is constructed in such a way that it forces those that support the Dollar to participate or destruct. What was a dead certainty (USD devaluation) has now become a drawn out process. With the lack of alternative currencies/bonds (as safe havens) the USD will prevail longer than most think.
While very fearful of the future anticipated events, I remain positive that with level headedness and action one can attempt to limit the impact on ones own / families life(s). Keeping a healthy mentality is absolutely crucial because the forces working against sanity will be extreme.
I went to a local coin shop and unless you wanted a collectors piece, they were out. Then I went to two pawn shops. Nothing! The demand is off the chart. I think what you are discounting is how disconnected the demand is from the price. And if you really want to buy silver, you will not get anything anywhere near the fictitious “paper” price. Liberty Coin & Precious Metals is offering to buy silver at 8% over spot. The “powers that be”‘s plan to cause the public to sell Gold and silver when they manufactured a severe price reduction backfired. It is easy to see how disconnected the paper markets are from supply and demand
And not that it will buy you much but I enjoy reading your posts 😉
George. Wish me luck there is a auction with a 20$ gold piece Saturday in Lebanon tn…I am 30 miles away, and yes I will be there.
Mr. Eric Sprott is such a fine man. You can just feel his complete honesty. I’ve followed him for years and you get a feel for BS after awhile and he honestly tells it like it is. Great interview. We need more just like sprott and Greg Hunter. The sad truth is they both are far and few between. I enjoyed this ———————–
Greg
I e mailed the jackass and he will have no info on euro bailins this wed. Hat trick letter. I also daily hit the liberty mill for all the real info web sites enmass, starting first ‘usaatchdog, silver doc, king world looking for the heavy weights
Jim willie. Then sprott, celente, pento sinclair, PCRoberts and more
I would advise everyone to subscribe to jim willie’s hat trick for at least 6 mo. 110.00 best money spent
Great interview w/sprott. Al ols
It’s good to hear someone with GRAVITAS be able to give a short, concise digest of the TRUTH.
People have lost their shirts in the precious metals market of late, because they have simply been DUPED by a lack of info on mainsream outlets and their constant mantra of “tapering” BS./ Seems that they are TRYING to confuse now.
Greg I am getting no video.
It worked when I changed to compatibility view.
JC Davis. It plays for me and you can always play it on the USAWatchdog.com You Tube channel. So sorry you are having trouble.
Greg
Hi Greg
Thanks and great reporting.Here’s the BEST summation i have heard in a long time,reference to the world economy
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/6/16_Fed_%26_Other_Central_Planners_To_Enact_Frightening_Solutions.html
Dave
Dave,
Thank you for the comment and the content!
Greg
Greg,
Sprott is very concerned that the central bank is probably out of gold. They are not concerned about it because all they have to do is make it to the next election. After that gold will be confiscated.
Bill,
It was easy for the socialist communist bastard FDR to confiscate gold because a high % of gold were held by the banks. IT was/is money. They may try to send Big Sis Napolitano (on the board of both the man haters and US Constitution haters club)at which point they will need to use a lot of the 1 billion 40cal HPs to shoot people with. You see, we know what happened to the money when FDR stole it. Its value dropped by 75%. It is easy to hide and I think even a majority the unthinking, illogical uber socialist will balk at giving up their gold to the Obamachrist and his legion of evil.
When they (socialist)talk about shared sacrifice, they mean the public, not themselves. If you don’t believe that, just look at Obama spending 100 million on a vacation for his family while he stopped schoolchildren that had scrimped and saved to do a tour of the people’s Whitehouse.
Obama rules by lies,subterfuge and giveaway programs much like the bread and circuses of the old Roman empire. Keep the public distracted and give them a crust of bread.
I am not saying Obama and his Gestapo will not try. And if you think my use of the “Gestapo” is inappropriate; well, just look at the facts.
1) Attacks on the Free press
2) Using the Government to suppress the opposition
3) massive invasions of privacy and collection of data on all citizens that would be the envy of Stalin, Hitler, and Mao
4) the attempt to disarm the population
5) the looting of the treasury of our country
6) the constant attack on the US Constitution (NDAA, Murder by drone, illegal wire taps (voice, data, email)
Please accept my apologies for this diatribe. I was reading the news while listen to FOX News and I am incensed by what is considered relevant. Fox, imo, is the closest to being “balanced” by far however, I see there agenda and biases in their presentations.
I think your making a mistake by assuming Obama is in charge. He isn’t. This goes way beyond him.
To the Obamachrist and his legion of evil. (More then one).
Greg could you do a interview with George?
GREG: While I wholeheartedly agree with Sprott’s various theses on gold supply (or lack thereof), it is always a question of timing. It’s amazing to me how long the Great Ponzi has been kept alive since 2008. It is certainly a tribute to the efficacy of the lies and propaganda emanating from DC. Since only a very few have “awoken”, who knows; it could have another decade to go. But there are many signs, or dots to connect, that indicate that the implosion is imminent. Under normal circumstances, I would welcome the “great reset”. Unfortunately, that aint gonna happen without the consequences of the boot of totalitarianism on our collective throats. The Fourth Reich is alive and well in the USA.
Greg there is no doubt Gold and Silver prices will hit all time highs when the collapse comes, but what do you do to survive in the meantime while waiting for the reset to happen? My grandfather lived in Oklahoma during the dust bowl depression, and did just fine. Here’s how he did it. He had no debt. He owned his own farm. He grew his own food, and even generated his own electricity with a windmill generator. In my way of thinking, the plan should be to hold on to your Gold and Silver until hyperinflation is through, and then cash in when the price of homes, stocks, real estate etc. hit bottom. My moms aunt did that and made a fortune. Unfortunately most people will exhaust their assets just to survive the initial blow from the collapse because they are not prepared. If you don’t have a food supply I’m not sure how long Gold will carry you? I guess it depends on how much you have, and who you can trade it with. Me personally, I’m planning on riding out the initial chaos hunkered down so I won’t be going anywhere to trade. Can you imagine dragging around a Gold bar in the midst of a hungry mob? Not me.
Jerry5, good points. How did your grandfather pay he’s property taxes on the farm? This seems to be my #1 problem. I agree I am not taking my silver dollar into a mob. Property taxes keep going up. Thanks. jc
Jerry, your people were very smart. JC Excellent question on property taxes. I am not sure when property taxes came into being. And while one can generate electricity for short periods of time for reasonable money, to be totally off the grid, you are either going to have to curtail the luxuries of life or spend a few $100K. I’d do it if I had it. One of my relatives has a beautiful spring and creek fed 30 acre pond that generated power for our family before the rural electrification project.
And it is going to be hard not to have to trade/do commerce with someone. Do you have a supply of drugs (Rx)to heal a sick spouse or child? Do you have a good supply of car/tractor/etc parts?
George . I keep some cash for taxes. just hoping there’s some new ideas to control the price of home owner taxes. These law makers in Tennessee are going crazy, IMO.
Hi!, Patrons Of USAWATCHDIG.COM ET AL:
Greg, these are all good interviews you place on your program regards the paper money regeime/aristocracy etc. but in my opinion OUR US Constitution has US all painted into a corner/stonewalled. The issue of economic recovery again in my opinion is muted by OUR Constitution, because the US Constitution dissallows the fiat paper money system generated by the paper aristocracy possibilities, by limiting OUR Nations money supply to gold and silver coins only announced @ Article 1; Section 10. Making paper profits in gold and silver by buying dips and selling rallies is not what the Constitution is about, when we read its’ message to OUR Nation to hold in OUR hands (deposits etc.) only gold and silver coins. If the US Constitution would have been honored as written by the informed framers, we would have NEVER allowed the TROJAN HORSE paper aristocracy any space into our economic lives. Now, the Constitution is forcing the issues OUR framers forsaw when they originated OUR Constitution, by contrasting the quality of money vs. quantity. We are parked in the corner economically wondering what to do with all the failing paper; just as it was faced when the Continental $ was failing but in a bigger volumed way aren’t we? The question nobody in my view is issuing their outlook against is how do we now get out of this unConstitutional corner; now that we have painted OUR country into it through our submission to the FED and the illicit US Government? Buying gold and silver coins at todays’ prices is a total hardship on especially those living on a fixed income who have problems buying just basic subsistance/survival food and fuel. One of my friends commented to me yesterday that he is on Social Security that gave him a 1.7% increase after 2 years of no increase (COLA); while the prices of food and fuel have skyrocketed out of sight vs. his lowly income level standard of living. He’s just trying to get by on what small income he receives. What’s he suppose to do to stop the theft of his abilities to stay economically sound? When those who are on fixed incomes are strapped to meet living expenses, in my view not only are they being robbed but so are those people with whom they would spend the money if they had some to spend with them also. This type of situation bears no resemblenses to an economic recovery in my book but forced austerity instead huh? The FED and OUR Federal Government do not want an economic recovery but power to control US instead and they are doing s darn good job aren’t they? The elderly; the poor; those on fixed incomes do not have any advocates like a Union etc. to exploit through lobbying etc. higher incomes in their behalf and so they silently suffer and pass on their sufferings to those whose incomes are squeezed by their poverty. How far are we having to take this experiement with fiat money, Greg, painted as we are into the corner by OUR Constitution given to US freely by OUR thoughtful founders, before we get back to recognizing/honoring OUR Constitution and take OUR Nation/Economy back to true value gold and silver coins only prosperity? Will that ever be a reasonable opportuniy and alternative or are we the people going to remain stuck in the corner?
RUSS SMITH, CA. (One Of Our Broke Fiat Money States)
[email protected]
WOW Russ Smith. I read every post. This is to gooood for the internet.
How far are we having to take this experiment with fiat money?
Beautiful question.
Listen to Mr. Sprott! Bank “Bail In” is real. Physical shortages of precious metals are real. Central Bankers are playing musical chairs. They have already committed to policies that leave them no choice. The bond market will experience significant reduction of principal if long term interest rates begin to rise quickly. Interesting times ahead!
Hey Greg
Can you identify where we can get confirmation on the bail-in legislation for the Us and Canada?
Thanks Greg, wonderful work!
B Haaf
I just say both recently. The one for the US was put into policy in 2011. I just don’t have the time to find them both but they are clearly out there. I am sure some other folks can post the documents here for you.
Greg
http://www.infowars.com/cyprus-style-bail-ins-are-proposed-in-the-new-2013-canadian-government-budget/
Canadian bank bail in:
http://www.cbc.ca/news/business/story/2013/04/18/business-carney-banks-bail-in.html
For the USA, recent legal precedent has set that a depositor doesn’t really OWN there funds once they have been deposited, they are merely a creditor of the failed institution. Can you say Jon Corzine and MF Global? Look it up
Greg, is the great FED ponzi banking scheme coming to a close? Or is it timed to correspond with the erosion of the Constitution by the government and or its agents the NSA? Something to ponder about. Art
Just look at what happened to the Japanese markets when Abe announced no new stimulus . A 20% correction happened . That’s our future. I don’t believe the FEDS are going to abruptly end QE (They will wean Wall St slowly and painfully ) but a correction is definitely in our future . Will it be the end of America (No) Will it be a reduced standard of living (You bet) It’s already happening ….And then there is the Middle East 🙂
Nathan .
Greg I was fascinated by one of your other posters who posted a link on Friday showing a Gold buying frenzy in China. 10,000. people lined up to buy Gold at several dealers there. It can only be one of two things.
1. Because the price of Gold has dropped and they see a good investment. Or….
2. They have heard from insiders in their government that something bad is getting ready to happen in the Bond market triggering a sell off.
What do you think it signifies Greg?
Jerry 5,
The bond market just 7 weeks ago or so was around 1.65%–today, it’s 2.18 percent. This may not seem like much , but on a percentage basis it is a very big move in a short amount of time. What would happen if everyone ran for the exits and sold U.S. debt? A spike in interest rates and/or massive monetization of U.S. government debt. In short a bigger crash than you saw in 2008. I have said this before, smart people are not looking at price because it’s all about possession. I don’t smell greed in the gold and silver markets–I smell fear and there is plenty to fear. Thank you for your support.
Greg
Wow … a 32% move
Don’t think it won’t happen in Canada.
The key word here is “interconnected” and they all are…just remember that!
http://www.silverdoctors.com/canada-includes-bail-in-provision-for-systemically-important-banks-in-2013-budget/
Thank you Mr. Stacker for your comment–all of it.
Greg
That gold buying spree in China was a sale for a lower price per gram. With a little search you can find that it wasn’t a random gold-buying spree.
“Gold promotion draws 10,000 buyers in E China”
“People crowding around a gold products counter jockey for position to pick up something in a gold store which sold its products at a price of 299 yuan per gram in a promotion – about 50 to 70 yuan lower than the normal level, in Jinan city, East China’s Shandong province on June 11, 2013.”
http://usa.chinadaily.com.cn/china/2013-06/12/content_16611576.htm
Wow, isn’t that a lot like the sale that is going on now at $1,407 for a one troy ounce Gold eagle. That is really a sale
I have read that those 10,000 people in China were lined up for a significant gold and jewelry sale, not just to buy at regular prices. Not much different from a black Friday sale at Walmart. The degree to which reporting of that event has been distorted seems like something I would expect from the mainstream media, and I’m disappointed to be reading such misinformation about it on sites that I respect.
The real issue is…
Can you imagine once this Immigration Bill passes, the Obama statement of Fundamentally Transforming America will have become reality and the new standard. Republicans will never see office again because the indigent mexicans that will have amnesty bestowed upon them will have demographically and fundamentally changed America for ever.
Kiss your A!! and your country goodbye if this passes.
Bank Bail in details: http://www.reuters.com/article/2013/06/17/us-coop-capital-idUSBRE95G07W20130617
http://online.wsj.com/article/SB10001424127887323566804578550620958819406.html
http://www.americanbanker.com/bankthink/co-op-bank-to-bail-in-bondholders-jpm-expands-and-contracts-1059888-1.html
The bail in report is on the FED’s web site.
UK’s Co-OP bank agrees to 1.5 billion pound Bail in, posted on Reuter.com June 17,2013 for more details it is on many web sites. But not word on Fox Biz, wonder why? It’s all NSA crap!
Boy they are hammering all the metals today, the fake CPI number is just plain nuts, how anyone would believe this crap on cooked data is really nuts!
Lack of ‘trustworthy’ news.
The “Main Stream Media” TV, radio, newspapers, magazines, internet sites, news gathering organizations, eg. Reuters etc. ALL. All are owned by just 6 world wide corporate conglomerates, that dance to the tune of the moneyed (1%) elite.
Eric Sprott hit it ‘outta the park’ with his observation about the Cyprus bail-in and how the western media, completely ignored it as a story worthy of any news reporting.
This is done to keep the majority of the masses controlled and complacent. Reminds me of a “Judas Goat”, which slaughter houses use to lead the other animals to their deaths. The goat is allowed to pass through the killing area, with a reward at the other end, so it may go around and do it again. In the end, its the goat’s turn to be surprised!
Those of you who think the banking industry (including precious metals) is not being manipulated really need to check this interview out that was done for frontline a few years ago. It really is quite telling about what’s going on now.
http://youtu.be/QjuMHdqA1Fo
I googled Cyprus Bail in and got 4,200,000 results. Eric better check his facts.
John,
If you look closely, very few were in the U.S. mainstream media. Forbes is the only U.S. media on page one of Google and that is on hardly the same news organization as NBC or ABC or CBS or CNN ect. But you are spot on with the “4,200,000 results” number. Thank you for pointing this out.
Greg
If anyone could show me any bill that has passed the House of Commons that shows depositors would have to bail-in to save a bank in Canada
The bail-in provision was for BANKS to have enough assets to be self funding in a crisis. NO shareholder or depositor would be required to bail in any Bank nor the Government.The legislation is very clear in this matter
No, Eric Sprott is not worried about the heat he’s taken in the past few years over the declining price of precious metals, because he is billioner. However, please have a look at the performance of his funds. His prime fund has lost annually 15% in the past 5 years.
He ruined his investors and many of them foolishly lost comfortable retirement by following Sprott’s ever same siren’s song, waiting for “Godot” who will never come.
Notice this is never mentioned in his interviews…wonder why. That is why he had good people leave his firm because they warned him to diversify his clients money.
His thesis never accounted for back swan events that would kill the price of gold and silver. At least Jim Sinclair apologized when he was proven wrong….nothing from Sprott.
Look at the stock market…there were signs for months that a major correction was on its way….did anyone pay attention…no. The same thing happened in the gold community…no one believed gold would crash.
Robert Burke,
Sinclair has not backed off his call that gold will trade for more than $3500 an ounce. Nobody has been “proven” wrong in the long term.
Greg
Long before they start selling assets, the economic data will turn severely negative and the Fed will be forced to admit the economy is addicted to the cocaine the Fed has been giving it.
We are now heading into a deflationary depression….there is no way out of it….
You really make it appear so easy along with your presentation however I to find this topic to be actually something that I think I’d never understand. It kind of feels too complicated and very wide for me. I am looking forward to your subsequent post, I’ll try to get the cling of it!