Eric Sprott on Gold Dynamics

Gold Reserves Silver Vault Bank of England

Eric Sprott recently spoke with Greg Hunter about his expectations for gold, based on supply and demand drivers in relation to central bank spending and the recent German withdrawal of reserves held abroad.

“Physical demand for gold is out of line with supply. How can all these new people come into this market when there has been no increase in supply . . . for the last 12 years?”

Sprott believes:

  • Silver will significantly outperform gold
  • Economies are weak, fueled by monetary easing, resulting in negative growth
  • U.S. will have to face the music, eventually cut pensions and entitlements
  • Recycled gold supply is drying up
  • Gold is the canary in the coal mine, a signal to hyperinflation

[Source: USA Watchdog]

[Photo: BankofEngland/Flickr]