This wirter was lucky enough to attend the Mineral Outlook luncheon on Monday at the Prospectors and Developers Association of Canada‘s (PDAC) annual convention, investment forum and trade show. We heard from Eric Sprott, the country’s favourite gold bug, on his growing love for silver, physical silver, as an investment.
Sprott is CEO and CIO of Sprott Asset Management and a gold bug extraordinaire. His love of precious metals is no secret to the mining industry, and he has backed a goodly number of junior companies. Now the remainder of the Canadian investment industry is beginning to appreciate his acumen. Earlier this month he was named Top Financial Visionary in Canada by readers of Advisor.ca. He was ahead of other market observers in predicting the bursting of the tech bubble in the early 2000s and the crisis in the US housing market and the subsequent global financial meltdown in 2008. His expertise is large.
Sprott told his audience that the tried and worn Keynesian economic model does not work. Balancing the US gross domestic product against that country’s debt, shows that printing money does not create wealth.
“Own gold,” Sprott said, “physical gold”. Estimates have been made that there are about 2.2 billion oz of gold above ground. Over 95% of the gold mined over the millennia can be accounted for.
The situation for silver is even more compelling. Most of the silver ever mined has been consumed. And demand is rising. Without known physical reserves other than unmined ounces, he expects the price to skyrocket.
“It’s $37/oz and rising. It’ll be $43 to $45 by the end of March or April,” he predicted.
Sprott has very little faith in the people running the world’s financial institutions, hence his advice to own physical precious metals. An investor could do worse than take the advice of Canada’s top financial visionary.