Buy Silver Bullion Coins

Tim Kiladze
August 18, 2011
www.globeandmail.com
Eric Sprott, the perennial gold enthusiast, has his sights set on a new precious metal.

Mr. Sprott's charitable organization, The Sprott Foundation, is selling two million units of its gold holdings and using the money to buy silver.
The move comes as gold veers close to $1,800 (U.S.) per ounce, and less than a week after Mr. Sprott had declared the metal "the investment of the last decade" in an interview with GoldMoney Foundation. "I think silver is going to be the investment of this decade."

Since the commodity boom kicked into high gear last fall, Mr. Sprott has been touting silver's merits. To demonstrate his conviction, he set up and invested his own money in the exchange-traded Sprott Physical Silver Trust, which buys silver bullion and stores it at the Royal Canadian Mint. Investors in the trust can cash in their units, or take delivery of silver in physical form if they wish.

He also launched a Silver Bullion Fund that enables investors to speculate on the metal's market price, but without the physical redemption option.

Until Wednesday, though, Mr. Sprott was still committed to gold, as its price rose to new highs. It could be that he is simply cashing in on a rapid rise in the price of Sprott Physical Gold Trust units, which are up 21 per cent since July 1, and of which he personally holds six million units, separate from the foundation's holdings.

On Wednesday, Mr. Sprott said his comment about silver does not mean he is abandoning gold altogether. "Anything I said about it being the resource of the last decade was not to suggest that it wasn't going to do well this decade," he said. "It's just I think silver will do better."
He bases that conviction on supply constraints: The amount of gold already mined is about 100 times greater than silver, yet for each dollar invested in gold, another dollar is currently being invested in silver. "By definition, you can't keep buying it at 1-to-1 and have the price stay the same" when the supplies are so different, he said.

Moreover, the price of gold is trading about 45 times the price of silver. Historically, the ratio has been about 16 times and Mr. Sprott thinks the two metals will move back in line with that ratio.

But not all silver assets are on equal footing. Mr. Sprott has been selling some of his own units in the Physical Silver Trust. In the past month, Sprott-related funds have sold about $23-million of his Silver Trust units, and earlier this spring they sold $34-million. Mr. Sprott said he is simply taking advantage of the trust unit's 20-per-cent premium to the fund's net asset value. (The premium has shot up since the fund was introduced last fall because of heavy retail demand, which means investors are paying more than the underlying metal's value per unit.) He is reinvesting the proceeds in other silver investments, including the Silver Bullion Fund.

Asked if investors in the Physical Silver Trust should be alarmed that he's cashing in, Mr. Sprott said "Anybody can do it any time they want to," and added that his sales are "all in the public domain," because he must report them to the U.S. Securities and Exchange Commission.
He also doesn't apologize for shifting more of his attention to silver, and is still touting his gold trust to retail investors who think economic turmoil will send bullion prices higher. "I think silver will outperform gold this decade, so why wouldn't I position myself, position our accounts, that way?"

Although the foundation announced that it would reinvest its money in the silver sector, it is interesting that it did not specifically say where it would invest, either in Sprott Physical Silver Trust, or the metal itself. But if you look at Sprott's recent selling activity, it's clear that money will go into the metal. In the past month or so, Sprott has sold about $23-million of the Silver Trust units. That comes on the heels of sales this spring worth about $34-million of the trust's units.

The sales have been pointed out by blogger ' kid dynamite.' While he acknowledges that Sprott is reinvesting the money back into silver, he points out that the Silver Physical Trust currently trades at about a 20 per cent premium to the net asset value. By exiting, Sprott captures that premium and then buys the metal at fair value.

Buying the metal ties back to Mr. Sprott's recent comments about being bullish on silver. In the GoldMoney interview, he pointed out that the physical amount of gold above ground is about 100 times greater than silver, yet people are buying the two metals on a 1-to-1 basis. That means the price of silver has to go up, he argues.

Plus, gold is trading at about 45 times the price of silver. Historically, the ratio has been about 16 times and Mr. Sprott thinks we will get back in line with that number.

But he isn't sure of the timing. "When it actually happens, I don't know," he said in the interview.

A big attendance at this year's New York Hard Assets event has the chance to listen to a number of eminent specialist commentators, with gold and silver dominating.

Lawrence Williams
May 10, 2011
www.mineweb.com

NEW YORK
Speaking to a packed audience (standing room only) at The New York Hard Assets Conference yesterday, Eric Sprott reiterated his well-known views on gold and silver the former he called the investment of the decade and the latter the investment of the next decade. Sprott was among the Keynote speakers at this year's event which attracted potential investors looking to learn more about investment in commodities and mining companies (mostly junior miners), with the featured speakers being big attractions for the audience.

Like most of the other keynotes, the Sprott's comments covered what virtually all the precious metals bulls see as the key drivers of the markets, namely the U.S deficit, excess printing of money by most major economies, the political unrest in the Middle East, North Africa and elsewhere, the depreciation of the dollar, accelerating global inflation, fear of debt defaults, the growth of wealth and investment in gold and silver in Asia etc. Indeed fellow keynote speaker Jeff Nichols came up with 11 such factors driving up prices. All the main speakers viewed the recent heavy downturns in commodities prices as being a blip in an ongoing upwards path.

While most of the speakers point to the money supply situation in the West as being the root cause of likely future inflation in both Western and Eastern economies, Martin Murenbeeld, one of today's keynote speakers, told Mineweb that China too has been stimulating - perhaps overstimulating - its economy in a similar way and blaming current Chinese inflation on the U.S. Fed is rubbish.

Coming back to Eric Sprott - he raised the specter of market manipulation so beloved of many of the precious metals bulls, pointing to silver falling $6 in 13 minutes on Monday in an extremely thin market when some key market players like China and the UK had public holidays. Coupled with the raising of margin requirements on COMEX, he saw this as a major effort by some of those with huge silver short positions to mitigate some of their losses. "If this doesn't show market manipulation I don't know what does" said Sprott.

Jay Taylor, speaking earlier in the day also raised the specter of the U.S. economy and its lack of growth, even though some official statistics may suggest it is beginning improve. "Think about what's really going on" he opined, "Not what the establishment wants you to think is going on!" Taylor puts total debt at $57 trillion if you take into account not only Federal debt, but state and municipal debt, credit cards etc. He reckons U.S. government policy is failing as in the 1930s when there were years of depression, high unemployment etc. He too pointed to the real price of gold rising in what has been the bull market of a lifetime.

Overall the Hard Assets conference organizers have done a pretty good job in pulling in a number of very well-known names in the precious metals and economic sectors to boost the audiences in the hope that many will stay in the auditorium area and listen to the junior miners and explorers presenting their projects - a number of whom have some very interesting stories to tell anyway. The difficulty for the investor, as always, is picking the wheat from the chaff. In a precious metals bull market junior companies can provide huge returns when they are successful - but then most aren't! Caveat emptor.

Eric Sprott believes that silver is likely to be the investment of the decade and could easily get to $50 per ounce by the end of the 2011

Marc Davis
February 8, 2011
VANCOUVER B.C. (WWW.BNWNEWS.CA )

Silver promises to become the next big buzzword among investors in 2011 and beyond, according to one of the investment industry's most prescient and successful experts on precious metals.

Eric Sprott is the founder of the Toronto-based investment firm, Sprott Asset Management LP. His renowned hedge fund, Sprott Hedge Fund LP, is heavily weighted in precious metals and has generated an estimated 23% annualized return over the past decade. Other similarly oriented funds under his stewardship have also been stellar performers in recent years.

He's now so bullish on silver that he launched the $575 million Sprott Physical Silver Trust in November of last year as he believes that: "Silver will be the investment of the decade."

"I think that silver could easily get to $50 this year," he tells BNWnews.ca.
This all bodes especially well for publicly traded companies that are already mining silver, he says. Likewise for ones that are developing primary silver deposits or gold deposits with plenty of silver as a byproduct.

"If the price of silver continues to go up, silver stocks are going to perform even better," Sprott adds.

Meanwhile, Sprott says the big catalyst for surging silver prices in the coming years will be exponentially increasing investment demand, which is already beginning to overwhelm existing silver supplies. The mining industry only produces around 800 tonnes of silver per annum. This is a relatively inelastic supply, regardless of silver prices, he adds.

As household investors are becoming increasingly jittery about the debasement of the U.S. dollar and other major currencies, they are loading up in record numbers on silver bars, coins and silver-denominated exchange traded funds, Sprott says.

However, there's also a quantum shift in investment demand taking place among big players in the precious metals market, including India (which is aiming to increase its imports by about 77 million ounces per annum), and of course China.

"China's net imports of silver were 112 million ounces last year. In 2005, they were net exporters of 100 million ounces," he says.
"That's a 200 million ounce shift in an 800 million ounce annual market that seldom ever grows because production hardly ever goes up. So where's it all going to come from? We don't know."

In fact, silver promises to outshine gold over the coming years, Sprott says. "Silver is the poor man's gold. Gold has had a great run for the past 11 years. But I absolutely believe that silver will outperform gold this year. Currently, there's more investment dollars going into silver than into gold."

Such a game-changing scenario should recalibrate the gold to silver pricing ratio in silver's favor, thereby eventually restoring it to its traditional level of about 16 to 1, he says. "It's the easiest call of all time."

"Silver as a currency always traded in a ratio of around 16 to 1 compared to gold, when it was a currency in the U.S. and the U.K. The current ratio is 48 to 1. If we go back to a 16 to 1 ratio, the implied price for silver would be $85.62 (per ounce)." he adds.

"On that basis, if gold goes to $1,600, then that would value silver at $100. And we certainly think that gold is going to $1,600. In fact, I'm willing to bet that this ratio will overshoot on the downside. It might even get to 10 to one."

The only reason why silver is still trading at a 48 to 1 ratio to bullion's spot price is that its price is being "manipulated" by big banks, Sprott says. That's because they don't want precious metals to become a popular alternative currency to Fiat money (currencies that are not backed by hard assets).

"Then there's also a huge short position out there on silver," he adds.
But time is on silver's side, he says, as the sovereignty debt crisis deepens in Europe and a continued policy of quantitative easing in the U.S. continues to undermine the value of the greenback.