The Hera Research Newsletter is pleased to present an incredibly powerful interview with Steve Forbes, Chairman and Editor-in-Chief of Forbes Media. The company’s flagship publication, FORBES, is the leading business magazine. Combined with international and licensee editions, FORBES reaches more than 6 million readers worldwide. The Forbes.com website is a leading destination for senior business decision-makers and investors with more than 30 million unique visitors per month.
Born July 18, 1947, in Morristown, New Jersey, Mr. Forbes graduated cum laude in 1966 from Brooks School in North Andover, Massachusetts. He received a B.A. in history from Princeton in 1970. A widely respected economic prognosticator, he is the only writer to have won the highly prestigious Crystal Owl Award, which was given to the financial journalist whose economic forecasts for the coming year proved most accurate, four times. Continue reading →
Activity at Day 2 of the Munich Precious Metals and Commodities Investment Conference is again busy. The show has about 130 exhibitors and show organizer Jan Kneist says they have about 6000 attending the two day event.
100 Grams of Silver
There is no doubt that this is, by far, the best investment conference in Europe for Canadian mineral exploration companies. Not only does it attract a lot of local people it brings together many investment professionals from Zurich, Geneva, Hamburg and other cities who both raise money for the Canadian juniors and invest in them.
But, while there are people visiting the chatting with the Canadians – language is no barrier – the buzz is most definitely with the many companies selling gold and silver products. They are all busy.
Hedge fund manager Eric Sprott’s speech at last week’s Silver Summit turned a room full of nervous precious metals owners into pumped-up silver buyers. Highlights are posted below.
Ten times more silver than gold is produced each year, and the ratio in the earth’s crust is 15:1, so how can the price be 50:1? Expect a return to the historical norm of 15:1, which implies that silver will outperform gold.
“It’s shocking how undervalued the junior miners are…Gold and silver stocks are growth stocks. They all have a plan to increase production dramatically. Small miners can start a new mine and double in size…The relative value of gold stocks will become apparent with time…The breakout, when it comes, will be very sudden.”
The demand/supply picture has seen a 380 million ounce per year positive swing — in a 900 million ounce market. Where is the silver coming from?
The paper silver markets trade a billion ounces a day and the world only produces 900 million in a year. The amount available for settlement of these futures contracts is something like 1.5 million ounces, ludicrously little compared to the amount of paper.
“On the physical side I’m seeing only buyers.”
“There are a lot more people who can afford a one-ounce silver coin than an ounce of gold.”
Gold will be a reserve currency and silver will also play a role.
“We tried to buy 15 million ounces of silver and had to wait three months — and some of the silver we got was manufactured after we ordered. So there’s not a lot of silver sitting on shelves waiting for people to buy it.”
“Somewhere along the line some manufacturer will say ‘I can’t get the silver I want’ and the jig’s up.”
People will prefer gold and silver to having money in a bank where there’s tremendous counterparty risk. Three months ago Dexia was considered to be the best capitalized European bank and now they’ve been nationalized.
“You go to some of the biggest names who own gold and ask them about silver and a lot of them haven’t even looked at it.”
Central banks are selling gold surreptitiously.
Written by Eric Sprott: Sprott Asset Management
Eric has accumulated 35 years of experience in the investment industry. After earning his designation as a chartered accountant, Eric entered the investment industry as a research analyst at Merrill Lynch. In 1981, he founded Sprott Securities (now called Cormark Securities Inc.), which today is one of Canada’s largest independently owned securities firms. After establishing Sprott Asset Management Inc. in December 2001 as a separate entity, Eric divested his entire ownership of Sprott Securities to its employees.
There were fireworks at the 2011 Silver Summit in Spokane, Washington as GATA’s Bill Murphy and CPM’s Jeff Christian battled it out over the topic of silver and gold price manipulation. MC’d by BNN anchor Andrew Bell.