Eric Sprott told Silver Doctors that he sees no reason for precious metals' to be priced so low with the current global economic weakness.
"All of the data speaks to huge volumes of physical gold being consumed, way beyond the ability of the miners to provide that gold, which makes me think the central banks are continuing to lease or to supply the gold into the market somehow," said Sprott.
He says China bought 100 tons in April, Kazakhstan is lifting reserves from 12% to 15%, and Turkey and Iran are both buying.
"Of course gold and particularly silver being in such short supply will be massive beneficiaries when all of a sudden people realize that there’s not as much gold around as people think. Of course the silver supply would disappear in a nanosecond because it’s a very small amount of money."
Sprott says the US, Japan and UK are all deeply in debt. Europe is most worrying. On a trip to the EU, Sprott was discussing the size of potential bank runs.
"I was sitting there and I asked someone, how many mortgages do they have? And they said, they have about a trillion. I told them, well the hole will be about $400 billion then because I’m sure all those things are 40% underwater!"
Sprott argues that the banking sector in Europe is way bigger than the countries and due to the massive deficits each country is running, there will be no way for the countries to bail out the banks.
"It’s a mess, everyone’s behind the curve, and I don’t think they’ll get in front of the curve quite frankly. Extending and pretending, program after program, and when the program ends, the markets always go down."
Image of Eric Sprott speaking at Casey Research/Sprott Summit When Money Dies