Posted on 23 June 2012
Eric Sprott, the self-made billionaire CEO of Sprott Asset Management is one of the world’s most successful investors in commodities. He’s been very vocal as a supporter of silver as the asset class of this decade.He has just issued a major statement on the market (click here) and we have selected a couple of extracts below. This is what you need to know. The central banks are lying and if you listen to them you will be the loser…
Eurozone crisis growing
‘We have no doubt that everyone is tired of bad news, but we are compelled to review the facts: Europe is currently experiencing severe bank runs, budgets in virtually every western country on the planet are out of control, the banking system is running excessive leverage and risk, the costs of servicing the ever-increasing amounts of government debt are rising rapidly, and the economies of Europe, Asia and the United States are slowing down or are in full contraction.
‘There’s no sugar coating it and we have to stop listening to politicians and central planners who continue to downplay, obfuscate and flat out lie about the current economic reality. Stop listening to them.
‘NOTHING the central bankers have done up to this point has WORKED. All efforts have simply been aimed at keeping the financial system from imploding. QE I and II haven’t worked. LTRO I and II haven’t worked, and the most recent central bank initiatives are not even producing short-term benefits at this stage of the crisis.
‘Just take Spain, for example. Following Rajoy’s announcement of the $125 billion bailout loan for the Spanish banks on June 10th, Spanish bond yields were trading back over seven per cent one week later – the same yield level at which other eurozone countries have been forced to ask for further international aid.
‘The market still doesn’t even know what entity is going to pay the $125 billion, let alone when the funds will actually be released or whether the Spanish government will have to count it as part of its national debt. Spain is the fourth largest economy in the eurozone and larger than the previously bailedout Greece, Ireland and Portugal combined…
‘To give you a hint of how bad it is in Europe today, the most recent retail sales out of Netherlands showed a decline of 8.7 per cent year-over-year in April. In Spain, retail sales fell 9.8 per cent year-on-year in April, which was six per cent greater than the revised drop of 3.8 per cent in March.
‘Declines of this magnitude are not normal occurrences and signal a significant shift in spending within those countries. We fear this is a sign of things to come within the broader Eurozone, which will only serve to complicate an already dire situation that much more.
Out of ammo
‘The G6 central banks are out of conventional tools to solve this financial crisis. With interest rates at zero, and the thought of further stimulus rendered politically unpalatable for the time being, we cannot see any positive solutions to this problem other than debt repudiation.
‘We continue to note the contrast between the reporting companies who by law cannot lie about their fiscal realities, versus the central planners who admit that they MUST lie to preserve calm and control. We’ll leave it to you to decide whose version of the truth you want to believe.’
ArabianMoney is coming to you from Austria this week and we have already noted the massive slump in tourism here this year (click here). The crisis is penetrating deep into the core of the eurozone.
Posted on 23 June 2012
Source: Lying central bankers are gold and silver’s best friend says Sprott « ArabianMoney
