Sprott's Thoughts
September 4, 2015



>>Interview with Jim Rickards (MP3)

During a time of increasing uncertainty in global financial markets, Jim Rickards, best-selling author and advisor to US Department of Defense and Intelligence Communities, was kind enough to share a few comments.

When asked about People’s Bank of China’s recently announced gold reserve holdings numbers, Jim noted that, “I’ve been [to] China and [spoke] to secure logistics people, that [told me] gold is being brought in completely off the books…over land using People’s Liberation Army assets…coming in from Kazakhstan, maybe Russia.”

“[So] I’m not saying the People’s Bank of China is lying about their gold [holdings]…But whether to ignore how much gold [affiliates hold] off the books is the question…I think it’s reasonable to estimate at least 3000 tons…[but] there’s reason to think it could be [much] more.”

Jim also shared a recent conversation with former Federal Reserve Chairman Paul Volcker, in which Mr. Volker explained he “was one of the people in the room [at Camp David]” when the decision was made to close the gold window.

“What Nixon actually said—and Paul Volcker confirmed this when I spoke to him—is that they didn’t think they were going off the gold standard…[It] was a temporary suspension until the major global powers could get together…rewrite the system and…get back to a gold standard…at a different [much higher] gold price.”

Since the closing of the gold window there has been confidence in the system. “But if you push one wrong button, the whole thing melts down catastrophically,” Jim added. “You create a chain reaction…[where] I see gold going to $5000, $7000, [even] $10,000 an oz.”

“[If] you have a global financial panic and need to restore confidence,” Jim concluded, “that’s the price of gold you would need…And that’s not a complicated equation. That’s the kind of eighth grade math anyone can do.”

Here are his full interview comments with Sprott Global Resource Investment’s Tekoa Da Silva:

Tekoa Da Silva: Hi. I’m Tekoa Da Silva with Sprott Global Resource Investments and I’m sitting down here today with Mr. Jim Rickards, author of national best sellers Currency Wars: The Making of the Next Global Crisis and the more recent The Death Of Money: The Coming Collapse of the International Monetary System. He also serves as an adviser to the US Department of Defense and the US Intelligence community. Jim, thank you so much for joining me.

James Rickards: Tekoa, great to be with you.

TD: Jim, you are the author of New York Times bestseller, The Death of Money. In reviewing your work, I see a lot of events surfacing in the world that you seem to have foreshadowed in your writings.

I’d like to ask you about those items, but for the person joining us for the first time, can you tell us a little bit about your professional background—how you went from working in the legal profession to now being a financial and global economic expert?

JR: Sure Tekoa. Well, at this point, the resume is kind of a long one. So, I won’t kind of go through every twist and turn. I am a lawyer by training. But before I went to law school, I got a graduate degree in International Economics from the School of Advanced International Studies. Tim Geithner was one of my fellow alumni from SAIS. SAIS, School of Advanced International Studies, is well-known as the intellectual training ground for the IMF. It’s a school where a lot of people go if you want to work for the IMF.

They take a lot of graduates and professors at SAIS as IMF officials who come over because they’re all in Washington, DC. The IMF is right around the corner, just a few blocks from the school, and so they have IMF officials come in as adjunct. So it’s an intellectual symbiosis between the School of Advanced International Studies and the IMF and that is where I went to graduate school in economics.

Now interestingly, my class was the last class to be taught about gold as a monetary asset. I graduated in 1974. A lot of people think the world went off the gold standard in 1971 when Nixon gave his famous speech but that’s not quite correct.

If you listen to what Nixon actually said (interested viewers can find the video on YouTube), he didn’t say we’re going off the gold standard. He said, “I am temporarily suspending redemption of dollars for gold and the ability of our trading partners to take their dollars and cash them in for gold.”

But he used the word “temporary” and I recently had an occasion to speak to Paul Volcker about it because Paul was one of the people in the room when that happened. There was a small group that went up to Camp David. There was President Nixon, John Connolly, Secretary of the Treasury, Arthur Burns, Chairman of the Federal Reserve, Paul Volcker who was Deputy Secretary of the Treasury and actually another friend of mine, Ken Dam. Ken very kindly offered a jacket commentary in The Death of Money but people who don’t know Ken should know that he was at Camp David that weekend.

But what Nixon actually said—and Paul Volcker confirmed this when I spoke to him—is that they didn’t think they were going off the gold standard. They thought they were calling a time-out. They thought this was a temporary suspension until the major global powers could get together and come up with new ‘rules of the game,’ kind of rewrite the system and that they might get back to a gold standard.

Now it would have been at a different gold price. Clearly, the dollar needed to be devalued and that’s actually what happened in December. So the Nixon speech was August ’71. December ’71 was the Smithsonian Agreement and at that time, the dollar was devalued. The official price of gold was raised to about $42 an ounce from $35 an ounce. So that was a 20% devaluation of the dollar and we were still on the gold standard at the time. But you still couldn’t redeem.

So the joke about US policy was – instead of not selling you gold at $35, we won’t sell it to you at $42. The US wasn’t redeeming either way, but officially the price had gone up and we kind of fumbled and stumbled our way through the next three or four years. There were a series of International Monetary conferences conducted, studies, and working groups under the auspices of the IMF. The world wasn’t sure – would they go back to fixed exchange rates? Would they move to floating exchange ranges? Would you have sort of dirty floats and pegs? Would there be a gold standard? Would there not be a gold standard?

That was all unclear until 1975 when the IMF finally broke the link to gold and demonetized gold. Well, my year was 1974. So I actually studied gold when it was still a monetary asset and I was a 25-year-old grad student in economics. But my professors were people in their 50s or older who were the young guns in the early 1950s at the origin of the IMF.

So I was being taught by people who ran the Bretton Woods system in the 1950s and 1960s as scholars and technical analysts, and they were my professors. So I would say anyone who is younger than I am who knows anything about gold is either self-taught or they went to mining college, because it literally stopped being taught in 1974, 1975.

So part of what I try to do in my books is to reintroduce some of that education. But then I went to law school. I started my career at Citibank. I was there for about 10 years. I worked for one of the primary dealers in US government securities.

Today it has been bought by larger banks but it’s now part of RBS - Royal Bank of Scotland. My old firm is now the primary dealer in RBS. Then I worked famously at Long Term Capital Management, the hedge fund. I did a few other things: worked for Bruce Kovner at Caxton and became an author and also after 9/11, an adviser on financial threats and financial warfare to the US Intelligence Community. So a little bit of an eclectic career, but my books, Currency Wars and The Death of Money, are a good chance to bring a lot of that perspective and knowledge and learning experience to an older audience who cares about their net worth and a younger audience who have not studied a lot of these things. So people in their 20s and 30s, all this happened before their time, but they can read the books and get some of that flavor.

TD: Jim, the price of gold as of late has been weak. That weakness was pronounced following an announcement from the People’s Bank of China that their exchange reserves holdings were lower than the investment community was expecting. What were your thoughts when you saw that release come out?

JR: Well, a couple of things. First of all, I did predict this in my book. The Death of Money came out in 2014 but of course I was writing it in 2013. It was published in 2014. But in the book I said that the Chinese would likely update their gold reserves in 2015 which is exactly what has happened because they’re on a sort of six-year tempo. They did it in 2003, then six years of radio silence. They updated in 2009.

Six more years of radio silence. They updated it in 2015. So there’s kind of a precedent, and they don’t like to break the mold so to speak. But I don’t know if it will be another six years next time.

The Chinese are trying to play nice with the IMF because they want the yuan, their currency, included in the basket of currencies that’s used to determine the value of the world money, which is the special drawing right, or the SDR, that’s printed by the IMF.

So China wants to get into that club. But by joining any club, you have to play by the rules. The club says wear a suit and tie - you wear a suit and tie. And in this case, the IMF club says you have to be a little bit more transparent.

China is doing this in an effort to be transparent, so they may update their gold reserves more frequently than this six-year tempo I just described as a way of showing the IMF that they’re ready to be fully or at least partially transparent members in the International Monetary System.

Having said that, the 604-ton update was China going from 1054 tons, which was a lie, to 1658 tons which was another lie, but they’ve updated the lie. When I say lie, I mean they’re not transparent and this is also explained in my book The Death of Money. They have three sovereign wealth funds or government entities, government portfolios if you will. One is the People’s Bank of China.

So that’s the one that updated the reserve position and reported the 604 additional tons of gold. But the other one is CIC, China Investment Corporation, which is a sovereign wealth fund, and the third is the most mysterious and biggest of all, which is SAFE. SAFE stands for State Administration on Foreign Exchange and what they do buy the gold and then every now and then for bookkeeping entry, they flip it over to the People’s Bank of China and then the People’s Bank of China updates their reserve balances.

So I’m not saying the People’s Bank of China is lying about their gold. That is how much gold they have. But whether to ignore how much gold that SAFE has off the books is the question. I think it’s reasonable to estimate at least 3000 tons, maybe more. There’s reason to think it could be more. How do we know that? I mean I’m not just guessing by the way. We know mining output is about 450 tons a year; it has been for a number of years.

We know Hong Kong imports run between 700-1000 tons a year. So just combine those two sources. But let’s just say there’s about 1300 tons a year between Hong Kong imports and mining output that we know about.

Now I also know, because I’ve been in China and spoken to secure logistics people, that some gold is being brought in completely off the books; actually over land using People’s Liberation Army assets, probably coming in from Kazakhstan, maybe Russia. The source is not clear but there’s some additional gold coming in. But let’s just take what we know about it without speculating too much. So let’s say there’s about 1300 tons of gold coming in. This has been going on for five years. So that’s 6500 tons of gold that we know about, not counting what we don’t know about.

Now, what we don’t know is how much of that gold is going into private hands and how much is going to the government. For the People’s Bank of China, it’s unclear. I assume 50-50. I could be wrong. But in the absence of better information, that’s a good first estimate. So it looks like 6500+ tons have come in and assuming 50% of that is going to the government—there’s over 3000 tons the government added that the People’s Bank of China has not reported. They just park it in SAFE in the meantime.

So we can be certain China has a lot more gold. But if the price of gold went down because people were expecting China’s reserves to be a lot higher and they turned out to be less—then I cannot dispute the price. But that’s no reason to mark down the price of gold, because China does have a lot more gold and we know it.

The declining price of gold by the way is apparent if you make the dollar the measure of all value. When people say gold went down, I say, “Well no, it didn’t. Gold is just gold. It just sits there.” So if you say the dollar is the measure of all value, then yes, gold went down.

But if you make gold the measure of value, to me what really happened is the dollar went up. In other words, the low dollar price of gold is really a strong dollar phenomenon more so than a weak gold phenomenon. You get more gold for your dollar. So you can say gold went down but it is equally logical to say the dollar went up. We have a stronger dollar.

So that’s how I view it and my basis is that gold is not the only thing that has a lower dollar price by weight. Copper, wheat, corn, steel, lumber, and iron ore all do. Look at commodities around the world. Look at all the other currencies, Australian dollar, Canadian dollar, and Japanese yen.

Every one of them is “down”, if you will, against the dollar. What’s the common denominator? It’s not that the price is down. It’s that the dollar is up. We’re living in a world of king dollars. But what is that? That’s the definition of deflation. When you get more for your money, when the dollar is worth more, and goods in dollar terms cost less, that is what deflation is.

But think about it from the Central Bank and Janet Yellen’s point of view. She wants inflation. She told us that. It’s not a secret. She publicly states that she wants inflation. We’re getting deflation. She’s threatening to raise interest rates which should add more deflation. So how does that work?

The answer is that it doesn’t work. I said last year that the Fed would not raise interest rates in 2015, and I think we’re going to get to 2016 and they still won’t be able to raise interest rates because of the power of deflation.

So I look at the commodities complex now including gold, and what I see is not that the prices are down, although nominally they are. To me, it’s a strong dollar story which is not sustainable, because the strong dollar is killing the US economy.

TD: Jim, in The Death of Money you spoke about the channels of passage that the People’s Bank of China needs to use in order to accumulate their gold position, in that the pricing environment is sensitive to a larger picture of global currency rearrangement. Some might suggest manipulation goes hand in hand with that. What are your thoughts?

JR: Well, you can call it manipulation (and it is in a way) but it’s also policy. Countries are very powerful. Countries have interest rate policies, foreign exchange policies, tax policies and they have a view on gold. They don’t talk about it, and again you can say it’s manipulation, but it’s really just the countries implementing their individual policies. Now China’s view of gold is fairly straightforward. They have $4 trillion equivalent in reserves. The vast majority of that is denominated in US dollars.

Some of it is gold. Some of it is euros. Some of it is other things. But the vast majority of it is US dollars. The vast majority of those US dollars are in US government securities. So when people say China wants to get rid of the dollar as a global reserve currency, that’s nonsense. The dollar has no greater friend. China wants a strong dollar because they own so many of them. If you had $4 trillion, you would want a strong dollar too.

The problem is the United States doesn’t want a strong dollar, but we’re getting one right now. I call this ‘Mick Jagger economics’ (of the Rolling Stones), where, “You Can’t Always Get What You Want.” The Fed wants inflation but can’t get it for the time being. They will get it eventually but it’s going to take longer than they thought.

But in the meantime, China wants a strong dollar because they own so many and a weak yuan because that helps their exports. The US wants a weaker dollar to encourage inflation but we’re not getting it. So that’s going to tell us something about the future of Fed policy. But China fears that the US will ultimately be successful in getting inflation.

They believe the Fed will eventually get the inflation it wants. That’s going to reduce the value of their dollar assets. If you inflate the dollar by 10% – 2% per year for five years – that’s a little over 10% with compounding. If China has $4 trillion and you devalue that by 10%, you’re moving $400 billion of wealth from China to the US because the debt we owe them is worth less and we can pay it off in cheaper dollars.

So they’re worried about that and they’re vulnerable. People say, “Oh, they’re going to dump US Treasuries.” No, that’s nonsense also. They’re not going to do that. They couldn’t. First of all, the market is not that big. The US Treasury market is a deep liquid market but it’s not that deep. It’s not that liquid.

There’s no way China could offload a lot of treasury securities without it immediately coming to the world’s notice. If it became malicious, a form of financial threat, the president could stop it by executive order. But why would China do that? It would be devaluing their number one asset. It’s like setting your own house on fire. They wouldn’t want to do that.

But they can do something else. At the margin, as they acquire additional reserves through exports, through their current account surplus instead of buying more dollars, they can buy gold and that’s exactly what they’re doing.

They’ve got this big pile of dollars and they’re worried about the dollar being devalued. So what they’re doing is acquiring a big pile of gold. So now when you have dollars and gold, you have a hedge position. If the dollar remains strong or gets stronger, the gold is not going to do very much.

But if we do get inflation and devalue the dollar, they’re going to gain on the gold because obviously gold will go up with inflation. The Chinese are not stupid. They’re not speculators. They’re hedging the dollars. One of them is always going to win.

So they need to buy more gold, and also, a lot of gold investors say China is going to bash the dollar and come out with a gold-backed currency and the price of gold is going to go to the moon. Also nonsense. China doesn’t want that. As I explained, they want a strong dollar, and for now, they need to buy more gold. If you needed to buy gold, would you want a high price or a low price? You would want a low price because you’re still buying.

Since they’re still acquiring, they want a cheap price of gold. So there are a lot of forces at play in the world. There are also people who think the Chinese are naively trying to destroy the dollar or naively trying to help gold investors, but no, China is out to help China. They’re not out to help you. They’re not out to help me. They’re not out to help gold. They’re out to help themselves.

What that means is they have to acquire a lot of physical gold. And what’s interesting about that, as we all know, is there’s not that much physical gold around. So I personally like to buy physical gold. I think when the system breaks down (which I do expect) and the price of gold begins to skyrocket, people will say, “Oh, I will go out and get my gold then.” Guess what. You may not be able to find it. The time to get your gold is now.

TD: Jim, in your mind what does that look like when the system begins to break down and gold behaves differently in US dollar term price?

JR: Well, people like to criticize the dollar and they say it’s not backed by anything and they will say the same thing about bitcoin. Bitcoin is another form of money, another currency and they go, “Well, I don’t like bitcoin because it’s not backed by anything.”

Well, guess what. The dollar and bitcoin and all other forms of paper money or digital money are backed by one thing, which is confidence. If people think it’s money, it’s money. If you have confidence in the form of money, then it has value.

So right now the dollar and the bitcoin are backed by confidence but let’s talk about the dollar in particular. The problem with confidence is it’s very fragile. It can be lost very quickly and once you lose it, it’s very difficult to regain and I don’t think the Fed understands that. I think the Fed takes the value of the dollar for granted. They assume that confidence will always be there. They assume that they can print as much money as they want, try to get as much inflation as they want and people won’t lose confidence in the dollar and I think that’s analytically and historically incorrect.

I would say that for now, yes, confidence is being maintained. But in a complex dynamic system, it’s a little bit like running a nuclear reactor. It can run well for a long period of time. But if you push one wrong button, the whole thing melts down catastrophically. You create a chain reaction and it melts down out of control.

It happens very quickly and the same thing is true of the dollar. Some set of circumstances, maybe something we can perceive, or something that we don’t perceive. It’s often the thing that you don’t see coming that gets you. But something could trigger this and the system is already unstable. It’s highly unstable.

But it’s chugging along. The confidence is being maintained. If it’s lost, it can melt down very quickly and that’s where gold—all of a sudden, boom! The day will come and it may be up $200 an ounce in one day. Boom, the next day, another $200 an ounce.

Then people will be saying it’s a bubble, and it just starts to really go hyperbolic. That’s when the panic sets in. That’s when confidence in paper money is being lost as reflected in a higher dollar price for gold.

At that point, the talk on TV will still be saying it has no intrinsic value. But it will have a life of its own and the price will go a lot higher. But at that point, you might not be able to get it. You might find that all the weak hands have already gotten rid of it. The strong hands are holding on to it, and you will call your dealer or they will say, “Sorry, I’m out of stock,” or you call them and they say, “We’re not making deliveries.”

Big guys, people who deal in tons, may be able to get some of it but may not. The unallocated gold holders, the LBMA contracts—they’re going to call their banks and say, “I want to allocate it. I want to take physical delivery.” The banks are going to say, “Sorry, we don’t have it. We’re going to send you a check for the price difference and terminate the contract.” People are going to find that the paper claims are just papers. So my advice is well, again, what are you waiting for?

TD: Jim, there’s one more question I want to ask you, and then there’s a passage in your book that you mentioned beforehand, that might be of interest to the reader.

What have you found to be the risk and the importance of telling the truth when we look at the political/economic stage globally?

JR: Well, I would start by saying truth has sort of a ring of absolute moral and scientific certainty to it. So I try to do the best I can. I work hard. I do the analysis. I read a lot. I travel a lot. I talk to a lot of people. I give people the best analysis I can and I believe in it. I wouldn’t publish or say anything that I didn’t personally believe in. So it’s the truth as far as I know, but I don’t want to claim moral certitude.

But I’ve spoken to members of the board of governors of the Fed, reserve bank presidents, senior officials of the IMF, heads of state, and I’ve spoken to Nobel Prize winning economists.

I also spoken to Ben Bernanke recently in Korea one-on-one. We were in a small group of about 10 of us, and had a nice conversation with the former chairman, and what I find is that sometimes people will say things privately that they won’t say publicly.

Part of that has to do with institutional constraints. If a chairman says something pretty candid about gold, it could start a panic so they’re very aware of their institutional responsibilities.Other times, you feel like you’re in a club where you say things in the club that you might not say elsewhere.

As an example, I’m a writer, analyst, portfolio manager, and a public speaker. I’ve got to call it like I see it, but that doesn’t mean I have a perfect analysis or a perfect track record. But it does mean I’m working hard and trying to convey to people exactly what I see.

But I’m not a government official. I’m not the head of the IMF. I’m not on the board of governors. I’m not the reserve bank president. So I don’t have some of those responsibilities to avoid panicking people. What I’m trying to do is warn people about some of the threats out there because that’s the world we live in.

So there are a lot of dangers out there but I’ve never said be 100% in gold. When gold goes down, people beat me up. They say, “Jim, you’re an idiot because you said gold would go up.” But I never said 100% should be one’s allocation. I’ve said 10% and I still say 10%. To me that’s the right amount.

If you have 10% of your investable assets in gold, and gold goes down 20%, it’s only a 2% portfolio loss because if you have a 20% decline on 10% of your portfolio and everything else is even, your portfolio has only lost 2%. But if I’m right and gold goes up by multiples that could be your insurance against losses if everything else is melting down. So to me, if you don’t have gold in your portfolio, it’s like not having fire insurance on your house. You better hope your house doesn’t burn down.

Tekoa, there’s one other thing I just want to follow up on – from my book, The Death of Money, because you’re in it. Readers who have read the book are familiar with it; but for some of our readers who might not have read the book, you did a fascinating Q & A with European Central Bank Chief Mario Draghi not that long ago at Harvard University. I commend you for asking a tough question of the head of the European Central Bank. But his answer was even more fascinating. I will just read parts of it quickly.

This is a quote from Mario Draghi answering a question from Tekoa Da Silva, where he says to you:

“You’re asking about gold to someone who has been the Governor of the Bank of Italy. The Bank of Italy is the fourth largest owner of gold reserves in the world. I never thought it wise to sell gold, because for central banks, this is a reserve of safety. It is viewed by the country as such.”

In other words, here’s Mario Draghi, the second most powerful central banker in the world after Janet Yellen speaking to you, saying that gold is a reserve of safety. You don’t hear a central banker speaking that way very often. But I commend you for getting that quote and I was glad to be able to use it in my book as part of a longer explanation of the role of gold in the International Monetary System.

TD: Jim, I was honored by you’re having added that in there, and I’m very grateful to have the opportunity to be sitting down with you discussing it. Thank you very much.

JR: Well, thank you. You’ve spoken to Mario Draghi. I’ve spoken to Ben Bernanke. So hopefully the readers will get a lot out of this interview because we’ve had some firsthand interactions. Thank you.

TD: In winding down, is there anything you think we may have missed?

JR: I would say – I know a lot of gold investors are very discouraged right now. We explained why the low dollar price of gold is just the inverse of the strong dollar. But I expect the dollar to get weaker. But I did also have an interesting conversation with Jim Rogers not long ago. Jim is a famous commodities trader, stock investor and analyst, one of the best in the world. He invests in all commodities and looks at emerging markets.

So he has been around longer than I have and knows more about commodities than anyone I know. But he made a very interesting observation. He said nothing goes through a [full up-cycle] without a 50% retracement somewhere along the way. So if you pick your base—it could be $200 oz. gold or whatever you want (and I see gold going to $5000, $7000, $10,000 an oz. by the way). If you want to go back to a gold standard or you have a global financial panic and you need to restore confidence, that’s the price of gold you would need. That’s where gold has to be in order to avoid deflation in a world where you’re using any kind of gold standard. And that’s not a complicated equation. That’s kind of eighth grade math that anyone can do.

So let’s say gold is going to go from $200 oz. to $10,000 oz. or higher; what Jim says is that it never goes there in a straight line. Somewhere along the way it will go down 50%. So if you look at the August 2011 $1900 high, we’re down about 50% percent from there. That’s the way commodities behave. But he also told me, “I’m not selling the gold I have. I will buy more around the $1000 level. My expectation is that it will go much, much higher from there, so there is no reason to be discouraged.”

So it’s a long game and I’m personally buying gold.

TD: Jim, how can our readers follow your communications moving forward?

JR: Well my Twitter feed is very active. It’s @JamesGRickards and I have my books, The Death of Money and Currency Wars. But I also have a newsletter Rickards’ Strategic Intelligence, pretty easy to find online. We have a monthly newsletter where I document the travels and conversations I have around the world.

TD: Jim Rickards—thank you so much for sharing your comments with us.

JR: Thanks, Tekoa.

For questions or comments regarding this article, or on investing in the precious metals & resource space, you can reach the author, Tekoa Da Silva, by phone 760-444-5262 or email tdasilva@sprottglobal.com.


Invest with Sprott

This information is for information purposes only and is not intended to be an offer or solicitation for the sale of any financial product or service or a recommendation or determination by Sprott Global Resource Investments Ltd. that any investment strategy is suitable for a specific investor. Investors should seek financial advice regarding the suitability of any investment strategy based on the objectives of the investor, financial situation, investment horizon, and their particular needs. This information is not intended to provide financial, tax, legal, accounting or other professional advice since such advice always requires consideration of individual circumstances. The products discussed herein are not insured by the FDIC or any other governmental agency, are subject to risks, including a possible loss of the principal amount invested.

Generally, natural resources investments are more volatile on a daily basis and have higher headline risk than other sectors as they tend to be more sensitive to economic data, political and regulatory events as well as underlying commodity prices. Natural resource investments are influenced by the price of underlying commodities like oil, gas, metals, coal, etc.; several of which trade on various exchanges and have price fluctuations based on short-term dynamics partly driven by demand/supply and nowadays also by investment flows. Natural resource investments tend to react more sensitively to global events and economic data than other sectors, whether it is a natural disaster like an earthquake, political upheaval in the Middle East or release of employment data in the U.S. Low priced securities can be very risky and may result in the loss of part or all of your investment. Because of significant volatility, large dealer spreads and very limited market liquidity, typically you will not be able to sell a low priced security immediately back to the dealer at the same price it sold the stock to you. In some cases, the stock may fall quickly in value. Investing in foreign markets may entail greater risks than those normally associated with domestic markets, such as political, currency, economic and market risks. You should carefully consider whether trading in low priced and international securities is suitable for you in light of your circumstances and financial resources. Past performance is no guarantee of future returns. Sprott Global, entities that it controls, family, friends, employees, associates, and others may hold positions in the securities it recommends to clients, and may sell the same at any time.



www.sprottglobal.com

Sprott Global Resource Investments Ltd.
(Member FINRA/SIPC)

Contact (USA): (800) 477-7853
1910 Palomar Point Way, Carlsbad, CA 92008

Subscribe | Unsubscribe | Forward to a friend