February 18, 2011

With silver at multi-decade highs and gold approaching $1,400, King World News interviewed one of the most street-smart professionals in the resource sector Rick Rule of Global Resource, now part of the $8 billion Sprott Asset Management. When asked about silver specifically Rick remarked, “Everywhere you look, in particular physical coin sales are booming. And with increasing amounts of silver already owned by the silver etf’s and things like the Sprott Physical Silver Trust, coming by silver strip to fabricate coins is going to become increasingly difficult.”

“Eric Sprott believes that in the near-term the sort of April-May time frame that there is substantial upward pressure in the physical market. It’s worthy to note that there is backwardation (in silver), meaning that the futures prices are lower than the physicals market which says something about the tightness in the physicals market. And the market is acting today as though Eric were right.

Given that I’m intermediate and long-term bullish on gold, I have to be intermediate and long-term bullish on silver. But more importantly, I suspect you have to be short-term bullish on silver given the extraordinary imbalance of supply and demand.”

When asked about the gold market Rick Rule had this to say, “There’s a sense that in addition to the fact that there’s this general and broad debasement of currencies and incipient inflation in the developed countries, that there is also the possibility or perhaps even the probability of some type of black swan event which will provide major upside impetus to gold.”

Rick Rule is one of the most level-headed and respected individuals in this business, so when he warns or even seems to suggest the coming of a black swan event KWN readers should takes notice. Anything that can go right does go right in secular bull markets, and in this case that generally means financial chaos caused by some type of shock to the system.

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/2/18_Rick_Rule_-_Probable_Black_Swan_Event_Equals_Gold_Explosion.html