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Rick Rule - Silver Shortage Continues, Financial Crisis Looms
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/6/1_Rick_Rule_-_Silver_Shortage_Continues,_Financial_Crisis_Looms.html
With continued volatility in gold, silver and the US dollar, today King World News interviewed one of the most street-smart pros in the resource sector, Rick Rule Founder of Global Resource Investor now part of the $9 billion strong Sprott Asset Management. When asked if there is still a shortage in the silver market Rule replied, “Yeah I think there is absolute shortage in the physical market. There has been some softness (in the price) which I think is mostly a function of two things, generally a sort of risk off trade as institutional investors in particular have found credit conditions more difficult, and of course the tightening of the margin requirements in the futures markets. But I don’t think that has obviated the near-term physical shortage which has come about from very, very strong retail end user investment demand and a shortage of coin strip.”
Rule continues:
When asked if silver was set up for a rally Rule responded, “I’d have to say yes, in the sense that I see a bunch of circumstances that are bullish for precious metals still, and silver would appear to be the affordable trade in precious metals, the poor man’s gold if you will. It is also the metal that attracts the retail precious metal trader who likes, rather than is repelled by volatility. You and I have joked before, the silver bug is sort of the gold bug on steroids. For the speculator, the current market conditions in the silver trade if one can handle volatility are optimal.”
When asked about gold specifically Rule stated, “Gold is the fear trade and I think there’s a lot out there to be afraid of. Greece of course is dominating the headlines, and I think it’s not so much will a restructuring occur as a when will a restructuring occur? But that’s taking people’s minds off of other topics that are worrisome. An example would be my old home town of San Jose California, an extremely, extremely affluent area, has decided that they are now going to restructure which means (they will) stiff $550 million in bonds.”
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