Rick Rule - Silver Will Trade Like an Internet Stock to the Upside

Rick Rule - Silver Will Trade Like an Internet Stock to the Upside

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/6/15_Rick_Rule_-_Silver_Will_Trade_Like_an_Internet_Stock_to_the_Upside.html

With gold trying to stay above $1,525 and silver bulls looking for a bottom, 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 about the possibility of silver trading like internet stocks to the upside in the future Rule had this to say, “I think that’s the case. I’m not a student of markets, I think Eric Sprott in our organization is the best at that, but I certainly remember the silver market going absolutely hyperbolic in the 70’s.

We were close to a hyperbolic market earlier this year. We had a situation going into that where the commodities exchanges increased very dramatically the margin costs in the futures market, but what they are not able to do really is to control the physical market.”

Rick Rule continues:

“You see a continued drawdown of warehouse stocks as a consequence of physical demand, and I think that there is an ongoing risk of a physical failure. Meaning that there could be a failure to deliver futures on a going forward basis. There has been extraordinarily strong off-take, physical off-take from investors.

Eric Sprott points out that about as much silver trades every day in paper form as is mined every year in physical form. The chances that sort of disparity between paper trade and physical supply could yield price shocks seems very, very real to me.”

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