Eric Sprott - Silver Prices to Go Supernova - Disgrace awaits at the End of the Road

Eric Sprott, the inimitable, one and only silver maniac, went on record with completely irrational statements yet again. From the transcript:
We hear about money flowing out of Greek banks and why wouldn’t it? And the next one was the money will be flowing out of Portuguese banks. And sooner or later, instead of just moving from bank A to bank B, people might start moving it from bank A, B and C to precious metals. Which I think is what ultimately will happen here and provide this huge supernova for gold and silver.
Well first of all I think COMEX is a joke and I think all the paper markets are a joke. As you are probably aware, we trade a billion ounces of silver a day. A billion ounces. The world produces 900 million a year. And you know, rather than us saying well the buyers are speculators, what are the sellers thinking? He is trading a billion ounces in the sell side, and there is all 28 million in the COMEX there is obviously a shortage of silver. What is the guy selling it thinking? He is the guy with the unlimited losses.
Huge Supernova? Sprott is making up new expressions to explain how fast the prices are going to rise and reach the sky. Unfortunately, there is no English word to qualify his über-bullisness.

First, banking defaults are deflationary in monetary terms.

Second, when the paper markets are what they are. It's not because million of ounces of gold or silver are bought and sold in a day, that it can have any relation with the production of silver. Specially now that you have automated market making systems (which do not keep any market exposure) and HFT.

So much nonsense in such a few number of sentences is unbelievable.

I am very much happy to find an ally in M3 Financial Blog, and agree 100% with the following statement they make: this Silver hype will likely mark the ending of Sprott's credibility and result in his disgrace.


Tiho said...

Silver will go so much higher from here. You couldn't even imagine how high it will go!

Forget your technical analysis mumbo jumbo targets, we are in a secular commodity bull market.

You don't even know what hot air looks like, wait til Silver really turns into a bubble!

I also have so so so much money invested in Silver and I'm still buying. If you were smart, you would buy some too, that way you can make a tone of money...

Tiho said...

p.s. I noticed you are pretty good at reacting to Bloomberg/Reuters/CNBC/Barrons/Economist/some popular blog/etc news which means you are are great contrary indicator. Hehehe!

All jokes aside, here is some proof mate. I have noticed that following your comments, which are reacting to the price action, could signal profits for me:

1.) You noticed at the end of June that grains tanked. This was also around the time I bought. Since I was already in, you said in the comments section:

"Dude, I hope you didn't get home on time to buy those grains. Nice collapse yesterday. Unlucky timing if you did..."

Funny enough, on the day you said that was the lowest low, and while I was a little early - couple of days early, Wheat is already up and in profits. So, lucky for me I got home quick enough to buy... *wink*

Well, either way I'm not a prophet, but to me it is starting to look like Wheat could put in a bottom here, and at least stage a rally. Majority including you, were/are very bearish with DSI at only 9% bulls and every man and his dog short Wheat on the COT! Here is your quote and here is the Wheat price.

2.) You noticed the Nikkei crash, followed by a Barrons cover saying buy Japan. In late March after a Fukushima accident and the Nikkei crash, you wrote a comment saying:

"awesome. Barron's are a great contrarian indicator :-)"

If you actually paid attention to the price and the sentiment properly, you should have bought like I said too. Even back than I said that I didn't think the magazine cover meant much. Once again your comment here and Nikkei price here. Once again, I'm not a prophet, but to me Nikkei looks in a strong uptrend.

3.) You've been calling Silver, Crude Oil and all types of commodities a bubble. This too me signals that you are once again being too bearish as commodities correction is in process.

You have said with too many comments and your own posts that commodities "have now topped and peaked." What you should be doing is buying, coz you are once again reacting to the price and the news. Instead of reacting, you should be AHEAD of the curve, as a contrarian.

Will come back to three if and when Silver, Crude Oil or the CRB Index, take out the May 02nd tops! I'm not a prophet, so I dunno what will happen, but I remain long and I'm still buying commodities!

pej said...

Nice one Tiho.

A few points though:

Let's not forget that for the market to be able to fool most of the people most of the time, it must make feel confident about their positions.

I'm not saying that the random moves of the markets will not make me wrong on the day following any post, and there was no element of timing in the posts, since I'm just reacting, as you said, to the news as they appear.

Even at $40/oz, silver is about 20% lower than where it was on the 1st of May. Was I wrong in calling silver to fall? it's all relative.

BTW: we can also both be right or wrong, depending on the timeframe. As I went short silver and oil, before they dropped dramatically, it was not me being wrong on the rather short term. Maybe you were buying when I was selling, and in 2 years silver will be at $100 — even though I don't think it's a likely scenario — and you'll be right as well.

What you say about wheat and me being a contrarian indicator can also be applied to yourself as when you said to buy it, it dropped majestically — maybe prior to rebounding.

Tiho said...

Hahaha! Timeframes?

Wait til Silver goes to triple digits. Than Silver at $5, $10 or $30 or $50 will all like like a bottom. That's why you should buy low and sell high!

Wheat didn't drop majestically. It barley even made a new low on that day. Besides, that was the last day... the last candle... after that Wheat has rallied over 12% now!

Both Silver and Cotton also exploded! Like I said back than and I'll say it now: any time commodities drop hard, I'm hope I'm smart enough to buy more commodities. It's a secular bull market. There will be corrections, consolidations and even crashes like in 2008. But commodities are going much much higher over the next 5 or even 10 years!

In the end the commodities will turn into a bubble like Nasdaq! I hope I will be smart enough to short commodities when that happens, but we got several years to go!

pej said...

What makes you say that the commodities will bubble like the Nasdaq did? Do you realize that we have had bubble after bubble, on a worldwide basis? And that normally, bubbles happen once every several generations?
Greenspan and Bernanke should be proud of their legacy: they have convinced Investors to go long any asset, and expect that asset class to end in a bubble.