In a recent call with Eric Sprott, founder of Sprott Inc., he said he was still buying physical gold -and planned to keep buying it for as long as he could. The gold shortage that he talked about in our May interview is still there, and economically, things aren’t getting better. “When people finally decide they want to buy gold, there probably won’t be any gold,” he explained.
Question: When you look at more recent economic data, do you believe it still supports the gold thesis?
A lot of people would contend that ‘things aren’t that risky’ because we have this ‘wonderful economic recovery going on.’ I think that’s mostly bunk — there is no real recovery. I look at economic data like Caterpillar’s sales and McDonald’s sales which have been stagnant. Consumer confidence as reported by Gallup has been flat for 2 or 3 years.90% of the US population hardly gets any wage growth and we have significant inflation. The consumer is not better off; in fact, he’s way worse off today. And I don’t even know if he has felt the true impact of the healthcare costs. Then you also have a big problem in America with student loans. We have cracks in the housing market here — and not just in North America. There is a large list of potential black swans out there, whether it’s geopolitical stuff in the Ukraine, in China and Japan, or India and Pakistan.
Question: What’s your current outlook for gold?
The most important factor right now is the physical shortage of gold. The declining amounts of gold in Shanghai storage suggest we are getting close. So I expect something to happen in the physical gold markets soon.
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