By Dominique de Kevelioc de Bailleul
In a gesture of highlighting the glaring impediments and equally exciting opportunities facing the silver industry today, Sprott Asset Management CEO Eric Sprott issued a “A Call to Action” letter to 17 of the world’s largest silver producers, posted on one the world’s leading sources of breaking news in the bullion markets, King World News. As a synopsis of the 1,876-word letter, Sprott outlines a compelling case for producers to hold back inventory for the sake of supercharging its balance sheets as well as maximizing future profits in the wake of drastically changed global market conditions from years past–namely, an environment, in which:
1) The dollar’s value is expected to decline more rapidly than it did during the 1970s. Through the Fed’s policy of negative real interest rates, the CRB Index has risen at a 10.3 compounded percent rate since 2002, already rivaling the decade of the 1970s and expected to get worse, as Bernanke has stated that ZIRP rates will last through June 2013, at least, in an effort to mitigate the effects of the crisis in Europe to liquify U.S. banks;
“Fitch Ratings recently warned that the U.S. banks may face severe losses from their exposures to European debt if the contagion escalates,” Sprott stated in his letter. “There’s very little at this point to suggest that it won’t. The roots of the 2008 meltdown live on in today’s crisis.”
