So, why has the price of gold and silver gone down?
When asked whether the current gold and silver correction is the beginning of a 2008 like collapse, or as Jim Sinclair has suggested, the last major shake-out prior to major bull moves for gold and silver, Eric Sprott responded:
It’s getting chaotic out there in the financial world. We have a worldwide economic recession, we have governments which have hugely over borrowed, and we have so much printing of money it’s surreal.
Interestingly, this whole time the price of gold and silver has gown down, which I find incredibly unusual because all of the data that you and I and other people in the precious metals business look to on a physical basis is so strong. I’ve always surmised that because it’s so chaotic, and because Paul Volcker stated back in 1980 that the mistake we made was not getting control of the gold price (of course the gold price at that time had gone from $35 in 1971 to $850 a mere 9 years later) and we ended up with double digit inflation. I certainly believe that precious metals are the tell on the irresponsibility of the central planners.
And I think that the central planners would know that these are massively unusual and irresponsible, but it’s the only thing they can do. They have to keep interest rates down because any uptick and all governments will face almost immediate bankruptcy because they wouldn’t be able to afford the interest.
We’re living in very unusual times, we see incredible volumes on the paper markets of silver and gold, which obviously bear no relationship with what’s going on in the real world.
When you trade 1 year’s silver production in a day- matter of fact I think we traded one year’s worth of gold production yesterday, which is absolutely ridiculous!
They just trade the paper like it’s the real thing but as you and your readers know, it’s not the real thing, and there’s a whole other market out there which ultimately will determine the price.
FEBRUARY 24, 2013 BY THE DOC – Silver Doctors