1.
Enquirica Research – Eric Sprott on Silver Prices
Enquirica Reserch - October 2011

2.
Eric Sprott on Silver Prices – 2011 Silver Summit
Some
highlights
from
hedge
fund
manager
Eric
Sprott's
speech
at
the
2011
Silver
Summit.
Sprott
of
course
created
and
is
one
of
the
largest
investors
in
the
Sprott
physical
silver
fund
that
trades
on
the
TSX
so
he
has
a
significant
personal
stake
in
the
outcome
of
the
debate
as
to
where
silver
prices
are
heading.
•
The
US
Mint
sells
approximately
the
same
dollar
amount
of
gold
and
silver
coins,
which
means
it
sells
50
ounces
of
silver
for
every
ounce
of
gold.
•
Ten
times
more
silver
than
gold
is
produced
each
year,
and
the
ratio
in
the
earth's
crust
is
15:1.
This
begs
the
question
how
the
silver/gold
ratio
can
be
50:1?
Sprott
expects
a
return
to
the
historical
norm
of
15:1,
which
implies
that
silver
will
outperform
gold.
•
The
paper
silver
markets
trade
a
billion
ounces
a
day
and
the
world
only
produces
900
million
ounces
a
year.
The
amount
available
for
settlement
of
these
futures
contracts
is
approximately
1.5
million
ounces
–
very
little
compared
to
the
amount
of
paper.
•
According
to
Sprott:
o
"On
the
physical
side
I'm
seeing
only
buyers."
o
"There
are
a
lot
more
people
who
can
afford
a
one-­‐ounce
silver
coin
than
an
ounce
of
gold."
o
"We
tried
to
buy
15
million
ounces
of
silver
and
had
to
wait
three
months
-­‐
and
some
of
the
silver
we
got
was
manufactured
after
we
ordered.
So
there's
not
a
lot
of
silver
sitting
on
shelves
waiting
for
people
to
buy
it."
o
"Somewhere
along
the
line
some
manufacturer
will
say
'I
can't
get
the
silver
I
want'
and
the
jig's
up."

3.
 Counterparty
risk
of
exposing
savings
to
banks
will
increasingly
drive
people
to
prefer
gold
and
silver
to
having
money
in
a
bank.
Witness
that
up
until
very
shortly
before
it
was
nationalized,
Dexia
was
considered
to
be
the
best
capitalized
European
bank
and
passed
what
was
alleged
to
be
a
stringent
“Stress
Test”.
Counterparty
risk
is
not
theoretical
any
longer.
•
Sprott
believes
that
silver
is
still
underrepresented
in
institutional
portfolios.
According
to
him
"You
go
to
some
of
the
biggest
names
who
own
gold
and
ask
them
about
silver
and
a
lot
of
them
haven't
even
looked
at
it."

4.
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