Weekly Wrap Up

“Big, Big, Big Things Happening” in Gold and Silver - Eric's Yearly Wrap Up

“Big, Big, Big Things Happening” in Gold and Silver - Eric's Yearly Wrap Up

 

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It’s been a year of good news and bad news: the bottom dropped out of the mining shares, but gold is even on the year while silver is up. Will this surprising trend continue into the new year? Host Craig Hemke sits down with special guest Eric Sprott to break down the biggest gold and silver news of 2022.

In this edition of The Monthly Yearly Wrap-Up, you’ll hear:

·        The most impressive commodity moving forward

·        What could upset the apple cart in 2023

·        Plus: can anything stop silver?

“As I sit here and think about the year in precious metals—and there’s many things to talk about besides precious metals—but in precious metals, to think that silver is at basically 24 on the COMEX today and it was 17.50 a few months ago, it’s put in a 40% move to the upside, almost. And this is while everything else is getting absolutely hammered. Bonds, stocks, cryptocurrencies, housing, private equity… There’s hardly been a place to put your money where you’re able to hold your own. But, shockingly, silver’s now up on the year and gold’s essentially unchanged. And I sometimes look at it and say, ‘Oh my God, I’m very lucky that I own those things in this market environment that we have.’ This is a bad, bad bear market, and it feels to me like it’s going to get a lot worse.”

 

To hear Eric’s full thoughts on the year’s gold and silver news, listen here:  

Announcer: You're listening to "Sprott Money's Monthly Wrap-up," with Craig Hemke.

Craig: Happy holidays, and welcome back to your Sprott Money News sprottmoney.com monthly and, well, yearly wrap-up. It's December 2022. I'm your host, Craig Hemke, but more important than that is our co-host this month, Eric Sprott himself. Eric, good to see you, my friend.

Eric: Hey, Craig. Great to be back here. And as I said in chatting with you before this, it's a great day for us to be here. We don't get many days when big, big, big things are happening with the precious metals, but we got a $30 move in gold and a dollar-plus increase in silver, so that rarely ever happens. So, happy to be here.

Craig: Yeah. You think back to all those calls we did on a weekly basis, you know, you might get a pop in the metals while we're recording them on a Friday, and then by the time it gets posted, [inaudible 00:00:53]

Eric: Yeah. Right.

Craig: Well, we can talk about that as we go, because that's been happening a little less frequently as we go through the year. Before we begin, again, always just wanna remind people that all of this content, the monthly previews with Chris Vermeulen, the "Ask the Expert" segments, all the blogs that are written, that I write, and David Brady writes, all of that's provided free. So, there's a couple things you can do to thank Sprott Money. At least subscribe or like their channel on whatever one you're listening to. That helps them get the, kind of spread a wider net. But then also, as you're buying physical metal, keep Sprott Money in mind. Go to sprottmoney.com. Right now you can still check the holiday gift guide. But even after the holidays, 2023 is gonna be a crazy year. If you need some physical metal, there's always great deals. If you need a place to store that physical metal, they can help you with that too. So, sprottmoney.com, and of course, just pick up the phone and call them at 888-861-0775. 075? It's four numbers, 0775. And someone will be happy to help you.

Eric, we're recording this, it is December the 20th, 2022. We've got seven or eight trading days left in the year. I suppose we should start with the year in general. My gosh. I mean, I'll remember it for a couple of things. One, the absolute bottom dropping out of the mining shares, for six months, you know, where the GDX went from 44 to 22. But then on the flip side, when we did this last year, if I'd have said, "Hey, Eric, I got some bad news for you, man. The Fed's gonna run off these 75 basis point rate hikes a couple times in a row. The two-year note's gonna go from under 1% to over 4%." If I'd have told you that gold would basically be even on the year after all of that, you'd have thought, "What?" So, what do you wanna focus on, the good news or the bad news?

Eric: Well, you know me. I like focusing on the good news and...

Craig: Okay, let's do.

Eric: As I sit here and think about the year in precious metals, and there's many things to talk about besides precious metal. But in precious metals, to think that silver is at basically $24 in the COMEX today, and it was $17.50 a few months ago, it's put in a 40% move to the upside almost. And this is while everything else is getting absolutely hammered. Bonds, stocks, cryptocurrencies, housing, private equity, the SPACs. There's hardly been a place to put your money where you're able to hold your own. But, shockingly, silver's now up on the year, and gold's essentially unchanged. And sometimes I look at it and say, "Oh my God, am I ever lucky that I own those things." In this market environment that we have... This is a bad, bad, bear market. And it feels to me like it's gonna get a lot worse. I mean, I can't believe how... I happen to be short some securities, typically FAANG-type things. And I just can't believe how almost every day, they show weakness these days. Doesn't matter what's going on. Down, down, down.

And of course, I do use other influences. For example, you know, I'm aware of Mike Wilson from Morgan Stanley, and Zoltan Posner from Credit Suisse. And these are the sort of recognized guys, who have had a grasp on where this market's going. And it's not very pleasant what they're even looking forward to. In fact, I think Wilson was suggesting we likely go to 3,000 on the S&P. I mean, that's a fair distance from here, considering how much we've gone down. You have Posner, who's been great on the Fed, suggesting that, gee, it looks like there might be some axis between China and Russia, where they're gonna get a currency that will include gold as a backer of it. Well, you know, these are wonderful things to contemplate, that we might have thought were appropriate long ago. Like, what's going on in the world is not good, particularly from a, I'm gonna say from a U.S. perspective, with this crazy war in the Ukraine, and it's getting deeper and deeper. And unfortunately, the U.S. keeps getting deeper and deeper and deeper into it. And who knows where that's all gonna go? But it's not looking pretty these days. So, that's only touching on a few of the kind of key items that we have to worry about.

Craig: Well, where do you stand, kind of, macro-wise? You know, I'll be writing my annual forecast here over the next couple of weeks. And I've already kind of crystallized in my head that, once again, we're looking at a year like 2010 or 2019, where everybody thinks, "Oh, QE is all done, and rates are going higher." And then by the middle of the year, "Oh, here comes the QE again," and then "Here come the rate cuts." Are you in the camp of higher for longer, kill inflation, or that the Fed will have to capitulate?

Eric: I don't know whether they're gonna be able to kill inflation. And so, for example, this is one data point I'll mention. In the last CPI report, I think they said that vegetable prices went up 38% in November, and are up 80% year over year. Now, I will guarantee you that the CPI probably doesn't really capture that one way or another because, obviously, no one's eating vegetables anymore, right?

Craig: Right. Exactly. Who eats vegetables, you know? What are potato chip prices?

Eric: [crosstalk 00:06:40] bread or something, or... Anyway. That was a shocking number to me. The fact that, I think it's 63% of the population is living paycheck to paycheck, it's worrisome. The fact that logic says people don't have excess money to spend. They don't. Between the fuel, and the food, and the interest rates going up and the fear that when their mortgage matures, all of a sudden they're gonna have a huge increase in their mortgage costs. It's gotta be frightening out there to the everyday citizen. And how about the split of the population in the United States, where, you know, you have conservatives and liberals, and the two just can't see eye to eye here? It's awful what's happening.

And I don't think there's a resolution on that, because people are getting so intransigent in their positions that goodness knows where it's gonna go. So, for example, when I see the Twitter revelations, by Matt Taibbi of the involvement of the FBI and so on. And, of course, none of this [inaudible 00:07:51] mainstream media even reports on it. But you read about it every day. Well, I read about it because, why do I read? Because I get that stuff, right? But the average person wouldn't have the slightest idea of what's going on. So, that's a problem.

I think the, who was it? Was it the BIS that came in and said we might have a derivatives problem, and we talked about having $80 trillion of derivatives based on currencies. And you might have noticed today there was a currency that went up 3%, the Japanese Yen. Now, if all that $80 trillion was in the Japanese Yen, some of it would be down $2.4 trillion today. Today. You know, like, excuse me? But because it's all out there, right. People, they think it doesn't move much. Well, gee, the U.S. dollar's fallen by, like, 10% here.

Craig: Yeah. Yeah.

Eric: Like, these things are happening. They're kind of crazy out there, so... And of course, I do worry about the whole vaccinated thing, and the people being unable to work, and the problems in the hospitals because people are sicker because of, I think, from the vaccine injury. So, those are big, big, big things that kind of slow you down. The whole housing market just falling flat in its face here. And I don't know whether we've seen the spillover of that. You know, with the people losing houses, people losing their cars. Oh my god, it's just snot nice to contemplate it.

Craig: All right. Let me ask you this, because I just recorded a thing with Steph Pomboy, our "Ask The Expert" segment for this month. And I'd invite everybody to go to Sprott Money and look that up. She had, full of great insights. And I asked her, I said, "Okay, so, for the stock market, you know, the S&P next year, what's more important? Is it QE or is it the PE?" I mean, because you think, at some point, fundamentals have to matter, but maybe not.

Eric: Yeah, yeah. Well, I think they are going to matter. And that's, for example, where Mike Wilson goes. He says, "It's got nothing to do with the Fed anymore." It has to do with growth. And the fact that we won't have growth. And I think, it's almost palpable what's happening out there, right, that people aren't spending money. When they do the ISM surveys and the consumer sentiment surveys, they will, "you think it's a good time to buy a dishwasher?" and, you know, nobody thinks it's a good time to buy a dishwasher, right? So, they are living hand to mouth. And I don't see a solution to this. And if the Fed comes back and prints too early again, then maybe inflation really sets in. And inflation, of course, is worse for the middle-income to lower-income guy. That's the guy really suffering. And you need them. So, I think we have a growth issue staring us in the face here, and we'll see it sort of bleeding out as we keep getting these surveys and they just... What I see as the survey of housing gone down 12 months in a row. You know, we're down to, like, I don't know. The number's like minus 80% or something versus the norm. So, it's not...things aren't gonna get better anytime too soon.

Craig: So, where do you stand in this? As we begin the year, again, like 2019, all these eight-figure Wall Street economist guys, like Jan Hatzius at Goldman Sachs are talking about, you know, the Fed funds going to 5% or 6%, you know, and the 10-year note going to 5%. I think they're gonna be cutting, you know, by the middle of the year. Where do you stand on this? Do you think that that, eventually, I mean, before we even get to the end of next year, will they be cutting?

Eric: I would guess that the economy will be so desperately bad that the Fed might assume some responsibility for that. And unfortunately, there's not much room for the governments to help out here because they've just wasted so much money, and they got so many commitments. So, I know I do think that the Fed will have to do something. But I think the fact that they do it will have some terrible repercussions as well, as you can imagine. I mean, if people think that inflation is legitimately here to stay, then the economy is gonna have a very, very, very difficult time gaining any traction.

Craig: Yeah. And so, if that's the case, then let me...here's another thing that's been on my mind. And you'll remember these days, back in the late '70s, you know, and into 1980, finally, it took to hold that, you know, inflation was here to stay, and it kept getting worse and worse. And that's when gold had gone from $100 to $200...or from $35 to $200, then back to $100, and then it went to $900. And the mining shares, so many mining shares that were 50 cents went to $30 or $40, that sort of thing, because they finally had lost credibility, you know, and nobody sold. They just kept bidding things higher. Do you think we could be on the verge of that again?

Eric: Well, when I look at the precious metals, and there's certain people that I'm tending to follow now more than others. And the one person I'm following the most is a guy named Michael Oliver, who you interviewed. And he's a momentum analyst, technical momentum analyst. And his view has been that silver will be by far the most impressive commodity moving forward here. And I might even say that one of the numbers, and he believe... And, of course, it's all worked out. It had gone from $17.50 to 24 bucks, okay. This is a big move. Most of the silver stocks I own that are producers are up 30% and 40%. They're in a bull market. Silver's in a bull market. And according to his prognosis, based on where we got to today, that we're off to the races here, and he believes that it could move to $30, and he uses in quotations, "with speed." Like, really fast. And of course, he further believes that you're gonna go through $30, you're gonna go to $50, for sure.

Now, you can imagine what's gonna happen to some of these stocks. So, if it gets back to $50, I mean, it'll be a rip-roaring performance. And I tend to think that's true. And of course, I have some fundamentals reason for thinking it's true. First of all, you know, being a believer in the GATA boys, who say it's been manipulated all these 40 years, believing Ted Butler, who says it's been manipulated for 40 years, and you kind of see it coming on the end, as you see these delivery issues that keep showing up, that it makes a lot of sense. And of course, the fact that silver's available in the ground 12 to 1, but it trades at 75 to 1. Like, it's totally ridiculous the situation we find ourselves in. So, I think it could go a long, long way. I hope it goes way beyond any $50. Way beyond that.

Craig: Well, you're making me think, I bet people would love to know what you're thinking about the physical side of it. Because I remember getting a text from you, just out of the blue, a couple of months ago about it, "Have you seen the import numbers into India?" And then we had this report from the Silver Institute, which is never, you know, like, anybody's best friend, but here they were talking about what, the 150 million-ounce supply deficit next year? And I'm sure you're monitoring the flows out of the COMEX and out of the LBMA. What do you make of the physical side of things?

Eric: Well, it's the physical side that's, in my mind, driving things, okay? And even, for example, Ted Butler believes that Bank of America's short a billion ounces to silver. Now, I don't know what... I mean, he saw a datapoint that suggested that, okay? And then all of a sudden, the person's like, a lot of datapoints have disappeared, for some bizarre reason. But I firmly believe that silver's always traded at kind of a 15 to 1 ratio to gold, which would imply a number well north of $100 already. I think gold's about to go, too. I know that Michael Oliver, I think his target is something like $3,000. Well, if you had 15 to 1, it'd be $200 silver, okay? And I would say this. These things don't have to happen exactly like that to do well. I mean, if it goes to $30, we're gonna do well. If it goes to $35, we're gonna do well. But if you really wanna score big in life, maybe you gotta believe in silver here, and load up. And when, you mentioned Sprott Money. I've bought a lot of hundred, thousand-ounce bars of silver through Sprott Money recently, thinking that, okay, it's well in train here. We are in a bull market in silver, for sure. So, don't miss it.

Craig: Well, yeah. And I've seen the reports. You know, it's not just even silver. Copper, and lead, and zinc, and aluminum and all the rest, the stockpiles around the globe just continue to be depleted. And you just wonder if commodities in general are gonna be rallying. And the dollar is falling. We might be onto something here in 2023.

Eric: Well, I would say that things are working our way. I know that Michael Oliver's number on gold, I think, is $1860. It goes through $1860, he thinks, "Okay. We're in a whole new bull market here, and we're gonna go a long way." We'll just blow through the old high like nobody's business. So, these are... All the data, most of the data, particularly in silver, is just screaming at you to do something. And the fact that the commercial shorts, and this is using Ted Butler's word, commercial shorts really aren't adding to their shorts anymore. And voila, the price goes from $17.50 to $24 just like that, because they're not in the game, because they've been told, "Don't keep doing this. Quit manipulating the price of silver, thank you very much." And maybe if they do, maybe they realize, just like our friends at Wells Fargo got slapped for $3.7 billion today, for messing around with their customers, and cheating them. And I think that these regulators can see what's going on here. I mean, it's as obvious as can be. So, maybe the word's out. You can't interfere with it.

Craig: That Basel III stuff might be having an impact, too. And I know you track the Commitment of Traders reports, like I do at my site. And isn't it fascinating that, even as of last week, I mean, silver's at $24, and the banks, they call them swap dealers on that report... But those are the banks. I mean, what are swaps, right? They're futures and options. And who deals them? The banks. They're basically net flat at $2. And open interest, Eric, open interest in COMEX silver is the lowest it's been in nine years. So, is there a potential for... I mean, we've all been waiting. And I know Ted Butler's talked about this for a decade. Maybe the next time the banks won't [crosstalk 00:19:18]

Eric: Four decades. Four decades. For Ted, four decades.

Craig: Yeah. Is there a potential for that, that maybe some of them will start to stand down and not get short?

Eric: Yeah, no, I honestly think that this is very likely to happen. When you see the physic... Well, take the Indian thing. I mean, what did they buy? Oh, my God. Did they buy, like, 300 million ounces of silver, up from a 100 million? Well, how does one country buy an extra 200 million ounces in an 800 million-ounce market? How does that happen? How could you get it? Well, the only one way that could happen. COMEX inventory's down, LBMA inventory's down. And yes, it looks like they had enough to supply it, but God forbid they keep buying. And now I gather that the Chinese might be doing some buying on the Shanghai Futures Exchange. So, it could be really hot. Well, it is really hot right now. Let's call a spade a spade.

Craig: So, safe to say silver is something that's on your radar, as we go into the new year?

Eric: You know what's funny? I mean, your listeners might find this interesting. The first thing I look at every morning is this CME data from the night before...

Craig: There you go.

Eric: ...and see who stood in for a delivery in the spot months, right? And who's putting the screws to these guys? Because something's going on.

Craig: Shows you how sick we are, because I do the same thing. I joke, Eric, and people can see it in our faces. My favorite joke is the precious metals markets, it's like dog years. Gold and silver will age you three years for every one year of life, right? It just...

Eric: It will.

Craig: ...the life just drains out of your face, and I get all these wrinkles and... But maybe we're due. All right. Let me transition to the shares, because I've got a question I just wanna get your opinion on for myself. You get these years like this where prices go down. And for these exploration companies, in particular, they need cash. I mean, they're constantly burning cash, drilling holes, you know, and stuff like that. And then nobody wants to provide them any cash. And so, all of a sudden, they get really financially stressed. I mean, I've got some that are just great, that have gone from a dollar down to 10 cents. And I'm sure you do too. So, for people out there that are like, "Okay, should I buy some more of that one?" Or are they just screwed at this point? It's too late. How do you measure? What do you look at to decide whether you want to, not necessarily put good money after bad, but be willing to, you know, kind of average in a little bit?

Eric: Sure. Well, you have to have a belief about where the prices are going. So, for example, for me, to consider buying a silver company, well, I'm way more open to it today, okay? So, for example, there's a little company called Summa Silver had an issue last week. And I think I ended up buying, you know, 25% of the issue. They had some pretty interesting drilling. And you have to believe in what you believe in, and act accordingly. And there's other companies. I put some money into New Found Gold two weeks ago.

Craig: Yep. Yep. Saw that.

Eric: [inaudible 00:22:32] that issue. I put money in a little company called Erdene, and it's a gold producer in of all countries, Mongolia.

Craig: Yeah, I remember you telling me that before. Yep.

Eric: Mongolia is a place where there's some huge orebody. That's where the Ivanhoe operation is. So, yeah. No, I'm looking at things and continuing to put money into various investments as the opportunities present themselves.

Craig: Are there metrics? You look at the balance sheet and go, okay, they've at least got a certain amount of cash versus what their market cap is. Are there metrics people that you like to look at that make you think, "Okay. They're gonna be okay. If the price comes back up, they're gonna be okay?"

Eric: I think the biggest thing, for me, first of all, it's the orebody. It's always the orebody. Okay. I know that contravenes, well, what about management, you know? It's, you gotta have the orebody first. That's the most important thing. Then, of course, was management open and honest about everything? Yes, they were. Okay, fine. At least we're not being wrung out here because it's something they've done wrong. We all know what the financing issues are. And given the passage of time, I mean, every time that silver and gold pop up here, trust me, there's all sorts of issues coming out. Stock issues coming out. And with silver where it is, and with gold hopefully breaking out of this sort of longer-term, on this longer-term trend, I would think... And, of course, the stock market doing what it's doing, where nobody can get an issue off in any security, there's actually some action in some of these gold and silver names. So, I'm happy to stick to the script here, and put my money where I think my money should go.

Craig: And then, of course, as you said, you still run that risk of... Like New Found. I mean, I know you're a big believer and happy to buy those shares, but here it's finally starting to perk up, and then the rug gets pulled out, and falls 20%. And that's just exasperating for people.

Eric: You know, Craig, one of the things I say about stock issues, and I'll use New Found as an example. So, the stocks at $6.50, they decide to raise $50 million. They go to their broker, who's hardly ever bought any shares in the open market. And he's gotta find people that will buy it. And typically, the people that he has to buy it are people who are just ready to spin it out again, and anyway. And so, we do an issue, when the stock was $6.50. Today it's, I'll call it $5.50 for the sake of argument. It's a little below that right now. So, fine. The stock goes down a dollar, the market cap goes down $180 million, and you've raised $50 million. Why do I think that the shareholders aren't winning much on that deal? You know?

Like, the managements have to bear in mind, there's a cost to raising money. And will you please try to mitigate the cost to us shareholders of you running out of money? Try not to run out of money, and come into the market at a very, very weak time. Like, you gotta wait. You gotta wait. Like, I know there was a big silver company, Owen and I, I said to the gentleman who's running it, I said, you know, "If you're gonna talk about doing an issue, you better have buyers lined up ahead of time. You just can't go and throw an issue out there." Okay. "Please, buy me." Okay. That ain't ever gonna work. You better go and sell somebody, this is a great idea. The guy says, "I believe you. I'm gonna be good for $25 million, can get another guy who's good for $25 million, and announce a $75 million deal." Because the other $25 will come in. But don't go out there when you don't have an order in your back pocket. Your job as management is to get that order. So, that's what the management have to learn to do. Go and get the orders. So, if they can, then they're gonna be very successful.

Craig: Yeah. There are still those companies out there that maybe they were running two drills, and then they cut it down to only running one, just to try to be a little smarter. Is there a certain price level of silver itself that would get outside investment a little more excited, and make it more worthwhile? You know, all of a sudden... Does silver have to break out above $28 to get the miners viewed favorably again?

Eric: Well, I think we're pretty close now. And one of the things I take great comfort with is that we have computers. Okay?

Craig: Yeah?

Eric: And at the end of the day, when we ask the computer, "Well, what's performing well?" and the computer says, "Oh, you notice that silver and silver stocks are doing well." And you're gonna say, "What?" "And you should buy them," the computer tells them. But the guy's not thinking about it, right, because, you know, they're all...it's verboten, and they're shut off from it. But the great things about computers, say, "Oh, yeah. Silver's the number one performer." By next week, "Silver's the number one performer. Silver's the number one performer." You know, give them about 10 in a row, and they'll figure it out.

So, they're gonna be coming in here. We see examples of mainline institutions that are thinking about gold and silver. I think some government agency in Australia announced that they were gonna buy some gold and/or gold shares for the big superannuation fund. So, that's the sort of thing that I think's gonna happen. Everyone can see what's happening in the currencies. Everyone can see the plight that we're in economically, can't they? You know, wouldn't they [inaudible 00:28:13] like to be a little bit diversified here, with some asset that might actually go up when everything else is going down? Which we can now say they're doing, or at least there's holding their own, right? Holding your own when everything's down 25 is a pretty good deal.

Craig: Yeah, no. No doubt about it. All right. I'm with you. I mean, I'm with you, and that probably doesn't surprise anybody. I'm excited about next year, in general. I think there are a lot of things that are going in the right direction for us. But there are risks. What could really upset the apple? I mean, there are a lot of things that happened this year that we couldn't see coming. What would be some risk to this overall story, do you think, to keep it from playing out as well as we think it's gonna play out next year?

Eric: I don't think there's much in the way that would stop silver, okay. I mean, it's just been, you got solar, you got the electric vehicle, and you got... You have so many uses. You got the Indians buying, you got the Wall Street Silver is buying every day. There's a lot of reason to think that silver just keeps going here. In fact, I mean, Wall Street Silver is gonna be getting a lot of runway here with what's happening, right? You can imagine. In fact, I think I read that they wanted to move up one of the raid days to December 23rd. I think that's this Friday. Well, we'll see.

Craig: Did you see that Elon Musk follows Wall Street Silver now?

Eric: As he should.

Craig: I mean, he just started following him yesterday. He only follows 165 accounts or something. And he started following Wall Street Silver yesterday. I'm sure Jim is thrilled. I mean, that's pretty cool.

Eric: Yeah. Our advice to Elon is you better protect your butt here.

Craig: Yeah, no kidding.

Eric: Do what the Indians did. Buy early. And it's not late at all. It's not late at all, considering the state of its silver market. In terms of gold, gold's a tougher one because, you know, there's never a shortage of gold, right? I mean, every ounce of gold ever produced is still on the surface of the Earth. I think the only thing we can hope is that, let's hope that [inaudible 00:30:22] is right, that Ted Butler's right. The other people who believe in a conspiracy, that there has been a conspiracy for a long time, also involving the central banks and the BIS and all that stuff. And it's funny. We're at the end of the road for that. And, you know, things will be allowed to play out as they should have played out. So, that would be my expectation. Could the banks come back in and slam the silver and gold? Well, yeah, as you see, every now and then, they do that. That's the one thing they can do. They can slam it for a day or two. Whether they can sustain it is a whole different [inaudible 00:30:59]. Because we're gonna see that their short position has grown here. And thank God Ted Butler's as proactive as he is, and he's forever sending stuff to the SEC. And the people at SLV, they've got all these shorts in the SLV and other ETF vehicles, and he's kind of all over it here, complaining that, why do you let a guy short an SLV that's in silver? Because that means he doesn't have to own it.

And that [inaudible 00:31:31] totally against the aims of the ETF. Anyway. And I am also of the view that that gives me comfort about the precious metal. And I just see an economic situation that's kind of collapsing here. What did I read about Ghana? Ghana just turned a back on all their debts yesterday. I heard that the Egyptians are buying gold because they're worried about their banking system. I read today on ZeroHedge that there's been all of a sudden an increase in borrowing from the Fed in their discount window by banks, which means there's something fundamentally wrong out there, right? And why wouldn't there be? All of the assets that they have as collateral for their loans is going down in value. Everything's going down in value, other than gold and silver. So, we have lots of mounting evidence that we could be on the right thing. And, you know, when I think back [inaudible 00:32:35] well, why didn't it happen earlier? Well, you know, because everyone fell in love with zero interest rates and printing money. Even though we all know it's foolish. And we didn't have to pay a price for that. Now we do. Now we have to pay a price for it. So, things are kind of going our way.

Craig: Well, and let's, as just one last question, let's talk about gold, because, obviously, if gold starts breaking out above $2000, that's...more people follow gold than they follow silver, so it's gonna help silver. As you look over the horizon and you see...you know, like, let me put it this way, Eric. I think the biggest thing that happened all year, when we look back, will be the first weekend of March, when the U.S. sees Russia's foreign-held foreign currency reserves, and kicked them out of SWIFT. I think we'll look back in history and go, "That was the biggest thing that happened all year." Do you think, with the central banks still buying gold... A guy that I know well, you probably have seen his work, Tom Luongo. Tom thinks that all of a sudden it's beneficial, especially for the banks and the ECB, to have a higher gold price. Do you think things are finally turning in our direction, of gold as a basis for currency, for money, you know, BRICs currency, that sort of thing? Is all that stuff possible now, too, finally?

Eric: I would think that if you were a central banker, whether you're European, or Asian, or wherever, you're African, when you see what's happened to the currencies, when you see what's happened when you're on the wrong part of the tee, and all of a sudden, they see something. All of this has been arguing that you should focus on gold. They're not gonna focus on silver because it's such a small market. But yes, for sure, focus on gold. And it would appear that they are focusing on gold, based on the last quarter's purchase of gold by central banks, right?

And the logic of it, and some banks are openly speaking out about it, that we want to own more gold. So, yes, I think that their job description would suggest that that's something that they should be thinking hard about these days, as you watch these currencies being as volatile as they are. Everyone owns the U.S. currency, and it just lost 10% in the last six weeks. Ten percent. Are you kidding me? "What could I have done differently? Well, maybe I should have owned some gold [inaudible 00:35:12] probably compensated for that 10% we dipped in that same time period."

Craig: Yeah. And I wonder if, when we look back a year from now, if we look back and go, "You know, it should have been a sign that when everything else was going down in 2023, and stocks were down 25% and bonds were down 25%, but gold was actually green on the year, that should have been a sign."

Eric: Thank God for computers.

Craig: Yeah. Right. Exactly. Well, Eric, thank you. It's always so much fun to visit with you. And I know we don't get to do it so frequently anymore, but it's great to see you. It's great to visit with you. I hope you have a great Christmas season. I'm not gonna root on your Buffalo Bills, I can tell you that. But if they do end up going to the Super Bowl, I'll at least be happy for you.

Eric: Well, good. Thank you. I'll be very happy too. And Craig, look, I love the work that you do and how you help Sprott Money. And I'm glad to lean in a little when the opportunity presents itself. And I'm glad that it looks like things are coming together. I mean, I just think it's coming together for our team. So, let's hope we have a great '23.

Craig: And thank you. And it's gonna be fun to watch, and hopefully, we can visit again soon. And again, I can't stress enough. Please thank Sprott Money for this content. A like, a subscribe, whatever, but go to the website. Check out the deals they have, check out storing your metal there. It's a great company, run by great people. And again, you can find them at sprottmoney.com, or call them at (888) 861-0775. Eric, Merry Christmas. You shaved your beard. Are your days working at the mall, or are you already done?

Eric: A little bit. Yeah, I know it's still a bit of a rough patch there, but...

Craig: Well, you know, and every time I'd see Santa at the mall, I'd go up and tug and see if that was maybe you. But now I guess I don't have to worry about that.

Eric: You're gonna get yourself in some trouble there, my friend.

Craig: Well, I noticed when you lean back...

Eric: [inaudible 00:37:19]

Craig: ...your belly jiggles like a bowl full of jelly, so you got that part going. But I do too. I can tell you that. Anyway.

Eric: Okay, Craig. Look, thanks for the opportunity.

Craig: It's always great fun. Merry Christmas. Happy New Year. And I look forward to seeing where we go next year.

Eric: All the best to you, and the listeners. I hope they all have a very rewarding 2023. All of it.

Craig: Yeah, let's hope. All right, and from all of us here at Sprott Money News and sprottmoney.com, again, Merry Christmas, happy holidays, happy New Year, all that stuff. And we look forward to a great 2023.

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About the Author

Our Ask The Expert interviewer Craig Hemke began his career in financial services in 1990 but retired in 2008 to focus on family and entrepreneurial opportunities.

Since 2010, he has been the editor and publisher of the TF Metals Report found at TFMetalsReport.com, an online community for precious metal investors.

*The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.

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