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Jim Cook



Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

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The Best of Jim Cook Archive


Commentary Of The Month

July 20, 2011

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By Eric Sprott

“When I look at the physical silver market, I mean there are some stunning developments.  The world supplies over 900 million ounces of silver a year. But if you simply go back to the Chinese, in ’05 they were an exporter of 100 million ounces; today they are an importer of 100 million ounces.  That is a shift of 200 million ounces from one source, in a 900 million ounce market.  Let’s go back to ’05, there were no ETFs.  Now we have ETFs that have 500 million ounces.  You had hedging which you do not have now, although there was some action put on late last year, particularly by Carlos Slim.  But I think all of the physical data we see on silver is just screaming that there is a shortage.  And in fact this morning, I just looked at the Silver Institute’s study of supply and demand for silver and I mean I find it almost ridiculous that they always show supply equals demand and they have a plugged in number for investment demand.  Our own analysis suggests that demand for silver far outweighs supply and ultimately the price has to go higher.  As you have mentioned, the industrial uses, I think last year were up something like 18% to 20%, the investment demand was skyrocketing.  I do not know where all this silver is coming from, you have to ask yourself, well who in ’05 was getting silver that today is not getting silver?  The Chinese are buying so much and coin sales are so high.  I mean it just boggles the mind that somebody has not come out and said they cannot access silver.  And that is the day I am waiting for, when let us say Eastman Kodak says, they cannot buy enough silver or there is not silver available.  That will really stun the silver market.
“When we started the fund [Sprott Asset Management], we had to go into the market and buy fifteen million ounces of silver, which is not a lot in the 900 million ounce market. The stunning thing is that it took about two and a half months to receive that silver.  And when we looked at the bars we saw some of that silver we ultimately purchased, was manufactured after we purchased it.  In other words, it was manufactured in November and we bought it in October.  So it just told me there was not silver lying around to be delivered against contract.  And when you look at the COMEX inventory for length of dealer inventories they are something like 28 or 39 million ounces, I mean that is $1.2 billion.  I mean that is nothing.  Any one of 500 institutions could buy it and there would be no COMEX silver.  I mean the whole takedown of silver, the manipulation of silver that has been suggested in lawsuits, I think, stands a good chance of proving to be the case.  The raid that took place on May 1st was a joke.   We are just in the process of analyzing it now and there was no way that speculators and the long sides could maintain their position when you wake up on a Monday morning and you are already down $6.00 an ounce which would have basically gotten rid of all your margins already.  And then they bang on four subsequent margin rate increases.  It was a perfectly orchestrated raid by the people who were short but I think it indicates that there was a real physical problem in the silver market.  I expect that to manifest itelf as we move into the latter part of this year.”