by: Justin O’Connell


For the gold bull market, institutional investors came in after the metal began running. For example, it was not until the last year-and-a-half as central banks became net buyers of the yellow metal. Similarly, in silver, institutional money will be late to providing a firm foundation and a harbinger for extraordinary price increases. When this happens, to be sure, silver will make jaw-dropping moves a la its spring 2011 test of $50.00/ozt., which indeed took place after Eric Sprott’s massive $580 million silver purchase of December the year prior.

Clearly, Sprott is not one such institutional investor. Although he oft mentions in interviews the slowness to the silver market of many huge institutions—take, for example, the company Apple, which currently has no silver position on its books despite billions in assets—Sprott has for a long time been bullish on silver, referring to it as the investment of the decade.

The Canadian-based Eric Sprott Management CEO has filed a follow up prospects regarding the purchase of $1.5 billion in silver bullion intended to cover anticipated demand for the company’s exchange trade, PSLV. That means more than 45 million troy ounces of silver.

This news comes in as the super committee returns to the public eye with no solution on how to cut a paltry $1.2 trillion in spending—no real news there. But, irregardless, pair a natural, demand triggered price rise in silver with headline grabbing failures in Washington D.C to fix domestic economic problems, which will certainly weigh heavily on the dollar, and we’ve got a nice setup for some exciting moves in silver.

On the heels of those massive institutional investors who follow Sprott, the public will again form lines in bullion shops across the country placing orders for silver that is backed up to all-time highs; thedemand will be so monumental, there will scant be a reason for these bullion shops to dial up their safes and set their alarms.

This sort of news is the sort that might spurn many investors to attempt to front run the purchase, putting more upward pressure on the metal’s price.

Sprott represents approximately half the size of the Hunt brothers who attempted to corner the silver market in 1979-1980. To Sprott’s dismay, his size and status as a legal entity requires him to file with Canadian regulators. So, news that such a big player is planning such a big purchase spurns many investors to try and front run his moves.

The last time Sprott got his hands on substantial, additional inventory, the silver price soared 177 percent, though there are no empirically proven studies between Sprott’s purchases and moves in the silver price.

This forthcoming purchase by Sprott is three times the size of the $580 million purchase he made last year.

From Harvey Organ:

Today the Globe and Mail announced Eric has filed a short form follow up Prospectus for a billion five physical silver,…holy jeepers, it could be approved in as little as two weeks people tell me, and he can trigger it OVERNIGHT without warning. Just bang, if he has got the orders. WE all know what happened with his last Physical Silver Issue, it was 580 million and blasted Silver 18 to 50 bucks in 5 months.

This news comes as Eric Sprott celebrates the 10th anniversary of the Sprott School of Business at Carleton University next week. The even will be more than a celebration, as Sprott will focus on the world economic crisis and the need for a financial collapse and reset.

“The world economy is still so uncertain; we’ve got tremendous pessimism, people earning less while the cost of living is going up, and we’ve got an aging demographic which affects our ability, as a society, to cover the costs of our pensions, our health care and education systems,” said Sprott. “The same old ways of thinking about these challenges won’t address the financial crisis we’re faced with. We need to rethink our approach and the financial system needs a reset.”

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