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Eric Sprott - This Financial Crisis Will Be a lot Worse Than 2008

With stocks plunging and gold and silver still consolidating, today King World News interviewed billionaire Eric Sprott, Chairman of the $10 billion strong Sprott Asset Management. KWN wanted to Sprott’s take on the ongoing financial crisis and where we are headed from here. When asked about the German bond auction, Sprott responded, “The results were that they (Germany) only sold about 65% of the issue on offer. Rates went up a little, but the fact that the Germans, who would have been regarded as the number one credit in Europe, couldn’t sell, I think it was a $5 billion euro issue, and they couldn’t sell it, I mean it’s truly shocking.”

Eric Sprott continues:

“What does it mean when some of these other governments are going to try to raise money that the number one credit (in Europe) can’t raise money. So I think it’s a very important signpost for us all, as we look at the reeling that’s going on amongst sovereigns in Europe, as we realize that the pressures in the banking system in Europe are just (so) intense. We can see that by the deposits/withdrawals and the borrowings from the ECB and so on.

Our expectation has been that when you are over-levered you’re in a very vulnerable position. The fundamental weaknesses in the banking system, I have the toughest time imagining that banks in Europe could have any capital left over after you are seeing what’s happened to the stock markets and the bond markets.

It’s just another nail in the coffin and I’m sure the domino effect will be spreading as we move along here....

Continue reading the Eric Sprott interview below...

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When asked how this portion of the financial crisis will compare to that of 2008 and 2009, Sprott replied, “I think it’s going to be a lot worse because it took a certain amount of money to bail out Lehman and all of the counterparties to Lehman. But when you have governments and sovereigns and major banks that have these issues, I just can’t imagine there is enough money to bail it out.

Of course day by day people are losing confidence in these various currencies. So I don’t think it can be solved. I don’t think there is enough money to bail it out and of course if they try we are going to end up with some kind of hyperinflation or (massive) depreciation of currencies. It’s not going to work, I just don’t think there is a solution to the problem.”

The KWN audio interview with Eric Sprott is available now and you can listen to it by CLICKING HERE.

Eric King

KingWorldNews.com

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