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Rick Rule - Gold Mania & Sprott’s Letter to Silver Producers
The gold mania of the 70s was absolutely breathtaking. One of the top gold mining stocks from that period gained over 542,000%. King World News interviewed one of the most street smart pros in the resource sector, Rick Rule, Founder of Global Resource Investments, to ask him about the 70s gold mania, what lies ahead for gold and also about Eric Sprott’s letter to silver producers. Rule had this to say about the Sprott’s letter, “I think it’s brilliant and I think the silver producers ought to listen, in particular some of the small silver producers where Eric owns more of the company than their senior managers do. The fact is that silver producers are being asked by their shareholders to have a view on the silver price, not merely to have a view about their salaries and options.”
© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast,
rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
December 1, 2011
Rick Rule continues:
“The silver investors, by and large, are silver-centric and believe in higher silver prices. And certainly the idea that investors would invest in a company that gives them some relief from the economic consequences of owning fiat currency, only to have the company that they had invested in store its own wealth in that same fiat currency is an absurdity.
What Eric has asked the silver industry to do is hold about 25% of its savings in physical metal. This theoretically would do two things for the shareholder. (One) Increase exposure to a commodity that they invested in the share to get exposure to in the first instance, and (two) shelter the shareholder from the depredation that they might experience from increased devaluation of the dollars and euros that the companies would otherwise hold their reserves in....
Continue reading the Rick Rule interview below...
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To hear legendary company builder Rob McEwen, original Founder of
Goldcorp discuss which company he invested $50 million
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“I hope and in fact suspect that the mining company managements will pass this IQ test which Eric has proposed to them.”
When asked about the last gold mania in the 70s, Rule responded, “Well it was certainly the wildest financial event I’ve ever lived through in my life. I was spending a lot of time in Vancouver, British Columbia and there was a facility called the Vancouver Stock Exchange that actually had an open outcry, a physical trading floor.
I remember personally witnessing people, retail people, civilians that weren’t securities licensed, double parking in front of the Vancouver Stock Exchange, pushing their way past the security guards to get on the trading floor and attempt to participate in the open outcry to buy gold shares, any gold shares without knowing the name (of the company) and at any price.
The mania that you describe was truly a mania...There were some insane share price escalations...Certainly the opportunity will exist for the market to completely re-price itself as gold moves mainstream.”
As Richard Russell has said, “There’s no fever like gold fever.” By 1980 the share price of Lion Mines had gone from just 7 cents a share in 1975 to $380. Wharf Resources had risen from 40 cents a share to $560. A mania in gold is coming at some point in the future, the only question is how will it compare to that of the 1970s?
The KWN interview will Rick Rule will be available shortly and you can listen to it by CLICKING HERE.
© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
Eric King
