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Rule:  “With regards to the big picture, the truth is that nothing has changed since gold and silver peaked in 2011 except the price.  So the prices are a lot cheaper, but if the set of circumstances that determines value is the same, and the price is less, that’s not called a bear market, it’s called a sale. 

And sales are good for people who want to get wealthy over time because they can reduce their average cost of the thing that to them constitutes value, i.e. gold or silver....

Continue reading the Rick Rule interview below...


To hear what billionaire Eric Sprott & Rick Rule are doing with their own

money and which $10 billion company John Embry &

Dr. Marc Faber oversee click on the logo:

“Of more immediate interest to me, Eric, is the action in the junior mining stocks.  I have a couple of comments that I think your readers need to keep in mind:  The first thing is of course that the junior mining shares are doing a lot more volume in the last three or four weeks than they have in the past. 

Some people are therefore seeing the nascent signs of a rally.  I don’t think we are seeing a real rally yet and here is the reason why:  Certainly the outlook for gold and silver stocks is better than it was in the past, but the unmet financing needs on the part of issuers is such that that any substantial uptick in volume that we see this summer will without a doubt be quelled by the issuance of stock from companies.

The unmet needs at the company level are so high that with regards to this mini-rally, the issuers will have the ability to overwhelm the rally by issuing new shares to raise desperately needed cash. 

This brings me to my second point, Eric:  For quite some time companies have not been willing to give fair private placement terms.  For every one of your readers who are private placement investors, just in the last two weeks I have seen the first signs that the issuers have been willing to take capital on reasonable, as opposed to unreasonable, terms.

It was my suspicion, Eric, that the entrepreneurs behind the gold and silver mining shares are incredible optimists.  They came to believe that the terms and conditions they enjoyed at stronger metals prices were normal conditions, as opposed to optimal conditions.

They took those expectations into 2012 and 2013 in what turned out to be much less favorable conditions for them.  But just in the last two weeks I have seen “A” rated management teams, not “C” rated management teams, come to market with private placement deals that reflected both the values inherent in their companies, and in fact the depressed market conditions that we are seeing today.

In other words, the playing field has begun to be leveled between the issuers and the check writers, and that will be healthier on a go-forward basis.”

Rule also added:  “Of particular interest on the bull side, Eric, is we are continuing to see vast amounts of private equity money, sovereign wealth money, and state-sponsored money.  In other words, money which has not been in the gold and silver share market before.

While there is certainly not very much institutional money to speak of, and while the usual suspects are not providing cash to brokered financing, what is of interest to me is the incredible amount of money that we are seeing in the sector from sources that are relatively new to the sector.  And I think that is very healthy going forward as well.”

© 2013 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.

The audio interviews with Eric Sprott, Egon von Greyerz, David Stockman, Gerald Celente, Andrew Maguire, John Mauldin, Dr. Paul Craig Roberts, Art Cashin, William Kaye, Marc Faber and Dr. Benn Steil are available now.  Also, other outstanding recent KWN interviews include Jim Grant and Felix Zulauf to listen CLICKING HERE.

Eric King

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