Eric Sprott On Gold

Eric Sprott talks to James Turk in Munich  

My view:

Eric Sprott is one of the few executives in which I have some degree of confidence. 

In this interview he outlines the problem of addressing a solvency issue in the banking system with liquidity from central banks. Governments, by continuing to provide back up for an insolvent banking system are simply taking on the risks of the banking sector.

The risk transfer is bound to end up in national insolvency in many western countries. 

Italy is likely to be the first large economy to succumb to this malaise. Spain is another likely candidate with France being close behind.

While there is no mechanism for national bankruptcy, the bond market determines how long the party will last.  For Italy, the party will soon be over as 10 year gov't bond yields are once again over 7% today.