“Holy Jeepers,” Sprott to Buy $1.5B of Silver Bullion!

The silver price could explode higher in coming months.

As the silver and gold price predictably fade ahead of option expiration, JP Morgan’s bullion manipulation scheme could be headed for unprecedented problems, not from the record purchases of gold and silver from the Chinese, Indians or Russians, but from one Canadian billionaire.

Canadian-based Eric Sprott Management CEO Eric Sprott filed a follow up prospectus for the purchase of an additional $1.5 billion of silver bullion to cover expected demand for the company’s exchange traded fund, PSLV.  Sign-up for my 100% FREE Alerts

Combined with the recent decline in the PSLV premium to spot silver to 14 percent from the typical 20 percent, along with Sprott’s reported sale of some of its holdings of PSLV at the rich premium, it appears a familiar hallmark of a gigantic $580 million silver bullion purchase in December of last year emerges once again.  Since demand for silver products at Sprott remain brisk, it should come as no surprise to the silver world that Sprott needs more silver.

Yet, only two Web sites mention the breaking news, The Globe and Mail and bullion market reporter Harvey Organ, HarveyOrgan.blogspot.com.  Don’t expect Eric Sprott to herald the milestone purchase; he’s trying to avoid investors front running the purchase.

“Since Sprott filed its prospectus last Friday, PSLV units have come down 12 percent, while the price of silver has dropped only 6 percent,” stated Canada’s daily newspaper, The Globe and Mail, on Nov. 18.  “Whether or not the new filing is the root cause of the difference doesn’t affect Mr. Sprott much. He has been selling his PSLV units for most of the year (as documented by kid dynamite.)”

Because Sprott today represents ½ the size of the Hunt brothers wallet and their attempt to corner the silver market in 1979-80, nimble investors have taken advantage of the bulky Sprott in the past by front running his purchases, as his size and legal entity requires him to file with Canadian regulators—an issue he laments of during his interviews.

But for silver investors, the regulation could be a boon to the silver price, as the last time Sprott needed substantial inventory, the silver price soared 177 percent, though Sprott’s purchase cannot directly be proven to be responsible for all of that monstrous move.

However . . . more than four years earlier, in April 2006, prior to the launch of the NYSE version of PSLV, the Barclay’s iShares Silver Trust SLV, spot silver at the COMEX more than doubled at its price peak leading up to the launch of the SLV to $15 from $7.50, as late as September 2005—a double within six months, or a 200 percent ARR.

Moreover, further evidence of a coming silver price mega pop may be gleaned from the exciting silver rally of July 2010 to April 2011.  That monstrous rally could easily be rivaled soon, as Sprott apparently gears up for a whale of a purchase, $1.5 billion of silver bullion—a nearly three times last year’s $580 million purchase and coincidental 177 percent explosion of the silver price.

“Today the Globe and Mail announced Eric has filed a short form follow up Prospectus for a billion five physical silver,” respected bullion market blogger Harvey Organ wrote in a Nov. 21 post.  “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.”

Considering the fundamentals underlying the raging bull market in silver and the confident predictions of, in some cases, another double in the silver price, at least, by spring from industry peer James Turk of Goldmoney, as well as other hard money heavyweights, Ben Davies of Hinde Capital, Jim Rickards of Tangent Capital Markets, Euro Pacific Capital CEO Peter Schiff and QB Asset Management Co-founder Paul Brodsky, it appears the industry insiders to the tiny world of silver anticipated Sprott’s need to replenish—and when Sprott needs silver look out.

13 thoughts on ““Holy Jeepers,” Sprott to Buy $1.5B of Silver Bullion!

  1. Sprott is not buying $1.5B in silver (doing a $1.5B secondary). he filed a $1.5B shelf.  There is a huge difference.

    “Under the shelf prospectus, the Trust may offer from time to time during
    the 25 month period after a final receipt is received for the
    prospectus up to US$1.5 billion of units of the Trust.”

    If you think he’s going to do this all at once, I have a bridge to sell you.

    • Yah but I wonder if Sprott wants to brake the silver cartel you got to watch this guy Sprot.  very sneeky i think the guy could be working with the chinese

      • that is EXACTLY what I want you to do – after PSLV does a small secondary offering – one that’s not even close to $1.5B -  observe that I was absolutely right and that Harvey was absolutely wrong.  Please.  Do that.  to be clear:  PSLV will not do a $1.5B secondary offering.  That is my statement.

  2. Go silver !!!! We all know Sprott will support the silver market big time with his Bunkee Huntee Bucks.  I guess Eric is bullish on silver.  :)

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  7. Kid Dynamite has a point.  Sprott will likely not go all in, but will pace his purchases.  Can you imagine the panic that would set in if he tried to take 40,000,000 + ounces at once?  That would definitely clear the COMEX, the price would go ballistic, and although it would be great in the short term, there would be only a short, sharp peak and it would take years to settle.  This happened in the early 1980′s, and a lot of the market scurried away for almost a decade.  I think Sprott is a bit more careful than the Hunt Bros.

    • “Can you imagine the panic that would set in if he tried to take 40,000,000 + ounces at once?”  
      Precisely.  Let those scum bag JP Morgan psychos wonder a little.

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