In an article published yesterday – click here – Eric Sprott is quoted as predicting “gold prices will more than double over the next few years as the U.S enters a full-blown depression”.  Mr. Sprott, a highly successful and well-regarded investment manager, is chairman of Toronto-based Sprott Asset Management Inc., which manages $4.5 billion. He gained tremendous credibility after his March 2008 call that the world was suffering through a “systemic financial meltdown”.

Among other things, Mr. Sprott is quoted as saying:  “The United States could be faced with a growing number of financial catastrophes over the next year - culminating with the failure of a U.S. Treasury auction - and gold could soar well over $2,000 an ounce as a result”, and “The (U.S. economy) trend is down, and there’s not one signpost that says it’s changing yet.  We’ll stand by to wait to see those, and until it does, you have to assume it gets worse.”  The article also says:  “Perhaps the most disturbing aspect of Sprott’s latest assertion is the possibility that a U.S. Treasury auction will fail. That outcome will have a “catastrophic” impact”.  The final quote attributed to Mr. Sprott is:  “I believe no matter what environment you’re in - deflation or inflation - people will run to gold, gold is proving exactly what we all would have expected, that in almost any environment, it’s a go-to asset.”

I strongly recommend you click here and read the entire article.

As regular readers of this Blog know, I believe gold prices will trend upward broadly for the same reasons as are attributed to Mr. Sprott. When I researched gold last fall (click here to see Blog Category ‘Gold as an Investment’ for an 11 Post Series on gold) virtually every book and article I read dealt with gold only as an inflation hedge. In the 9th Post in the Blog Series – click here – I concluded it was both.  I am particularly interested in the number of commentators who now are discussing gold as a ‘safe haven investment’ in both inflationary and deflationary times.

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