- Eric Sprott – The Current Financial System Will End In Ruin!
Today billionaire Eric Sprott told King World News that the current financial system will end in ruin. Sprott also stated, “It’s unfortunate for those of us in the precious metals sector that, in essence, we are fighting the Fed all of the time … but I have no doubt that we will win.” This is the first in a series of interviews with Sprott that will be released today which reveals, despite mainstream propaganda, the reality of the increasingly desperate situation Western central planners face. Below is what Sprott, who is Chairman of Sprott Asset Management, had to say.
Eric King: “Dr. Paul Craig Roberts (Former Assistant Secretary of the US Treasury – interview to be released in a couple of hours on KWN) spoke with King World News earlier today about the fact that the Fed has produced a perfect storm which could consume the US and perhaps the entire Western world. What’s in front of us, the financial collapse, can you talk about how you see that playing out?
Sprott: “My concern early on about the financial system was leverage in the banking system, that the banks were levered 20/1. By interpretation this means that for every dollar of assets there is 5 cents of capital, and if that dollar goes down by 5 cents there is no capital.
That’s before we even get into the derivatives which are out there, and would take that ratio from 20/1 to probably 50/1 or even higher, which means you can only lose 2% of your money before there is no capital. And I think it’s this huge derivatives book that is just going to blow up one day. There is $1 quadrillion of derivatives out there, which is a number that bears no relationship to world GDP….