Eric Sprott states that governments are scared of market sell and panic liquidation

After Lehman’s failure and the market crash back in 2009, governments around the world are worried that it could happen again and are doing everything they can to avoid it. Fannie, AIG and GM of course were taken over to prevent and avoid this kind of panic liquidation event. Still Eric believes that the market is continuing liquidating no matter what the governments and powers want them to do. Eric Sprott believes that the process is getting bigger and forming itself into a tsunami…

This information was taken from a recent interview by King World News. Feel free to read the interview here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/5/18_Eric_Sprott_-_Governments_Frightened_of_Panic_Liquidation_Event.html

Eric Sprott is a Canadian hedge fund manager and founder of Sprott Asset Management. He became a billionaire on paper with the initial public offering of Sprott Inc., the parent of his Sprott Asset Management firm.

Eric Sprott on derivatives and problems

Eric Sprott of Sprott Asset Management is worried what could happen during market declines when derivatives trigger. He said that there is no underlying wealth creation of these things. There is always a seller and a buyer. The thing is which could explode if the contract must be paid off.

What is strange is that most participants in the market believes they are making bugs of this in and out trading. The reality is different. Yes there are some people draining a lot of money out of these derivatives but its on the back of the mass.
The worrisome thing is that the derivatives market is growing very rapidly. We have no what it could cause. If there is not enough money around and a big counterparty fails , who knows what could happen.

Eric Sprott is a Canadian hedge fund manager and founder of Sprott Asset Management. He became a billionaire on paper with the initial public offering of Sprott Inc., the parent of his Sprott Asset Management firm.