What a Sprott we’ve got! « Mining Blog

What a Sprott we’ve got!

3. November 2011,

One Canadian entrepreneur is said to be “forging an innovative path to changing the global banking landscape – for the better. And in the process he may build the world’s safest bank” [Money Morning, 3 November 2011]..

Eric Sprott, the billionaire resource investment “guru” behind the eponymous Sprott Inc, is apparently buying 51% of Ontario currency trader Continental Currency Exchange Corp. – aiming to make it into a financial institution that doesn’t offer loans. Instead it will take deposits from customers and and generate income by currency trading and by selling precious metals.

According to Money Morning, while private banks already simply take deposits, provide brokerage, custodial, and management services, and charge a commensurate fee, their minimum investments are $1 million and upwards “leaving most depositors with only standard banking options”.

As the EU and US get further and further embroiled in debt, and the spectre of another “crash” looms larger, a run on all the banks is something customers devoutly want to avoid.

But, “with Sprott’s model, you could rest easy knowing your money was backed by hard assets – and not being loaned out and leveraged”, says Money Morning.

Eric Sprott’s goal is “to one day allow customers to hold their deposits in gold- or silver-backed accounts. Checks could be written against those accounts to make purchases, which would then be debited, just like any other account”.

Whether this is truly innovative is open to question. In fact, in some respects, it seems to be a rturn to the “good old days” when exchangeable international currencies were backed by gold. The Chinese know a lot about that…

For more on Sprott’s investments in minng, please go to:

http://moneytometal.org/index.php/Sprott_Asset_Management

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