Eric Sprott - Governments Frightened of Panic Liquidation Event

"Today billionaire Eric Sprott told King World News that governments are desperately trying to avoid a “Liquidation Event.”  Sprott, who is Chairman of Sprott Asset Management, also warned the the market is liquidating, “irrespective of whether the powers that be want it or not.”  Here is what Sprott had to say about the unfolding crisis:  “Something has to be done because it’s totally out of control these days.  I mean you can’t have bank runs (like we’re seeing).  The one thing the powers that be, the central banks and the governments, have tried to do is to avoid what I call a ‘Liquidation Event.’”

“...and the world is going to start focusing back on precious metals.  We’ve had one Minsky moment in Greece and we’re going to have another one.  

As these Spanish yields and Italian yields move up here, it will become a Minsky moment in those countries as well.  I would suggest the same would be true for most major developed economies because the obligations of the state are way beyond the productive capacity of the remaining workers to fund those obligations.

I think on a worldwide basis, whether you’re talking Japan, England, the US, and all of Europe, people are going to realize that we have too much debt here.  At a certain interest rate cost, we can’t pay the interest.

That’s exactly what I would imagine should unfold here.  That’s what’s causing the bank runs.  That’s what’s causing interest rates on sovereigns to rise, and I think that’s what will tip over into a mass desire to get involved in precious metals..."

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