Having recently traveled to mines in Australia and New Zealand, longtime gold and silver bull Eric Sprott was at his vacation rental in San Jose, Costa Rica drinking a beer when Forbes caught up with him in late January. Silver had just hit an all-time high of $100 an ounce but he was nonplussed.

“Both the gold and silver stocks have massively underperformed,” said Sprott, 81. “ I think the prices are going much higher, quite frankly. I think silver can easily go to $200, even $300. I think gold could go to $10,000.”

Days later, when silver had plunged by a third to $76 and gold dropped below $5,000, Sprott was equally unmoved, noting that such volatility is to be expected, as conflicts flare across the globe and people scramble for safer investments. In his view, the swings reflect a market that’s searching for direction amid global uncertainty.

That might be one reason why lots of new investors have scooped up gold and silver, but Sprott thinks there was another reason behind the insane rise in metals prices – irresponsible spending by central governments. It’s a song that has been sung by “sound money” pundits for decades. The theory goes that high levels of spending have eroded consumer trust in fiat currencies and driven more people to tangible assets like precious metals that are seen as stores of value. "I think all of us know that governments have been quite irresponsible in terms of the financial system and the printing of money and the overspending. Every government, whether it's Canadian, US, UK, Japan, you name it, they've all overspent,” says Sprott. “They just think that if you can print money, let's use the printer, and so we overspend."

It’s that conviction that has led him not only to hoard bullion, but (more lucratively) to scoop up stakes in more than 200 silver and gold companies. His deep industry knowledge has allowed him to target small, lesser-known companies with what he believes are undervalued assets. “I think of deposits,” says Sprott. “I’m not a geologist– I know nothing about rocks, but I know about numbers...if the reward's a big reward I........

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