An Interview with Randy Smallwood
By Kevin Michael Grace
Silver Wheaton TSX:SLW President/CEO Randy Smallwood was interviewed August 8.
Q: The price ratio of gold to silver per ounce is now almost 58 to 1, which is historically high. Do you think the ratio will remain as high as this or change? If so, in what direction?
A: Yeah, I think it is historically high, and I do think it will come back to the norm. Especially considering most silver produced comes from base-metal operations, and there’s not a lot of good copper, lead or zinc projects out there. There are a number of factors that will pull the silver-gold ratio back to what is more normal.
Q: So you would expect the price of silver to rise?
A: To outperform, yes.
Q: Do you have any parameters?
A: I think the rest of 2012 will be pretty flat, as the Euro continues to have its challenges and with the election in the US. We’re looking at some QE3, some quantitative easing.
Q: I was going to ask you about that. There is a very strong feeling amongst a lot of people that, given that the recovery in the US hasn’t happened, QE3 is inevitable. What do you think?
A: I don’t think it will happen before the election. That’s why I think 2013 will be a very exciting time to be in precious metals. QE3 is just another phrase for devaluing the currency by printing more dollars. It’s the easiest, and it’s the tried and true method of dealing with debt and deficits: devalue the currency to the point where you weaken yourself against your competitor—so much so that you become much more competitive. I’m confident we’re going to get increased commodity prices as currencies get devalued, especially the US dollar.