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Monthly Archives: November 2012
GoldMoney’s Andy Duncan spoke with Peter Schiff on Wednesday about the US fiscal cliff, world monetary policy, and gold as a safe haven.
“…as people worry about Japan or China or Europe, they look for a safe haven…When they talk about the risk-free assets, they talk about dollars…But in my perspective, the real risk off-trade is into gold…There’s a little volatility right now in gold, but I think if you look at a chart of gold over the last decade, that volatility really disappears and all you see is a pretty steady appreciation.”
Peter Schiff had a lengthy conversation with Lauren Lyster on Russia Today earlier this week. They discussed hidden inflation, the realities of our consumer economy, and the dollar as a reserve currency.
“People are underestimating around the world just how important cheap money is to our borrow and spend economy. And they’re overestimating the ability of the Fed to withdraw that liquidity and have the economy continue to grow on its own. It can’t. The growth that we’re having now is not legitimate growth. It is simply borrowed money that we’re spending and we’re counting that as economic growth.”
His interview begins at 2:45 in the video below.
Peter spoke on CNBC Asia yesterday about the US economy’s unhealthy dependence on foreign production:
“To the extent that the government gets more revenue, it should be consumption based. It should be taxing people for spending money, not earning money, not saving and investing their money…Right now the government is an enormous drain on the private sector…They’re preventing the private sector from producing the types of output that we need, so that we can produce goods to satisfy the demands of Americans and not rely on the rest of the world to supply us with that stuff on credit.”
As European banks scramble for more capital and China continues to hoard gold, more and more people are looking into precious metals investments. For once, most commentators seem to agree with Peter Schiff that the price of gold is still far from its peak. Jeff Clark of Casey Research explained the relationship between monetary policy and the price of gold in the November edition of Peter Schiff’s Gold Letter:
“There are plenty of long-term charts that show a connection between gold and various other forms of money (and credit). Most show that one outperforms until the other catches up. But let’s zero in on our current circumstances, namely the expansion of the US monetary base since the financial crisis hit in 2008.”
In the latest video of the Schiff Report, Peter explains why Black Friday and Cyber Monday are not healthy for the US economy, as so many people seem to believe. He then elaborates on how the markets have responded to the likelihood that Congress will continue to kick the can of deficit reduction down the road by avoiding the fiscal cliff.
“[The dollar] was rallying when we thought there might be a fiscal cliff. Now the dollar is selling off on the idea that we might avoid the cliff. Gold was kind of restrained when we though that we might go over the cliff. Now that more people think we might avoid the cliff, gold is starting to break out.”
Peter Schiff appeared today on CNBC’s Futures Now and spoke about how a deal to avoid the fiscal cliff will affect the gold price. He also discusses how since there is no limit to how low the value of fiat currencies can go, there is no predictable ceiling on the value of gold :
“…if we avoid the cliff, that is very bullish for the gold market, because it means that trillion dollar plus deficits will perpetuate. And these big deficits are what are undermining the dollar, because the Fed has to print money to finance them, and the more money they create…the higher the price of gold is going to go up.”
Peter Schiff tells Fox Business why the fiscal cliff scheduled for the new year is essential for real economic recovery. Not only that, but tax hikes need to be bigger if Obama wants to continue with his big government programs.
“Taxes are less damaging to the economy than the deficits that replace them. But the real problem is the spending…We’re going to pay the tax one way or another. Either we are going to pay it legitimately, or we are going to pay it through inflation…The increase in the price of everything you have to buy is simply going to be another tax in disguise.”
Gold had some interesting headlines this week that are worth reading. China has become the largest purchaser of gold in the world, Deutsche Bank predicts a big gold rally, and even US lawmakers recognize the inherent value of precious metals!
In a recent interview with Olly Ludwig on Seeking Alpha, Peter emphasized that the US dollar would go down and gold would go up no matter who won the presidency:
“Ludwig: As you take in this Obama victory, is there any asset allocation shift you think might be more sensible now than, say, before it was clear the president would win re-election?
Schiff: I think it’s the same asset allocation as before: You want to avoid the dollar; you want to avoid bonds; you want to be in precious metals; you want to be in resources; you want to invest abroad.
But the problem with the Obama victory is that he’s obviously the worse of the two candidates—the reason Obama was elected is because he’s promising free stuff. The fact that we would re-elect Obama, despite the fact that the economy is bad and getting worse, just shows how hopeless the situation is as far as America ever doing the right thing.”
Peter explains to some British CNBC hosts the reality of a dollar crisis.
“[The U.S.] economy is inherently more unstable. We depend on the charity of the rest of the world…the world has to keep lending us money despite the fact there is no way we can pay it back with legitimate money. We either have to default or we have to inflate. The real fiscal cliff is going to come when we run out of credit and we do face that crisis…Inflation is the number one concern of the average American…Inflation is already much higher than any reasonable central bank would tolerate…Buy gold, buy silver, buy something a central banker can’t create out of thin air!”