Category Archives: Peter’s Commentaries

Gold’s Doing Fine, but the Dollar Is Being Propped Up (Video)

Peter Schiff appeared on CNBC’s Futures Now this afternoon to share his expectations for the price of gold following the Federal Reserve’s policy statement scheduled for later today. Peter also commented on what he expects from Q2 GDP numbers and why he thinks the US dollar isn’t nearly as healthy as everyone thinks. Finally, Peter emphasized that gold has had bad press in 2014, even though it has out-performed the stock market with an 8% rise in the first six months of the year.

“Gold has gone up every year but one since the year 2000. So if you’ve been calling for a rise in the price of the gold, you’ve been right every year except one. That’s not a broken record, that’s just understanding what’s going on and predicting a higher gold price. It’s the people that have been calling for gold’s demise every single year who don’t understand the fundamentals… No market goes up every single year… I know what’s driving the trend and that’s the central banks, particularly the Federal Reserve.”

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Rick Santelli vs. Conventional Ignorance (Video)

You may have seen the explosive debate between Rick Santelli and Steve Liesman on CNBC’s Halftime Report this week. Santelli admittedly “blew a gasket” when he began to challenge the conventional “wisdom” that the Federal Reserve has actually helped the economy with its quantitative easing. So was Santelli completely off-base? Has the Fed’s stimulus been successful? Absolutely not. In a longer segment on his radio show this week, Peter Schiff reviewed Santelli’s points and defended his argument that the Fed’s stimulus is actually laying the groundwork for much worse economic woes.

“When the collapse finally comes, they’re going to say, ‘Nobody could have seen this coming!’ … They’re not going to realize that this phony recovery and the economic monetary policy behind it is going to be the reason for the next crisis. But because it takes years to unfold, they can’t connect the dots, and they think that anybody who saw it early and warned about it is just a stopped clock.”

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Gold Videocast: Gold’s 2014 Half-Time Report

In the first edition of the new Gold Videocast, Peter delivers his verdict on the gold market for the first half of 2014, analyzes Janet Yellen’s performance so far as Fed Chair, and makes some contrarian forecasts for the rest of the year.

1:00 – Gold’s rise has confounded Wall Street banks that advised their clients to sell in expectation of a big correction.

1:40 – Even though the financial media has focused on the Dow breaking 17,000, gold has actually outperformed the Dow this year.

2:10 – Mainstream forecasters have bought into the narrative of a genuine US economic recovery and the ability of the Fed to effectively withdraw its monetary stimulus. In fact, the economy is not recovering and will relapse into recession, perhaps beginning in the second half of 2014.

3:17 – The price of gold is putting in a bottom, supported by the mining stocks. They led the market down in 2013, and are now leading it up.

4:15 – There is going to be a short squeeze as gold sellers try to buy back their positions when they realize the economy is not recovering.

5:30 – Even though the Fed’s own inflation measure has passed its target of 2%, Janet Yellen continues to claim inflation is under control.

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The Perfect Storm for Gold (Audio)

Chris Waltzek interviewed Peter Schiff on GoldSeek Radio last week. They began by discussing how the European Central Bank’s interest rate cut will influence the price of gold. They moved on to address the rising cost of living, Asian gold consumption, technical indicators of gold’s bottom, gold repatriation, buying precious metals with bitcoin, and much more.

“I think going into the second half of the year, people are going to be surprised by how weak the economy is… Yellen’s going to come back screaming for more QE. The gold market has to take off sometime between now and then… I think the problem that the traders are going to have is buying back the gold they sold… A lot of the gold that was dumped into the marketplace since the middle of last year is now very deep in some Chinese vault… It’s not coming back to the market. The people who bought gold at $1,300 or $1,400 – they ain’t selling it. They bought it to keep it, not to trade it.”

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Debt Is No Salvation

In his latest commentary, Peter Schiff addresses the ridiculous claim that America was built on consumer debt, as put forth by Steve Liesman, senior economic reporter for CNBC. Peter explains why a healthy economy is based upon savings and production, not debt. While most of the Western world seems intent on accumulating more debt, wise investors are protecting their economic futures with savings in physical gold and silver.

“Thus far 2014 has been a fertile year for really stupid economic ideas. But of all the half-baked doozies that have come down the pike (the perils of “lowflation,” Thomas Piketty’s claims about capitalism creating poverty, and President Obama’s “pay as you earn” solution to student debt), an idea hatched last week by CNBC’s reliably ridiculous Steve Liesman may in fact take the cake. In diagnosing the causes of the continued malaise in the U.S. economy he explained, “the problem is that consumers are not taking on enough debt.” And that “historically the U.S. economy has been built on consumer credit.” His conclusion: Consumers must be encouraged to borrow more money and spend it. Given that Liesman is CNBC’s senior economic reporter, I would hate to see the ideas the junior people come up with.

Before I get into the historical amnesia needed to make such a statement, we first have to confront the question of causation. Just as most economists believe that falling prices cause recession, rather than the other way around, Liesman believes that economic growth is created when people tap into society’s savings in order to buy consumer goods that they could not otherwise afford. But consumption does not create growth. Increasing productive output allows for greater consumption. Something needs to be produced before it can be consumed.”

Read the Full Commentary Here

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Was America Built on Debt? (Video)

Earlier this week, CNBC’s Steve Liesman revealed how backwards mainstream economic thinking is when he made the argument that America needs more consumer debt to have a healthy economy. Contrary to common sense and generally accepted knowledge, Liesman argued that America was built on debt and that consumers need to be taking on more of it. Peter Schiff wasn’t going to let these economic fallacies slide and tore into Liesman’s arguments on his radio show yesterday.

“Consumer credit was the cancer in the American economy… The smart thing to do, if you’re worried about the future… You should be paying off your debts. You should be creating a cushion. What about saving for a rainy day? Here you’ve got Steve Liesman saying, ‘No, no, go out and borrow for a rainy day.’ … You can’t borrow for a rainy day, because then you’re going to get soaked! This is asinine.”

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The Platinum Supply Shock

Peter Schiff's Gold Letter

Say farewell to the Gold Letter! It will be replaced next month with Peter Schiff’s Gold Videocast. In this final edition, Peter reviews the tumultuous news surrounding the platinum group metals market and why we can expect a very strong year for platinum. If you’ve already invested in physical gold and silver, now could be the perfect time to further diversify your precious metals holdings. You’ll also find a guest commentary from Detlev Schlichter addressing the phantom menace of “very low inflation” in the eurozone. Lampoon the System’s June comic commiserates with the bankers who are finding it harder and harder to rig the gold and silver markets nowadays. Enjoy!

“Even investors who typically eschew precious metals have been hard-pressed to ignore the platinum industry this year. The longest strike in South African history paired with surging Asian demand is set to push the metal back into a physical deficit in 2014 – and could have repercussions for years to come. While gold remains the most conservative choice for saving, the “industrial precious metal” platinum is a compelling investment for those, like me, who are bullish on global net economic growth.”

Read the Full Gold Letter Here

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Phony Economy Needs to Collapse (Video)

Peter Schiff spoke with Hedgeye TV CEO Keith McCullough this week on “Real Conversations”. Peter discussed his debate with Nouriel Roubini from last week, explaining why Keynesian economists like Roubini are dead wrong when they argue that deflation is bad for the economy. Peter also explained his precious metals strategy based upon what he expects the government to do, not what he hopes it will do. This is an excellent, relaxed introduction to Peter’s investment philosophy.

“If the government acted responsibly, that would counter my [gold] investing thesis. But I’m investing the way I’m investing because I’m sure the government is not going to be responsible. They’re going to be reckless, they’re going to keep on printing money until we have a currency crisis. And so I’m prepared for what I think is going to happen…”

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The Silver Fix Is Dead. So What?

By now you’ve probably heard the biggest precious metals news of the week – the London Silver Fix will be shutting down in August. You can read all about it here.

It was just the beginning of May when Euro Pacific Precious Metals Chairman Peter Schiff added his voice to the conversation on gold price manipulation. This latest news about the Silver Fix makes Peter’s timing almost uncanny.

For years, Peter had remained above the conspiracy fray, because the possibility of price fixing does not change his fundamental approach to gold and silver investment. But news of gold manipulation has hit the mainstream hard in 2014, making it impossible to ignore.

Apparently the company behind the London Fix has reached a similar conclusion. It can no longer ignore ongoing lawsuits against banks involved in the LIBOR scandal and the London Gold Fix. Perhaps they thought it best to get out of the benchmark business before the Silver Fix became the next victim.

No one yet knows what will replace the London Silver Fix, but this is (unfortunately) a great opportunity for governments to become more involved in the regulation of precious metals markets. Nevertheless, physical gold and silver investors should not be deterred by this latest news out of London. The fundamental safe-haven value of silver will not disappear simply because some big bankers stop telling the world what they think the price should be.

You can read Peter Schiff’s full opinion on gold and silver price manipulation in his latest Gold Letter, available here:

The Gold Price Is Fixed. So What?

silver bar

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And the Band Played On

Peter Schiff’s new commentary from Euro Pacific Capital looks under the surface of the US economic data released in the past week. It should come as no surprise that the mainstream media has focused on the positive numbers that support the narrative of a US recovery, while quietly brushing any contradictory figures under the rug.

“After three months of consistently disappointing jobs numbers, the markets were as keyed up for a good jobs report as a long suffering sailor awaiting shore leave in a tropical port. The just released April jobs report, which claimed that 288,000 jobs were created in the U.S. during the month, provided the apparent good news. However, you don’t have to go too far beneath the surface to find some troubling trends within the data. But even this minor excavation was too much for the media cheerleaders and Wall Street pitchmen to handle.

The dominant narrative held that the prior reports had been so weak because the unusually cold weather (the 10th snowiest in the past 50 years) had prevented consumers from venturing outside to make purchases or employers from hiring workers. Time and again the winter was blamed for the disappointing jobs reports that came in over the 1st quarter. As a result, the consensus of economists predicted a rebound in April with 215,000 net new non-farm jobs. The 288,000 figure that greeted the markets last week – which helped bring down the unemployment rate to a post-crash low of just 6.3% – confirmed the weather hypothesis.

In reality, the desperation in which these tenuous data straws were grasped is a testament to our chronic economic weakness…”

Read the Full Commentary Here

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