Category Archives: Peter’s Commentaries

In his latest commentary, Peter Schiff explains the dynamics of a currency war and the disastrous consequences for the citizens of any country that participates in one. The Japanese are particularly intent on destroying the yen, though the United States remains in the lead with a dollar that no longer reflects any real fundamental value.

“While the world’s economies jockey one another for the lead in the currency devaluation derby, it’s worth considering the value of the prize they are seeking. They believe a weak currency opens the door to trade dominance, by allowing manufacturers to undercut foreign rivals, and to economic growth, by fighting deflation. On the other side of the coin, they believe a strong currency is an economic albatross that leads to stagnation. But the demonstrable effects of currency strength and weakness reveal the emptiness of their theory.

A country that attracts investment from abroad (through stable and fair governance, low taxes, a growing economy, and a productive labor force) and produces goods that are in demand on the global stage will generally see a rising currency. In essence, this is the reward for a job well done. Strong currencies then help nations stay strong by conferring greater purchasing power to its citizens and businesses, which keeps input costs low, thereby enhancing international competitiveness. Strong currencies also encourage savings, keep real interest rates low, lower capital costs, and allow for greater productivity and higher real wages.”

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In his May Gold Letter, Peter Schiff dissects the gold market’s response to the sale of Cypriot gold reserves as part of an EU bailout plan. Contrary to mainstream opinions, Peter maintains that the movement of gold and wealth from West to East, from debtors to creditors, is a very bullish factor for gold long-term. The May Gold Letter also has an incisive commentary by Bud Conrad at Casey Research comparing paper and physical gold markets, as well as useful information about Euro Pacific Precious Metals international shipping. Enjoy!

“The most puzzling part of the investment business is seeing how the vast and largely economically illiterate masses interpret any given piece of news. Take the recent gold selloff: many large players were motivated to sell by news that Cyprus will have to liquidate its gold stockpiles to pay off acute debt obligations. But just a moment’s reflection shows this reaction to be knee-jerk.

The real story behind Cyprus’ deal has much more profound ramifications – and they are positive for gold.

The reaction to Cyprus’ forced gold sale re-affirms my belief that most Western investors remain in a state of extreme anxiety. This leaves no room for the kind of nuanced analysis that leads to wise long-term investment decisions.”

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In his latest commentary, Peter Schiff encourages gold bears to stay focused on the big picture: gold is moving from indebted nations to emerging markets that are reducing their dependence on US dollar reserves.

“In the opening years of the last decade, most mainstream investors sat on the sidelines while “tin hat” goldbugs rode the bull market from below $300 to just over $1,000 per ounce. But following the 2008 financial crisis, when gold held up better than stocks during the decline and made new record highs long before the Dow Jones fully recovered, Wall Street finally sat up and took notice. The new devotees helped to push gold to nearly $1,900 by September of 2011. For the next year and a half it held relatively steady, trading mostly between $1,500 and $1,800 as more mainstream investors caught the fever. But now it appears that the brief love affair is at an end. It was really only a flirtation as the two were never a good match in the first place. Gold’s new suitors never understood the fundamental case for gold and now they are turning their affection back to their true love: U.S. equities.

This is creating a brutal season for gold investors. The metal is in the midst of its largest pull back in nearly five years, and as the selling has gathered momentum powerful Wall Street voices as diverse as Goldman Sachs and George Soros have declared the end of its nearly fifteen year run of dominance.”

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Peter Schiff’s April Gold Letter came out today with a piece by Bun Conrad on the US bond bubble, the latest Lampoon the System comic, and a detailed look at the exciting Valcambi gold CombiBar. In this month’s commentary, Peter dissects the Cypriot banking crisis to reveal its broader implications for the world:

“There are many signs that the Cypriot government’s desperate attempts to keep its system afloat – capricious bailout dealing, an extended bank holiday, and widespread capital controls – have deeply shaken confidence in the entire Western financial system.

Just a few days ago, the Financial Times covered the post-Cyprus spike of interest and inflows into my 100% reserve Euro Pacific Bank. (EP Bank is based in the Caribbean and due to financial regulations, not available to US citizens.)

We’re also seeing the rise of the ‘unbanking’ movement, whether through barter associations, Bitcoin, or precious metals.”

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