central banks

Marc Faber Warns Of Massive Deflation In Asset Prices, Shares Buy Recommendations

Monday, Swiss-born investment advisor/money manager Marc Faber was on the phone with Trish Regan of the FOX Business Network show The Intelligence Report. The publisher of the monthly investment newsletter The Gloom Boom & Doom Report warned viewers that:

Everything is in a bubble.

Dr. Faber subsequently predicted massive deflation in asset prices was coming. When Regan asked him what he would recommend people buy, the man famous for advising clients to get out of the U.S. stock market one week before the October 1987 crash offered up:

I tell you it will be very difficult to hide, because even bank deposits may not be safe. But, relatively inexpensive are gold mining shares, silver mining shares, and physical gold and silver. But you have to hold it physically and preferably outside the U.S.

(Editor’s note: Bold added for emphasis)

Regan asked Faber why outside the United States. He replied:

Because in the U.S., and even in Europe and Switzerland, there is a threat that one day when things really will go bad, central bankers will blame the gold holders for the disaster, and they will say, “We’ll have to take the gold away,” and so forth. This is less likely to happen in Asia.

(Editor’s note: Bold added for emphasis)


“Marc Faber warns of ‘colossal systemic risk’ in markets”
FOX Business Network Video

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)

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Marc Faber Warns ‘Have At Least Some Money In Precious Metals’ And Store It Overseas

Swiss-born investment advisor/money manager Marc Faber was just interviewed by Simon Black over at Sovereign Man, a provider of global financial intelligence and solutions. The publisher of the monthly investment newsletter The Gloom Boom & Doom Report talked about the need of investors to be in precious metals, and where to store it. In the exchange that was uploaded to the Sovereign Man website on May 8, Dr. Faber told listeners:

The only currencies that I regard as significantly undervalued at the present time are the precious metals- silver, gold, platinum, palladium. And I would advise any investor to have at least some money in precious metals. The problem is, as a very informed reader of mine said, if precious metals really one day work out- in other words, gold goes to $10,000 an ounce- you can be sure that the government will take it away from you. That is a threat.

As you know in the world- since you are running an organization Sovereign Man- there is a move to curtail freedom, and there is a move to abolish paper money… If I were your listeners and I held gold, if paper money is abandoned or banished, about the last thing you want to hold is gold because it will be taken away as well. So you better close down your accounts at Citi, in my view. Put your money somewhere, anywhere in the world, except in U.S. banks.

Back in February, Faber warned in a King World News interview:

The central banks and the governments will try to take the gold away from ordinary people, you understand? I think they know that this would be one solution for the global financial system to peg it again to some extent on gold. But before they do that, I think they’ll go after you and me and say, “Okay, parasites of society that do not spend but keep their money in gold that is unproductive- let us take it away.” That is the threat. I’m not worried about the price of gold. What do I care if the gold price is at $1,000 or $500 or $1,500 or $5,000? What I care is that I can keep ownership of gold.

You can listen to that Sovereign Man interview in its entirety on their website here (precious metals discussion starts at 13:59).

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Marc Faber Recommends Equities, Real Estate, Precious Metals To Counter Stock Market Plummet

Swiss-born investment advisor/money manager Marc Faber was on the CNBC TV show Trading Nation yesterday. Speaking by phone, the publisher of the monthly investment newsletter The Gloom Boom & Doom Report reminded viewers of the stock market correction he’s been predicting for some time now. Dr. Faber said:

I think that the market is in a position where’s it’s not just going to be a 10 percent correction- maybe first goes up a bit further. But when it comes it will be 30 percent or 40 percent minimum.

Famous for advising clients to get out of the U.S. stock market one week before the October 1987 crash and for predicting the 2008 global financial crisis, Faber added:

I’m not short the market yet.

Nevertheless, it sounds like the “crash prophet” is prepared. “Dr. Doom” shared with viewers:

I don’t want to be 100 percent in cash for the simple reason that I don’t trust governments, and I don’t trust banks. So I want to own some equities, I want to own some properties, and I want to own some precious metals. And when we talk about stocks, the only group that stands out as great value around the world are gold mining shares.

Faber went on to talk about gold stocks more in-depth.


“Marc Faber talks protection strategies”
CNBC Video

Later on in the show, Dr. Faber added:

If I look at the ignorance of central bankers, and their recklessness of printing money from the U.S. to the ECB to Japan to the Bank of England, I want to own some precious metals.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Marc Faber Doubts Fed Rate Hike In 2015, Buys Crude Oil Stocks

Swiss-born investment advisor/money manager Marc Faber was recently interviewed by Latha Venkatesh and Sonia Shenoy at CNBC-TV18 (India). The publisher of the monthly investment newsletter The Gloom Boom & Doom Report talked about a number of financial/investing topics- including a potential rate hike soon by the Federal Reserve. From a transcript of the discussion published on the Moneycontrol.com website on April 13:

Sonia: So, you are not expecting a rate hike from the US Fed this year?

A: What I said is in my view the Fed will not increase rates this year unless there is really a very sharp pick up in the economy or there is a colossal pot-hole developing in stocks. But otherwise I doubt it because the dollar has been strong. Okay, it may weaken somewhat, but I do not think it will collapse against the euro and against the yen and the British pound and so forth. So, the dollar is relatively strong. The economy in the US, the latest say, ten indicators that came out were all on the weak side. And under these conditions I doubt the Fed will increase rates. But that is an academic debate. What is important is I think the Feds and other Western Central Bankers will keep interest rates at a very low level for a very long time and will try to keep interest rates in real terms negative. In other words below the rates of cost of living increases.

(Editor’s note: Bold added for emphasis)

Dr. Faber shares the belief of fellow “crash prophet” Peter Schiff concerning an increase in the federal funds rate in the near future. However, Schiff has added that if the U.S. central bank does raise interest rates anytime soon, it will be miniscule.

Faber, who correctly forecast the rise of commodities, emerging markets, and China last decade, shares something else with a different “prophet.” From the transcript:

Latha: Yes, I note your exasperation. Therefore let me come to another asset class: commodities. Do you think they have bottomed or is it that there would be a long trough for this asset class?

A: We have to distinguish because the price of oil has very little to do with the price of orange juice or coffee. So each commodity has its own price dynamics driven by global production and global demand. Now industrial commodities have performed miserably along with emerging markets over the last couple of years because the demand was slowing down especially from China. So, you have prices of iron ore and steel and copper and oil that have collapsed. I happen to think that at this level a lot of commodities are reasonably priced, does not mean they will go up right away. But they come now into a buying rate and I have been buying some oil stocks recently.

(Editor’s note: Bold added for emphasis)

Last Sunday, I noted Yale economics professor Robert Shiller, who spotted the U.S. housing bubble last decade and the dot-com bubble a few years earlier, had purchased a crude oil ETF.

You can read the transcript of the entire exchange between Dr. Faber and CNBC-TV18 on Moneycontrol.com here.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Jim Rogers: ‘When This Ends, It’s Going To Be Much Worse Than The Last Time We Had A Big Collapse In The Financial Markets’

Investor Jim Rogers appeared on Bloomberg TV India last Friday. Anupriya Nair asked the CEO of Rogers Holdings about a number of financial/investing topics, including his outlook for emerging markets. The co-founder of the legendary Quantum Fund issued the following warning to viewers. From their exchange:

NAIR: Jim, you’re an avid traveler as well. We here in the emerging markets are bystanders and watchers of what’s happening in the developing world. Should we be concerned though with the kind of movements we’re seeing in global currency and commodity markets. Is this the making of a perfect storm for emerging markets?
ROGERS: Oh yes. We’re going to have serious problems. America’s stock markets have been going up, almost straight up, for six years. That’s very unusual. At the same time, debt has been going higher and higher and higher all over the world, and central banks have been printing a lot of money. That is not normal. When this ends, it’s going to be much worse than the last time we had a big collapse in the financial markets. It’s going to be much, much worse. So yeah, we all should be concerned. We’re getting some signals now, in the emerging markets- markets which borrowed a lot of money. No, it’s going to be a mess the next time we have a financial crisis. And we will have financial crises- we’ve been having them since the beginning of time. If anybody tells you there’s no more financial crises, run the other way.

The entire interview can be viewed on the Bloomberg TV India website here. That bit about the next financial crisis starts at 5:21.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Peter Schiff: What’s Suppressing The Price Of Gold

The second installment of Peter Schiff’s Gold Videocast for 2015 is out on YouTube. And Euro Pacific Capital’s Schiff shared his thoughts about what’s been suppressing the price of gold these days. He told viewers:

ObamaCare forces employers to provide insurance for full-time employees. As a result, employers are hiring more part-time workers than they normally would. And that is substantially influencing these numbers. In fact, the real reason that we have such a low unemployment rate and we’re creating so many jobs, is because people are in effect sharing their job. We have a job sharing program…

Traders are ignoring all of the bad economic data that they should be focusing on, and instead just remaining fixated on the job numbers. And I think they are in position to be blindsided when the economy turns around…

So for now, it’s the false belief that the economy is strong, and that the Fed is going to raise rates- based on a misunderstanding of what the jobs’ numbers really mean- that is keeping a lid on the price of gold.

“False belief” plays an additional role in lower gold prices at this time, says Schiff. He added:

One other thing that is happening that should be lifting the prices of gold which is inflationary monetary policies all over the world. You know, more and more central banks are reducing their interest rates, launching their QE programs. Gold prices are rising in terms of those currencies. But the fact that everybody believes the dollar, the U.S. is going to be the lone holdout in the easy money parade- that is what’s keeping gold prices from really going ballistic…

I think we’re going to be leading that parade. Not only are we not going to raise interest rates or not raise them substantially- maybe we get a trivial rate hike although even there I think it’s more likely that we won’t. But we are going to be launching a new QE program- the Mother Of All QEs…

And when the markets realize this, then it’s going to be like taking the lid off the pressure cooker when it comes to the price of gold. And it’s going to be rising sharply. In the meantime, I continue to encourage people to accumulate as much physical gold and silver as they can before the rest of the financial community wakes up to this reality, and they’re rushing to buy these metals at much higher prices.


“Gold Videocast: America’s New ‘Job-Sharing’ Economy”
YouTube Video

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Marc Faber: Central Banks, Governments Will Try To Confiscate Privately-Held Gold

Last week I was listening to a King World News interview of Swiss-born investment advisor/money manager Marc Faber. The publisher of the monthly investment newsletter The Gloom Boom & Doom Report warned listeners that he believes privately-held gold is in danger of being confiscated by central banks and governments. From an exchange between Eric King and Dr. Faber in that interview which appeared on the website on February 10, 2015:

KING: Marc, we were talking about the money printing earlier. Obviously, we had the revaluation of the Swiss franc overnight that led to so much chaos. But what I wanted to ask you today is, you’ve already said I think gold is going to have a strong 2015, but are we going to wake up at some point in the future and have a massive revaluation of gold overnight? Is that something you see happening not this year but in the future? Is that coming at some point?
FABER: Yes. But I think before it will happen the central banks and the governments will try to take the gold away from ordinary people, you understand? I think they know that this would be one solution for the global financial system to peg it again to some extent on gold. But before they do that, I think they’ll go after you and me and say, “Okay, parasites of society that do not spend but keep their money in gold that is unproductive- let us take it away.” That is the threat. I’m not worried about the price of gold. What do I care if the gold price is at $1,000 or $500 or $1,500 or $5,000? What I care is that I can keep ownership of gold.
KING: Just so I understand this, there may be a global coordinated effort by as many central banks that can get together on this to seize the gold, to take the gold.
FABER: Yes, because the professors at the central banks and the academics, most of them have never owned a single ounce of gold. And they know that gold is the honest currency that cannot be printed. Yes, the supply increases and sometimes the price goes up and sometimes the price goes down. But this is a market they really cannot control in the long-run. They can manipulate it in the short-run, but the more they manipulate it, the more it will eventually go to its real level. And so central bankers basically who are the money printers- the counterfeiters of this world- they hate gold. Period.

Later on in that King World News interview, “Dr. Doom” talked about the investments he owns these days. Faber revealed:

I own some real estate in Asia. I own some gold. I own some stocks. I own some bonds, because I agree with you at some point the bond market will diverge. In other words, they’ll print money and buy bonds, but the bond market will go down.

You can listen to the entire interview on the King News World website here (gold confiscation discussion begins at 14:09).

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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GoldSilver.com’s Mike Maloney: Potential Fallout From Unpegging Swiss Franc From Euro

Regular Survival And Prosperity readers may recall that GoldSilver.com used to be an affiliate marketing partner of the blog. Great company (specializes in the instruction of precious metals investing and providing world-class gold and silver dealer services and products), but they pulled the plug on their affiliate marketing program not too long ago. Anyway, I still receive e-mails from the Santa Monica, California-based operation, and yesterday I watched a video by Mike Maloney, the precious metals expert, advisor, and author who heads up the firm. Maloney has been an advisor to Robert Kiyosaki of Rich Dad Poor Dad-fame, and even wrote a book about investing in gold and silver under the Rich Dad’s Advisors series.

Anyway, in that GoldSilver.com video Mike Maloney discussed the potential ramifications of the Swiss franc being unpegged from the euro last week- among other things. Maloney warned viewers:

Back when we were filming Hidden Secrets of Money, when we started filming it, we did the opening sequence. And in there I said, “We’re entering a period of financial crisis that is the greatest the world has ever seen.” And that is happening today. These shockwaves that could cause the Russian- this could cause another Russian Revolution to happen. We have no idea what’s going to happen. But the shockwave of all these things- the deflationary pressure, the Russian crisis that’s going on, commodities falling, and then the Swiss unpegging from the euro- all happening at once. And by the way, there’s bank runs happening right now in Greece, and four of the largest banks in Greece have asked for assistance from the European Central Bank. So, this is all happening at once. What I think is going to happen is this will smooth out for a short period of time, but then it’s going to get worse again. So these shockwaves, this all undermines the trust in central banks and the trust in fiat currencies…

The central banks are now backed into a corner, and everything that I’ve been predicting is starting to unfold here. It’s unfolding very slowly, and on a scale that’s huge. But it’s not going to be slow forever. There’s going to come a day when slow turns into very fast. And a lot of this stuff happens overnight. For instance, the currency unpeg. Nobody knew it was coming- it happened immediately. And so, these things always end up eventually being good for precious metals. I don’t look forward to the economic chaos that we’re about to go through. But, we’ll get through it, and it will be a different world when we come through the other end. Hopefully, what ends up happening, is free enterprise, free markets, capitalism, and sound money win. That would be the best outcome.


“Global Shockwaves To Come From Swiss Currency Bombshell – Mike Maloney.”
YouTube Video

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Peter Schiff: China, Other U.S. Creditors Could Emulate Switzerland, Implode America When Fed Attempts QE4

“One of the world’s safest investments- the Swiss franc- has swung wildly this week after the central bank in Switzerland announced it would scrap its policy of limiting the rise of the currency.

It may seem like an arcane move, but it’s not. The Swiss National Bank’s surprise decision on Thursday caused the franc to surge against the euro and dollar, sending shockwaves through the global financial system.

Holders of Swiss francs profited handsomely, but many investors and brokerage firms, were pounded with losses…”

-Associated Press, January 16, 2015

Anyone been paying attention to what happened with the Swiss franc this past week? I have a feeling most American aren’t- which is a mistake, because the actions of the Swiss central bank may be repeated by China and other countries in the near future with respect to our country. Euro Pacific Capital CEO Peter Schiff talked about the possible implications in his January 16, 2014, entry in The Schiff Report vlog on YouTube.com. Schiff warned viewers:

When the Fed comes up with QE4, China is going to be faced with a similar decision as Switzerland. Are they going to back up their trucks and load them up with dollars? Because if we do QE4, we’re going to expect the Chinese to bear the burden if they want to keep their currency from going up. And I think Switzerland is going to show them the way. They’ll see the light. This is not going to be detrimental to the Swiss economy. On the contrary, this is going to be a positive for Switzerland, and it could be a positive for China if they abandon their peg as well. But, that’s going to be even worse for America than what Switzerland did to Europe… for America, we’ve been relying on this Chinese crutch for so long, you take it away, and there’s a real implosion here. We’re going to suffer much more if the Chinese pull our plug. I mean, we’re really going to go down the drain. This might not necessarily be the nail in the coffin for the Europeans. ..

People should look at this lesson of Switzerland and heed these warnings. And don’t just look in the rearview mirror at what happened in Switzerland. But look forward, look through the windshield at what’s coming. Look at the relationship between the Swiss franc and the euro and what are the implications between the dollar and other pegged currencies like the yuan and the Hong Kong dollar. All of these relationships are eventually going to crack. All of the countries that are subsidizing the United States, that are absorbing our trade deficits, that are piling up our Treasuries- they’re all going to have the same problem that Switzerland had. They made a mistake and corrected it in three short years. These others countries have been making a bigger mistake for a longer period of time, but eventually, they are going to be forced to bit the bullet and cut and run. And I think it’s going to be the same decision that motivated the Swiss is going to be the prospect of QE4, because everybody is expecting a tighter Fed, everybody believes that we have a legitimate recovery, and nobody is expecting this recovery to implode, and the Fed to come back with QE4- but that is exactly what’s going to happen. Just the way they were caught by surprise by what happened with the Swiss franc, they’re going to be even more surprised by what’s going to happen with the U.S. economy, what’s going to happen with the dollar…

Don’t wait for that to happen. Don’t be surprised. Don’t be bankrupted like the forex traders, or the forex companies that were extending the credit to the leveraged speculators. Get your economic house in order. Understand that economic fundamentals always come through in the end. Sometimes it takes longer to happen, and sometimes people become emboldened, because if something hasn’t happened, they think it’s never going to happen. And exactly when you get complacent, when you think it’s always going to be that way- and believe me, the people that were levered up short the Swiss franc, in their wildest imaginations, they could not see this day coming. Even though it should have been obvious that this day would come. Nobody knows when. And that’s why I always tell my clients, we’ve got to be prepared in advance. It’s too late, if you’re a day late. You’ve got to be early. If you woke up yesterday morning, and you were short the Swiss franc, it was too late to cover. The market just gapped, it was a huge move, there was nothing you could do. You had to be prepared in advance. You couldn’t time it- there was no way to know exactly when it was going to happen- because nobody could figure that out. You have to be early. You can’t be late. And so when it comes to structuring your portfolio and preparing for a dollar crisis, you’re not going to see it coming. You’re not going to do it at the last minute. You’ve got to be prepared in advance. And, you know, there’s plenty of warning signs that that day of reckoning is coming.


“Will China Pull a ‘Switzerland’ on the U.S. Dollar?”
YouTube Video

Schiff, who also heads up SchiffGold, shared his view on how gold might perform in the coming year. He told viewers:

I think gold’s going to have a big first half- even bigger than the first half of 2014- but in the second half, that’s when it could really take off.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Marc Faber: Gold Going Up 30% In 2015

“BullionVault, an online service for investors to buy and sell physical gold and silver, said its Gold Investor Index fell in December to an almost five-year low.

The gauge, which measures the balance of buyers against sellers, slipped to 50.5 from 52.1 in November, the London-based company said in an e-mailed report today. That’s the lowest level since February 2010 and marked the biggest drop since 2013. A reading above 50 indicates more buyers than sellers…”

-Bloomberg.com, January 6, 2015

Regular readers of Survival And Prosperity know that Swiss-born investment advisor/money manager Marc Faber has been a gold bull for some time. And the publisher of the monthly investment newsletter The Gloom Boom & Doom Report is so confident about a rising price of gold in 2015 (in spite of all the negative sentiment among investors) that he made an eye-opening prediction yesterday. Sara Sjolin reported on the MarketWatch website Tuesday afternoon:

“I’m positive [that] gold will go up substantially [in 2015] — say 30%,” Faber, whose investment letter is called the Gloom Boom Doom Report, said at Société Générale’s global strategy presentation in London on Tuesday.

“My belief is that the big surprise this year is that investor confidence in central banks collapses. And when that happens — I can’t short central banks, although I’d really like to, and the only way to short them is to go long gold, silver and platinum,” he said. “That’s the only way. That’s something I will do.”

(Editor’s note: Bold added for emphasis)

BullionVault

Dr. Faber repeated his recent “bubble in everything, everywhere” statement while in London. Sjolin added:

“We simply have highly inflated asset markets. Real estate is high, stocks are high, bonds are high, art prices are high, and interest rates and short-term deposits are basically zero,” Faber said. “The only sector that I think is very inexpensive is precious metals, and in particularly precious-metals stocks.”

(Editor’s note: Bold added for emphasis)

Faber, who became well-known for advising clients to get out of the U.S. stock market one week before the October 1987 crash and for predicting the 2008 global financial crisis, appeared on CNBC’s Squawk Box back on September 19, 2014, and warned viewers:

Today, the good news is we have a bubble in everything, everywhere– with very few exceptions. And, eventually, there will be a problem when these asset markets begin to perform poorly. The question is- what will be the catalyst? It could be a rise in interest rates not engineered by the Fed, because I think they’ll keep interests rates at zero on the Fed funds rate for a very long time… We could have essentially a break in bond markets at some point. We also could have a strong dollar. A strong dollar has already happened in the last two months signifies that international liquidity is tightening. And when that happens, usually it’s not very good for asset markets.

Dr. Faber also sees a potential investing opportunity in emerging markets, which you can read about in Sjolin’s piece on the MarketWatch website here.

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Alan Greenspan: Gold Is A Currency, And Currently A Good Investment

Back in late October I recall The Wall Street Journal talking about some comments made by former Federal Reserve Chairman Alan Greenspan to the Council on Foreign Relations concerning gold. I’ve been meaning to look into what Greenspan, who served as Fed Chair from 1987 to 2006, actually said about the precious metal. During lunchtime, I dug up the final version of the transcript from his visit with the CFR in New York City on October 29, 2014. From the exchange between the president of Greenspan Associates LLC and presider Gillian Tett:

TETT: I’m going to turn to the audience for questions in one minute, but before I do though, I just want to ask though, one of the really interesting chapters in your book is about gold. And there’s been a lot of media debate in the past about your views on gold.

You yourself oppose a question as to why would anyone want to buy this barbarous relic — I don’t know whether John Paulson is in the audience — but it’s an interesting question. But do you think that gold is currently a good investment given what you’re saying about the potential for turmoil?

GREENSPAN: Yes.

(LAUGHTER)

TETT: Do you put…

GREENSPAN: Economists are usually perfect in equivocating. In this case I didn’t equivocate. Look, remember what we’re looking at. Gold is a currency. It is still by all evidences the premier currency where no fiat currency, including the dollar, can match it. And so that the issue is, if you’re looking at a question of turmoil, you will find, as we always have in the past, it moves into the gold price.

But the gold price is actually sort of half a commodity price, so when the economy is weakening, it goes down like copper. But it’s also got a monetary characteristic which is instrinsic. It’s not inbred into human beings — I cannot conceive — of any mechanism by which you could say that, but it behaves as though it is.

Intrinsic currencies like gold and silver, for example, are acceptable about a third party guarantee. And, I mean, for example at the end of World War II, or just at the end of it, Germany could not import goods without payment in gold. The person who shipped the goods in would accept the gold, and didn’t care whether there was any credit standing — associated with it. That is a very rare phenomenon. It’s — it’s the reason why, for example, in a renewal of an agreement that the central banks have made — European central banks, I believe — about allocating their gold sales which occurred when gold prices were falling down, that has been renewed this year with a statement that gold serves a very important place in monetary reserves.

And the question is, why do central banks put money into an asset which has no rate of return, but cost of storage and insurance and everything else like that, why are they doing that? If you look at the data with a very few exceptions, all of the developed countries have gold reserves. Why?

TETT: I imagine right now, it’s because of a question mark hanging over the value of fiat currency, the credibility going forward.

GREENSPAN: Well, that’s what I’m getting at. Every time you get some really serious questions, the 50 percent of the gold price determination begins to move.

TETT: Right.

GREENSPAN: And I think it is fascinating and — I don’t know, is Benn Steil in the audience?

TETT: Yes.

GREENSPAN: There he is, OK. Before you read my book, go read Benn’s book. The reason is, you’ll find it fascinating on exactly this issue, because here you have the ultimate test at the Mount Washington Hotel in 1944 of the real intellectual debate between the — those who wanted to an international fiat currency which was embodied in John Maynard Keynes’ construct of a banker, and he was there in 1944, holding forth with all of his prestige, but couldn’t counter the fact that the United States dollar was convertible into gold and that was the major draw. Everyone wanted America’s gold. And I think that Benn really described that in extraordinarily useful terms, as far as I can see. Anyway, thank you.

TETT: Right. Well, I’m sure with comments like that, that will be turning you into a rock star amongst the gold bug community…

(Editor’s note: Bold added for emphasis)

I’m not sure if the above will mean Greenspan is now a rock star among the “gold bugs”- he’s still considered by many as being a habitual asset bubble blower. But such a high-profile individual within the global financial community lending support to the ideas that gold is a currency and currently a good investment will no doubt anger a number of gold bears and haters.

You can read the entire transcript of Greenspan’s visit to the CFR on their website here.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Peter Schiff: Swiss ‘No’ Vote May Signal Gold’s Bottom, Return Of Bull Trend

“Swiss voters overwhelmingly rejected an initiative on Sunday that would have forced the country’s central bank to hold one-fifth of its assets in gold, a move that would have eroded its ability to conduct monetary policy.

Citing projections from results in 19 of the country’s 26 cantons, Swiss television said roughly 78% of voters opposed the initiative, dubbed ‘Save Our Swiss Gold.’ The gold initiative would have also barred the Swiss National Bank from selling gold in the future…”

The Wall Street Journal website, November 30, 2014

I hadn’t been paying too much attention to that Swiss vote on gold. But after the mainstream financial news outlets cheered the Swiss citizens rejecting the initiative, I thought this could rank right up there with the United Kingdom selling off half its gold reserves in 1999 when the precious metal was valued at only $300 an ounce- a 20-year low at the time.

In other words, a move the Swiss may very well come to regret in the coming years.

To each their own, I always say.

And Wednesday, the CEO of Euro Pacific Capital, Peter Schiff, shared his thoughts about Switzerland’s rejection of the yellow metal. From his December 3 SchiffGold “Gold Videocast” entry on YouTube.com:

I actually believe that the “no” vote- from the long-term perspective- is even more bullish for the price of gold than had Switzerland voted to back their currency with 20 percent gold…

Thinking about it from a historical perspective, if there’s a chance that we saw the lows for the entire gold move on Sunday night, it would be ironic, and then I think makes a lot of sense, that the Swiss “no” vote on adopting even a modified gold standard would mark the low point for gold. Just like you have the Bank of England dumping a bunch of gold at the lows, I mean, central banks or actions around central banks sometimes mark key points. And the fact that the Swiss said “no” to gold, “we don’t want it,” that may be the day that gold actually bottomed out and now we’re resuming the bull trend. Only time will tell whether that is the case. But again, if it’s not the absolute bottom, I think it’s close enough not to worry about it, and I think that people need to be buying the gold that the Swiss citizens just told their bank not to buy. And not only the gold, silver. Because if gold goes up, silver’s going up. So buy both metals.


“Gold Videocast: Swiss Franc No Longer a Safe Haven
and a Possible Bottom in Gold”
YouTube Video

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Jim Rogers Details Russian Investments, Shares Outlook For Developed Economies

While searching for the latest activity from the “crash prophets” this morning I came across an insightful piece on well-known investor, author, and financial commentator Jim Rogers on FT Alphaville. Izabella Kaminska reported on the Financial Times (UK) daily news and commentary blog today:

Rogers’ Russian investments now include stakes in fertiliser maker Phosagro, airliner Aeroflot, a Russia ETF and the Russian stock exchange, but he said was looking to expand into different sectors as well…

Rogers’ bullish view on Russia contrasts significantly with his outlook for Europe, Japan and the United States. Regarding Japan, Rogers proposed that Prime Minister Shinzo Abe was doing “terrible things” to Japan and advised young Japanese to leave the country as soon as they possibly could to avoid losses. However, in the short-term, he believed there were also opportunities in the stock market as a result of the extraordinary central bank action.

Regarding the Eurozone, Rogers said he didn’t own any euros, nor did he want to because he would rather buy Russia.

As ever, his outlook for developed economies remained bleak on the basis that central banks had debased the currency and that government statistics were lying about the true state of inflation in the land…

(Editor’s note: Bold added for emphasis)

It should come as no surprise to regular readers of Survival And Prosperity that the former investing partner of George Soros has been investing in Russia (blogged about in May here).

Rogers shared with the Financial Times his reasons for selecting the above Russian investments. Good stuff by Kaminska and FT Alphaville, which you can read in its entirety here.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Jim Rogers: Some Currencies, Real Assets Could Shine When Coming Bust Arrives

Enough about Chicago already. Let’s talk money.

Last time I blogged about well-known investor, author, and financial commentator Jim Rogers, he shared this warning regarding the ocean of liquidity that’s been created by unprecedented money printing via the world’s central banks:

When it ends, we will all pay a terrible price.

That was the end of May. And now?

Disturbingly, he’s singing the same tune.

Elena Torrijos reported on the Yahoo! Finance Singapore website yesterday:

He doesn’t know when the party is going to end, but he believes when it does, “we’re all going to suffer very, very badly”. He said the US would also fare worse than it has in previous economic setbacks because the country’s debt is now so much higher than before.

“So the next one [economic bust] is going to be much worse… so be worried, be careful and be prepared,” he warned.

Everybody should have a game plan, he said. “Learn how to cut back if you need to, even learn how to sell short. Short sellers are going to earn a lot of money the next time around,” he pointed out.

(Editor’s note: Bold added for emphasis)

The Singapore-based Rogers suggested certain currencies could initially offer refuge when the “bust” arrives. Torrijos added:

He believes some currencies are going to do well in that time of turmoil. “The Chinese renminbi, for instance, will probably continue to do extremely well over the next few years. I even own the US dollar at the moment. The US dollar is a terribly, terribly flawed currency, but at the moment I own it because when the turmoil comes many people will flee to what they see as a safe haven,” he said.

When invariably central banks start printing money to pump prime their economies, he’s not sure which currency he’d flee to. “Maybe the renminbi, maybe gold, probably real assets, because once the floodgates open even more, the value of paper money everywhere is going to go down a great deal,” he said.

(Editor’s note: Bold added for emphasis)

What about commodities- something with which the former investing partner of George Soros is so closely identified with? Back on December 3, 2013, Rogers appeared on The Lang and O’Leary Exchange, a Canadian business news television series which airs weekdays on CBC Television and CBC News Network. He told host Amanda Lang:

This is going to end badly. We’re all floating around on a sea of artificial liquidity right now Amanda. This is not going to last. No, no. And when it ends, the bull market in commodities will probably end too. But, the bull market in a lot of stuff will end.

(Editor’s note: Bold added for emphasis)

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

Source:

Torrijos, Elena. “Jim Rogers reveals his Singapore investment strategy.” Yahoo! Finance Singapore. 14 July 2014. (https://sg.finance.yahoo.com/news/jim-rogers-reveals-his-singapore-investment-strategy-153319907.html). 15 July 2015.

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Jim Rogers: ‘We’re All Going To Pay A Terrible Price’ When ‘Artificial Ocean Of Liquidity’ Ends

Tonight, I want to talk about well-known investor, author, and financial commentator Jim Rogers. The former investing partner of George Soros- who I recently heard is worth approximately $300 million (Soros $23 billion)- recently shared his thoughts about the global financial system and potential investment opportunities.

On May 27, Nina Xiang of the China Money Network contributed the following on the Forbes website:

Legendary investor Jim Rogers has been warning about “the ocean of artificial liquidity” as a result of the unprecedented money printing by central banks around the world for quite some time now.

But with the U.S. stock market at an all-time high, his cautionary words seem to have hardly been heeded…

“When it ends, we will all pay a terrible price,” says Rogers…

Read it as an advocacy for an alternative attitude that is unpopular at the moment: the attitude of awareness that we are in this “artificial period” and it will end one day; the attitude of fearfulness that there will be more turmoil in the next ten years; the attitude of preparedness, that includes stocking up some extra food, a spare flashlight, and gold coins — instead of gold bars — for when the time of emergency comes…

(Editor’s note: Bold added for emphasis)


“Jim Rogers: We Will All Pay A Terrible Price For Today’s Artificial Liquidity”
YouTube Video

Note that in the Chinese Money Podcast that was uploaded onto YouTube the same day as that Forbes piece, Xiang and Rogers talked about regional conflicts and the Singapore-based investor predicted:

I would suspect that sometime in the next ten years, the world’s going to have a bigger conflict.

On May 26, the text of another interview with Jim Rogers was published on the website of The Economic Times (India). Rogers, who correctly predicted the commodities rally that started in 1999, talked about the following investment opportunities:

• Gold and silver- “If it goes down, I assure you I will be buying more gold and more silver.”
• Crude oil- “Remember, all the other known reserves in the world are in decline, even if the supply from the US is rising. Everywhere else, there has been declining reserves, because there have been no great oilfield discoveries in over 40 years.”
• Sugar- “I am bullish on sugar.”
• U.S. dollar- “I own the US dollar and have not sold any. In fact, probably I would have bought some more, if I weren’t talking to you.”

Rogers concluded this discussion by sharing that:

I am still trying to find some more things to buy in Russia, maybe some Chinese shares and maybe some more Japanese shares…

Nice job by The Economic Times getting this information from Rogers.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

Sources:

Xiang, Nina. “Why We Should All Take A Moment To Listen To Jim Rogers.” Forbes. 27 May 2014. (http://www.forbes.com/sites/ninaxiang/2014/05/27/why-we-should-all-take-a-moment-to-listen-to-jim-rogers/). 29 May 2014.

“Will be excited about investing in India if Narendra Modi delivers: Jim Rogers.” The Economic Times. 26 May 2014. (http://articles.economictimes.indiatimes.com/2014-05-26/news/50098911_1_jim-rogers-commodity-space-gold-imports). 29 May 2014.

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Christopher E. Hill, Editor
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