gold prices

Peter Schiff On Gold: ‘We’re Going To Have A Big Rally Probably Beginning Here In The Second Half Of 2014’

It’s been a little over a month since I last blogged about “crash prophet” and head of Euro Pacific Capital Peter Schiff. But tonight, I’ll be talking about the first-ever installment of Peter Schiff’s Gold Videocast (which replaces the monthly Peter Schiff’s Gold Newsletter). Schiff, who also heads up Euro Pacific Precious Metals, told videocast viewers on July 9:

I think that the sellers have been exhausted in the gold market, and the buying continues. And when we run out of sellers- again, there’s only one direction for the price of gold. And I think once all of these speculators that have been shorting gold discover that their premise is wrong- that we’re not going to get this vibrant recovery. And that we’re not going to get less QE, we’re going to get more. That we’re not going to get rate hikes, but the Fed is going to keep interest rates at zero in order to prop up this phony, bubble economy that they’ve inflated. You’re going to have to see this mad rush from all the short sellers who are going to be anxious to buy back their money losing positions. But that’s going to be a lot more difficult, because there’s not going to be a lot of gold around. Because a lot of the gold that was liquidated in the second half of 2013 is not going to be available for sale in the second half of 2014. That gold was probably purchased by entities that never intend to sell it.

So I think we’re going to have a real short squeeze and we’re going to have a big rally probably beginning here in the second half of 2014. But maybe gathering momentum as the year comes to a close.

Schiff, who is credited for calling the U.S. housing bust and 2008 economic crisis, added:

I expect the price of silver to rise. Other precious metals- platinum- and commodities in general are all responding to the inflation that the Fed is creating to prop up this phony economy. All the while denying that inflation is a problem.


“Gold Videocast: Gold’s 2014 Half-Time Report”
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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Resource Of The Week: Gold & Silver Vault App By GoldSilver.com

I meant to end last week on a high note- with a “Resource Of The Week” post- but was just too spent being sick and all. I’ve recovered. And before I start getting on a roll with this week’s blog material, I wanted to get that ROTW out to readers.

Now, as I’ve mentioned before on Survival And Prosperity, I’ve been a keen observer of gold and silver for some years now. And people who’ve been following the price action of these precious metals lately will tell you these are very interesting times (gold dropped to a 16-week low, silver to an 11-month low, last week).

Particularly if you hold either of the two as an investment/trading vehicle.

With all that’s been going on lately, more people might desire to keep a close eye on the latest gold and silver news and prices. Perhaps even keep track of the value of their holdings.

Enter the Gold & Silver Vault App by affiliate marketing partner GoldSilver.com. The Santa Monica, California-based gold and silver educator and dealer (reviewed here) now offers a free “app” for the Apple iPhone and Android which lets users track their gold and silver investment value 24/7:


“Gold & Silver Vault Phone App TVC V2”
YouTube Video

Looks very useful and informative. Too bad I don’t own a smartphone (maybe one of these days). But readers might.

Check out the Gold & Silver Vault App on GoldSilver.com via the banner ad below. The app can be found on the “Goldsilver” tab, in the “Knowledge Center” drop-down menu near the top of the page. Please note that by clicking on the ad and purchasing a product from GoldSilver.com, I receive a commission from the sale.


GoldSilver.com - Buy Gold & Silver

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

(Editor’s note: Link added to SP “Resources” page)

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Marc Faber: ‘I Will Never Sell My Gold And I Buy Every Month’

More recently, Swiss-born investor advisor/fund manager Marc Faber has been making headlines about his thoughts on equities. So I’ve been curious to hear what the publisher of the monthly investment newsletter The Gloom Boom & Doom Report has to say these days about precious metals. In particular, gold.

Dr. Faber appeared on the Bloomberg Television show Street Smart yesterday. From an exchange with host Trish Regan:

BLOOMBERG: Do you continue to invest in gold because of concerns about central banks?

FABER: Yes. I will never sell my gold and I buy every month some gold. I think it may still go down somewhat. But I wouldn’t be short gold.


“Marc Faber: I Will Never Sell My Gold”
(Gold discussion begins around 8:10)
Bloomberg 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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Bearish Peter Schiff Debates Bullish Nouriel Roubini

“How long was I warning about the housing bubble and the financial crisis before it happened? It was years. It takes a while for these problems to surface. We do have an inflation problem. We do have a bubble. And commodity prices are rising. Gold prices are rising.”

-Peter Schiff, debating with noted “bear”-turned-“bull” Nouriel Roubini on CNBC’s Fast Money yesterday


“Roubini vs. Schiff: Who’s “Doomier” on US Economy?
YouTube Video

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

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Richard Russell Warns ‘In A Matter Of Months, I See The Dollar Crashing’

Speaking of high-profile supporters of gold, how many readers have heard of Richard Russell? I had this to say about Mr. Russell of Dow Theory Letters-fame back on September 21, 2011:

Russell gained wide recognition from a series of over thirty Dow Theory and technical articles that he wrote for Barron’s during the late fifties through the nineties. Russell was the first (in 1960) to recommend gold stocks. He called the top of the 1949-66 bull market. And almost to the day he called the bottom of the great 1972-74 bear market, and the beginning of the great bull market which started in December 1974. Did I mention he’s been bullish about gold for almost a decade now?

Russell’s made some great calls over the years, and now he’s making headlines with another gigantic call. From the King World News Blog on April 22:

I think we are seeing the greatest transfer of wealth (West to East) in all history. China is amassing a huge hoard of gold while I don’t know how much the US and the English speaking nations actually have. The western central banks’ policy of selling gold to knock down the price is a disaster (and China must love it). The US will lose its reserve currency advantage within a few years or probably less time. Our defense against a weak economy is always to print more money. In a matter of months, I see the dollar crashing.”

(Editor’s note: Bold added for emphasis)

I was about to hit the sack the other evening when I read that last sentence, and knowing all too well Russell’s reputation, it gave me some late night jitters.

I’m not going to steal the thunder away from the King World News Blog, so check out everything that Russell’s had to say over there.

By 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 On Gold: ‘Most Likely Prices Have Bottomed’

A little more than a week ago, Euro Pacific Capital’s Peter Schiff- who correctly called the housing bust and 2008 economic crisis- told CNBC viewers that gold prices would eventually head north of $5,000 an ounce (blogged about here).

Schiff did an e-mail interview with MarketWatch this week, and the CEO of Euro Pacific Precious Metals talked more about the yellow metal. From that exchange:

Q: What would you say to investors who are discouraged by gold’s performance so far this year? (Futures are prices up around 7% year to date, but only partially making up for last year’s plunge.)

Be patient. Many investors in the 90’s believed that gold was a dead asset class. But in the 10 years from 2001 to 2011, gold increased almost 900%. The moves come in waves.

Q: With prices currently under $1,300 an ounce, have prices hit bottom for this year? Is gold a bargain at these levels — is it a good time to buy now? Please explain.

Most likely prices have bottomed, as too many speculators are looking for lower prices. The fundamental case for gold has also never been stronger. From a gold short seller’s perspective, this will prove to be the equivalent of a perfect storm. Their losses will be severe…

I’ve been following gold closely for a decade now. I can’t remember any time in those last ten years when the amount of hate directed at the precious metal was ever greater. Particularly in the mainstream financial media and accompanying reader comment sections. Just check out some of the comments in the MarketWatch article I’ve been discussing if you don’t believe me.

I can’t help but wonder sometimes if paid “trolls” aren’t out in force these days in the various comment areas and forums with the mission of talking down gold and its highest-profile supporters at any chance they get.

Then again, many of these comments could just be coming from individuals who fear a rising gold price for some reason or another.

“Where you stand is where you sit”?

I just know one thing. I don’t see stocks catching nearly the same kind of flak as this particular “shiny lump of metal,” as one “correspondent” recently called gold.

Like Mr. Schiff pointed out- before the recent pullback, the price of one ounce of that “shiny lump of metal” increased almost 900 percent in the decade prior.

Anyone want to give me their “shiny lumps of metal”? It’s going to plummet past $1,000 to almost nothing anyway- if one believes what’s claimed in many comments and forums these days.

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:

Saefong, Myra P. “Peter Schiff: Reckless Fed may push gold to $5,000.” MarketWatch.com. 25 Apr. 2014. (http://www.marketwatch.com/story/peter-schiff-reckless-fed-may-push-gold-to-5000-2014-04-25?pagenumber=1). 25 Apr. 2014.

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Peter Schiff Predicts Gold Going Higher Than $5,000 An Ounce

Peter Schiff, the CEO and Chief Strategist over at Euro Pacific Capital, appeared on the CNBC TV show Futures Now on April 15. Schiff, who correctly-called the U.S. housing bust and Great Recession, told viewers:

I’ve been buying gold for the same reason for the last decade, and it’s because central banks are creating too much money, there’s too much inflation, interest rates are too low, and so I want to store my purchasing power in something that central banks can’t print. Meanwhile, during that time period, gold has gone from under $300 an ounce to a high of $1,900. We’ve pulled back. I think we are headed much, much higher, because they are not going to stop these presses. They are going to run them in overdrive…

I don’t know the time period. They’re just going to trend higher. They’re going to go a lot higher. I’ve said $5,000. They’ll go higher than that.


“I’m Off Base, You’re Not Even in the Ballpark!”
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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China Gold Demand To Increase In 2014?

“Gold futures on Friday held below $1,300 an ounce as recent data showing a pickup in the U.S. economy helped draw some investors away from the metal and to the stock market, feeding a loss of roughly 3% in gold prices for the week…”

-MarketWatch.com, March 28

No doubt China exerts significant influence on the gold market.

In fact, on March 4, I blogged about HSBC Global Research’s claim of China’s buying of gold jewelry and bullion now being the biggest driver of prices, rather than investment demand from the West.

I also noted the World Gold Council expects China not only to remain the world’s largest consumer of physical gold (roughly 25% of global gold demand), but to increase its acquisition of the precious metal as well.

The WGC isn’t alone in thinking that.

Nat Rudarakanchana reported on the International Business Times website this morning:

Demand for gold in China, which broke consumer records in 2013, could reach new heights in 2014, according to some analysts…

New York’s CPM Group projects that net Chinese gold demand, which sums investment and consumer demand, will rise to over 44 million ounces in 2014, up from 41 million ounces last year…

“But the rate of growth is sharply lower,” in 2014 compared to last year, cautioned CPM Group commodities analyst Jeffrey Christian…

Since 2006, Chinese gold demand has risen at an annualized rate of 20 percent, according to Dundee Capital Markets economist Chantelle Schieven.

Lower average gold prices in Chinese yuan in 2014 could drive more purchases this year, as Chinese incomes rise, she said at a recent New York gold seminar. Schieven also expects Chinese demand to increase in 2014…

(Editor’s note: Bold added or emphasis)

Gold finished today higher after touching six-week lows under $1,300 an ounce.

By 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.)

Source:

Rudarakanchana, Nat. “Chinese Gold Demand Could Rise In 2014, In Surprise Call, Though India’s Demand May Have Peaked Years Ago.” International Business Times. 28 Mar. 2014. (http://www.ibtimes.com/chinese-gold-demand-could-rise-2014-surprise-call-though-indias-demand-may-have-peaked-years-ago). 28 Mar. 2014.

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Peter Schiff: Gold Fundamentals ‘Great Right Now’ As U.S. Recovery A ‘Myth’

Euro Pacific Capital’s Peter Schiff appeared on the CNBC show Futures Now on March 20. The financial commentator and author talked about a number of issues, including the Federal Reserve, gold, and inflation. On gold, Schiff told viewers:

The fundamentals have favored higher gold prices all along. The fundamentals for gold were great at the beginning of 2013. They were great at the end. They’re great right now. It’s just that most people don’t understand how great they are. They believe the myth of the U.S. recovery. They believe that the Fed can actually unwind its balance sheet, that it can end QE, that it can raise interest rates, and that the economy is going to keep on expanding. None of that is going to happen. It’s all fantasy.

We’re going to have QE Infinity. There is massive inflation. And it’s going to manifest itself in substantially higher gold prices.

The ensuing short debate between Schiff and economist/investor/hedge-fund manager Mark Dow about inflation was also interesting to watch. Perhaps those two can set up something “official” down the road.


“Mark Dow vs. Peter Schiff on Gold, Inflation, Fed”
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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HSBC: China, Not Investment Demand From West, Now Steering Gold Prices

Sounds like China may be firmly in the driver’s seat these days when it comes to steering gold prices. Yue Li reported in The Wall Street Journal’s MoneyBeat blog this morning:

China’s buying of gold jewelry, coins and bars is now the biggest driver of prices, not investment demand from the West, according to HSBC Global Research.

“We would argue that physical demand trends in the emerging world will largely define gold’s price movements this year,” HSBC analysts James Steel and Howard Wen said in a research note.

China alone can take up the equivalent of half of the global gold mine output, while a possible recovery in Indian demand could also act as a boost for the yellow metal as long as the Indian authorities reduce import tariffs on gold.

Investment demand, typically coming from gold exchange-traded funds, had long been considered the sole reason behind the gold’s decade-long bull run…

(Editor’s note: Italics added for emphasis)

Long-time observers of gold have recognized China’s growing influence in this market.

A question that’s probably on their minds is, will Chinese demand continue to steer prices?

Consider what Jennifer Schonberger wrote on the FOX Business website back on February 21:

China overtook India last year as the world’s largest buyer of physical gold, according to the World Gold Council. In 2013, Chinese demand for gold bars, coins and jewelry soared 32% to a record high, as China imported 1,066 metric tonnes of the precious metal, or more than one third of the 2,968 metric tonnes of gold produced globally.

And last year’s record wasn’t a one-hit wonder. This year, the World Gold Council expects China to remain the world’s largest consumer of physical gold. While down slightly from last year’s record level, the research body projects China will still gobble up a robust 1,000 tonnes to 1,100 tonnes of gold in 2014. China accounts for roughly 25% of global demand for gold and is likely to boost its share in coming years. The stock of gold in China is less than half of India and consumption per head in China is still catching up to other markets.

The Chinese gold rush comes after China’s government lifted restrictions on gold ownership. Until 2002, Beijing barred citizens from owning gold bars and coins. Culturally there’s been an appreciation for gold for a long time in China, but citizens weren’t able to access it to the extent they have over the past 12 years. Now that China has lifted restrictions, the government has unleashed pent-up demand…

I blogged last April what the demand for the precious metal has looked like in China at times.

In the meantime, the financial mainstream media here in the West keeps running pieces about gold’s imminent demise. And no doubt plenty of Americans will keep believing it.

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

Sources:

Li, Yue. “China Now Biggest Driver of Gold Prices, HSBC Says.” MoneyBeat. 4 Mar. 2014. (http://blogs.wsj.com/moneybeat/2014/03/04/china-now-biggest-driver-of-gold-prices-hsbc-says/). 4 Mar. 2014.

Schonberger, Jennifer. “Going for the Gold: Chinese Demand Could Be Gold’s Long-Term Bid.” FOX Business. 21 Feb. 2014. (http://www.foxbusiness.com/investing/2014/02/21/going-for-gold-chinese-demand-could-be-golds-long-term-bid/). 4 Mar. 2014.

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Goldman Sachs Misses Big On 4 Of Last 5 Year-End Gold Price Predictions

Speaking of Goldman Sachs this evening, yesterday I caught their year-end price forecast for an ounce of gold. Jeff Morganteen wrote on the CNBC website Monday afternoon:

Bad news for “gold-bugs”- bullion’s current beginning-of-the-year rally will not only lose steam, but prices could drop sharply by the end of 2014, according to Goldman Sachs’ Jeffrey Currie.

Currie, Goldman’s head of commodities research, told CNBC on Monday he had an end-of-year price target of $1,050 per ounce for gold, a 16 percent drop based from current prices of $1,251. The main culprit? Economic recovery…

I used to blog about these “end-of-year price targets” for gold from the major financial institutions starting back in early 2007, when I ran Boom2Bust.com, “The Most Hated Blog On Wall Street.”

Not so much anymore.

Why’s that? I’m not sure. Perhaps it was because I felt the many forecasts I blogged about over time weren’t turning out to be too accurate.

After reading that Goldman Sachs year-end gold price prediction, I decided to dig up this particular financial institution’s forecasts- made almost a year in advance- for the last five years. What I found pretty much confirmed my suspicions:

2009 Goldman Sachs year-end gold price forecast? $795
New York spot gold price on December 31, 2009? $1,096.20
Goldman Sachs off (under) by $301.20

2010 Goldman Sachs year-end gold price forecast? $1,350
New York spot gold price on December 31, 2010? $1,421.60
Goldman Sachs off (under) by $71.60

2011 Goldman Sachs year-end gold price forecast? $1,690
New York spot gold price on December 30, 2011? $1,566.40
Goldman Sachs off (over) by $123.60

2012 Goldman Sachs year-end gold price forecast? $1,940
New York spot gold price on December 31, 2012? $1,675.20
Goldman Sachs off (over) by $264.80

2013 Goldman Sachs year-end gold price forecast? $1,800
New York spot gold price on December 31, 2013? $1,205.50
Goldman Sachs off (over) by $594.50

Except for its 2010 end-of-the-year gold price prediction, Goldman Sachs was off by more than $100 in its forecasts for the other four years.

Most striking was the 2013 prediction, where the New York City-based multinational investment banking firm was off by almost $600.

I’m not trying to give Goldman Sachs a hard time over these forecasts. If anything, I want to use this example to share with you a lesson I learned a long time ago observing gold, which is how incredibly difficult it is to successfully predict the price of an ounce of gold a long way out.

And to do it on a regular basis? Does such talent even exist?

I would think if it did, Goldman Sachs would employ it.

Down the road, I’ll look at other year-end gold price forecasts from other major financial institutions and do the 5-year comparison with them. Who knows? One of them might turn out to be relatively accurate with their predictions, and able to do it consistently.

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

Source:

Morganteen, Jeff. “Gold to tank in 2014: Goldman Sachs.” CNBC.com. 13 Jan. 2014. (http://www.cnbc.com/id/101331595). 14 Jan. 2014.

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Tuesday, January 14th, 2014 Commodities, Precious Metals, Recovery No Comments

Peter Schiff: ‘The Fundamentals For Gold Have Never Been Better Than They Are Now’

Euro Pacific Capital CEO and Chief Global Strategist Peter Schiff appeared on FOX Business Network’s Markets Now show on January 3. Schiff, who correctly-called the recent U.S. housing bust and global economic crisis, shared the following about gold with viewers:

Well, I’ve been buying gold now for 14 or 15 years. And out of the last 13 years, it’s been down once, which was in 2013. Did I anticipate a 28 percent decline in 2013? No. But the fact that it happened doesn’t change anything. What’s amazing is that you have this big down year, and yet hardly anybody views it as a buying opportunity. They think 2014 is going to be just as bad. Because the fundamentals for gold have never been better than they are now. The fact that so many people can’t see that, just makes me even more bullish.

Rogers reportedly “ultra bullish” on gold long-term. Schiff “even more bullish” on the precious metal than he was before.

When asked if gold’s price could rise in 2014 and by how much, Schiff, who’s also the CEO of Euro Pacific Precious Metals, said:

We had a pretty big down year in 2013. So I would expect a pretty good year upwards in 2014. Is it possible that we could have two down years in a row for gold? It’s possible. You know, but I don’t think it’s probable.


“A Fed Induced Phony Recovery is Bullish For 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 ‘Ultra Bullish’ On Gold Long-Term

While a good amount of “dislike” has been directed at gold lately, it really ramped up to a new level starting December 30. Later that afternoon I noticed the headlines on the financial mainstream media websites emphasizing (extra big and bold in a number of cases) the price of gold getting pummeled in 2013. For example, there was this on the Financial Times (UK) website Friday:

8:58am On Wall Street from MARKETS
Gold bulls lose faith in bullion’s allure
Last year’s losses battered the metal’s reputation as a store of value
• Gold funds lose lustre
• Gold miners braced for reserve cuts
• Little glitter for gold in 2014
• Gold set for biggest drop in 30 years

All that in one section of the site. The above is pretty typical of what I’ve been seeing the last couple of days across the Internet.

And reading all the negative press, I have to wonder if now might not be a good time to acquire gold. Especially as “crash prophets” Marc Faber, Jim Rogers, and Peter Schiff are bullish on the yellow metal in the long run.

According to a recent report in a prominent international, web-based publication focusing on all aspects of the mining sector, Rogers, a well-known investor, author, and financial commentator, is actually “ultra bullish” on gold in the long term. Alex Williams wrote on Mineweb.com on New Year’s Eve:

Rogers prefers gold over gold mining shares and divisible coins over bullion, but says “there’s nothing in precious metals that I’m tempted to buy at the moment.” Indian import tariffs he views as the single biggest drag on the gold market currently…

For early 2014, Rogers is therefore long inflatable equities and neutral on gold, but longer term, he expects to short junk and government bonds and is ultra bullish on gold. “Gold will become one of the only refuges around,” he says. “That’s not this quarter.”

(Editor’s note: Italics added for emphasis)

It’s no secret that the Singapore-based investor sees gold doing well over the long haul. Back on August 5, I noted that Rogers had recently appeared on GoldSeek.com Radio’s The Gold and Silver Review show. Speaking to Chris Waltzek on the August 2 show, Rogers predicted the following for gold:

Eventually, we will make a new low, whether it’s this year, next year, or the year after. And then, of course, the bull market will resume. And we’re off to the races and wonderful new highs will be made. But it may be a few years from now.

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:

Williams, Alex. “Bernanke has set the stage for the Fed’s collapse- Jim Rogers.” Mineweb.com. 31 Dec. 2013. (www.mineweb.com/mineweb/content/en/mineweb-political-economy?oid=222934&sn=Detail). 3 Jan. 2014.

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Peter Schiff Bashes QE, Taper Lite, Gold Bears

“Gold Set for Worst Annual Tumble Since ‘81”

-FOX Business website headline, December 23, 2013

“Gold’s safe-haven role is over: strategist”

-MarketWatch.com headline, December 23, 2013

“I wouldn’t buy gold with my worst enemy’s cash: Strategist”

-CNBC.com headline, December 22, 2013

Not only have I been waiting to hear Euro Pacific Capital CEO Peter Schiff’s take on last week’s “taper” of the Federal Reserve’s quantitative easing program, but also his opinion on the latest bout of gold selling.

Schiff, who correctly called the recent housing crash and 2008 global economic crisis, just uploaded a new entry to The Schiff Report, his YouTube video blog. Schiff told viewers on December 20:

We have never had more stimulus- both monetary and fiscal- than we have right now. This is record-breaking, Keynesian stimulus. And it’s barely working. Yes, it’s inflating a stock market bubble. It’s inflating a real estate bubble. But it’s not creating genuine economic growth. And it never will. It is not raising living standards for the vast majority of Americans. And it isn’t creating productive, high-paying jobs. And it never will. And Ben Bernanke doesn’t understand that.

Like fellow “crash prophet” Marc Faber, Schiff believes the Federal Reserve will eventually pursue more, not less, bond-buying in the future. He explained:

Why did gold sell off? “Because everything is great.” “Because the Fed has done the impossible.” “It’s tapered and it hasn’t hurt anything.” This is what everybody believes. That the Fed has accomplished its goal. It hasn’t done anything. It’s talked about doing a tiny bit. But again, as far as I’m concerned, monetary policy is even easier now than it was before they announced this trivial taper lite. And the rest of the taper is probably never going to happen because the Fed is going to have to buy more bonds, not fewer bonds, to keep this whole house of cards from imploding.

Now, is gold going to continue to fall? I don’t know. My gut is that it’s probably still finding a bottom around 1,200. There is plenty of legitimate support for gold all around the world. Yes, all the speculators who are convinced that everything is great. The same people that thought it was great in 2007. Or it was great in 1999. That crowd, completely clueless about actual economics, is convinced that there is no reason to own gold. And so, they’re going to sell it, they’re going to short it. But there is a larger community around the world, particularly I think a lot of the emerging markets, central banks, China in particular, that see it differently. And they’re using this opportunity to buy as much gold as they can so that when the speculators and the investors figure out how wrong they’ve got it, and they realize that they need to be buying gold not selling it, there won’t be any gold left to buy because they would have already sold it. And the people who bought it from them aren’t going to sell it back. The gold that China bought- they’re never going to sell it. I don’t care how high the price of gold goes. They want that gold as reserves for their currency because they know the dollars that they have in reserve are eventually going to be Monopoly money. It’s going to be confetti. So they need something real to back up their own currency, and they want gold.

And so, I think that we need to be taking advantage of this opportunity. And don’t be worried about all the negativity that’s out there and all the professionals who are writing gold’s obituary. They’ve written it before, they’ll write it again. But I still think that the bull market has a long way to go. Ultimately, we are still heading for a currency crisis.


“Taper Lite: Bernanke Tightens Monetary Policy by Easing it!”
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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Signs Of The Time, Part 72

If there’s one thing the growing masses donning rose-colored glasses despise, it’s gold.

Gold stocks included.

Myra Saefong reported over at the MarketWatch website this morning:

Many major gold companies have lost at least half their value this year after a more than 25% plunge in gold prices, but analysts aren’t convinced that miners have hit bottom — and tax-loss selling may further the declines.

The Philadelphia Gold and Silver index XAU lost 51% as of Thursday year to date and the NYSE Arca Gold Bugs index XX:HUI declined 57%. Shares of Barrick Gold Corp. ABX, the world’s largest gold-mining company, has dropped by 56% this year.

Among exchanged-traded funds, the Market Vectors Gold Miners GDX, which provides exposure to publicly-traded companies involved primarily in gold mining, sank this week to its lowest level in about five years. It’s down 55% this year.

The losses for the gold miners aren’t much of a surprise given the hefty declines in gold prices, which are poised to log their first loss in 13 years. But shares of the gold miners have suffered a drop that’s roughly double the year’s price loss for the metal.

(Editor’s note: Italics added for emphasis)

For many of those who recognize the true economic health of the nation and larger financial system and consider the so-called “sheep” as reverse indicators, the precious metal probably looks mighty attractive right now.

Downright gorgeous for plenty of veteran gold mining stock investors, I’d have to guess.

After all, it can be argued gold’s fundamentals really haven’t changed much since recent times when the gold price was up significantly higher.

Which brings to mind the following. Almost exactly a year ago, The Wall Street Journal published a surprisingly bullish article about gold stocks. Brett Arends wrote back on December 7, 2012:

In Gold Investing, Forget the Metal and Focus on Stocks

Want to buy some cheap gold? Consider gold-mining stocks.

Shares of the leading precious-metals companies have lagged behind the price of physical gold bullion so steeply in recent years that they now trade for significantly less than the value of the companies’ gold reserves, say analysts. In fact, the gap is among the widest ever seen, analysts say…

I wonder what the folks over at the Journal think about “paper gold” today?

Sequel, Mr. Arends?

By 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.)

Source:

Saefong, Myra P. “Gold miners drop over 50% with no bottom in sight.” MarketWatch. 6 Dec. 2013. (http://www.marketwatch.com/story/gold-miners-drop-over-50-with-no-bottom-in-sight-2013-12-06). 6 Dec. 2013.

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Christopher E. Hill, Editor
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