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Original Analysis

Ray Dalio Follows Peter Schiff’s Lead: Watch for Minor Rate Hike, then QE4

POSTED ON August 28, 2015  - POSTED IN Key Gold Headlines, Original Analysis

In mid-July, Scott Nations of CNBC as much as laughed in Peter Schiff’s face when Peter predicted the Federal Reserve may raise interest rates a very small amount before launching a fourth round of quantitative easing in 2016. Nations said:

It seems that you’re a little bifurcated here. You say that you think the Fed may raise rates a little bit by the end of the year, but that they’re also going to implement QE4. Which is it? Because those are absolutely binary. Those are completely polar opposites… How in the world do they raise rates and institute QE4?”

Peter clarified: “No, no, no, they would reverse that. Let’s say they raise rates to 25 basis points. Then by 2016, they lower them back to zero and do QE4.”

Jackie DeAngelis jumped in, reproaching Peter with the stern voice of a mother chiding a foolish child: “They cannot raise rates, then lower them back to zero, Peter.” (Watch the full interview for yourself here.)

Do you think CNBC would have reacted the same if Peter’s forecast came from one of the largest hedge funds in the world? Because now it has.

15 08 28 dalio

When World Leaders Tell the Public, “Don’t Panic”…

POSTED ON August 27, 2015  - POSTED IN Key Gold Headlines, Original Analysis

company-addison-qualeThis article was submitted by Addison Quale, SchiffGold Precious Metals Specialist. Any views expressed are his own and do not necessarily reflect the views of Peter Schiff or SchiffGold.

Bloomberg recently published an article about how world political leaders don’t have too much to say about the current sell off in equities – the worst of its kind since 2008. It states:

It’s wiped out more than $8 trillion in the value of global equities, leaving virtually no market unaffected, yet reaction from world leaders so far has ranged from muted to dismissive.”

15 08 27 world leaders

Essentially, the message is that despite people’s portfolios hemorrhaging value and the world economy clearly starting to slow down, this is no big deal. There is no reason to panic and get out of the stock market. Oh – and it’s also China’s fault.

The Fed Is Spooking the Markets, Not China

POSTED ON August 26, 2015  - POSTED IN Original Analysis

Peter Schiff has been in the financial media a lot this week, presenting his interpretation of US market volatility and what it means for Federal Reserve monetary policy. Watch a couple of his appearances here and here. Below is Peter’s thorough written commentary on the matter, originally published on Monday by Euro Pacific Capital. Find it here.

Fasten your seat belts, this ride is getting interesting. Last week, the Dow Jones Industrial Average was down more than 1,000 points, notching its worst weekly performance in four years. The sell-off took the Dow Jones down more than 10% from its peak valuations, thereby constituting the first official correction in four years. One third of all S&P 500 companies are already in bear market territory, having declined more than 20% from their peaks. Scarier still, the selling intensified as the week drew to a close, with the Dow losing 530 points on Friday, after falling 350 points on Thursday. The new week is even worse, with the Dow dropping almost 1,100 points near the open today before cutting its losses significantly. However, no one should expect that this selling is over. The correction may soon morph into a full-fledged bear market if the Fed makes good on its supposed intentions to raise interest rates this year. Have no illusions, while most market observers are quick to blame the sell-off on China, this market was given life by the Fed, and the Fed is the only force that will keep it alive.

15 08 26 janet yellen

Financial Media Starting to Agree with Peter Schiff: QE4 Is Coming

POSTED ON August 26, 2015  - POSTED IN Key Gold Headlines, Original Analysis

In an attempt to stem stock market losses and stimulate a sagging economy, the Chinese central bank slashed its interest rate on Tuesday.

As Bloomberg reported, it was the fifth Chinese interest rate cut since last November.

The one-year lending rate will drop by 25 basis points to 4.6 percent effective Wednesday, the Beijing-based People’s Bank of China said on its website Tuesday, while the one-year deposit rate will fall a quarter of a percentage point to 1.75 percent. The required reserve ratio will be lowered by 50 basis points for all banks to cover funding gaps, it said.”

printing press

Of course, the United States stock market also plummeted Monday, shedding more than 1,000 points in early trading. With signs the American economic recovery might not be as robust as the government wants you to believe, what steps might the Federal Reserve take to shore things up in the near future?

Great Reason to Own Precious Metals, Even If You’re Not a Gold Bug

POSTED ON August 20, 2015  - POSTED IN Key Gold Headlines, Original Analysis

company-addison-qualeThis article was submitted by Addison Quale, SchiffGold Precious Metals Specialist. Any views expressed are his own and do not necessarily reflect the views of Peter Schiff or SchiffGold.

Most people who buy physical gold and silver these days tend to be those who are worried about our financial system.

They see unbacked, untrustworthy fiat currencies as an intrinsically flawed foundation for an economy. They see skyrocketing debt that doesn’t stop rising. They see an overvalued stock market, inflated by repeated rounds of quantitative easing. And they see world governments that cannot be trusted to act economically responsible – especially in light of how things have played out recently in Cyprus and in Greece. These are all good reasons to distrust and opt-out of the banking system and put one’s wealth in physical gold and silver instead.

15 08 20 gold bug

Of course, not everyone is onboard with these ideas. Many do not see the sky falling so quickly and are still hopeful that our financial system is going to pull through okay.

Regardless of whether you are a gold bug or maintain faith in the “system,” there is still a very strong argument for holding up to 5-10% of your portfolio in precious metals — something that Peter Schiff has always recommended. And that is simply the argument of diversification.

FOMC Minutes Confirm Peter Schiff’s Forecast: No Rate Hike in September (Audio)

POSTED ON August 20, 2015  - POSTED IN Original Analysis, Videos

After the Federal Open Market Committee’s meeting yesterday, the markets finally started to wake up to the fact that Janet Yellen’s Federal Reserve has no clue when or how it will raise rates. Analysts are starting to realize what Peter has said before – how will the Fed deal with the next recession if rates are stuck at zero? Of course, nobody but Peter is pointing out that a fourth round of quantitative easing is the Fed’s only solution.

The price of gold moved up on the news, while stocks were choppy. As usual, Peter Schiff took the time to dig into the latest economic data that reveals the economy is in no condition for the Fed to raise rates in September, let alone this year. This is just one of many reasons why now might be the perfect time to invest in physical gold.

Case in point was the Empire State Manufacturing Index that came out earlier this week on Monday. This is for August. Last month in July, that index was 3.86%, which is a really low number. The consensus was for a slight improvement to 4.75%. That’s what everybody thought. Well we actually got minus 14.92%… It wasn’t even in the realm, anywhere close. The lowest forecast that anybody made was 3%. Positive 3%.”

The Future of Money: Fool Me Once, Shame on You. Fool Me Twice…

POSTED ON August 18, 2015  - POSTED IN Original Analysis

company-addison-qualeThis article was submitted by Addison Quale, SchiffGold Precious Metals Specialist. Any views expressed are his own and do not necessarily reflect the views of Peter Schiff or SchiffGold.

I recently attended the Freedom Fest Conference in Las Vegas this past month. During a panel discussion that included a number of Austrian School economists, it was remarked with certainty that the United States dollar (USD) would eventually collapse. This invited the inevitable question: “Since the USD is the world’s reserve currency, what will replace it once it collapses?”

A conventional view out there – one espoused by many free-market economists even – is that just as the US displaced the United Kingdom as the world’s superpower and the dollar displaced the pound following World War II, a similar course of events is bound to take place. The consensus seems to be that China is waiting in the wings and will eventually emerge as the world’s next superpower, with the yuan displacing the USD.

15 08 18 usd-rmb-sdr

The Shot Not Heard Around the World

POSTED ON August 17, 2015  - POSTED IN Original Analysis

This article is written by Peter Schiff and originally published by Euro Pacific Capital. Find it here. Peter discusses the real lessons to be learned from China’s yuan devaluation of last week, which garnered so much mainstream attention. Peter brought up some of these points in a CNBC interview last week.

China’s recent move to devalue the yuan has sent shock waves through the global financial markets and convinced most observers that a new front in the global currency wars has begun. The move has caused many to envision a new round of competitive devaluations around the globe in which the race to the bottom will intensify. In this scenario they envision that the US dollar will solidify its standing as the only strong currency. This misses the point entirely.

15 08 17 yuan

In the past, most of the action in the “currency wars” had been focused on the efforts that many nations undertook to prevent their currencies from rising against the US dollar, which itself was being weakened by a perpetually easy Federal Reserve and persistently negative US trade and budget deficits. But with the dollar now strengthening significantly, the Chinese government has become concerned that the yuan, which has remained largely tethered to the dollar, had become too strong against other currencies, particularly its primary trading partners in Asia and the Pacific. To remain competitive locally, it decided to ease the tether to the dollar and instead let its currency float more freely. The purpose and implications of this significant pivot has largely escaped the US media. In reality, the move raises the likelihood that the yuan will rise significantly when the dollar resumes its long-term bear market, not that it will remain weak forever.

PBOC & Yuan: Trust Gold, Not Central Bankers

POSTED ON August 12, 2015  - POSTED IN Key Gold Headlines, Original Analysis

company-addison-qualeThis article was submitted by Addison Quale, SchiffGold Precious Metals Specialist. Any views expressed are his own and do not necessarily reflect the views of Peter Schiff or SchiffGold.

So the People’s Bank of China (PBOC) just weakened the yuan fix to the United States dollar by the most on record – 1.9%. A central bank has devalued its currency, you say? Well, duh! With apologies to GEICO, it’s what central banks do. Apparently with exports suffering and their economy struggling to grow, something had to give. Devaluing the yuan immediately gives its export sector a boost. The hope is that this boost offsets whatever capital outflows result from a now weakened currency.

15 08 12 yuan fix

The move recalls another recent currency devaluation on the other side of the world. This time last year, the Swiss National Bank still wholeheartedly protested that it would never let its currency fix of the franc to the euro revalue. It continued declare as much right up until the week that it dropped that very peg. Me thinks it doth protested too much.

2015 May Be Worst Recovery Year; Revise Your Rate Hike Expectations (Video)

POSTED ON August 11, 2015  - POSTED IN Original Analysis, Videos

Peter Schiff’s digs into Friday’s jobs numbers and the great expectations for a September rate hike from the Federal Reserve. In this Schiff Report, Peter walks us through the options Janet Yellen has right now and the repercussions they will have on the economy and US stocks.

This year, 2015, is probably going to be the weakest year of the entire recovery. And that’s with interest rates at zero for the entirety of the year. If the Fed really begins to raise interest rates, what’s going to happen in 2016? Obviously, we’ll be in a recession. If the Fed raises rates now, we’ll be in a bear market in stocks…”