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Original Analysis

How to Buy, Store, and Sell Precious Metals with SchiffGold

POSTED ON April 28, 2016  - POSTED IN Original Analysis

company-dickson-buchananThis article was written by Dickson Buchanan, SchiffGold Precious Metals Specialist. Any views expressed are his own and do not necessarily reflect the views of Peter Schiff or SchiffGold.

Due to the high level of response from our readers to the first article we posted on the benefits of our low cost vault storage solutions, we wanted to follow up and delve into the details of how to buy and sell gold and silver stored in a domestic or international vault.

To begin with, creating a storage account through our storage partners is a simple and easy process. Individuals as well as corporations, LLC’s, trusts, partnerships and other legal entities, can open an account. There is a one-page form to fill out, a couple of identification documents to provide, and in about two to three business days, your storage account will be opened. As our website details, we have domestic storage locations here in the US in addition to strategic international jurisdictions abroad.

Once the storage account is created and you have your assigned account number, you can then proceed to buy your physical metals from our firm.

Pension System Collapse Turning Retirement Dreams into Nightmares

POSTED ON April 27, 2016  - 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.

You know the old saying. “There’s a sucker born every minute.”

Sadly, many Americans have been suckered into thinking their pension was going to provide a stable and comfortable retirement. But government mismanagement and central bank monetary policy are quickly turning that retirement dream into a nightmare.

Pensions have been a major contributor to the Greek financial crisis, and the American system is looking increasingly Greek.

Just last week, Central States Pension Fund, one of the largest pension funds in the nation, filed an application to cut participant benefits. Central States handles retirement benefits for current and former Teamster union truck drivers across various states including Texas, Michigan, Wisconsin, Missouri, New York, and Minnesota. And in Illinois, pensions are underfunded to the tune of $111 billion.

This is not just an American phenomenon. A UK pension fund is also having serious issues and is slashing benefits.

Another Prick In the Student Loan Bubble: Obama Administration to Forgive Nearly 400K Debtors

POSTED ON April 13, 2016  - 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.

On Tuesday, the Obama administration announced that the federal government will open the door to forgive nearly 400,000 student loans. According to a MarketWatch report, if every eligible debtor takes advantage of this pathway to forgiveness, it will total more than $7.7 billion:

The Department of Education will send letters to 387,000 people they’ve identified as being eligible for a total and permanent disability discharge, a designation that allows federal student loan borrowers who can’t work because of a disability to have their loans forgiven. The borrowers identified by the Department won’t have to go through the typical application process for receiving a disability discharge, which requires sending in documented proof of their disability. Instead, the borrower will simply have to sign and return the completed application enclosed in the letter.”

According to MarketWatch, about 179,000 of the borrowers eligible for discharge under the program are already in default.  A group of about 100,000 are at risk of having their tax refunds or Social Security checks garnished to pay off the debt.

It’s important to keep in mind this money doesn’t just disappear into thin air. The US taxpayer is ultimately on the hook for every forgiven dollar.

Inflation: A Semantic Change Worth Noting

POSTED ON April 12, 2016  - POSTED IN Original Analysis

Joel BaumanThis article was submitted by Joel Bauman, SchiffGold Precious Metals Specialist. Any views expressed are his own and do not necessarily reflect the views of Peter Schiff or SchiffGold.

We hear on the news all the time, “The Fed is fighting deflation,” or, “Central banks are responsible for maintaining a healthy 2% inflation rate.” But what exactly is the Fed fighting? What exactly is inflation and deflation?

The concepts of inflation and deflation have been completely misconceived by the public and economists alike. Back in grad school I was in the middle of class, and I realized the definition of inflation used by my professor was different than what I had originally learned. In fact, the definition given depended on whom I asked, or which book I read.

One can look up the definitions in any Webster’s dictionary published from 1864 through 2003 and find inflation defined as: “Undue expansion or increase, from over-issue; — said of currency.” This definition is seen in older versions of the American College Dictionary describing inflation as “Undue expansion or increase of the currency of a country, especially by the issuing of paper money not redeemable in specie.”

Central Banks are Pushing Monetary Heroin to Addicted Economies

POSTED ON April 7, 2016  - POSTED IN Original Analysis

Joel BaumanThis article was submitted by Joel Bauman, SchiffGold Precious Metals Specialist. Any views expressed are his own and do not necessarily reflect the views of Peter Schiff or SchiffGold.

We hear a lot about the role of central banks in the world’s economies. But what exactly have they been doing over the last few years, and what has the actual impact been?

Central banks have the authority over the interest rates and the quantity of a nation’s currency. Their official responsibility is to regulate price stability. By law some central banks, such as the Federal Reserve, operate under a dual mandate and must also promote full employment. Central banks hold the reserve assets that support the integrity of their issued currency.

The Federal Reserve holds the enviable position of being the issuer of the world’s primary reserve asset, the Federal Reserve Note, also known as the United States dollar. The Fed, in many ways, has led the charge in terms of the size and scale of unorthodox monetary policies practiced over the last few years. The impacts of these monetary policies are incredibly profound, and the world will soon see the true extent of their economic consequences.

Basically, the Fed and other central banks have played the role of a drug dealers pushing more heroin on addicted economies.

Negative Yields, Opportunity Cost and Gold

POSTED ON April 4, 2016  - POSTED IN Original Analysis

company-dickson-buchananThis article was written by Dickson Buchanan, SchiffGold Precious Metals Specialist. Any views expressed are his own and do not necessarily reflect the views of Peter Schiff or SchiffGold.

Last week, I published an article on the causes and consequences of negative interest rates. In it, I talked briefly about how negative yields hold significant implications for gold as an asset class. In this followup article, I will explain why that is.

Capital and Negative Yields

Capital in waiting – capital sitting on the sidelines waiting for a good investment opportunity – typically gets parked in government bonds. This is true for a number of reasons. Bonds are less speculative compared to most assets. The only risks are a sudden rise in yields or a fall in the denominated currency if it’s a foreign bond. Of course, some governments and jurisdictions are less appealing than others, as anyone with exposure to Greek bonds will tell you.

Despite a less than perfect track record,  government bonds are still considered the “risk free” asset. Setting aside whether they truly are“risk free” (they aren’t) they are certainly less risky than buying a stock, or trading a commodity or a piece of real estate. In the former two options you risk immediate price exposure with every tick, and in the latter, there are natural liquidity restraints. Additionally, the bond market is the only market big enough and liquid enough to absorb this kind of capital. If you are thinking about money in the bank, make no mistake, there are little to no physical cash reserves sitting in the bank. All the deposited funds are moved into another asset at the bank’s discretion within regulatory restraints.

Stockman Misses the Boat: We Don’t Need to Get Rid of Yellen; We Need to End the Fed

POSTED ON March 31, 2016  - 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.

Perhaps you are familiar with David Stockman and his mind-bogglingly long in-depth economic analyses topped off with blustery bombastic titles. Clearly, he’s an incredibly smart guy, and he’s produced some great stuff. But something is off in this recent article, and unfortunately, it betrays a fundamental lack of understanding of what’s really going on in the financial system.

It only took the first two paragraphs of his tirade for him to go astray:

Simple Janet should have the decency to resign. The Fed’s craven decision last week to punt on interest rate normalization is not merely a reminder that she is clueless and gutless; we already knew that much. That’s right. In the midst of vastly inflated and combustible financial markets, the all-powerful Fed is being led by a Keynesian school marm stumbling around in an explosives vest. She apparently has no idea that a 38 bps money market rate is not a pump toggle on some giant bathtub of GDP; it’s an ignition fuse that is fueling the greatest speculative mania in modern history.”

Essentially, Stockman is calling for Yellen’s resignation because all the economic data is pointing toward the appropriateness of a Fed rate hike after almost a decade of ZIRP. Instead, at the latest Fed meeting Yellen, “paused” the rate normalization, and, as such, is merely fanning the flames of the current speculative bubbles at work in the economy that will inevitably burst.

Stockman makes two errors in his analysis.

Negative Interest Rates: Causes, Consequences and Ramifications

POSTED ON March 29, 2016  - POSTED IN Original Analysis

company-dickson-buchananThis article was written by Dickson Buchanan, SchiffGold Precious Metals Specialist. Any views expressed are his own and do not necessarily reflect the views of Peter Schiff or SchiffGold.

Central Banks are under the mistaken belief that negative interest rates could be the magic kiss which turns their toad economics into Prince Charmings.  Why exactly do they think this? What makes Draghi, Kuroda, and others think imposing negative interest rates will stimulate credit and lending in their respective economies?

It is important to understand the logic behind this historic moment in global monetary history. Negative interest rates are unprecedented and show how far we have gone off course in terms of policy related to money and credit markets. They are already having a tremendous effect in several European countries and Japan, and they may eventually be coming to the US. Negative rates hold significant future implications for gold as well.

MF Global: Heed the Warning

POSTED ON March 28, 2016  - POSTED IN Original Analysis

Joel BaumanThis article was submitted by Joel Bauman, SchiffGold Precious Metals Specialist. Any views expressed are his own and do not necessarily reflect the views of Peter Schiff or SchiffGold.

Unfortunately, too few people remember or know of the story of MF Global Inc.

MF Global was one of the most respected primary dealers for stock, bond, and futures trading. The firm had been operating over 200 years, formerly known as Man Financial. In 2010, the company was directed by Jon Corzine, who was a senator, governor, and at one time was the CEO of Goldman Sachs. MF Global was second-to-none, and it serviced some of the wealthiest private traders and institutions.

In the fall of 2011, 38,000 accounts were adversely affected when MF Global illegally transferred $1 billion in funds out their clients’ trading accounts. MF Global used these funds to cover the company’s personal trading losses after some European bond investments went belly-up.

Why Bother with Cash When You Can Own Gold? – Peter Schiff’s Gold Videocast with Albert K Lu (Video)

POSTED ON March 24, 2016  - POSTED IN Original Analysis, Videos

The conventional knock on gold is that it is inconvenient and expensive to hold, and doesn’t provide yield. But as Albert K Lu shows in his latest Gold Videocast, in a world of negative interest rates, this argument is becoming applicable to cash.

For instance, the world’s second largest reinsurance company has decided to pull cash from banks and store it in its own vaults to avoid negative rates. If you are going to do that, why not buy gold? Especially in a very weak economic environment.

I think people are figuring out that if you’re going to go to all this trouble holding physical bills, taking your deposits out of the bank where they once were very liquid and apparently very safe, and go to the trouble of vaulting them at home or in your company’s vaults as in Munich Re, maybe you should start thinking about gold.”