Kitco News spoke with Peter Schiff at the Grand Cayman Liberty Forum about the gold market. They covered the gamut, from the economic fundamentals for gold’s next price rise to the Swiss gold referendum at the end of the month.
The price of gold in US dollars was up 1.5% this morning, boosting it to a 2-1/2 week high. Although the financial media continues to be bearish on precious metals, central banks around the world are starting to look more closely at the yellow metal as an important asset. Their reasons for buying or considering to buy gold vary widely from one bank to the next, but analysts are starting to expect a boost to the gold price in December thanks to central banks.
The 3rd quarter of 2014 marked the 15th consecutive quarter that central banks were net purchasers of gold, according to the World Gold Council. Here’s a brief rundown of some of the notable international gold news this week:
This post was submitted by Erik Oswald, SchiffGold Precious Metals Specialist. Any views expressed are his own and do not necessarily reflect the views of Peter Schiff or SchiffGold.
In this article from Smaulgld, Louis Cammarosano examines the fundamental supply and demand figures for the gold market. Demand for physical gold has been increasing year over year since 2008, despite rising prices up until 2012. Following the correction from $1900 per ounce, market demand for physical bullion really took off. While many in the West do not appreciate the monetary significance of precious metals, the East has been consuming physical gold and silver at an unprecedented rate. This is evident in the official reserves reported by central banks. On the whole, Western central banks have been decreasing their holdings of physical bullion while Eastern central banks have been all too eager to purchase the surplus.
Countries like China are all too familiar with the dangers of paper monetary systems and have a much longer view of history than most Western central banks. The United States has never experienced a hyper inflationary environment in which the dollar has dropped to its intrinsic value of zero. Because we have exported inflation to our trading partners since World War II, we have been able to stave off the destructive effects of circulating irredeemable paper notes as real money in ever increasing quantities. Meanwhile, the developing BRICS countries have been cementing various trade and financial agreements with one another over the last several years. Their appetite for physical gold and silver is but one of many steps being taken to prepare for a world without the US dollar as a reserve currency.
Although we’re based out of the United States, SchiffGold and its Chairman Peter Schiff are passionate supporters of the Swiss Gold Initiative. Our hope is that Switzerland sends a message to the world’s central bankers that people are sick and tired of having their money manipulated. We’ve been doing our best to promote the issue, and Peter has even recorded a popular video appealing to Swiss voters that you can watch here.
However – and we hate to suggest this – what happens if Switzerland does not re-embrace gold and a sound currency on November 30th? The truth is that you do not need to rely on your government and central bank to maintain a gold standard. You can start your own personal gold standard at any time by owning precious metals as part of your own savings – your personal “reserves,” as it were. Jim Rickards explains the concept very well in a recent article:
In an interview with HedgeyeTV, David Stockman explains why he believes we’re on the verge of popping another major financial bubble for the third time in this century. He and Keith McCullough also discuss the potential political fallout from this bubble – who will be the politician to fire Janet Yellen and refute Keynesian policies? They wrap up by talking about Stockman’s recent book The Great Deformation and how the financial media is caught up in a “recency bias” that allows them to ignore the monetary fraud being perpetrated by the Federal Reserve and the government.
While parts of this conversation are a bit technical, Stockman does a great job explaining the fundamental economic and political realities of the United States.
In this SchiffGold exclusive video, Peter Schiff sits with Axel Merk at the recent New Orleans Investment Conference to discuss gold investing in the midst of the currency wars. Like Peter, Axel was one of the few analysts to warn of the 2008 financial crisis and he remains one of the few analysts independent from the mainstream “recovery” consensus. Their conversation covers the history of gold’s price performance, the upcoming Swiss Gold referendum, the role of physical bullion in a portfolio, and much more.
Lampoon the System urges the Swiss to defend their Fortress of Sound Money by voting “yes” on the Swiss Gold Initiative on November 30th.
SchiffGold now has a full archive of all past editions of Lampoon the System comics created for our brand. Explore them here.
Jon Pawelko publishes the web comic Lampoon The System to poke fun at insane economic policies and educate the public on sound economics.
Click here for more cartoons and information on his anthology book, available for only $15.
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James E. Miller, editor-in-chief of Mises Canada, published a defense of Peter Schiff’s forecasting record last week. Miller calls out mainstream financial media as biased Keynesian propagandists, while praising Peter’s willingness to stand by Austrian Economics in the face of public ridicule.
Still, Schiff has a point. He went on national television and endured a deluge of mockery for challenging established opinion. His forecasts, while not always correct, were far more accurate than those of his contemporaries. No one likes an ideologue wedded to a philosophy to the point of redundancy; yet there comes a point when facts are facts. When it mattered, Schiff had both an accurate assessment of the economy and a solid explanation to justify his findings. His advice might have saved the livelihood of millions, had it been taken. To this day, his call was seen as heroically prophetic, even while his philosophical underpinnings are still held in suspicion. He hasn’t earned the benefit of the doubt in the eyes of his Keynesian-minded contemporaries.”
Renowned author and investor Jim Rogers appeared on RT yesterday to share his thoughts about the end of the US dollar as the world’s reserve currency. In this short interview, he suggests that the Chinese renminbi might fill the void left by the dollar. This prediction shouldn’t be much of a surprise to our readers, as we’ve been following the ever-growing gap between the East and West. The big takeaway is this: Rogers is certain that by the end of this decade, the world will be well on its way to completely abandoning the dollar as a reserve currency.
The US thinks that they’re in charge and they don’t have to worry about anything. No, I hate to say it – I’m an American citizen – but you know, there’s a lot of arrogance still in the United States. Especially about the dollar.”
This post was submitted by Erik Oswald, SchiffGold Precious Metals Specialist.
The Financial Times reported yesterday that Russia and China have signed a gas deal that would side-step Western markets. This agreement is just the latest development as the two countries continue to cement ties and diversify their holdings away from the United States. Reaching this agreement further removes the Chinese from dependence on oil purchased from OPEC and thereby puts another nail in the coffin for the petrodollar standard. Not only that, but its announcement comes just days after Mikhail Gorbachev warned that the world is nearing another Cold War.