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Key Gold Headlines

Newly Released White Paper: The Student Loan Bubble

POSTED ON September 3, 2015  - POSTED IN Key Gold Headlines, Original Analysis

This article accompanies SchiffGold’s newly released white paper, The Student Loan Bubble: Gambling with America’s Future. To learn more about the shocking student debt bubble, click here for a free download.

“You need a college degree to succeed in America.” This idea has become so commonplace that the right to higher education is now a core issue in most political platforms. What if a young person cannot afford a college degree? The “obvious” answer from politicians on both sides of the aisle is that the government should subsidize them. Very few are brave enough to ask the far more important question: “At what cost?”

The answer is simple: as of today, the cost is $1.2 trillion. That is the current level of student loan debt in the United States, which represents the second largest category of consumer debt after home mortgages. It has grown by leaps and bounds since the financial crisis of 2008 and now surpasses even car loans and credit card debt.

student debt growth

The American Dream used to be simple: the ability to shape one’s own destiny and wealth without interference from the king, the government, or other powerful interests – the right to “life, liberty, and property.” Over generations, this dream has been coopted by politicians and bankers to gather votes and riches. In the 20th century, the idea of owning a home became an integral part of the Dream, which led to the disastrous idea that even unqualified borrowers deserve the opportunity to buy a house. We are all familiar with the fallout – the subprime mortgage crisis and ultimately the Great Recession.

Frightening Data Points to Potential Market Panic & Fed Inaction

POSTED ON September 2, 2015  - POSTED IN Key Gold Headlines, Original Analysis

Yesterday, the Arms Index (TRIN) spiked dramatically to levels not seen since 2011 and nearly twice as high as last week’s “Black Monday.” The Arms Index is a way of measuring how balanced the stock market is, with higher values suggesting the market might head in a bearish direction sooner than later. As ZeroHedge describes it:

A sudden surge in the TRIN indicates a jump in trader lack of confidence, as everyone scrambles to either go long the 2-3 rising stocks, or to sell or short the biggest decliners, ignoring the bulk of the market.

15 09 02 Arms Index

Of course, the Arms Index is a purely technical indicator that stock speculators watch closely, but it coincides with a growing mountain of data pointing to frightening volatility in American stocks and major cracks in the rosy mainstream narrative of an economic recovery in the United States. International banks, investment firms, big-name fund managers, and everyday technical analysts have all been sharing insights into terrible data and trends the financial media has largely ignored.

This Month in Gold – August 2015

POSTED ON August 31, 2015  - POSTED IN Key Gold Headlines

South Korea, China Buying Up Gold
Reuters, Bloomberg – South Korea and China both reported an increase in gold purchases last month. Based on first-half sales through the country’s largest gold merchant, South Koreans are on pace to purchase $860 million in bullion – a yearly record. Analysts estimate South Koreans hold around 800 metric tons of gold in households and private vaults. China upped its gold reserves by 1.1% in July, an increase of about 19 tons. In an unexpected update, Chinese officials said the country owns about 1,677.4 tons of gold. The previous update came in July, after China had been silent on the size of its reserves for six years. Read full South Korea Article>> Read full China Article>>

Perth Mint Gold Sales Hit 9-Month High
Reuters – Gold sales at the Perth Mint climbed to a nine-month high in July. The spike followed a similar rise in US Mint sales of gold coins, which hit a two-year high last month. Perth Mint sales of gold coins and minted bars rose to 51,088 ounces in July, from 31,019 ounces in June. That was the highest increase since October 2014. The Perth Mint runs the only gold refinery in Australia, which is the world’s second-biggest gold producer after China. Read Full Article >>

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.

Could Americans Someday Use Dollars as Napkins?

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

Stories about plummeting stock markets, a sputtering Chinese economy, and the yuan versus the dollar have dominated financial news over the past few weeks. Lost in the din: the economic disaster continuing to unfold in Venezuela.

Venezuelans face crippling shortages of basic staples as their currency, the bolivar, continues to inflate at breakneck speed.

bolivar

Hyperinflation has rendered the bolivar practically worthless. A photo uploaded to Reddit of a man using a 2 bolivar note as a napkin went viral last week. Business Insider reported that based on the official exchange rate, the makeshift napkin was worth about 32 cents. But in reality, the man didn’t waste nearly that much.

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?

Greenspan: Higher Interest Rates Are Inbred in Human Nature (Video)

POSTED ON August 21, 2015  - POSTED IN Interviews, Key Gold Headlines, Videos

Former Federal Reserve Chairman Alan Greenspan appeared on Fox Business this week with two strong messages for investors:

1. The United States economy is “extraordinarily sluggish,” and part of this problem is the massive amount of government entitlements. He pointed out that entitlements have grown nearly 10% a year for the past 50 years, no matter which political party is in office. This adversely affects savings, which is the foundation for economic growth – a message Peter Schiff has been sharing for years.

15 08 21 greenspan on fox

2. Interest rates have never been kept this low for this long, so a huge bubble in bonds is forming. While this could correct itself slowly, history tells us that it will likely pop quickly, with devastating effects for the financial markets.

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.

Surviving Without Fiat: Alternative Currencies in Greece

POSTED ON August 14, 2015  - POSTED IN Key Gold Headlines

The other week, we wrote about the growing barter economy in Greece. With cash withdrawal limits still in place, Greek citizens are finding it difficult to conduct daily business using traditional methods. Now, the Wall Street Journal reports on the flourishing of a variety of alternative currencies, particularly one named TEM:

TEM—a sophisticated form of barter whose name is the Greek acronym for Local Alternative Unit—was founded in 2010 in the early months of Greece’s debt crisis with less than a dozen members. Now it includes dozens of participating local businesses that use the system to sell goods and services, including prepared food, haircuts, doctor visits, or even for renting an apartment.

“One of the larger and more established alternative payment systems in Greece, TEM has given Greeks living under the strain of wage cuts and tax increases a supplementary way to trade. Instead of dealing with a physical currency, members have an online account that starts at zero when they join. They can opt to take payment for goods and services in TEM, and then use those to buy products from others.”

15 08 14 TEM