On CNBC last night, Peter Schiff debated Wayne Kaufman, Chief Market Analyst at Phoenix Financial Services. Is the NASDAQ in bubble territory today? Kaufman argues that the tech landscape is completely different than it was in 1999. Peter counters that a bubble always looks different than the last one when you’re in the middle of it.
Whenever there’s a bubble, it’s always different this time. There’s always reasons to rationalize why it’s different. Remember, that’s exactly what everyone was doing in 1999 and 2000. They were rationalizing why it was a new era, it was a new economy… Bubbles always make you choose. Either you’re going to look like a fool before they pop, or you’re going to look like a fool after they pop.”
Income inequality has been a hot topic since the bailouts of the big banks following the 2008 financial crisis. A recent article from National Public Radio’s Planet Money shines a light on the history of the trend, which has only gotten worse in the past few years.
Beginning in the Great Depression, and continuing until about 1970, the average income of the bottom 90% of United States wage earners exploded. It grew more than 200%, while the top 1% saw just a tiny fraction of that income growth.
Beginning the 1980s, that trend reversed dramatically. Since then, the bottom 90% of Americans have had relatively stagnant income growth, while the top 1% has grown its income nearly 250%. What is NPR’s explanation for this?
In his latest video blog, Peter Schiff briefly reviews last week’s negative economic data. He then looks at a recent public interview with Alan Greenspan, who believes that the US economy is not nearly as strong as everyone would like to believe. While Greenspan blames this on Congress, he simultaneously credits the Federal Reserve for inflating the current stock market bubble. All this from an economist who once criticized the Fed for market manipulation. How the times have changed.
I think Alan Greenspan knows it’s going to end badly. That’s why he’s advocating that people buy gold. But in this particular interview, he’s trying to absolve the Fed, because he’s trying to absolve himself.”
Jessica Fung, Commodities Analyst for BMO Nesbitt Burns, explained her firm’s belief that gold has always been and will always be a safe-haven investment. Fung sticks to the mainstream perspective that the Federal Reserve is still planning to raise interest rates in 2015, though she does admit that BMO now predicts the Fed is going to push back that rate hike. It’s interesting to watch a major financial firm dance around the increasingly confused market sentiment and convoluted messages from the Fed.
Investors should take note that major financial players are starting to publicly admit that gold is an essential investment regardless of the supposed strength of the US economy or dollar – exactly what Peter Schiff has been saying for years.
Explore the latest exciting developments in the silver industry with the February edition of Silver News. Its front-page story covers how silver nanowires are being explored as an alternative to widely-used indium tin-oxide. Once testing is complete, silver could become even more essential to the manufacturing of touch-screens, plasma televisions, and other common electronics.
Perhaps even more exciting is the new commercial release of a 3D printer that can simultaneously print conductive silver inks inside plastic designs. Everyday consumers can now print customized electronic devices. This advancing technology could add significant demand to the electronic silver market beyond large manufacturers. You can watch a video about this new printer from Voxel8 below.
Chinese Gold Demand Outpaces World Production
Forbes – More than 315 metric tons of gold were withdrawn from the Shanghai Gold Exchange from the beginning of January to mid-February. During the same period, only 300 tons were newly-mined around the globe. The gold demand came in preparation for the Chinese New Year, the country’s biggest holiday. China is already the world’s second largest gold consumer, but its bullion demand will likely surge with changing demographics. In the next 5 years, China’s middle class is expected to grow 66% to 500 million.
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Peter Schiff appeared on RT last night to discuss Janet Yellen’s testimony, the Federal Reserve’s schedule for raising interest rates, the direction of the US economy, and stock buy backs that indicate a bubble in the stock market.
After her testimony to Congress this week, the mainstream media reported that Janet Yellen has put the Federal Reserve on the path to raising interest rates. However, Peter Schiff digs into Yellen’s official testimony from this week, showing beyond a shadow of a doubt that the Fed hasn’t even begun to think about a rate hike. It’s all right there in Yellen’s official prepared remarks. Peter also addresses the ridiculous popular notion that inflation is necessary for economic growth.
James Grant, Founder of Grant’s Interest Rate Observer, spoke with Kitco about his disappointment in the current price of gold. He places most of the blame on central banking, and the market’s inability to understand the long-term consequences of monetary manipulation. However, Grant believes it won’t be long before the world wakes up to the realities of this manipulation and returns to gold as a safe-haven investment.
The gold price, is to me, the reciprocal of the world’s faith in the words, deeds of these central bankers… The lower the confidence [in central banking], the higher the gold price.
“I, for one, can’t imagine why anyone would have confidence in the doctrines of central banking, predicated as they are on the manipulation of prices. Interest rates are prices. Central banks are in the business now, more than ever, of manipulating interest rates. They are inflating asset markets. It seems to me that the world will eventually see that these policies are non-starters.”
The US Justice Department has begun to investigate whether 10 of the world’s largest banks have manipulated gold and silver prices. The Justice Department is just the latest in a series of financial regulators to investigate possibilities of precious metals manipulation, including the UK Financial Conduct Authority, Germany’s BaFin, and Switzerland’s competition commission WEKO. On top of that, there are a number of pending civil lawsuits in New York against some of these same banks for gold price rigging.
What should physical gold and silver investors take away from this news?
