This article was written 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’re already familiar with the investment strategy based upon the gold-silver price ratio. For those who are not, allow me to explain a bit about how focusing on this ratio can actually help you maximize your gold holdings.
(A quick disclaimer – SchiffGold does not recommend the trading strategy explained in this two-part article. Some sophisticated traders of gold and silver do employ it to increase their gold holdings. I’m writing about this, because SchiffGold believes gold investors should be aware of the long-term relationship between gold and silver and the implications of this price ratio. You can read more in our free special report – The Powerful Case for Silver.)
The strategy is pretty straightforward once you understand the gold-silver price ratio. The ratio is exactly what it sounds like: the price of gold divided by the price of silver. As of the writing of this article, gold sits at $1098 and silver checks in at $14.17. Dividing, we arrive at a gold-silver ratio of 77.49 ounces of silver to one ounce of gold. SchiffGold tracks the live gold-silver price ratio here.
So what’s the significance? Well, this price ratio is not constant.
Over the past two weeks, Peter Schiff released a podcast and a Schiff Report video. He also appeared on CNBC, the Daily Ledger, Fox Business, X22, Newsmax, Yahoo! Finance, Stefan Molyneux’s podcast , and CCTV America.
Since the beginning of the new year, Peter has focused on the horrible start on Wall Street and the likelihood of an economic downturn in 2016. In several appearances, he continued to argue that the Federal Reserve won’t be able to maintain its interest rate increase, and will ultimately drop the rate back to zero and launch another round of quantitative easing. Peter also offered his views on the State of the Union Address.
Follow these links to jump to the video or article you’d like to see:
1. CNBC Admits Peter Schiff Was Right, Jan. 14
2. CNBC: Blame Market Volatility on the Fed, Not Commodities, Jan. 14
3. Yahoo! Finance: What Will the Fed Blame the Coming Recession On?, Jan. 14
4. Stefan Molyneux’s podcast: The State of the Union: A Big Joke on the American People, Jan. 13
5. Schiff Radio podcast: Obama Delivers the Most Clueless State of the Union Address Ever, Jan. 13
6. The Daily Ledger: Yellen Could Pave the Way for Hillary with More Easy Money, Jan. 11
7. Fox Business: Bull vs. Bear; When Will the Stock Market Capitulate?, Jan. 11
8. Schiff Report: Deja Vu All Over Again: Stocks Plunge; Gold Surges; Markets Ignore Reality, Jan. 9
9. X22 Report: Next Crisis Will Be Much Harder on All Americans, Jan. 5
10. Peter Schiff Says Wild Ride on Wall Street Will Continue Until Fed Admits the Truth, Jan. 5
11. CCTV: Peter Schiff: Puerto Rico Bailout Immoral; Bankruptcy a Better Solution, Jan. 4
This 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.
Check out this article on an absolutely mind-boggling phenomenon taking place in Switzerland. Apparently Local Cantons (what states are apparently called over there) are actually telling taxpayers not to send the money they owe in to the government – at least not right away. They’re saying just hold on to the cash until the deadline.
What could possibly be a good reason for Leviathan to not want its food/funding ASAP? Well, when you live in a land of negative interest rates, things get a bit tipsy turvy. I guess it’s a bit like bizarro-world from that episode of Seinfeld – where up is down and bad is good.
Peter Schiff appeared on Stefan Molyneux’s podcast Wednesday and dissected the State of the Union address. Peter summed it up this way:
He opened with a joke, he closed with a joke. The entire State of the Union address was one big joke. Unfortunately, the joke is on the American people.”
Peter Schiff believes the Federal Reserve’s December interest rate hike was actually the end of the Fed’s tightening cycle that began with the first talk of tapering quantitative easing (QE) several years ago. Economic data will continue to be weak, and the US will likely be in an official recession in 2016 if it isn’t already. The Fed will be forced to restart QE and lower interest rates again, maybe even into negative territory. When that happens, investors who have been selling gold on expectations of economic health will have to reverse their bets and begin buying as gold rallies.
In episode 130 of his Podcast, Peter Schiff discussed the State of the Union address, calling Obama’s speech the most clueless ever.
Peter breaks down all of the economic fallacies the president invoked during the SOTU, honing in on the fact that the president seems oblivious to the fact that we are about to head over an economic cliff. Instead he’s claiming victory over the Great Recession and acting like economy is great:
I think it will probably go down in history as the most clueless State of the Union Address ever, because all he talked about was how great the economy was, how we created all these jobs. He even had the chutzpah to take credit for reducing the budget deficit.”
In the latest Schiff Report, Peter Schiff looks back at the first week of the new year, examining the performance of the US and Chinese stock markets, the price of gold, and a collection of other economic data. Peter was one of the only analysts who insisted gold would rise after the December rate hike, but mainstream financial media and investors seem determined to ignore his warnings. Peter can’t help but see the parallels between today and the years leading up to the dot-com bubble and housing crisis.
The one thing that hasn’t declined since the Fed raised rates is gold… If you remember, everybody was unanimous that if the Fed raised rates, gold was going to tank… But I was saying the opposite, because I knew the price of gold had been falling for years, anticipating the Fed raising rates… In fact, this week alone, the price of gold was up 4%. We closed at over $1100 an ounce. If you want to measure the stock market in gold, the Dow dropped better than 10% this week in terms of gold, which is a horrible week for the market in real terms. And I think there is a lot more coming.”
This 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.
Flashing red stock markets seem to have become something of a norm in this new post-rate-hike world.
Since Yellen made her big announcement in December, we’ve witnessed a general downward trend in stocks. At one point this week, the S&P had shed over 120 points. That’s well over 5%. The Yellen announcement aftermath has been particularly bad for US stocks. They were down almost 100 points early in the week. This drama has been punctuated and influenced greatly by the continued carnage in Chinese stocks.
Nobody really seemed to pay a whole lot of attention to the bombshell dropped by the former president of the Federal Reserve Bank of Dallas, but Peter Schiff picked up on it.
Richard Fisher essentially admitted that the Fed manufactured the stock market recovery. Peter talked about it on his podcast.
[He]was on CNBC yesterday. I can’t believe some of the things he actually said. But he admitted that he and his buddies at the Federal Reserve engineered – and that was his word, ‘engineered’ – a stock market recovery rally. That they front-loaded a bull market. He said this. He said the Federal Reserve did it deliberately to create a wealth effect. Yes, they wanted to create all this phony wealth based on an artificially pumped up stock market. They wanted all this phony wealth to cause us to make stupid, irrational, reckless decisions.”
In episode 129 of his podcast, Peter went on to talk about the ramifications of the Fed’s actions, and took an in-depth look at the numbers, revealing a fundamentally weak economy. He also continued to make the case that the Fed won’t be able to maintain the rate hikes, but will ultimately go back to zero and launch more quantitative easing.
