Don’t Wait for Gold’s Official Bottom to Buy (Video)

Greg Hunter of USAWatchdog interviewed Peter Schiff last week about the new highs in the stock market and what the positive financial news really portends for the United States economy. Peter also shares his thoughts about a bottom in the gold price.

Here are some highlights from the interview:

They don’t actually understand the fundamentals. The big disconnect right now is between the real state of the US economy and the fantasy land that a lot of investors believe exists. Everyone is of the opinion that the Federal Reserve’s monetary policy worked. That because they did QEs 1, 2, and 3, and they kept interest rates at zero, the Federal Reserve saved the US economy. They solved all the problems, and because the problems have been solved, we no longer need a Fed. They can end quantitative easing, they can raise interest rates back to normal. They can shrink their balance sheet… Everything is fine. That is a complete fantasy. I think there is a bigger disconnect now than there was just before the 2008 financial crisis…

Rather than raising interest rates next year like everybody expects, I think they’re going to launch QE4, which nobody expects. Because there is no end to this. The Fed has to do this indefinitely, because the minute they stop artificially propping up this phony economy it will implode. What everyone is confusing is a bubble for a genuine recovery. It’s not…

The fact that we’ve been able to postpone the day of reckoning so long, just makes the problems worse. Which means the day of reckoning is worse, because the further back into the future we deal with the consequences, the bigger the problems are… Just because it hasn’t happened yet, doesn’t mean it’s not going to happen…

Maybe [more QE is] going to be the wakeup call. Because the only reason we’ve been able to get away with it is because people believe it’s temporary. They believe it’s going to work. They believe the Fed has an exit strategy. When they realize it didn’t work, it failed, and because it failed, it’s never going to end, it’s going to be repeated indefinitely, it’s QE-infinity. Which is what I said from day one. That once we went down this road, we would never stop. Once we have an economy that lives by QE, it will die by QE…

I think it’s still too early to call a bottom [in gold and silver]… Certainly in the mining stocks… [it] looks like capitulation, which is what you get at the end of a bear market. I think some of the valuation of these stocks is absolutely ridiculous. I think it’s the mirror image of the dot-com bubble, where they were extremely high valuations. Here you have extremely low valuations and the sentiment is off the charts negative for the gold markets. I think it is very suspicious for a bottom…

I would like to see the price of gold back above $1,250 in order to feel confident that we have a bottom… But I wouldn’t wait. Prices are certainly low enough that you should be buying. If you’ve been out of the market, waiting for a bottom, don’t wait, just buy. Even if we’re not at the bottom of the market, you’re certainly close enough to it that you’re getting a tremendous value. Trying to get the absolute bottom is almost impossible to do and it probably guarantees that you’re going to miss it by a wider margin than if you just bought now. I don’t think it matters whether the bottom is in…

We also have the Swiss vote coming November 30th… If the Swiss do pass that it could be very bullish for gold. It could be the first of many central banks. Maybe other citizens will decide to rein in their runaway bankers and reclaim their currencies. We’ll see if they do pass that, there’s a lot of gold they will have to buy, or a lot of euros they will have to sell…

I’ve never seen a situation where you have so much money that’s been printed and so much money that’s going to be printed, and that central bankers are promising to print. And yet people aren’t smart enough to know they should be buying gold. They’ll figure it out eventually…

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