Peter Schiff: You Can’t Compare GameStop and Silver

On Monday, Feb. 1, Peter appeared on NTD Business to talk about the attempted short squeeze on GameStop and silver. He said we shouldn’t compare GameStop stock to silver. Unlike GameStop, there are fundamentally sound reasons to buy silver, with or without the endorsement of the Reddit traders.

When the Reddit Raiders turned their attention to silver, Peter tweeted that they were getting smarter. “Silver stocks are actually cheap and represent good investment value. The fact that some investors were foolish enough to short these stocks makes their trade even better.”

So what’s the difference between GameStop and silver? Peter said it’s a “completely different story.”

Silver is undervalued. I mean, it is way undervalued. Recently, it was historically cheap in relation to gold. And there is a relatively significant short in the silver market that eventually is going to be forced to cover. I don’t know if they’re going to be forced to cover now. But I think they will eventually, especially in the futures market where you have all this paper silver that’s traded. People are on the hook to deliver it, but they never have to because the longs never actually want the silver. They’re just content to take their paper profits or roll the contracts to the next month. But one of these days, all the people who have bought these contracts are going to actually want delivery. They’re going to want the actual silver and the people who have shorted the contracts are not going to be able to deliver. They’re going to have to go into the market to try to buy the silver to deliver it and it’s just not there — and so the price will go up a lot.”

Peter said people should be buying silver. And people who are more speculative should look at silver stocks.

I think there’s a lot of upside potential there. So, I would definitely encourage people to buy into silver.”

Peter reiterated that this is much different than GameStop.

I’m worried about all the people who are going to lose money there. I’m not worried about people buying silver — as long as they hold on to it.”

He said people shouldn’t get scared and sell if silver pulls back (as it did on Tuesday).

Don’t be scared. Just don’t throw it all in at once. And if you get a pullback, well, average down and buy more because you’re building a position in an undervalued commodity that I think is going to go way up over the next several years.”

So what will bring on the “day of reckoning” when people will start asking for delivery of physical silver? Peter said he didn’t know. Of course, it hasn’t happened yet.

Sometimes people get complacent. Just because something hasn’t happened doesn’t mean it won’t happen.”