After months of speculation, the Chinese yuan is now officially part of the International Monetary Fund’s benchmark currency basket, elevating it to reserve currency status.
Chinese monetary policy has focused on gaining entry into this elite club for the last year or so. With its membership safely secure, it raises an interesting question.
What’s next?
The IMF announced the yuan’s inclusion in the Special Drawing Rights (SDR) basket Monday. The New York Times called it a “milestone decision,” underscoring the significance of the move in terms China’s growing power on the world economic stage:
This article was written by Dickson Buchanan, SchiffGold Precious Metals Specialist. Any views expressed are his own and do not necessarily reflect the views of Peter Schiff or SchiffGold.
To hike or not to hike? That is the question.
Indeed, that has been the question for what seems like an eternity. But the question of whether or not the Federal Reserve is going to raise interest rates in December misses the point. The truth is, the Federal Reserve is damned if it does and damned if it doesn’t.
The “rate hike hype” began nearly three years ago. We’ve experienced almost 36 months of wishy washy, back and forth, pseudo-scientific attempts to decipher increasingly vague and non-conclusive Fed minutes as to when, how much, and what kind of rate hike we can expect.
You don’t have to be a professional economist to recognize the Fed policy as a stall tactic. Peter Schiff has called them out on this point time and again, showing that if they really wanted to raise rates, they would have done so by now.
You probably think of eBay as a good place to snag a deal on electronic gadgets, musical instruments, or sporting goods. But increasingly people are logging onto the auction site to buy gold and silver.
EBay officials told CNBC the company is touting its global user base of 150 million people to reach non-traditional buyers. With so many people entering the market for precious metals, buyers should beware. The strong demand creates a breeding ground for scammers. In fact, eBay is apparently using the demand for gold and silver bullion to peddle collectibles.
Black Friday has become an infamous holiday of American consumerism. We seem equally amused and disgusted by the inevitable news of crowds waiting through freezing nights only to trample each other on the way to a discount toaster. Many people watch a video of Black Friday fights like the one below and shake their heads at the blatant materialism. We ask ourselves, “Where has the good, old-fashioned holiday spirit gone?”
Perhaps we should be asking a different question. These fights seem almost like an ominous foreshadowing of just how desperate people could become when faced with a real economic crisis. When Peter Schiff points to goods shortages, hyperinflation, and drastic bank emergencies in countries like Greece, Cyprus, or Argentina, most people shrug it off. “That could never happen here. America is different.” But if suburban house moms are willing to get into hair-pulling fistfights over electronics discounts, what do you think they’d be willing to do when their life savings disappears overnight thanks to inflation or a banking crisis?
On Tuesday, the US Mint announced it has sold out of one-ounce 2015 American Gold Eagles. Mint officials say they don’t plan to produce any more at this time.
Earlier this month, the mint announced it had run out of one-tenth and one-fourth ounce Gold Eagles.
The tremendous demand for gold bullion coins we’ve seen over the last several months continues unabated in November. Buyers have already snatched up 80,500 1-ounce Gold Eagles this month. Combining all coin sizes, total Gold Eagle sales stand at 199,500 in November.
On CNBC Asia on Wednesday night, Peter Schiff defended his forecast that the Federal Reserve is very unlikely to raise interest rates in December. He argued the Fed is focused on keeping a market bubble inflated, instead of allowing the US to experience a painful, but necessary economic recovery. Peter pointed to companies like Amazon as proof that market valuations are completely out of line with fundamental realities:
Amazon sells stuff for less than it costs. They just keep selling stuff and losing money… This is the problem everybody has – when you have companies that are selling at a loss because they’re trying to drive their revenues, not their profits. Because the people buying the stocks just don’t care.”
A federal program that will soon forgive billions of dollars in student loans illustrates the ineptitude of government planning and foreshadows bigger problems down the road.
The Public Service Loan Forgiveness (PSLF) Program erases the balance on student loans after the debtor makes 120 monthly payments while working full-time for a qualifying employer. The program was designed to incentivize graduates to go into relatively low-paying public service jobs such as public defender, social worker, and public health provider.
But as the Wall Street Journal reports, a loophole will allow thousands of high-paid workers to dump their student loan debt:
Increased demand for solar power is forecast to put significant upward pressure on silver prices in the years to come.
CNBC recently reported on the strong potential in the solar industry as governments continue a concerted drive to reduce global carbon dioxide emissions:
While the solar industry just accounts for just 6% of overall physical silver demand now, global solar capacity is growing at an average rate of 53% a year in the last decade, underscoring future growth potential, said London-based Capital Economics’s Simona Gambarini in a note Tuesday. About 2.8 million ounces of silver are needed to generate one gigawatt of electrical capacity from solar energy.”
Peter Schiff discussed the market expectations of a December rate hike from the Federal Reserve in his latest appearance on Alex Jones’ InfoWars. The two went on to discuss the real condition of the United States economy and why the US may soon be following Europe’s lead towards negative interest rates and more inflation. Finally, Peter made the case for electing Bernie Sanders in the 2016 Presidential Election:
By having Sanders as President, he’ll screw up the country so badly so quickly – and it’s already screwed up – that he might hasten a real revolution towards free markets, to abandon all this nonsense. All he wants to do is make the welfare state bigger. He wants to expand the socialist programs from the New Deal, from the Great Society. The stuff he wants to do would bankrupt America. But the problem is we’re already bankrupt. So why not go all-in on socialism so we know how bad it is, so we can puke it all out and start over again?”
The headline on the Pittsburgh Tribune-Review website says it all – “Collectors willing to overpay for silver.”
The article highlights an ongoing silver scam in Pennsylvania and other states featuring “US State Silver Bars.”
