Last night, Peter Schiff told CNBC how he expects the Greek financial crisis to affect United States markets. Peter thinks that the Federal Reserve will come in with another round of quantitative easing to prevent the dollar from rising too much against a struggling euro. Instead, he believes the Puerto Rican debt crisis presents a bigger problem to the US, because it could add significant risk to the municipal bond market and perhaps even breed a greater distrust of Treasuries.
In this final part of their video series, Peter Schiff and Mike Maloney discuss why gold is the ultimate hedge against the government’s irresponsible monetary policies. Neither Mike nor Peter like to predict a final price for gold. However, they agree that given the history of paper money systems, gold will be heading much higher when priced in US dollars. How much higher? Find out in their full, 5-year gold forecast.
View part one: Peter Schiff & Mike Maloney’s First Face-to-Face Discussion
Part two: Is Gold Heading to $13000?
Part three: Saving Your Retirement Nest Egg from the Next Market Crash
Part four: The Inflation/Deflation Debate
This post 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.
You know, it’s funny. When someone is known to have a valuable treasure, everyone around them surely covets it. In fact, if it’s really really valuable, many would try to get their hands on it, perhaps by offering to trade for it, or even by trying to steal it outright. But as long as the owner knows the true value of their treasure, they’re not likely to let it go easily.
But therein lies the key to getting at that treasure. What if you were able to convince the owner that their treasure really wasn’t that valuable? What if you could trick them into thinking it was worthless, run of the mill, and just a beat up old piece of junk? What if you slowly deceived them into thinking their treasure was just a “barbarous relic”?
Perhaps you already know where I am going with this and have seen Mark Dice’s recent video of trying (and failing) to give away a 10-ounce silver bar on the streets of Encinitas, CA. Americans have been tricked into believing precious metals are not valuable.
China will reportedly create a yuan-denominated physical gold price setting mechanism through the Shanghai Gold Exchange (SGE) by the end of the year.
According to a Reuters report, the plan aims to give China more influence over gold pricing. The country already leads the world in production and consumption of gold bullion.
Greece has closed its banks and instituted capital controls. The measures will remain in effect until at least July 6th, the day after a popular referendum on European bailout aid is due to take place.
Rather than agree to further austerity measures in exchange for an extension of financial aid from its international creditors, Prime Minister Alexis Tsipras surprised markets by putting the decision to a popular vote. Greece’s current bailout program expires tomorrow, when a 1.6 billion euro payment to the International Monetary Fund also comes due.
Stock markets across the globe fell on the news, and gold rose about 0.7%.
Bloomberg reports that Greece’s capital controls include:
- Banks are closed up to and including July 6.
- International payments and transfers are banned.
- Daily ATM withdrawals are limited to 60 euros ($67; £42).
Carl Icahn made news this week when he sold his stake in Netflix. However, the bigger message Icahn shared with CNBC was that he thinks the United States stock market is “extremely overheated.” He warned investors that he sees similar problems as 2008:
I personally do [think that the US equity market is in for a dramatic pullback]. I’ll tell you that to me it’s a no-brainer.”
Billionaire investor Icahn isn’t the only high-profile advisor warning against high-yield bonds. Ian Spreadbury, one of the biggest bond fund managers in Britain, is warning investors to start saving in cash and precious metals.
The Telegraph reports that Spreadbury is worried about another “systemic event” rocking the markets, “possibly similar in magnitude to the financial crisis of 2008.”
The best strategy to deal with this, he said, was for investors to spread their money widely into different assets, including gold and silver, as well as cash in savings accounts. But he went further, suggesting it was wise to hold some ‘physical cash’, an unusual suggestion from a mainstream fund manager.”
It’s been a while since we heard from Jim Rickards, one of the leading contrarian economists. In a new interview with Kitco, Jim shared his opinions on a wide range of topics. He talked about the current relationship between the United States dollar and the Chinese yuan, as well as what he expects to happen in Greece. He shares Peter Schiff’s opinion that politics will prevent Greece from leaving the euro. He also agrees that the Federal Reserve is not going to raise interest rates until 2016, or maybe even as late as 2017. On top of all that, he sees the dollar losing value in the coming year and price of gold rising.
Mark Dice walked around downtown Encinitas, California and tried to sell a 10-ounce bar of silver for only $10. At today’s prices, that bar is worth about $160. He asked men and women, young and old, if they’d like to buy it. He even lowered the price to $1 while standing directly out front of a gold dealer. How many people do you think took him up on the offer?
This is a great video to show the naysayers who argue that precious metals are in a bubble. There are many people who think the prices of gold and silver are ready to plummet at any time. They predict gold could drop as low as $700 an ounce and silver could fall into the single digits.
However, bubbles are often associated with a certain amount mania. The asset or market in a bubble is often widely considered to be a valuable investment.
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Renowned investors like Bill Gross and Carl Icahn have warned Fox Business that a bubble is forming in financial assets. Icahn told Fox:
[In] the financial markets, I believe that there really is a bubble brewing. Interest rates now are at a low that in the history of the Federal Reserve, they’ve never been held down this long. I don’t think anyone will deny it’s unchartered territory. It could be very, very destructive.”
Fox followed up with Marc Faber to get his take in the interview below. Faber warned of a destructive bubble in even stronger terms and recommended investors turn to gold mining shares, as well as physical precious metals for protection. He advocates storing your gold and silver internationally, for fear of confiscation from the federal government.
Peter Schiff doesn’t necessarily agree the government would take such a drastic course of action. The government doesn’t have the same incentives to seize physical gold nowadays. However, if you are interested in storing your gold and silver abroad, SchiffGold’s Precious Metals Specialists can help you find a safe and trustworthy custodian.
