After rallying on Friday, stocks tanked on Monday, dropping over 450 points. In fact, it was the worst first day of the second quarter since the Great Depression.
Most analysts blamed the plunge on the escalating trade war, but Peter Schiff has a different take. He said it was just another bad day in a bear market. In fact, he said the market could have rallied because the Chinese response wasn’t as bad as it could have been. But when you’re in a bear market, all news is bad news.
Yesterday, we reported that some of the big mainstream players in the investment world, including Goldman Sachs, have suddenly gone bullish on gold. They aren’t alone. US Global Investors CEO Frank Holmes said he thinks the yellow metal might hit $1,500 per ounce this year.
Even with the headwinds caused by Federal Reserve monetary tightening, gold has had a pretty good start to 2018. It’s up close to 3% on the year. In fact, gold is one of the best-performing assets so far this year. As of March 23, gold had outperformed the dollar index, the S&P 500, US Treasuries and the Bloomberg Commodity Index.
President Trump’s new economic adviser did an interview on CNBC’s Closing Bell Wednesday and offered a little investment advice.
I would buy King Dollar and I would sell gold.”
So, should you follow Larry Kudlow’s guidance?
Of course, that’s up to you. But Kudlow doesn’t have the best track record when it comes to predicting the future. On the cusp of the 2008 financial crisis, he was among the mainstream pundits saying the whole subprime mortgage thing was “no big deal.”
Turkey went on a gold-buying spree in 2017. That trend continued through the first two months of 2018 as the country continues to diversify away from foreign currencies – i.e. the dollar.
Data released by Borsa Istanbul shows Turkey imported 44.47 tons of gold in January and 16.03 tons in February for a total of 60.5 tons over the two-month period.
This article was written by Joel Bauman, SchiffGold Senior Precious Metals Specialist. Any views expressed are his own and do not necessarily reflect the views of Peter Schiff or SchiffGold.
The current debt-based fiat monetary system creates an illusion of wealth expansion.
For example look at this 100-year price chart of the Dow Jones Industrial Average.
We’ve been talking a lot about the rising levels of debt – both government and household. Set in an environment of rising interest rates, this is a huge problem very few people seem concerned about.
We’ve been enjoying a big party and it’s about to come to an abrupt end.
Russia has passed China to become the world’s fifth-largest gold-holding country.
According to a Bloomberg report, the Bank of Russia added nearly 20 tons of gold to its stash in January, raising its total to 1,857 tons. The People’ Bank of China reported holdings of 1,843 tons.
Russia has bought gold every month since March 2015 in an effort to diversify its foreign currency holdings and minimize its dependence on the US dollar.
During a podcast last month, Peter Schiff asked a key question: who is going to buy all of the debt necessary to finance the ballooning US deficit?
In his most recent analysis, Dan Kurtz at DK Analytics explores this question more in-depth and comes to generally the same conclusion.
The dollar has lost more than 8% of its value over the last year. That decline may accelerate as bond investors sell ahead of a huge expansion in Treasuries coming into the market. Interest rates will have to climb significantly. The price of bonds will drop. As Dan put it, where bonds go, stocks follow.
We’ve excerpted some key points from Dan’s report.
Remember the golden rule: He who has the gold makes the rules.”
And the Russians have the gold. Or at least they are in the process of getting it.
Peter Schiff recently attended the Vancouver Resource Investment Conference. While he was there, he did an interview with Daniela Cambone of Kitco News.
Peter and Cambone talked gold, and Peter said he thinks the yellow metal is set to soar, despite the sentiment that Federal Reserve Rate hikes will hold gold down.
Gold has not really rallied. It’s been going up, right? But it’s been creeping higher. Now, everybody expected it to fall. Everybody believed that as soon as the Fed hiked rates, gold’s gonna tank. And it didn’t tank. It rallied.”