Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

The Sound Money Business: Four Years Past and Future Forecast

Commodities / Gold and Silver 2014 Oct 04, 2014 - 12:13 PM GMT

By: Peter_Schiff

Commodities

Yesterday, I launched a new website and announced the rebranding of my gold bullion dealer from Euro Pacific Precious Metals to SchiffGold. I started this company four years ago to provide a trustworthy option for my Euro Pacific Capital brokerage clients, but it has since grown to become a major US gold dealer in its own right. This landmark for my company comes in the midst of a historic time for the precious metals. The past four years have had highs and lows. We have been experiencing the inflation of remarkable new asset bubbles, and gold’s response has been mixed. But I have reason to believe that over the next four years, gold and silver investors will witness shocking macroeconomic events that put to rest any doubts about the importance of having sound money in every portfolio.


Short-Term Memory Lane

It’s hard to believe that when I started my gold company in the summer of 2010, the Federal Reserve was already finishing its first round of quantitative easing (QE1). Yet even that massive inflationary program was not enough to paper over the fallout from the credit crisis of ’07-’08. Because the economy did not “return to normal,” Fed Chairman Ben Bernanke had his excuse to begin a second round of QE just a few months later.

The government had already started the circular narrative that confuses the markets to this day: “The economy is in genuine recovery, but it still requires ongoing emergency stimulus from the Fed.” 

The announcement of QE2 spurred many of our initial customers to make substantial purchases of gold and silver. The rest of the market soon caught up. In the year following QE2, gold rocketed to its current record-holding high of just over $1900. 

As QE2 ended, “Operation Twist” began, and before long QE3 was introduced. In order to prevent their currencies from appreciating against a now increasingly worthless US dollar, nations around the world joined the money-printing party. These foreign governments wrongly believed that they were dependent on exporting their goods to the US for dollars, when in fact stronger currencies would have allowed them to keep the fruits of their labor to enjoy at home. This has developed into the ongoing international “currency war,” in which countries are racing to see which can impoverish their citizens fastest. 

The currency war has been a boon to the US dollar, which has appeared fairly stable relative to other currencies. However, just because you and a fellow skydiver both fall in tandem doesn’t change the fact that you’re both headed toward the ground. Short-sighted speculators have ignored this reality, and the precious metals have taken an undeserved beating.

What the Future Holds

QE3 has been winding down throughout 2014, and investors are eagerly awaiting news of a rate hike from the Fed. After all, if the economy is as healthy as the government claims, we should no longer be in need of these multiyear emergency measures.

Unfortunately, the Fed's zero interest-rate policy (ZIRP) is the very thing making the economy appear healthy. It has boosted stocks and financed corporate acquisitions. It has also allowed the federal government to continue operating under a crushing debt load. Even a rise in rates to historically average levels could very well bankrupt the federal government and many of America’s remaining industrial giants.

Neither Fed Chairwoman Janet Yellen nor Washington want to bear responsibility for the painful process of raising rates. Instead, I have long forecast that the Fed will follow QE3 with QE4, and so on. After all, each round of QE is like trying to put out a fire with gasoline, it only makes our economic problems burn hotter.

Meanwhile, our creditors will continue to make careful moves to extricate themselves from the US dollar reserve system, like China’s recent currency swap deals with other emerging markets or its rapid liberalization of domestic gold markets.

This means that a stagnant job market and poorly disguised inflation is the “new normal” for Americans. Forget about sending the kids to college – it’s going to be a struggle for many families just to make ends meet. Those who don’t own gold and silver will see their dollar savings and quality of life diminish at a faster and faster rate.

Helping You Turn Paper Into Gold

My new motto for SchiffGold is “Helping you turn paper into gold.” This has been our mission for the last four years, and it will only gain urgency in the next four. 

While the precious metals may have seemed like they were riding a roller coaster recently, serious investors must learn to see past the short-term noise to understand the important fundamental signals. By all accounts, the global dollar reserve system is in its death throes. At the first major crack, we are likely to see the biggest gold rally the world has ever seen. At that point, it will matter less whether you bought in at $600, $1200, or $1900, because those prices will all seem so cheap as to be quaint. Remember $1.20 a gallon gas? That wasn’t too long ago, and yet we know that we’ll never see that price at the pump again.

SchiffGold will continue to help customers redeem as many paper dollars as possible for physical gold and silver – trading a devaluing asset for one that has been on a 12-year uptrend. I am proud of how my gold company has weathered the storm of overwhelming negative sentiment towards precious metals. While doubters abandoned ship, we were the first to introduce innovative new products that increased investor liquidity, like the Valcambi CombiBar and the Silver Barter Bag. When others laid off brokers, we were training passionate new specialists in the intricacies of precious metals investing. The result is that, as I understand it, we have the most loyal customer base of any US gold dealer.

We’ve managed to accomplish this without resorting to selling the high-margin products that make up the bulk of many major dealers’ revenue. Soon after forming my company in response to these widespread shady dealings, we launched the
Classic Gold Scams educational campaign. In the years since, we have exposed nearly every scam and ripoff imaginable. More recently, several unscrupulous dealers have come under investigation and closed their doors. 

The years spent growing my gold company from scratch have been exciting, but our greatest work has yet to be done. Our mission will continue as long as the US government remains committed to obliterating the value of the dollar, and investors seek out an honest guide to safety.


Peter Schiff  is Chairman of gold bullion dealer SchiffGold and CEO of stock brokerage firm Euro Pacific Capital. Schiff became internationally known by successfully forecasting the collapse of the dot-com bubble, the US housing market bubble, and the bankruptcy of major global banks. He is also the author of several bestselling books, including "Crash Proof: How to Profit from the Coming Economic Collapse” released in 2007 before the financial crisis struck, and the more recent “How An Economy Grows And Why It Crashes” and “The Real Crash: America’s Coming Bankruptcy". Follow his latest thoughts at Peter Schiff's Gold News.
Peter Schiff Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in