Peter Schiff on Gold Prices

[Kevin_Kennedy]

[youtube]P4hzx8_HnNE[/youtube]

 

[Mr. H.]

There is massive inflation? That's debatable.

As the blonde said "there's a lot of questions about the technicals in this market."

Same can be said about crude, which BTW was up $3 today.

This guy is peddling contracts, of course he'll talk it (gold) up.

 

[Kevin_Kennedy]

There is massive inflation? That's debatable.

As the blonde said "there's a lot of questions about the technicals in this market."

Same can be said about crude, which BTW was up $3 today.

This guy is peddling contracts, of course he'll talk it (gold) up.

Yes, there is. The banks have been filled chock full of reserves and as soon as it hits the market prices, especially gold, are going to skyrocket.

 

[Paulie]

The massive inflation hasn't really begun yet. We're seeing the first signs of it, I believe, in equities and in oil.

We're also seeing the tell-tale sign that it's coming, in the prices of metals right now. Gold hasn't broken the $900 mark in about a year, and now silver is creeping back up to the $17 range, with gold flirting with $1000 again. Even through what was one of the worst deflationary periods in decades, metals remained near all-time highs.

The Fed's expansion of its balance sheet, and the huge increase in the monetary base, are the reason for this. The seeds are sown for the massive inflation, unless somehow Bernanke pulls off this miracle "exit strategy" he claims to have.

I believe the Fed has said it won't be raising rates again for at least another 6 months. That seems to me like it's too long.

 

[editec]

"It's all this money printing"

Of course the fact that all that perceived value (in stocks and real estate) that was recently lost (read deflation) isn't even being considered in his formula for inflation, is it?

This Gold bug, I'll wager, is somehow connected to some commodities trading cabal.

they're constantly preaching how the runaway inflation will make their customers rich.

And every decade or so they're right...for a while.

 

[Toro]

I'm not a fan of Peter Schiff. He lost a lot of money for his clients last year. I think Schiff is wrong about there being a dollar crisis whereby central banks are going to dump dollars. That's not going to happen.

However, I think he's pretty much dead on about everything else in that clip.

Inflation is not the change in the price level. Inflation is the change in money. The price level is a manifestation of the change in the amount of money circulating in the economy. However, there can be other things which force down the price levels. If this is the case - as it has been for much of this decade - money will flow elsewhere, usually into asset markets. That is why virtually every asset went up in price this decade. Now, the same thing is happening again, and gold will almost certainly be a big beneficiary of this.

 

[Paulie]

"It's all this money printing"

Of course the fact that all that perceived value (in stocks and real estate) that was recently lost (read deflation) isn't even being considered in his formula for inflation, is it?

This Gold bug, I'll wager, is somehow connected to some commodities trading cabal.

they're constantly preaching how the runaway inflation will make their customers rich.

And every decade or so they're right...for a while.

Schiff is the president of an investment company called EuroPacific Capital. The position they suggest to their clients is anything that is the antithesis of the US Dollar, mostly foreign equities, along with precious metals.

They actually don't push commodities that much besides the pm's. For commodities, you'd be looking at a man named Jim Rogers. Both he and Schiff are very bearish on the Dollar, and both have made a ton of money on that position throughout their careers. Rogers is basically the commodities equivalent to Buffet.

I've almost never heard Schiff push foreign equities when he's interviewed on the air, even though that's his main position. I wouldn't say the guy has any kind of agenda. I mean, he's barely ever given enough time to even say everything he wants to before he's overpowered by the others on the panel and then cut off by the anchor.

It's not like the guy doesn't have a damn good reason to be bearish on the Dollar, even if you don't agree with his extent of bearishness.

 

[Fox]

Schiff's predictions are not especially impressive, as heterodox economics is based around predictions of the failure of actually existing capitalism, with even the marginal and anti-empirical Austrian School not being exempt from that. However, Marxist crisis theory is rather consistent with predictions of the various facets of the recession also, which accounts for the recent renewed popularity of Capital.

 

[Paulie]

It's not really a matter of being "impressive". At the time when it was MOST important, he called a massive bubble that was about to burst, when all the mainstream economists who most consider to be the geniuses, did nothing of the sort.

When it mattered MOST, the Austrians made the right call. I'm hard pressed to believe the Keynesians didn't see it coming. It did not require a genius savvy to see what was coming. If the tech bubble was ANY indication, then the housing run-up should have thrown red flags up all OVER the place.

The question is, where were the red flags from the mainstream?

 

[Fox]

I didn't refer to the other mainstream economists, though, as I have disdain for them and their policy proposals; I referred to heterodox economics as a whole. Marxist crisis theory, for example, is capable of explaining the recession soundly and there were socialist predictions of destabilization and a negative period also.

 

[Paulie]

You remind me way too much of another poster around here. The only other poster who advocated Marxist crisis theory, and probably the only far left leaning poster here who even knows what that is.

Anyway though, I'm as equally unconcerned about Marxist crisis theory as you are about mainstream economists.

I was just defending Schiff's prediction of the housing collapse in the face of any criticism about how he and others like him come to such predictions.

 

[Toro]

Both Keynesian and Austrian theory explained the financial crisis well. Keynesian because Keynes knew the paradox of thrift. Hyman Minsky, deriving his theory from Keynes, predicted the instability of financial markets in this crisis to a tee. The Austrian theory of credit was bang on in explaining the genesis of the crisis.

 

[Paulie]

Perhaps the theory contained an explanation, but who from that camp was on the air warning people?

Most people don't study schools of economic thought, which is why this many people got burned. Sadly, this country requires that the media help keep them informed. Where was the media? Where were the typical Keynesian heads when it mattered most?

Because all we saw was the ONE guy who had the balls to come on the air and give a warning, get LAUGHED at the entire time leading up to the biggest collapse most of us have lived through.

 

[Fox]

You remind me way too much of another poster around here. The only other poster who advocated Marxist crisis theory, and probably the only far left leaning poster here who even knows what that is.

Seriously, dude? This is your evidence? Not the mockery of David, or did you assume that was just a natural instinct for every newb?

 

[Paulie]

You have to at least feel me on THAT, Toro. While the Keynesian theory comes complete with explanations of such collapses, the Keynesian figureheads that the majority of the country relies on for such information, were all amplifying the problem by pushing even more of what fueled the bubble to the entire country.

 

[Paulie]

I'm not sure about paradox of thrift, though. Are you saying the wrong move on the part of the public when they become aware that there was a major problem, was to save?

We should have continued spending?