Posted on 01/14/2016 12:21:15 PM PST by Citizen Zed
(Kitco News) - The bearish sentiment towards gold doesn't affect this permabull, who thinks gold is setting itself up for the "mother of all rallies."
In his 2016 forecast for gold and the U.S. Federal Reserve, Peter Schiff said the central bank is going to have to reverse course this year and drop interest rates again, maybe even introduce QE4 - a fourth round of quantitative easing.
And, according to the Euro Pacific chief, the moment the Fed raised rates was what he believe to be the "buy signal" for gold.
"It had no choice but to raise rates because failure to do so would be perceived in a lack of confidence in the economy and the markets," he said in a videocast Thursday. "The only thing that's going to stop this correction from turning into a bear market is for the Fed to capitulate and admit that the economy is weaker than they thought, that they had made a mistake raising rates."
Schiff argued that this is not the beginning of a tightening cycle as markets perceive, but rather the end of it.
"That rate hike was the end of a tightening cycle that first began a couple of years ago with the 'taper talk,'" he said.
By the time the Fed got around to raising rates, he continued, that was the end of the tightening cycle, which would imply gold prices would move higher.
(Excerpt) Read more at forbes.com ...
No. The FED hiked interest rate predicted on a strengthened economy. Retrenching to near ZIRP means they economy is teetering on the edge and needs to be stimulated, big time. That means Zero lied in SOTU. Color me shocked.
Schiff has been wrong about gold for so long that he has to stick with it now. It will rally someday and he will claim prescience.
He’s been wrong about a lot of things for years come to think of it. But, you have to push what you are selling, no matter the reality. I’m surprised he’s hasn’t had to close up shop.
I’m a big gold buyer. At $724. I will start nibbling at $800. My analysis shows gold bottoming in that area.
Again?
Gold did what it did, ramping over $1900, in anticipation of Fed QE. Dumb metals can be smart like that.
Schiff has an utterly remarkable record of being about 95% wrong. Possibly better than Hillary Clinton. He’s not even as good as Dick Morris, who is about 23.4% right.
$5000/oz. Here we come! (Schiffspeak)
each new stress on civilized global society has created a drop in metals pricing.....for years now....its obviously manipulated....if that fails.....the dollar would be gutted....and standard of living here would dramatically effected....imo
Nobody would ever mistake me for an economics scholar, so forgive the dumb questions: What is the big deal with gold? Why is it so valuable?
What I have read is that gold is a storehouse of value. It has been for 4500 years. Read the wording on any greenback and it says it is backed by the full faith and credit of the US. I would like to have a large pile of paper money but in the end it is just that, paper, backed by nothing.
Whatever it touches will cease to exist. Oil. Metals. Stocks. Bonds. Real Property. Manufactured goods. All Commodities.
Everything but food, water, weapons and ammunition is on the road to destruction.
Oh, except cash too.
Buy and hold cash. Debt Deflation is disastrous.
When the people who print infinite amounts of currency can use it to buy stocks and bonds and are doing so, it's all over. Any stock market "rebound" will be engineered by the monetary powers and not by real demand for stocks.
Shiff knows this, that's why he is all in for gold. It is not currency that can be created infinitely. It is real money. At some point real physical gold will climb in value to astronomical levels vs. paper currency. It is just a question of when.
Holy Schiff!
I agree with Schiff on the rates. We are IMO heading into a deflationary depression. That .25 pt rake hike by the Fed has been cut to 12.5pts by the market.
I don’t doubt what you said, but I still don’t see how that makes gold so valuable. Sorry to seem dense....
1) You can't create it out of thin air (MAJOR benefit of fiat currency) - you have to dig it up out of the ground and smelt it. In other words, you have to WORK to get it, which is why it is called "Stored Sweat".
2) Unlike steel or grain, it doesn't rust or rot - it LASTS - making it a good store of value.
3) If the govt backs their paper money with gold (in effect, a warehouse receipt), they can always claim that on Jan. 30, 1934, it now takes $35 in paper money to buy an ounce of gold instead of the $20.67 they told you it would buy on Jan. 29, 1934. However, they cannot say that today an ounce of gold weighs one half an ounce and not the full ounce it was yesterday. Governments can't manipulate it to their benefit, which is why their fear it.
To be valuable, and a viable means of "value store", it has to meet certain requirements. It has to be scarce. It has to be desirable. It has to have intrinsic value. Gold meets all those qualifications. So does silver and precious gem stones. What you should be asking is the opposite question. "How did it became 'normal' to use pieces of paper to conduct transactions instead of gold silver and/or other precious commodities?"
Limited supply, doesn’t rust, great conductor, very malleable, used in industry as is silver, pretty to look at and the pols can’t inflate its value away. A dollar now buys what a nickle did a hundred years. An oz of gold buys the same as it did 100 years ago. It could just as well be big round rocks as long as we agree that they are our medium of exchange.
I agree, as with Schiff as well.
Thank you for that explanation.
Ah, good points.
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