Gold Surges On Spain Downgrade, Euro Crashes As End Of Fiat System Approaches

Tyler Durden's picture

Fiat down, gold up. Any questions? Algos finally found where Europe is on googlemaps. Europe closing so US is isolated in its schizobubble for the rest of the day.

EUR killed:

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RobotTrader's picture

Dollar rally is simply stupendous.

Peter Schiff must be going broke with horrific losses on dollar shorts and asian stocks.

And exactly the wrong time, when he's trying to finance a campaign.

SWRichmond's picture

The losses on the dollar shorts are paper losses.  I'm not selling any of my dollar shorts, and I suspect Peter isn't, either.

THE DORK OF CORK's picture

The US is still playing the consumption game , still using the dollar reserve to bleed the Europeans of buying power which is taking heat from both America and the Asian industrial Giants.

I expect massive capital walls going up over all of Europe to prevent this siege on even a idea of semi sound money.

Relations between us might get very frosty all of a sudden.

 

Martel's picture

Peter Schiff would be worth listening to only if there wasn't any Marc Faber.

omi's picture

"I just refuse to accomodate to the market! That will show the market who's the boss!"

SWRichmond's picture

I just refuse to be pushed next to you into the cattle car.

Mako's picture

Peter was heavy long Euro and European stocks for years.   As far as I can tell he has probably done worse then the average market indices over the last 3 years even though he said housing was going down.  He never shorted housing.

Peter doesn't realize it's a global credit system.  He is in la-la land.

He was telling everyone to buy Asian stocks before the meltdown there, and Euro stocks, short the dollar, long gold and long gold stocks.

Basically, the only one to do even remotely well is long gold, the rest has tanked more then once.

FEDbuster's picture

Asian stocks w/dividends (they are producers with real growth in better currencies), gold miners (they are producers of real money) and physical gold and silver (real money) have been Peter's recommendations for the past couple of years. 

He stays away from US stocks, bonds and pure currency plays, because they are manipulated over the short term with FED and govt. interference.  He has been asked if he shorts Treasuries, and he has answered "no".  He does think rates will rise and the dollar will go down with the rest of the fiat (fraudulent) currencies.

 

Mako's picture

He was heavy Euro stocks, short the dollar also.... I know I talked to his clients. 

They lost their shirt and their pants. 

He is a moron.  

Most of his clients I talked to did much worse than market averages... 60-70% down. 

He doesn't talk now that he has clients in Euro stocks because they are taking a beating, just like he is not talking about his Asian stocks on TV... the only thing he talks about is gold. 

FEDbuster's picture

I am not a Euro/Pac client, but I listen to what he has to say about the economy.  He was right about the housing crash two years prior to it happening.  His views along with Faber and Rogers on gold and silver have served me well.  Plus, Peter has recomended some oil and gas MLPs in the past, one of which I own and have done quite well with. 

Bash him all you want, if that's your thing.  My view is he has made some pretty strong calls that were unpopular (and premature) at the time, but in the end he has been right most of the time.

Mako's picture

The only thing he was right about was the housing crash, which he didn't serve his clients at all because he didn't short the housing market.

The rest he is playing along with everyone else except he still has clients in losing positions in Europe with no exit strategy.   He has done worse then if someone told you to pick the S&P 500. 

Rewriting history is not going to change anything.   Everyone that bought his book "Crash Proof" in fact did crash.

He is no better then the "houses go up forever" crowd, the house he is selling is just a different type of house.  

tmosley's picture

Then why am I up 50%?  I bought Crash Proof, and all of his other books.  I'm not a EuroPAC client, but I don't need to be to tell you that they invest in dividend producing stocks, mostly in Asia, with the intent of never selling.  They just collect the dividends until something changes.  Thus far, all the changes have been in their favor, except for this phony dollar rally.  

If you love the dollar so much, I'd suggest you go buy some 30 year treasuries and hold to maturity.

Mako's picture

Asian stocks took not one hit but two hits, sorry but I think you are smoking something. 

"If you love the dollar so much, I'd suggest you go buy some 30 year treasuries and hold to maturity."

This is what someone says when their bet went the wrong way, which I bet yours did.  I never once said I love the dollar, what are you smoking.

If you followed Peter's advice you are down depending when you bought, if you bought since April of 2009, you are probably up, as is everyone else.

You certainly didn't buy in 2006-2008 and are up 50%, not using Peter's advice.  You could have bought the S&P500 and made 50% if you bought last April. 

Peter is riding the same thing as everyone else, decoupling is a huge myth, matter of fact it's fact... look at Europe.

steve from virginia's picture

Yr looking at the whole picture from the back side.

The dollar is hard because of its de facto peg to crude oil. If oil 'breaks out' and prices rise further then the peg is in difficulty ... oops! An oil breakout means an economic meltdown in real time. Cannot happen! If it does the resulting demand destruction also destroys the oil price.

After a 'wound licking period', the price rises again to where the dollar peg is reestablished. Crude oil is making the dollar into a punishingly hard currency, consequently there is dollar preference and flight from other currencies, gold and derivatives.

The same thing happened during the 1930's with gold and sterling. Greece is the 21st century's Creditanstalt.

The transition from 'trash dollar' to hard currency is taking time and is not widely recognized which keeps derivatives in play - for a time longer. Every time oil prices break down under $80 a barrel the buck gets a bit harder.

The hard dollar is massively deflationary. I've been telling people since November of last year (when gold/dollar broke) here, there and everywhere to close out dollar short positions yesterday.

trav7777's picture

Peak oil is going to shit all over your theory.

Nevermind that there isn't the production to support our expenditures as monetized.

Crummy's picture

I believe the intent in long run to play natgas against crude in much the same way silver has been played against gold.

Mako/Mish, correct me if I'm wrong, but I remember seeing that Peter Schiff was a part of a hedge shorting sub-prime and the mortgage market separate from EuroPacific.

Mako's picture

I am not Mish.

NO, Peter said he was not short the market or the housing market and if I remember correctly he doesn't short anything directly.  I can tell you his clients were not setup that way for sure.

Peter believes in the decoupling myth.  He has no idea how the global financial credit system works.  The only thing he talks about now is gold because that is really the only one of his investments that has worked out. 

Of course he is correct the US will collapse as will everyone that is connected to the credit system, he is wrong about why it will collapse.   His decoupling theory is beyond stupid.

As you can see now Europe is decoupling alright, right into the ocean.   When the US goes it all goes. 

Look he is not the devil, he is just like the rest of them... "it's going up".   When someone tells me he had all figured out then why did his clients take a beating?

The Deacon's picture

Agreed on the natgas oil pairs trade theory, as with Gold and Silver.

Where does all this created money go?  There are two answers.  Too much money out there and funny things start happening in the markets.

 

They will trade more freely...one day.

 

 

The Deacon's picture

Listen to everyone, make your own mind up.

I appreciate his macro views and on that he speaks truth.  I don't follow everything he picks and am not a client.

You can piss on this comment all you want, but he will be proved right...one day.  HA!  Were the analysts who shorted Global Crossing or Nortel wrong?  Yes and no.

Anyone who follows markets knows people who forecast a trend change are often early.

 

My question is - in 5 years, who is in better shape, Asia or the US?  Vote with your $$$ accordingly.

PS - while the Dow may hit 30,000, what will a USD truly be worth?

Strider52's picture

OK, I've got a question: Let's say the Euro takes a face-slam into the pavement. Doesn't that make the $ once again very strong? Strong dollar = lower gold price in dollars.

  That is, until hyperinflation sets in, then artificially high gold price, in dollars... n'est ce pas?

faustian bargain's picture

In your question, the dollar is only strong against the euro. It says nothing about its strength versus gold. If the dollar and the euro are both racing to the bottom, they're both weaker in gold terms, no matter who wins the race.

FedUpGuy's picture

I am actually a Europac client, and they've done quite well for me.  They've never recommended a single European stock to me, that's for sure. 

I'm no financial guru like all you guys are around here, but most of the stocks in that portfolio are up-- many are way up.  Right now things have definitely slowed down, but I'm still very happy with what they've done for me and I wish I'd sent them more money in the first place. 

That said, I feel good having some of my money working outside the U.S.

 

I'll shut up now...

 

 

 

 

DosZap's picture

Peter's funds did not do as well in '08, but he more than made up for it in '09.I do not know of anyone calling it sooner, for longer than Schiff.

The man is a Genius.

If we could get about 50-60 of him, and Ron Pauls in the Gv't......it would sure be fun.

Talk about SHTF..LOL

theworldisnotenough's picture

Europe is a small part of what is presented for investment. And the European stock that are suggested are not EMU countires, and they are dividend paying stocks in very stable unsexy companies.

Just like Peter Schiff did not short housing he is NOT, I repeat NOT shorting the dollar. Buying gold is not the same thing as buying shorts. He does not short bad investment but goes long the opposite based on fundamentals.

The portfolio I see recommended is mostly Asia, gold (metal and mining), European dividend paying non EMU bluechips.

Peter cannot talk individual stocks or be too specific in talking about his strategy without a call from the SEC. Jim Rogers is the same way. When Jim is asked specific questions he has to generalize the answer.

Double down's picture

The difference between right and wrong is timing

chumbawamba's picture

Yep.

GOLD BITCHES!!

I am Chumbawamba.

SgtShaftoe's picture

last I heard from Schiff, was that he's heavily positioned in gold, and mining stocks.

Mako's picture

The last you heard him on TV that is what he said, but he has his clients still stuck in Euro stocks, short the dollar, long Asian stocks as well.

He just talks on TV about whatever is in his position that isn't tanking... gold.   Mining stocks in general peaked in 2006 especially individual juniors, yeah a few have done ok but for the most part, it's dead.   gold stocks took the same dip as everything else in 2007-2009.

I talked to a few of his clients last year that were down 70%, I am not joking. 

He has no idea what he is talking about... he thinks it's just a US problem, he has no idea how the credit system works... he listened to his daddy too much.   He's a moron.

Burnbright's picture

Dude you are talking out of your ass. His clients were down right after the crash, just like everyone else that skin in the game.

Mako's picture

Exactly. 

Funny, you say I am talking out of my ass then you agree with me.

His clients were down more then the market indices, the ones I talked to 60-70%.   He still has his clients on with the same bet. 

- Short dollar

- Long gold

- Long gold stocks (sorry even this one has been a loser)

- Long Euro

- Long Euro Stocks

- Long Asian Stocks

If you think the US is going to collapse then you should be long buying a farm, some farm equipment, and guns. 

He has no idea how the global credit system works, he thinks the US goes down and worldwide credit system just magically survives when everything is based on the USD being the reserve currency. 

Wait till Peter finds out China is running the same system everyone else is... oh no really. He believed in this "decoupling" nonsense, he probably invented the nonsense.  The only way there is decoupling is if all the worlds countries decouple and collapse into the ocean like Europe is doing.   Once the US goes, it all goes.  There is no alternate backup global credit system.  END OF MESSAGE.

FEDbuster's picture

"If you think the US is going to collapse then you should be long buying a farm, some farm equipment, and guns"

Some of us are.  When I buy ag commodities, I take delivery in five gallon pails, sealed with oxygen absorbers in mylar bags.

Mako's picture

The problem is he believes in this decoupling myth.  He has no idea how the system works, not a clue. 

Anyone that believes in decoupling is in for a rude awakening.  You would have been better just investing in Stock index funds, and he still has no exit strategy for his clients.

One trick pony, "I called the housing top".  Ok, how much did you make from that call?  Zero, nada, nothing, zip. 

GS is short Gold's picture

Actually, his main investment thesis has always been PMs and PM stocks. That being said, they won't be a safe haven when shit hits the fan, imo. I'm looking forward to adding gold at about 800.

Mako's picture

Not true at all... commodities, pm, pm stocks, euro stocks, short dollar, asian stocks.

http://2.bp.blogspot.com/_nSTO-vZpSgc/SXuj9sc6cDI/AAAAAAAAFfk/lzLgjUQC7N...

Basically, his clients took several hits, multiple hits when asian stocks got hit, now the double whammo with long euro stocks and short gold strategy. 

Most of the clients I saw lost much more than the average US stock index in 2008-2009. 

tmosley's picture

Ok, I call bullshit.  You have seen exactly ONE portfolio from a kid who bought at the top, bought very risky assets (and was told as much by his broker, who he ignored), and then complained and sent this shit to Mish, who then used it to launch a BS propaganda campaign against Schiff to get more people to invest with him.  They went over this shit last summer, and Schiff's clients 97% agree that this is stupid bullshit.

Mako's picture

You call BS, you are the BS, I saw multiple clients that were down over 70%.  These were client from 2006-2007, down huge!!!!

Let me see investing in gold, energy, euro stocks, asian stocks.... they all took a freaking hit. 

The only BS is you.   This is fact, go look at the euro stock charts, go look at the asian stock charts, go look at the gold mining stocks, they were all getting wacked.

Let me see it's a huge conspiracy, I went out on every chart in the world and made them lose 50-80%.... yep, it's all a big conspiracy. 

He crashed his clients probably worse then the average investor.

akak's picture

.

I don't need to know every jot and tittle of the issue here to be able to smell when somebody is (dishonestly) grinding a rather large ax.

Your lies and misinformation will win you no friends here, asswipe.

One a gold-hating troll, always a gold-hating troll.

 

"Because gold is honest money, it is disliked by dishonest men."

(Ron Paul)

Mako's picture

I swear you stupid gold bugs lie worse then anyone in the world.   I never said I hate the stuff, heck I don't hate chickenwire either.  Gold not going to save you from the tanks, they didn't save anyone last time.  

You know nothing of the global financial system, so someone like me has to point out the obvious to you trailer park trash. 

Yeah listen to Ron Paul, go to a gold standard, financial system collapses the very next day.  Sorry but you can still lend and borrow gold at a rate of compounding interest.

Sounds like you got Crashed by Peter Schiff's strategy that FAILED.  Yeah you don't notice him talking about going short the dollar anymore or that he has clients in euro stocks, nope.

 

dleddy14's picture

Mike Norman, is that you?  Get over it dude.

dleddy14's picture

Mike Norman, is that you?  Get over it dude.

Mako's picture

Get over what?  I have no idea who that is.

chumbawamba's picture

I trade and barter primarily with those within a 10 miles radius of my house and my shop.  Why should I care what happens in the rest of the fucking world?

Fuck you and your global financial system.  I couldn't give a shit about it.  I hope it implodes forcefully and finally, and takes out every mother loving trader and investment banker within a lightyear radius.

I am Chumbawamba.

Mako's picture

Why is it "my system".

Again, sounds like someone on the losing end of the stick and wants to blame me.   Don't worry it will take out billions this time. 

BTW you don't need to own a bank to be a banker, all you have to do is lend to each with compounding interest attached and then you are the banker.   Humans will never learn. 

akak's picture

.

 

Oh, I see your point:  Central banksters are not only indespensible, but they are central to society, and civilization itself would utterly collapse without them!

My contempt for you is now complete.

Mako's picture

Boy you need to think outside the trailer.

Sure you can survive without them.  You don't even need a central bank... all you nutbags have been lending and borrowing with each with compounding interest for 1000s of years... always ends in failure. 

You are very confused trailer park trash individual.

chumbawamba's picture

Why is it your system?  Because you're the fool defending it.  Obviously you have some vested interest in keeping it going, whereas I see every reason for it to be torn down to its foundation (gold) and hauled off to the scrapheap of history.

I am Chumbawamba.

akak's picture

.

 

 

.

 

I concur.

(But

this

squeeze

is

making

it

hard

to

breathe.)

Mako's picture

You don't read so well. 

"Why is it your system?"

Oh I didn't design this system, all you nutbags and your parents and their parent, and their parents designed this system where you lend and borrow at a rate of compounding interest.

I only tell you the obvious, it will implode and billions will die.

Hephasteus's picture

Not without it getting confused enough first. Gotta keep the bullshit flowing.

Nobody goes home till they are either willing to forgive this bullshit or consigned to being powerless against it.

http://www.youtube.com/watch?v=6bMM61Y5CEU