Peter Schiff Explains What Currency War Will Mean For Gold

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Mon, 11/08/2010 - 12:25 | 708190 Anal Picnic
Anal Picnic's picture

I'll start buying dollars when the paper they are printed on is worth their face value.

Mon, 11/08/2010 - 12:42 | 708250 tired1
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Anyone have insights as to how Russia will be affected. Read lask week that China/Russia were seeking to trade directly with their own currencies.

Mon, 11/08/2010 - 14:31 | 708805 Charley
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Debasing currency from gold was the first form of QE. Gold allowed a floor to be put under interest rates because, while it didn't pay interest, even in the form of a hoard it carried an effective interest rate of zero. Debasing the currency allowed government to impose negative real interest rates on savers. These savers were then forced to loan their money to Washington as the next least risky form of savings wioth at least a zero rate of interest.

The current round of QE is doing the same for savers who hold their savings in the near money form of treasuries. Buying up the treasuries allows Washington to place an effective negative interest rate on them. Savers will be moved out of US treasuries and into other-government debt -- see China in Portugal. The point is to force China to save in riskier assets. If inflation rises, these riskier forms of debt will be squeezed.

Although no one will admit this, in post-war economic theory, savers are the problem...

Mon, 11/08/2010 - 14:38 | 708856 Charley
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Of course, when the savers are national entities, we call them mercantilists... i.e., China, Japan, Germany, etc...

Mon, 11/08/2010 - 16:08 | 709253 DosZap
DosZap's picture

"Although no one will admit this, in post-war economic theory, savers are the problem..."

No ain't dat a biatch?.

The RESPONSIBLE humans are the problem.

Who would have thought,doing,living a proper quiet, and fiscally responsible lifestyle would cause you to be the cause of the FIAT systems destruction.

Bullshit................it's a the same slimy,greedy, theiving SOB's that have been the issue since the dawn of time.

Mon, 11/08/2010 - 12:31 | 708216 jellydonut
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What about silver?

Mon, 11/08/2010 - 12:34 | 708222 Ragnarok
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It will return to its historic exchange rate with gold of ~15-20:1.

Mon, 11/08/2010 - 16:26 | 709327 BigJim
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That is the usual ratio given for silver:gold in the earth's crust.

But given that silver is used up in industrial applications, and gold isn't (virtually all the gold ever mined is still in usable existence, whereas most of the silver ever mined is to all intents and purposes gone forever) it's quite possible that the ratio will be even lower.

Mon, 11/08/2010 - 15:13 | 709021 masterinchancery
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Particularly since the very limited world supply of gold will be under heavy pressure if gold starts to be acquired by the masses.

Mon, 11/08/2010 - 12:33 | 708220 Clark_Griswold ...
Clark_Griswold Hedge Mnger's picture

silver is doing nicely, thank you.

SLW has been really nice to me lately, can't imagine it has anything to do with POMO /sarc/

Mon, 11/08/2010 - 13:02 | 708335 Cruel Aid
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Well understated.

Mon, 11/08/2010 - 16:27 | 709321 SWRichmond
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I am also loving my SLW.  Oh, and BTW, HL is up a buck as I write this.  12.6%.  Today, bitches.  Wanna know how many shares I own?  Muahahahaha.

Mon, 11/08/2010 - 12:34 | 708224 TheMonetaryRed
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"Even in the ruins of Europe after the Second World War, when there was no central authority and chaos reigned, an ounce of gold was worth what it always had been."

Yeah, and real estate always goes up in value. 

Mon, 11/08/2010 - 12:36 | 708230 EscapeKey
EscapeKey's picture

Constant exponential growth != static value.

Mon, 11/08/2010 - 13:03 | 708339 TheMonetaryRed
TheMonetaryRed's picture

What in the world are you talking about?

Mon, 11/08/2010 - 13:08 | 708363 EscapeKey
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Peter Schiff is talking about an ounce of gold retaining its value. You are equating that to house prices always rising = perpetual exponential price development.

Those are not the same.

Mon, 11/08/2010 - 13:23 | 708455 TheMonetaryRed
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No, what I'm talking about is that neither gold nor houses "retain" value because they're valued in an evolving marketplace. They don't have any value other than the value people assign to them.

Schiff is just another Wall Streeter talking his book.

Mon, 11/08/2010 - 13:48 | 708609 redpill
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Did he run for Senate just to "talk his book" too?

Comparing the real estate bubble to the current gold price demonstrates a complete misunderstanding of the role of gold through much of human history.

 

Mon, 11/08/2010 - 14:00 | 708670 Eman Laer
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No, what I'm talking about is that neither gold nor houses "retain" value because they're valued in an evolving marketplace. They don't have any value other than the value people assign to them.

You could also say that food doesn't "have any value other than the value people assign to them". 

Schiff is just another Wall Streeter talking his book.

I think you don't know much about Peter Schiff.

 

Mon, 11/08/2010 - 20:29 | 710042 medicalstudent
medicalstudent's picture

i would have thought the people who disagree with peter schiff would not have survived this far in evolutionary time.

 

i would have been wrong today.

 

but what about tomorrow?

Mon, 11/08/2010 - 14:21 | 708778 7againstThebes
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   <i>They don't have any value other than the value people assign to them.</i>

Of course. "...tis nothing good nor bad but thinking make it so."  The value of an ounze of gold goes up and down all the time.  Schiff's point is that the price of gold is not vulnerable to the schemes of politicians. On the other hand, the price of gold is extremely sensitive to the actions of politicians, which is a bit of a paradox.  Gold can't be bossed around, which is why it is not liked by political authority.

Mon, 11/08/2010 - 14:27 | 708799 goldsaver
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Ah, but grasshopper, is gold's price volatile because gold is volatile? Or is the price volatile because fiat is volatile? There are two sides to every exchange. You must not limit your analysis to a single side.

The value of an ounce of gold, as compared with goods/services/products (purchasing power) has been stable for thousands of years. It is the value of the fiat that has changed.

Mon, 11/08/2010 - 16:33 | 709356 Absinthe Minded
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Bingo! I think we have Bingo here!

Mon, 11/08/2010 - 15:16 | 709037 masterinchancery
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gold is an efficient, low-cost store of value without significant carrying costs. Real estate is a consumer good with very high carrying costs and great exposure to confiscation in most societies. No comparison.

Mon, 11/08/2010 - 15:42 | 709129 Bill Lumbergh
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Any money manager who publishes or interviews talks their book by default...why would you expect someone to espouse a certain belief system and invest their funds in a noncongruent manner?

Mon, 11/08/2010 - 14:34 | 708833 Charley
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In the ruins of Europe there was a shortage of everything. Now, there is surplus productive capacity in everything. This is not post-war Europe! Make money by understanding the real -- not wishful -- situation.

Mon, 11/08/2010 - 12:34 | 708226 lolmao500
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I don't have gold. Know why? I prefer have years of food, ammo and guns then gold.

Mon, 11/08/2010 - 12:52 | 708296 goldsaver
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They are not mutually exclusive, I hold both. It is called diversification. I have a year worth of staples (sugar, grain, salt, rice, beans, etc), a side/long arm for every family member, 1k rounds of ammo per firearm. Water filtration and first aid kits. I also have gold and silver. Why? There are 3 possible outcomes in the current FUBAR environment.

1. Slow stagnation. Think Carter years or Japan. In that case, violent crime will rise due to anger, opportunity and hunger. Foodstuffs will be available, but at a much higher price. Unemployment is a very likely possibility. Under that scenario, food is stored to feed my family and sidearms would be necessary. PMs can be slowly sold for inflated dollars to buy necessities in case of unemployment.

2. Temporary hyperinflation / market disruption. Several months of empty shelves, no money available for purchases and rioting in the streets until a new currency is issued. Again, beans, bullets and band-aids very useful in this case. Gold and silver would serve as a bridge to safeguard my wealth until the new currency is issued and as a monetary unit to purchase things that I might not have thought of, pay for services I might need (dental work or mechanical work in cars, etc) and as a means to purchase BK property for farming or production after the collapse.

3. Mad Max. All of the above plus PMs would be useful for safe passage out of the country. Airplane tickets, bribes, etc. Start over elsewhere.

Mon, 11/08/2010 - 13:13 | 708399 TradingJoe
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Man, I cannot but love this insane fatalism, where the heck is it coming from?!

Mon, 11/08/2010 - 13:32 | 708517 Rich V
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The daily news headlines?

Mon, 11/08/2010 - 15:20 | 709051 masterinchancery
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Well put. Gold and silver provide protection against the black as well as the grey Swan event.

Mon, 11/08/2010 - 17:06 | 709508 redpill
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Exactly.  The reason I own physical gold and silver is not because I know what is going to happen, rather I own it because I don't.

Mon, 11/08/2010 - 12:57 | 708314 Obama2012
Obama2012's picture

i dont have gold because i have faith in our leadership. you people are crazy if you think the world is going to end or the dollar is going to die. we have the best military stationed in all the right places. as much as you people hate obama because he's not like you at least he's keeping america's priorities straight. stop letting poor people suffer at the hands of the rich, promote education and healthcare, secure resources. things are finally back on track

Mon, 11/08/2010 - 13:04 | 708343 -Michelle-
-Michelle-'s picture

You are quite the skilled satirist.  Not capitalizing your letters is a fine touch.

Mon, 11/08/2010 - 16:41 | 709382 Absinthe Minded
Absinthe Minded's picture

Is satirist synonymous with assclown? This guy is the administrations wet dream, another dolt watching CNN not even realizing our dollar is going right down the shitter! Wake up! Gold isn't in a bubble, FRN's are in a tailspin. Guess who has all the parachutes?

Mon, 11/08/2010 - 16:56 | 709459 -Michelle-
-Michelle-'s picture

Just giving him the benefit of the doubt.  I prefer not to think that anyone could actually be so willfully ignorant.

Mon, 11/08/2010 - 13:09 | 708371 goldsaver
goldsaver's picture

Wow, really? I must have missed the /sarcasm tag, please try again.

If you are serious, welcome to reality. You must choose between the red pill or the blue pill, the choice is yours. If you choose the red pill we can only show you how deep the rabbit hole goes, nothing else. What you do is up to you. Stick around a few weeks. Read daily what is been said in these pages. Then ask yourself, if I prepare for a disaster what is the worst that can happen? Food can be eaten, ammo shot at the range and PMs can be sold at a profit. But if you don't prepare and we are right, what will happen to you and your family?

Are you ready to trust your life to the same FEMA that ran post Katrina ops? Or the same leadership that dealt so efficiently with the BP oil spill? Would you trust the people at the DMV with your life?

Mon, 11/08/2010 - 13:17 | 708429 Obama2012
Obama2012's picture

you know how many times i've heard about the end of the world in my life? know how many times it's happened? exactly

you people need to chill out, theres been enough senseless death in the past due to doomsday cults. if thats really your thought why are you on the internet? go buy some purple nikes and build a cabin in the woods

Mon, 11/08/2010 - 13:28 | 708486 SilverIsKing
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Obama2012: "you know how many times i've heard about the end of the world in my life? know how many times it's happened?"

SilverIsKing: "do you know how many times the end of the world happens?"

Mon, 11/08/2010 - 13:32 | 708521 DaveyJones
DaveyJones's picture

you're right, it will never happen to us because we're different, and we have a big army and a big strong government. History has no examples. "/

Mon, 11/08/2010 - 13:41 | 708566 goldsaver
goldsaver's picture

Wow, you are serious. Why do you frame reality to your lifetime? Did civilization not exist before your birth?

OK, first lets define couple of things. TEOTWAWKI is different for every person. Mad Max might happen, eventually, but it might not. So lets look at other possibly disruptive events that would impact you life and decide, are you ready for them?

Do you live in a flood area? Do you have sand bags just in case?

Do you live is a hurricane area? Do you have a generator, food and water, some candles stashed in a drawer, just in case?

Could you loose your job and be unemployed for 6 moths? Do you have a bit of savings to tie you over?

The end of economic world has happened many times in the past. Wiemar, Chile, Argentina, Zimbabwe are some recent examples. Here in this country we have gone thru the dust bowl era, soup lines, the seventies inflation. Are you so dense that you do not believe that either of those could happen here? Do you believe that our government is much more efficient than the governments of Germany post WWI, Chile and Argentina?

Every empire fails. Phoenician, Greek, Roman, Egyptian, Ottoman, British, French and the US. Always painfully and with great disruption. Are you ready for it?

Do you truly believe that disruptions to the supply chain are impossible? That oil can not go to $300 a gallon? That fiat currencies can and always do fail?

We are not a doomsday cult. Quite the opposite. We refuse to drink the kool aid. We are not here to wait for the end so we can die. We are preparing to live and prosper.

Warning, I (since I would not presume to speak for others here) will not feed you, clothe you or shelter you. I will try to teach you how to fish. If you don't do it, you starve.

Mon, 11/08/2010 - 13:56 | 708654 DocLogo
DocLogo's picture

There's a big difference between "the end of the world" and the end of a world order. World orders fall and collapse all through history. Italian people still exist. The Romans, however, are no more. I think the sentiment here on this site is preparing oneself for the transition from dying empire to what comes next. We all know the world will be here for billions of more years...it's us we are worried about.

Mon, 11/08/2010 - 13:39 | 708560 quasimodo
quasimodo's picture

Why bother? He/she has most likely took a lethal dose of kewl aid at this juncture

Mon, 11/08/2010 - 13:26 | 708461 Spalding_Smailes
Spalding_Smailes's picture

promote education and healthcare, secure resources

 

Education for what ? How to stack boxes at walmart,target and the debt you take on for the education ... ugggg, how about a long term focus on job growth in the u.s.a and not giving out hand jobs in india ....

Obamacare = Business albatross ...

Securing resources ? The trillions he has spent has secured inflation in food,oil, ect ...

His trillions are used prop'n up fail'd assets for the banks.

Mon, 11/08/2010 - 21:25 | 710201 StychoKiller
StychoKiller's picture

Dontcha just love how the Govt always comes up with these nifty programs to "help" us with our problems?  They're so nifty in fact, that the Govt is gonna make them MANDATORY, because no one in their right mind should be deprived of the program's usefulness by making it voluntary!  What a crock!

Mon, 11/08/2010 - 13:47 | 708600 mtomato2
mtomato2's picture

Everybody relax.

This assclown has been around less than two weeks.

 

"Look what I found, mommy!  Can I keep him?"  "No, child, not unless you want to clean up after him..."

 

Mon, 11/08/2010 - 13:50 | 708618 digalert
digalert's picture

"i have faith in our leadership"

Thanks, I needed a good laugh today. In fact, why don't you put your faith right where you keep your hope and change stash.

Mon, 11/08/2010 - 21:26 | 710208 StychoKiller
StychoKiller's picture

I too have faith, in fact I have certainty:  The Govt WILL ALWAYS come up with a way to make my life MORE MISERABLE!

Mon, 11/08/2010 - 15:21 | 709055 masterinchancery
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Delusional.

Mon, 11/08/2010 - 15:32 | 709077 ThreeTrees
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It's a good thing this is a comment thread on the internet, cuz if you had to speak that big statist dick in your mouth would make you unintelligible.

Do NOT follow this link or you will be banned from the site!