Thursday, 19 May 2011

Hi Ho Silver

Peter Schiff: Silver to take out $50

With gold off the lows and silver trading higher, today King World News interviewed Peter Schiff CEO and Chief Global Strategist of Europacific Capital.  When asked about the pullback in gold Schiff remarked, “I think it’s a buying opportunity...I do believe the US economy is slowing down, in fact I think it’s going to slow a lot more than people realize.  But for that reason I think that quantitive easing will not end over the summer, in fact I think the Fed is going to step it up.  QE3 could be even bigger than QE2 and that’s very bullish for precious metals and very bearish for the dollar.”

When asked about the Mexican central bank purchase of 100 tons of gold Schiff replied, “What surprises me is that more central banks aren’t buying even more gold.  Central banks are loaded up with depreciating dollars, they need to buy gold instead.   The crazy thing is that I’m even hearing talk about the US selling its gold to help fund its debts.  That would be the worst thing we could do.  The last thing we would want to sell is our gold, I mean if we sold that then that would be it, we would have nothing.  The dollar would just become complete confetti.” 

When asked about silver specifically Schiff stated, “Remember it went up to $50 from $30 almost as fast as it came down.  I think if you just take a look at the long-term trajectory it’s still a big bull market.  I think that $50 high is not going to hold...We are going to take that ($50 high) out and move a lot higher.  We are suckering a lot of new short sellers into the market as people are comparing it to a bubble now or 1980, the Hunt Brothers.  I don’t think what we’ve had so far is anywhere close to what happened in 1980.  We might get to that point at some time in the future, but we’re not there yet.

We’ve created sufficient nervousness and anxiety in the market and enough shorts that we should have a nice wall of worry that we can climb, and ultimately a pretty good short covering rally.  I think a lot of the people who have shorted this selloff in silver are going to lose a lot of money...We could have a dollar crisis as early as this fall and if we are having a dollar crisis then I would be expecting silver prices to be making new highs.”

Regarding mining shares Schiff had this to say, “A lot of these juniors are lower than they were five years ago, some of them are lower than they were ten years ago.  You wouldn’t even know that we are in a bull market in gold, you’d think it was still a bear market.  I own a lot of them and not a single one of them has ever split.  To me it doesn’t sound like a bull market when you don’t have any of your stocks splitting and I’ve owned them for ten years.  You remember the internet stocks, I mean there were internet stocks splitting every week.  There’s no bubble activity going on in these mining stocks, hardly anybody owns them.”

The KWN audio interview with Peter Schiff will be released shortly and you can listen by CLICKING HERE.   

Schiff is a smart hombre and one of about 6 financial commentators in the world I listen to intently.

Here he is in 2006 - 2007 calling it like a soothsayer (with accompanying jackasses rubbishing him).

Sidenote, looking at that Mexico buying Gold, back in 1997 Treasurer Costello and his RBA sycophant McFarlane sold 2/3s of Australia's Gold Reserves (167 Tonnes sold) for $2.4B. Today 167 Tonnes is worth $7.5B (AUD).

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