Brexit Is Not The Reason; It's The Catalyst - Peter Schiff

Peter Schiff with a podcast titled: Brexit Is Not The Reason; It's The Catalyst after BREXIT, Episode no# 176, 25th JUNE 2016

Keywords: bitcoin, Brexit, economics, economics theory, economy news, gold, peter schiff, silver, silver gold, eu, europe, world economics, macro economics

Peter Schiff Talks Economics - Ep. 174: Alien Invasion More Likely Than July Rate Hike

Peter Schiff Talks Economics in this radio podcast 174 where he states that an Alien Invasion is More Likely Than July Rate Hike by the Federal Reserve in the United States

Peter Schiff is an economist, financial broker/dealer, author, frequent guest on national news, and host of the Peter Schiff Show Podcast
gold, silver, economics, peter schiff, fed, fed reserve, interest rates, federal reserve

Will China Pull a "Switzerland" on the U.S. Dollar?

Peter Schiff Poses and attempts to answer the question, Will China Pull a "Switzerland" on the U.S. Dollar?


 

#PeterSchiff  #China  #Switzerland  #centralbanks  #gold  #economics  #monetary  #policy

Swiss Franc No Longer a Safe Haven and a Possible Bottom for Gold

Peter Schiff responds to the results of the "Save Our Swiss Gold" initiative this past weekend. He explains why he thinks it is bullish for gold and might have even marked gold's bottom.




0:17 – “Save Our Swiss Franc” would have been a more accurate description of the Swiss gold initiative.

0:59 – Switzerland used to have more than 40% of its reserves in gold and was very prosperous.

1:47 – The Swiss gold initiative was a threat to the powers-that-be, because it limited the ability of the Swiss National Bank (SNB) to create inflation

2:35 – If the initiative had passed, Switzerland would have been an example of a strong economy in a sea of European inflation.

3:34 – How is it crazy to have only 20% of your assets in gold, but sensible to have 100% of your assets in fiat currencies?

4:30 – The Swiss originally didn’t want to adopt the euro, but now they’ve embraced a de facto euro standard.

5:30 – Gold and silver dropped dramatically after the vote, which was surprising since no one had really expected the initiative to pass.

6:23 – Gold and silver recovered their losses quickly once the United States started trading.

7:10 – Peter believes the “no” vote is more bullish for the long-term price of gold.

7:43 – If the Swiss had adopted the referendum, it would have slowed down Swiss money printing and Swiss inflation.

8:28 – When the world realizes the United States is going to return to quantitative easing, the Swiss franc will no longer be a safe-haven option. This would mean greater demand for gold.

9:36 – If the SNB won’t be buying gold on behalf of its people, the Swiss will buy gold individually to protect their purchasing power.

10:49 – Looking at historical actions of central banks, there’s a chance that gold’s low price on Sunday could end up being gold’s bottom.

Gold Could Lose Glitter with End of US ‘Cheap Money’ Policy

The end of Federal Reserve emergency cash is unlikely to derail gold’s 10-year rally, but the precious metal might face a rockier road as the cheap money that had fuelled its ascent dries up, at least for now.

Fund managers have cited the threat of deflation, slower growth, a resurgent dollar and gold’s overvaluation as just a few reasons why the precious metal’s performance as a safe haven is unclear. In the past, its value tended to rise in times of economic crisis.

Since the global economic downturn, however, gold has benefited from a string of stimulus measures by central banks attempting to boost growth.

Gold prices have doubled since the 2008 crisis, but that rally may be difficult to sustain if the Fed winds down its cheap money policy. Kacper Pempel / Reuters

Bullion has more than doubled from its 2008 low at the depth of economic crisis, and is up 20% since Federal Reserve Chairman Ben Bernanke’s Jackson Hole speech last August, which marked the start of the Fed’s second round of quantitative easing.

On Thursday, the Federal Reserve ended its $600 billion bond-buying program known as QE2, for quantitative easing, because the addition of money to the monetary system effectively lowered US interest rates.

“Even with the QE ending, there is no prospect of the Fed increasing rates any time soon. We have negative US real interest rates. And gold historically did very well in a negative-real-rate environment,” said Bob Haber, chief investment officer of Haber Trilix, which manages $2 billion in assets and runs US and Canadian hedge funds.

On Friday, Gold fell below $1,480 an ounce, nearly $100 below its record high of $1,575.79 set on May 2.

Fed Chief Bernanke has yet to offer any hints of further monetary easing, or QE3. Even though the Fed is not expected to tighten money policy any time soon, gold is likely to rally if the US central bank reintroduces additional market stimulus, which US President Barack Obama called for this week to spur job growth.

“The notion of QE3 is more liquidity, which will likely be dollar-unfriendly. And it would then further run the risk of inflation,” said Mark Luschini, chief investment strategist at broker-dealer Janney Montgomery Scott.

“With that being taken off the table at least for now, it was enough to obviously impair gold prices heavily,” he said. Janney manages $54 billion in assets.

Dollar as reserve currency

A strong US dollar undermines gold’s status is as an alternative currency.

Most commodities, including oil and gold, are denominated in the greenback, which remains the world’s reserve currency, despite an uncertain US economic outlook and political tensions about raising the debt limit in the world’s largest economy.

Most investors see dollar strength limiting gold’s gains.

“If risk assets sell off, and people shun the dollar, that’s when we are in a new regime, that’s when gold’s going to take off. But, I don’t see that happening,” Jeffrey Sherman, commodities portfolio manager of DoubleLine Capital, which oversees $12.5 billion in assets.

Sherman said the threat of deflation, partly created by a European debt crisis, should drive investors toward US Treasuries and the dollar, making gold susceptible to weakness.

“Gold is somewhat of a safe haven, but it’s only a safe haven when you are worried about inflationary pressures,” he said.

Billionaire financier George Soros dumped almost his entire $800 million stake in bullion in the first quarter. Famed gold bull John Paulson remained the largest holder of the SPDR Gold Trust at the end of the first quarter.

Overvaluation?

The precious metal, which notched 10 consecutive yearly gains, has increased fivefold from just $250 an ounce in 2001. Adjusted for inflation, bullion’s all-time high was above $2,200 an ounce set in 1980.

Gold’s rally appeared to stall at the end of the second quarter, but the metal still posted a 4% gain in a quarter that saw the benchmark index of 19 commodities fall 6%.

Jason Pride, director of investment strategy at Glenmede, a wealth management firm with $20 billion in assets, said the extreme valuation of gold is hampering its ability to rise further and perform as a safe haven.

“It has simply gotten to a point now where the value of gold puts investors looking to protect their portfolios at risk simply from the valuation angle,” he said.

Bullion should still offer some protection against inflation and sovereign debt default risk due to its unique role as a global monetary vehicle, but its overvaluation is likely to constantly drag down on prices, Pride said.

“With gold having no dividend, no profit, it’s as much a visual reaction to what you think is going to be the direction of gold as anything, because there is really nothing you can point to from a fundamental standpoint that says it should be worth X or Y,” said Janney’s Luschini.

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