Tuesday, December 31, 2013

Fed support needed for low interest rates

Without the support of the Federal Reserve, long term interest rates are headed a lot higher and our economy is too broke to afford it. The highest rate we can really afford is zero at this point and the markets haven`t figured this out yet.

Monday, December 30, 2013

Friday, December 27, 2013

Peter Schiff: Gold vs Bitcoin video





While I have a lot of sympathy with what the bitcoin community is trying to acheieve, I just think they have the wrong vehicle [ Watch the video for full text ]

Thursday, December 26, 2013

Possibility of higher interest rates

The Chinese made a blockbuster statement that was summarily ignored. Last week, a deputy governor of the People's Bank of China said that buying foreign exchange reserves was now no longer in China's national interest. The implication that China may no longer be accumulating U.S. government debt would amount to the "mother of all tapers" and could create a clear and present danger to the American economy. 

But the story barely rated a mention in the American media.  Over the past decade or so, the People's Bank of China has been one of the largest buyers of U.S. Treasuries (after various U.S. government entities that are essentially nationalizing U.S. debt). China currently sits on $1 trillion or more in U.S. bond obligations.

So, just as many expect that the #1 buyer of Treasuries (the Fed) will soon begin paring back its purchases, the top foreign holder may cease buying, thereby opening a second front in the taper campaign. This should cause any level-headed observer to conclude that the market for such bonds will fall dramatically, causing severe upward pressure on interest rates. 

Tuesday, December 24, 2013

Schiff on Walmart workers and fair wage



Would you contribute 15% of your total price for the Wal-Mart workers?


Monday, December 23, 2013

Difficult to end QE

There can be little doubt that the Fed announcement is an epic attempt at rhetorical audacity. The message they hope to convey is that they are tightening monetary policy by loosening it. Based on the early market reactions, the trick has seemed to work.

In my opinion the seemingly positive economic signs of the past few months are simply the statistical signature of the QE itself. There is little evidence to suggest that the trends are self-sustainable. But seemingly strong data had made the arguments in favor of continued QE increasingly untenable. As they could no longer stay the course the Fed had to do something. Ultimately they decided to play it both ways.

As far as the headline grabbing taper decision, the Fed's hands were essentially tied by widely held expectations. Perhaps spurred by a desire to initiate the end of QE before he leaves the chairmanship, Ben Bernanke did surprise some by announcing the taper now instead of allowing Janet Yellen to do so in March. The $10 billion reduction has convinced many that the QE program will soon become a thing of the past. At his press conference Bernanke affirmed that he expects QE to be fully wound down by the end of 2014. Look for those forecasts to change rapidly.

Without QE to support the markets, in my opinion, the economy will likely slow significantly and the stock and real estate markets will most likely turn sharply downward. As a result, I expect the Fed will do its utmost to keep the markets convinced that the QE program is in its final chapters.

I suspect that when the economic data begins to disappoint, the Fed will quickly reverse course and increase the size of its monthly purchases. In fact, today's Fed statement was careful to avoid any commitments to additional tapering in the future. It merely said that further changes in the amount of purchases will be dependent on the data. This means that QE could go in either direction.


http://finance.yahoo.com/blogs/breakout/peter-schiff--despite-taper--fed-bond-buying-isn-t-going-anywhere-195423236.html

Friday, December 20, 2013

Maybe bitcoin will be Money in the Future

I don`t know with any degree of certainty what gold is going to be worth next year. I can`t know that, but I do believe it will be valuable. I don`t believe it will be worthless. 

But with Bitcoin, the unknowns are so great, that it can`t be money right now, you can only view it as a speculative asset. Maybe it will be money in the future. 

Right now it is a highly speculative asset.


Thursday, December 19, 2013

Harry Dent talks to Peter Schiff on inflation and Deflation

The FED wants inflation and will print money like crazy to fight the deflationary pressure put forth by the sluggish economy. We are going to see a very bad deflation soon followed by a mega print by the fed to stop the deflation and losing control and spin off to hyper-inflationary scenario. May happen within this decade.

Peter Schiff is an investment broker, author and CEO of Euro Pacific Capital Inc. Schiff is known for his bearish views on the US economy and US dollar, and his bullish views on commodities, foreign stocks and foreign currencies.

Tuesday, December 17, 2013

Join Peter Schiff in Las Vegas for Passport to Freedom Jan 2013

Peter Schiff will be in Las Vegas, January 23rd thru 26th. You may join and learn ways that may help your weather the economic storm, protect your savings and wealth, and become a 'Nomad Capitalist.'

Peter Schiff is an investment broker, author and CEO of Euro Pacific Capital Inc. Schiff is known for his bearish views on the US economy and US dollar, and his bullish views on commodities, foreign stocks and foreign currencies

Sunday, December 15, 2013

Fed will not taper this year




Brian Belski talks about the market rally and expects S&P500 to close at 1900.

Also Peter Schiff thinks the Fed will not taper this year, more QE to come and that investors will go into emerging markets.

The Bernanke QE & Multiple Stage Rocket Analogy

 In an interview this week, outgoing Fed Chairman Ben Bernanke likened the QE program to the first stage in a multiple stage rocket that gets the spacecraft off the ground and accelerates it to the point where it is close to achieving permanent orbit. Like a first stage that has spent its fuel and has become dead weight, Bernanke seems to concede that QE is no longer capable of providing positive thrust, and as a result can now be jettisoned (like a first stage) so that the remainder of the spacecraft/economy can now move higher and faster. The Chairman’s nifty metaphor provides some inspiring visuals, but is completely flawed in just about every way imaginable.

In real rocketry, when the first stage separates, it falls back to earth and is no longer a burden to the remainder of the ship. Subsequent booster rockets (which in economic terms Bernanke imagines would be continuation of zero interest rate policies) build on the gains made by the first stage. But the almost $4 trillion in assets that the Fed has accumulated as a result of the QE program will not simply vaporize into the stratosphere like a discarded rocket engine. In fact it will remain tethered to the rest of the economy with chains of solid lead.

In the process of accumulating the world’s largest cache of Treasuries, the Fed has become the most important player in that market. I believe the Fed can’t stop accumulating and dispose of its inventory without creating major market disruptions that will drag the economy down. - in Value Walk


Peter Schiff is an investment broker, author and CEO of Euro Pacific Capital Inc. Schiff is known for his bearish views on the US economy and US dollar, and his bullish views on commodities, foreign stocks and foreign currencies

Saturday, December 14, 2013

China Announced The Mother Of All Tapering

Here is the biggest bombshell of the week, maybe of the year. Everybody was focusing their attention on what the Federal Reserve did not even say, they were pretending that the Fed said they were going to taper, even though they did not. So while everyone was focusing on stuff the Federal Reserve did not say, nobody paid attention to what China actually did say.

Because China announced the mother of all tapering. China finally came out and admitted that a further expansion of their foreign currency reserves is no longer in China`s interest. Now, expanding their foreign reserve currency reserves has not been in China`s interest for a long time, it is just that now they finally came out and publicly admitted it. Now, what does it mean?


If China isn`t going to expand its balance sheet anymore because its not in their interest, it means it has to stop buying Treasuries. It has to stop buying mortgage backed securities, the same securities the Federal Reserve is buying and is threatening to taper off.

Friday, December 13, 2013

Peter Schiff : Bitcoins A Modern Day Tulip Mania


To me it looks like a modern day tulip mania, the fact that there are people in the hard money community that have embraced bitcoin.

A bubble is a bubble. The dotcom or the real estate bubble, there is a bubble in bitcoin. I think the reason people are buying bitcoins is because the think they are going to make money. They think the price is going to go up. It will keep going up until it implodes. And a lot of people are going to lose a lot of money in bitcoins. A small amount of people will make a lot of money but it will be paid for by a much greater amount of people who lose because they come at the end of the pyramid scheme. Whether we are at the end now, or whether it is going to keep going higher for months or years, I do not know.

Peter Schiff is an investment broker, author and CEO of Euro Pacific Capital Inc. Schiff is known for his bearish views on the US economy and US dollar, and his bullish views on commodities, foreign stocks and foreign currencies

Thursday, December 12, 2013

Peter Schiff Bitcoins : People Will Lose A Lot Of Money

I do not think it is going to end up being a source of commerce for the world. I think right now it is a source of gambling and I think people will lose a lot of money. But again, I don`t know where the top is. I never know where the top is but I think I got a pretty good vision when it comes to seeing bubbles and I certainly see one in bitcoins.

Peter Schiff  is an investment broker, author and CEO of Euro Pacific Capital Inc. Schiff is known for his bearish views on the US economy and US dollar, and his bullish views on commodities, foreign stocks and foreign currencies

Wednesday, December 11, 2013

Gold Is Used In Industry As Well

Gold Is Used In Industry As Well Gold is used in industry as well, just not as much as silver. Gold is used in a number of cellphones, albeit a tiny amount, as well as dentistry and also gold is used as jewelry. While jewelry is not money, people still adorn themselves with gold, and they will continue to do that even if gold is $5,000 an ounce.

Peter Schiff is an investment broker, author and CEO of Euro Pacific Capital Inc. Schiff is known for his bearish views on the US economy and US dollar, and his bullish views on commodities, foreign stocks and foreign currencies

If The Fed Stops, We Will Have A Complete Collapse

The Federal Reserve is not going to back off. The market is going to push it off. The Federal Reserve is going to do this until it cannot do it anymore. Because if it stops then we have a complete financial collapse.

Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.

Tuesday, December 10, 2013

Bitcoins: Don`t Have Any Value Absent Being A Medium Of Exchange

The main problem when you try to look at bitcoins versus gold, because people are saying, well, its just a new version of gold. For hundreds of years, maybe more, before gold was used as money it was already used, it was an acceptable highly coveted, valued commodity that people wanted. It eventually became used as money because it was a more manageable commodity than other commodities that were used as money in addition to gold. So gold just was the commodity that was best suited to also be money but it was first and foremost a commodity, a luxury good that was in demand all around the world.

The thing with bitcoin is nobody wanted bitcoin until it was invented for commerce. The sole purpose of bitcoin is to be used as money. But it does not have any value absent being a medium of exchange.

Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.

Monday, December 9, 2013

Bitcoin: Money Or Speculative Asset?

I don`t know with any degree of certainty what gold is going to be worth next year. I can`t know that, but I do believe it will be valuable. I don`t believe it will be worthless. But with Bitcoin, the unknowns are so great, that it can`t be money right now, you can only view it as a speculative asset. Maybe it will be money in the future. Right now it is a highly speculative asset.

Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.

Sunday, December 8, 2013

Digital Currencies Backed By Gold?

I am already starting to hear about digital currencies that would be backed by gold, which would make them a more legitimate currency, more of a replica of the original paper currencies that were backed by gold.

Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.

Wednesday, December 4, 2013

China Announced The Mother Of All Tapering

Here is the biggest bombshell of the week, maybe of the year. Everybody was focusing their attention on what the Federal Reserve did not even say, they were pretending that the Fed said they were going to taper, even though they did not. So while everyone was focusing on stuff the Federal Reserve did not say, nobody paid attention to what China actually did say.

Because China announced the mother of all tapering. China finally came out and admitted that a further expansion of their foreign currency reserves is no longer in China`s interest. Now, expanding their foreign reserve currency reserves has not been in China`s interest for a long time, it is just that now they finally came out and publicly admitted it. Now, what does it mean?

If China isn`t going to expand its balance sheet anymore because its not in their interest, it means it has to stop buying Treasuries. It has to stop buying mortgage backed securities, the same securities the Federal Reserve is buying and is threatening to taper off.

Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.

Tuesday, December 3, 2013

The Only Reason Anybody Wants Bitcoins

The only reason that anybody wants Bitcoins is because they believe somebody else wants them.

Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.

Monday, December 2, 2013

The Original Currencies

The original currencies were issued by private banks, in fact if you go back to the beginning, the first currency was issued by a goldsmith. Somebody took their gold to a goldsmith and he gave him a warehouse receipt for that gold. Now, the person who owned a warehouse receipt from a reputable goldsmith instead of going back and taking his gold, he might be able to take that receipt and exchange it with with somebody else who had goods and services that he desired. The other person might accept it because they recognize the receipt, they know its a reputable mint, they know there`s gold there and so that warehouse receipt can circulate as currency. That`s what banks did. Before the Federal Reserve in 1930, private banks all around the United States issued their own note currency. The currency was backed by gold that the banks had in their vaults.

Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.

Sunday, December 1, 2013

Will Bitcoins Be Worth Zero? They Might.

Today of course, we do not have a legitimate currency. We have fiat currency. There is nothing behind the dollar, which is why people think, well, what is wrong with bitcoin? Because there is nothing behind the dollar and there is nothing behind bitcoins, there fore its the same.

Well, there is a significant difference. The dollar is legal tender in America. Other currencies are legal tender some place else. And even though I do not want dollars, the government only accepts dollars in payment of taxes, therefore if I don`t want to go to jail and I value not going to jail (that does have a value), the only way I can stay out of jail is to have enough dollars to pay my taxes. So, there is a legitimate use for dollars even though they do not have any intrinsic value, the way gold does.

But bitcoins, do not have any intrinsic value whatsoever. So here is the problem. People are advocating the use of bitcoins as if its a form of money. But it can`t be. Because bitcoins do not represent a store of value. You don`t know how much bitcoins will be worth next week, next year, in 5 or 10 years. Nobody knows. Will bitcoins be worth zero? They might because they don not have any intrinsic value.

Somebody may come up with an alternative digital currency maybe more attractive than bitcoins and people will use that one. Somebody might come up with a legitimate digital currency that is actually backed by gold. That is not hard to do.

Peter Schiff is an American businessman, investment broker and financial commentator. Schiff is the CEO and chief global strategist of Euro Pacific Capital Inc.

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