Peter Schiff: Silver “will bust through” $50

As precious metals traders brace for a potentially stormy September in the financial markets, Euro Pacific Capital’s CEO Peter Schiff told King World News to expect another splendid surge in the silver price.

Schiff, one of the most effective and courageous critics of central bankers and their deceptive practices, said Bernanke, knowing the U.S. economy is in big trouble, continues “sugar coating” terrible data and “cheerleading” an economy he knows won’t improve enough to slow the slide of the U.S. dollar.  In fact, Schiff is down right negative on the prospects of the U.S. dollar and other competing currencies.

As gold surges in response to central banking monetization (QE-x) of unserviceable debt—dead debt, historical data show that silver runs faster and longer than its kissing cousin, gold, as investors eventually sober up to realities and flee from fiat currencies.  As the next wave of defaults and QEs from the Fed and ECB are announced, Schiff sees an explosive move ahead for silver.

“ . . . if you look at silver around this $40 level, it’s still hanging on to a lot of its gains and I do believe that it will rebuild and make another assault at that $50 mark and eventually it will just bust through it,” Schiff said.

In support of Schiff’s assertion that the global economy is headed for another injection of cheap dollars and, by association, cheap euros, Bloomberg published a chart (republished on which shows each time (post-WWII) U.S. GDP slows to below stall speed, a compelling case can be made for forecasting a recession around the corner. So far, that indicator has a 100% track record of accuracy.

According to Bloomberg, the chart shows: “Since 1948, every time the four-quarter change has fallen below 2%, the economy has entered a recession. It’s hard to argue against an indicator with such a long history of accuracy.”

Expect terrible employment numbers and housing weakness (two critical data points) for years to come, Schiff has repeatedly stated since the collapse of Lehman Brothers, and has suggested front-running the gold and silver trade before the remaining Johnny-come-latelys finally capitulate and wake up to the Fed’s “sugarcoating” and “cheerleading” tactics.

“So the demand for gold is going to expand as more and more people wake up to this reality and discover that gold is the only safe haven,” Schiff stated.  “The fiat currencies can be created at will in infinite quantities.”

And to further buttress Schiff’s warning of a coming super rush of retail investors into gold and silver, published another chart courtesy of John Lohman.  It’s definitely worth a look.

The chart can be found here, at the bottom of the post.

Zerohedge wrote:  “. . . sealing the deal for the ‘recession’ argument is the following data from John Lohman which finds that the collapse in real-time economic data over the past three months is the sharpest in history.”

Facts speak for itself.  On the other hand, the Fed claims it didn’t see the housing bubble in 2006-2007; it didn’t expect GDP to come in so slow in the first half of 2011; it didn’t anticipate inflation this year; it cannot explain the rise in precious metals; and it relentlessly “sugar coats” the health of the U.S. economy and the Fed’s effects of its monetization programs (QE-x).

On the other hand, Schiff saw this house of cards coming to a tearful ending a long time ago.  Read just one of his several books, each one foretelling events we witness today.  Now Schiff says to buy some gold, better yet, silver. Who can argue against success?  Go with guy who’s gotten it right.

Warren Buffett’s strange $5 billion play in BofA

As Warren Buffett makes headlines again with his $5 billion preferred stake in Bank of America (NYSE: BAC), many questions have swirled surrounding Buffett’s thinking about this complete dog of a bank.

The problems with BofA’s balance sheet are so numerous, just with the bank’s tier 1 and 2 assets, alone, that the bank should have gone under in 2008 along with Lehman.

Here are the problems with BofA’s balance sheet:

Yves Smith (Susan Webber of Aurora Advisors) of has looked at the second-mortgages assets of BofA and cannot fathom a write down of anything less than 60% of the $80 billion reported by BofA.  That’s $48 billion.

Smith also winced at BofA’s “Goodwill” fluff of $78 billion, stating that “perhaps a lot of their $78 billion of goodwill might have air in it.” Add that to the $48 billion and we get a total of $126 billion in questionable valuations.

Next, BofA is being sued by everyone who’s ever heard of the bank, which according to could amount to $20 billion in judgments and/or settlements to make whole the customers of its Countrywide subsidiary.  Now we’re up to $146 billion of inflated garbage.

Next, European exposure to Europe sovereign debt totals $17 billion, of which $1.7 billion is on the line with the PIIGS (Portugal, Ireland, Italy and Spain).  $1.7 billion is not enough to put the bank in trouble, but the domino effect of contagion within the banks of France and Germany could be substantial.  Would BofA have to set aside billions more for the inevitable demise of the euro?

Lastly, the biggy.  The Bank of International Settlement (BIS), the central bank of central banks, has notified the 14 largest holders of tier 3 derivatives to begin clearing them by June 2012.  Of the $697 trillion on the books of the top 14 institutions, of which BofA is one of them, how much in write-offs will BofA have to take?  Who knows?  And that’s the problem.  BofA’s balance sheet, like the other TBTF banks report fictitious numbers.  That write off could be too large for anyone to bailout.

Buffett knows all of this.  Then, what in the world is he thinking?

The $5 billion “investment” in BofA may just be Buffett’s way of remaining a “good” guy with Washington and the American public during the slow-motion collapse of the financial system.  He’s already been the biggest beneficiary of TARP and clandestine shenanigans from the Fed in the bailout of AIG.  Hank Greenberg took the lion’s share of the hit in the AIG scandal, and the American people bailed out Buffett and his precious AIG.  Buffett owes the American people nearly everything he’s got, because he knows who’s going to be stuck paying the bill for the biggest mess yet to come.

Marc Faber: “My Favorite Investment remains Gold”

As gold sells-off from a tremendous 29% run from the July 1 low of $1,478, Marc Faber, the editor and publisher of the Gloom Boom Doom Report, told Bloomberg’s Carol Massar and Matt Miller on Wednesday his “favorite investment” still remains gold.

The self-described “greatest bear on earth” reiterated his long-standing view that the Fed will print the U.S. dollar into oblivion in response to sickly economic data that continues to stream in from all sides of the U.S. economy and for as long as the eye can see.

What Fed Chairman Ben Bernanke will say at Jackson Hole on Friday is less relevant to his forecast for the markets, Faber suggested, as the Swiss money manager said the Fed has already embarked on QE3 after it issued a Fed policy statement at the close of the FOMC meeting on Aug. 9, strongly implying that the Fed sees no evidence of a strong-footed U.S. economy anytime soon.

“ . . . the Committee decided today to keep the target range for the federal funds rate at 0 to ¼% ,” according to the FOMC press release.  “The Committee currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.”

Immediately following the announcement, the Treasury market, Swiss franc and gold soared, culminating in a two-week follow-through rally in the 10-year Treasury, which saw its yield stunningly drop below 2%, the Swiss franc trade as high as $1.30, and gold spiking to $1,917.90.

Faber believes the rally in these three markets suggests that the effects of the FOMC statement have already begun to manifest themselves in all markets, leaving nothing meaningfully left for Bernanke to add to the FOMC policy statement.  QE3 is here.

Expect a dud from Bernanke at Jackson Hole, according to Faber.  In fact, the gold market may be selling off in anticipation of a “no news” meeting in Wyoming, as Treasuries, gold and the Swiss franc have already priced in quite a bit of QE3.

“I think what [Bernanke] will say is that they are monitoring the situation, and they will take ‘appropriate measures’ when they are required,” he said.  “To some extent we are in the midst of QE3 already, because by announcing the Fed will keep zero interest rates until the middle of 2013 . . .”

Though the same dire issues confronting Western economies (ergo, affecting Asia, too) have not gone away, leaving the Fed no options other than to continue printing money, according to previous Faber interviews.

In fact, according to many respected economists, the overhanging debt loads are heavier today than they were in 2008.  Faber has said on many occasions that he sees nothing but gloom for the equities and bond market for the foreseeable future, and expects that the Bernanke Fed intends to affect negative real interest rates for years to come in an effort to debase the U.S. dollar.  Savers and creditors will suffer during the process.  And, the U.S.-led wars will escalate, he said.

“All I am saying is I am very bearish. I think we will have inflation. I think the Treasury market is a disaster waiting to happen,” Faber declared.  “I think the economy will slow down. They’re going to print money and we will go to war at some stage somewhere.”

He added, “So, you are probably better off in equities than in bonds. My favorite investment remains gold. As it happens, the gold price is coming down, and I hope it will drop $100 or $200. Not necessarily a prediction. I think we will go down in a correction because there has been too much enthusiasm recently.”

Blue-blooded Cazenove Capital: Gold $5,000 “at a minimum”

Robin Griffiths, a regular guest of King World News, told Eric King yesterday he expects the gold price to ultimately reach between $5,000 and $10,000 per ounce “at a minimum” after a pullback  from a $400 move to a record $1,911.40.

Griffiths’ opinion of the direction and magnitude of the next major move in gold weighs heavily within the investment community, as the 40-year veteran and technical strategist at British wealth management firm Cazenove Capital Management works among investment professionals rumored for years to be  trusted advisers of the Queen of England.

He told CNBC in January, when gold traded at, what was thought to be a lofty price at the time, of $1,375, “I think not owning gold is a form of insanity. It may even show unhealthy masochistic tendencies, which might need medical attention,” adding that the dollar will be printed into “oblivion.”

Beyond Griffiths’ flare for the humorous, the point of view he put across isn’t far off from what he sees is the malady suffered by the mainstream investor at the hands of the Fed’s 98-year history of deception—a deception of fostering mislaid trust in a “modern” financial system devoid of a 6,000-year-old demonstrable trust in the value of gold as the ultimate medium of exchange.

That “tradition,” stated Fed Chairman Ben Bernanke, is the reason why the U.S. Treasury holds 8,133 tons of gold as reserves.  It was a telling response to Rep. Ron Paul’s inquiry during the Fed’s Humphrey Hawkins testimony in July into the Fed’s viewpoint on the long-standing financial role gold has played as money throughout recorded history.  Paul’s attempt to expose the Fed as a newfangled institution founded upon untested and questionable principles worked, as he brought to light that mankind has already discovered the least-flawed medium of money, gold—a simple, yet elegant tool that has been tested for a time period exceeding Christianity by a whopping 4,000 years.

Ultimately, the Fed cannot win the game of inculcation, brainwashing and other “cultist” practices perpetrated on the masses unaware of the central bank’s true agenda—an agenda which is to ultimately protect member banks from credit collapses brought on by the inevitable “irrational exuberance” among speculating bankers suffering from one of the seven deadliest of sins—greed!

And how many investors know that the Federal Reserve Act of 1913 was the response to the worldwide banking crisis of 1906-07, which wiped out the “elite” from New York, London to Paris?  Not many, and that ignorance among the American people won’t be placed at the top of any agenda at the Eccles Building in Washington any time soon.

Is it no surprise, then, that documents obtained by Bloomberg about the Fed’s activities since the fall of Lehman revealed that banks across the globe received more than $1.2 trillion in loans, while homeowners lost their homes to those very same bankers?

Maybe that’s what Griffiths alluded to with his seemingly facetious remark on the mental state of the typical retail investor who still has no gold in his portfolio.  The mom-and-pop investor must undergo some serious deprogramming, first, regarding the true definition of money, then learn the tricks played on them by central bankers who presumably do know before a rational case for owning gold can be accepted as self-evident—even at prices which today appear so high in terms of dollars.

But Griffiths believes that the gold price isn’t anywhere near its ultimate print when all the fiat dollars, euros, yen and sterling revert back to their intrinsic value—zero.

“I’m in the camp thinking it (gold) will go to somewhere between $5,000 and $10,000 an ounce, at a minimum,” he said.  “There are scenarios that take it higher than that, but it’s got many times up from here.”

Clearly, Griffiths believes that from the data the dollar and competing currencies will be debased, and debased quite substantially.  The hole left from imploding derivatives stack up into the 10s of trillion, if not 100s of trillions, according to estimates derived from the total dollar value of derivatives outstanding at the Bank of International Settlements (BIS).  Now back those numbers into the number of gold ounces on the planet.  Griffiths is lowballing.

Firing of S&P CEO signals Gold to Soar

Washington’s desperation to contain the inevitable fall of the U.S. dollar reared its ugly head once again yesterday, as the CEO of Standard & Poor’s Deven Sharma was fired as the rating agency’s head, and serves as a warning to others that this could happen to you for telling the truth.

Like NY Attorney General Elliot Spitzer, IMF Chief Dominique Straus-Kahn, and a number of U.S.-installed North African and Middle East dictators, Sharma (presumably a clean guy) has become the latest casualty in the war for preserving U.S. dollar hegemony.

Plausible reasons for Sharma’s departure surely will be forthcoming.  But the truth of Sharma’s departure is most likely due to his reluctance to contribute  further to the coverup of the U.S. debt Ponzi scheme now reaching the critical collapse stage.

Essentially, theft of property (beyond income and property taxes as well as fees and fines levied above the true cost to government) by overt force, or though currency chicanery, is a war on the American people and its overseas creditors.  And when a citizen of the U.S. is deprived of his livelihood for the sake of continuing the deception of U.S. profligacy and phony wars built upon the dollar’s primary reserve status, he becomes a casualty of that war.

Experience proves that the man who obstructs a war in which his nation is engaged, no matter whether right or wrong, occupies no enviable place in life or history.

—Ulysses S. Grant

No one will remember Sharma for seeking to right S&P’s shameful record.  Unlike Rep. Ron Paul, Sharma can be fired.  There’s no need to unleash the FBI to set up the target with criminal activity, or export inflation to poor countries in an effort to depose unneeded U.S. dictators through the guise of a “democratic” revolution; just fire the guy to let others know what happens to “snitches.”

Arguably, Sharma may have gotten off easily from the mob this time; he could have fallen victim to the “whistle blower” Andrew Maguire botched automobile hit-and-run job, which was executed within mere hours of his testimony about the JP Morgan gold and silver manipulation scheme at a CFTC hearing earlier this year.

So what does the Sharma story have to do with the price of gold?  Everything.

Sharma’s abrupt dismissal underscores the underlying ruthlessness of a U.S. government, taking its rogue operations to the next level—in the open, for everyone to see—which will serve as a warning to others on the “good guys” side  who dare come clean on the merits of escalating the war on American citizens and U.S. creditors.

But when the “bad guys” expose the truth, mom-and-pop-front-porch won’t take it seriously.  After all, he is the bad guy, you know.  Besides, taking on Libya’s Gaddafi is one thing.  Taking on Russia’s Putin is another.

“Thank God … we do not print the reserve currency. But what are they stirring up? They are simply acting like hooligans,” Putin said in Moscow in mid-July regarding the Fed’s quantitative easing programs.

“They turn on the printing presses and fling them (dollars) over the entire world to resolve their immediate tasks,” he added.  “They say monopolies are bad but only if they are foreign — their own are good. So they use their monopoly on printing money to the full.”

The only way the dollar can be debased in an orderly manner is for investors holding the dollar to continue believing it still will maintain its value (relative to other debauched currencies, of course), which is the point of Putin’s comment when he said “to resolve their immediate tasks,” and the point S&P’s Sharma made by downgrading U.S. sovereign debt.

Angering the world’s leaders through sadistic methods of currency devaluations, and firing of a man who shouts, “the emperor has no clothes” in plain view of the world, smells of desperation in Washington.  The firing of Shama is another signal of a gold and silver market very near hyperbolic moves—moves that hard-money advocates have been forecasting for as far back as 10 years ago.

The last time U.S. policymakers ticked off world leaders through reckless monetary and fiscal policy to the extent they have done so since 2008 was during the 60′s and the Vietnam War.  And we know what happened to the dollar relative to gold during the 70s.

Back then, it was French President Charles de Gaul who led the charge on Ft. Knox in an attempt to rein back reckless U.S. spending and dollar devaluations.  Today, with the blatant disregard for the leadership role the U.S. has taken on as the administrator of the world’s premiere reserve currency, it appears that Venezuela President Hugo Chavez will attempt to fill the size-15 shoes of the great de Gaul, while S&P’s Deven Sharma takes the bullet for the American people and its foreign creditors.

Gold Price poised to “Go Parabolic” to $2,100

As the gold price touched $1,890 per the ounce in London trading today, persistent doubt of the consensus forecast for U.S. and Europe economic growth has weighed down equities, lifted bond prices, and soared gold, as traders scramble in and out of positions to suit renewed uncertainty and the growing distrust of the Fed as well as European and U.S. policymakers.

Adding to the stack of the most recent gold-bullish news, which has been streaming in nearly daily now, comes Hugo Chavez’s request for a repatriation of Venezuela’s gold reserves from the Bank of England.

CEO of Hinde Capital, Ben Davies, today told King World News he believes Chavez’s move to bring 365 tons of gold reserves back to Venezuela could result in an explosive move in the gold price, as data suggest that the gold market has operated equivalently to a banking fractional reserve system since 1971—and a highly levered fractional system, at that.

“There was a game changer event yesterday: Chavez – the proverbial thorn in the West’s side – ruined the gold-bears’ picnic, “ stated Davies.  “So what? I hear you say. Well I believe this is significant. Chavez holds 365.7 tonnes of gold overseas, mostly in Western Central Bank vaults, such as the Bank of England. Some 100 tonnes of Venezuelan gold is held there.”

“The question is: do these vaults still have all the gold?” Davies asked rhetorically, who now targets gold at $2,100 on this move.

In fact, the gold may not be there, according to Gold Anti-Trust Action Committee, who has published numerous articles showing the steep ratio between “paper” gold and the physical.  Davies said that the global gold market’s fractional reserve system “means each troy ounce has been lent or swapped out many times over, and should gold holders request the return of their gold en masse, we could get a proverbial ‘gold bank’ run.”

If Chavez’s move triggers a gold run, or not, it most certainly will spark at least some fear into those traders seeking an empty chair before the music stops in the gold market.  Force majeures at a time of panic to gold will leave wealth exposed to the threat of cliff-dive devaluations and bizarrely-priced physical gold ounce bars, a possible scenario that could turn rich people into poor ones, and vice versa.

Chavez appears nervous about the situation in the gold market, and may trigger other countries to repatriate their gold from Western entities, too, in another bullion bank run similar to the run on Ft. Knox in the early 1970s.

Even the U.S. dollar apologist of the gold market Dennis Gartman of the Gartman Letter is getting skittish about the possibility of a flashpoint in the currency markets.

“Gold is strong in any and all currency terms, and it is now entering that stage when prices go parabolic,” Gartman stated in his Gartman Letter.

Flight out of the U.S. dollar and euro won’t have many paths to left to safety, as banking officials of well-managed currencies fight back the stem of appreciation.  A recent survey among Swiss reveals a majority of respondents alarmed by the rise in the franc, and fear a string franc will devastate exports of Swiss-made goods.

“You have a look at some of the other safe-haven assets that investors were looking at, the Swiss franc and Japanese yen,” Fat Prophets resource analyst David Lennox told Bloomberg.  “Authorities there have taken steps to try and curb the rise in those particular currencies. That’s probably pushed more investors into gold.”

Marc Faber turns “Ultra-Bearish”; what to do now?

After calling for a bear market in stocks two weeks ago, the publisher and editor of the Gloom Boom Doom Report Marc Faber has become more bearish on the outlook for the world’s financial markets by the minute.

Even the bull, Barton Biggs, who said stocks are at a bottom when the Dow was closer to 11,000 than 10,000, equivocated on his bullish stance on Bloomberg, yesterday.  So, even the bulls are questioning their logic of stock valuations during the solvency crisis in Europe and the contagion it will most assuredly spread to U.S. and Asian markets.

“Financial conditions are today worse than they were prior to the crisis in 2008,” Faber told MarketWatch earlier this week. “The fiscal deficits have exploded and the political system [in both the U.S. and Europe] has become completely dysfunctional.”

“Dysfunctional” may be the best word to describe revolving bailouts and further debt creation by the world’s Western debtors, certainly as far as creditors are concerned.  And the biggest creditor of them all, China, has repeatedly expressed outraged at the handling of the sovereign debt crisis in Europe and the U.S., voicing at times their concerns publicly of the future purchasing power of its $2 trillion of dollar-denominated assets.

No too surprisingly, the Chinese have opted to skip-out of the annual meeting of central bankers at Jackson Hole, Wyoming, slated for August 27, according to a Reuters report, released Friday.

“China will skip next week’s annual conference of central bankers in Jackson Hole, Wyoming,” according to Reuters.  But the news agency couldn’t get a comment from Beijing as to the reason for the no show, it stated.

“It’s a suicidal investment to own 10-year or 30-year U.S. Treasurys,” Faber said of U.S. paper, adding that “U.S. government bonds are junk bonds.”

If Beijing, who holds $2 trillion in dollar-denominated assets, is upset with the West’s devaluation of the future purchasing power of those paper assets, Faber’s point that if U.S. paper is indeed junk, than the preservation of capital should be priority one to every investor during these troubling times, leaving capital appreciation for a later time when central bankers finally must give up on the debt pyramid scheme, and stop the race to the bottom in the currency devaluation war.

For now, Faber’s recommends the safest of all financial vehicles, gold, taking a page from history as his guide for investors to survive the coming catastrophic endgame to this financial crisis.

“Physical gold in a safe deposit box is the safest,” Faber added. “Forget about huge capital gains. I would look at capital preservation. I want to preserve my capital.

Peter Schiff slams Obama, Geithner and Buffett

As global stock markets crash in the backdrop of a soaring gold price, Euro Pacific Capital CEO Peter Schiff unleashed a series of salvos on the Obama Administration in the handling of the budget crisis, and slammed billionaire investor Warren Buffett for encouraging continued profligate policies of the White House and, by implication, the Congress.

Standard & Poor’s downgrade of U.S. debt kicked off a firestorm of financial and political calamity that has now required an all out damage control operation from the White House and the government’s go-to “private sector” operative Warren Buffet.

“In Wall Street parlance, any downgrade means get the hell out … If they [rating agencies] go from a Strong Buy to a Buy, it means, you know, look out below,” Schiff told Max Keiser of Russia Today’s Keiser Report.

“What S&P is saying, as far as I’m concerned, is get out of U.S. debt, any dollar-denominated debt, because what they’re really downgrading is not Treasury bonds, but the dollar.”

And, immediately after the S&P downgrade, investors fled the dollar—in mass.  As U.S. Treasuries soared (dollar positive), gold sailed past Treasuries (dollar negative), turning what seemed like a dollar-positive event into a catastrophein the dollar in purchasing power against the ultimate currency, gold.

Even the Wall Street Journal headlined an article on Monday, following the rating agency’s announcement of a U.S. downgrade on Friday, heralded U.S. Treasuries as the “gold standard” of debt, in a well-place position atop Yahoo’s financial news feed.  The orchestrated response, crafted over the weekend, couldn’t be more obvious to those following closely the 3-year-long slow-motion global financial crisis.

Of course, the U.S. has other options apart from defaulting in a manner Argentina, Mexico or German had defaulted in the past.  Instead, it appears the U.S. has predictably chosen to inflate its way out of overburdening debt, which Schiff said, is the point of S&P’s downgrade.

“Because S&P knows—as Alan Greenspan said, and Warren Buffett said—they don’t have to default, they can print,” Schiff explained. “But that’s worse, especially if you’re a bondholder; you get paid back in Monopoly money.”

In complete agreement with European leaders, Schiff went on to ridicule a rating agency system that rates the world’s largest creditor, China, below the world’s largest debtor, the U.S.

“Why is China, the world’s biggest creditor nation—we owe China trillions—how could they be rated AA-, and we’re rated AA+?” Schiff asked, rhetorically.  ”What kind of twilight world is the world’s biggest debtor a bigger risk [meant to say, better risk] than world’s biggest creditor?”

Then, in a typical Schiff rapid-fire rant, U.S. Treasury Secretary Timothy Geithner entered Schiff’s sites.

Geithner, who said S&P made a math error in its calculations of projected U.S. deficits, calling the error a “$2 trillion mistake,” only serves as a red herring, or a canard, as Keiser put it in his question to Schiff about Geithner’s comments.

Schiff responded to Geithner’s comment by pointing out that the Congressional Budget Office (CBO), a political arm of the White House, had made grandiose growth and unrealistically low inflation assumptions in its forecast, which Schiff implied, were nothing more than typical self-serving propaganda budget forecasts out of Washington.

“The reality is that we are going back to recession,” Schiff scoffed.  “So you take all those rosy scenarios and throw them in the trash can where they belong.  The budget deficit is going to be much worse than both the Administration and S&P believe.  So they’re all wrong on the math.”

And on the subject of Warren Buffett’s comment following the S&P downgrade announcement, in which, he said U.S. Treasuries should hold a “AAAA rating,” Schiff again commented by implying that Buffett is a has-been, a kept man of the rigged system, and has become more of a humorous sideshow during the crisis than a man whose comments should actually be taken to heart by investors.

Buffett’s opinion is “moronic,” said Schiff.  In his advanced age, “senility is catching up with Warren.”

Gold Price entering Phase 3 of Bull Market: Jim Sinclair

$1,764.  That’s the demarcation price for gold’s move into the next phase of the bull market, the third and most exciting phase, characterized by widespread participation by the mainstream investor, according to Jim Sinclair.

As one of the world’s foremost “scholars” on the subject of gold and money, Sinclair believes the long-awaited awakening of the retail investor to the dollar endgame lies just ahead.

Phase 2 of the gold bull, he said, began at $524.90, and has now ended.

“$1764 has the same significance as $524.90 because it represents phase 3, the point when a runaway price market for gold would gain exponential properties,” stated Sinclair, on his Web site,

Anecdotal evidence of increased traffic at bullion dealers in the U.S. have been streaming in, as investors there already see the handwriting on the wall for the dollar, and want to front-run a replay of 1979.

Certainly, in Europe, the reports of periodic bank runs in Greece, Ireland, Spain and Italy (with the latter two through electronic withdrawals) have been well-reported since 2010, leaving Americans anxious for refuge as the back-end of the eye of the currency storm reaches the shores of the U.S.

So far, the assets of choice at this stage of the global financial crisis have been deep government paper markets, the Swiss franc, yen and gold, with most of the scared money presumably bypassing reasonable (and not so reasonable) facsimiles of money, and moving straight into gold.

“Some of the finest minds in gold anticipate a very short but brutal reaction in price,” added Sinclair. “The dollar market seems to not agree with a gold correction here.”

“Market wise, the Fed has thrown the U.S. dollar into the wind. Under .7400, the dollar denies a reaction in gold at these levels.”

Sinclair’s $1,764 marker for the price of gold is a key point in the bull market, he has repeatedly stated over the years.  That is the price where the most dramatic devaluation of the dollar begins, with a target north of $10,000 per ounce as a projected peak price for the metal, following the final months of the predictable mania period of phase 3—a phase much similar to the 100% move in the Nasdaq during the last six months of the tech bubble of 1999.  But, first, the fight for entry into phase 3 rages on before the real fun begins for holders of gold, according to Sinclair.

“Because $1,764 is such a significant number, you can expect one of the more serious price battles before the price departs to Alf Fields’ and Armstrong’s predictions,” he stated, referring to five-digit projections for the gold price from fellow hard-money advocates, Alf Fields and Martin Armstrong.

With price targets above $10,000, $1,764 gold is a screaming buy, according to the JSMineset think tank.

“To sum up the situation, you haven’t seen anything yet,” exclaimed Sinclair.

3 Gold Stocks to Watch

Goldcorp Inc. (NYSE: GG)


SPDR Gold Trust (NYSE: GLD)

Yamana Gold Inc. (NYSE: AUY)




Where to now for Gold? Peter Schiff, James Turk and Richard Russell weigh in

The three men most well-known to the broader investment community seeking a fair shake and honesty from the financial industry, Peter Schiff, James Turk and Richard Russell, all have recently gone on the record as raging bulls on the gold price in the coming weeks and months.

Each man has his unique style of communicating the fundamentals underlying the move in the precious metals; the widely misunderstood concepts regarding money, in general; and why it’s vital to act now to protect wealth from monetary events expected to materialize one way, or the other—with both outcomes varying in degree of tragedy.

Either politicians and monetary authorities will standby idle and let nature takes its course regarding irreparable insolvencies of governments and many of the largest financial institutions, globally, or they will attempt to fix only the symptoms of a malaise that cannot be ultimately fixed without profound consequences, which are inevitable anyway, but will take on a different guise.

All told, both outcomes point to gold as a no-brainer asset of choice during the widespread and profound awakening coming soon, globally, and will most likely avail is itself in earnest some time by New Year.

Starting with the man with the most stamina and passion for waking up the mainstream investor: Peter Schiff of Euro Pacific Capital.  Schiff possesses the business sense to promote almost any investment, making a living while guiding his clients through both calm waters and avoiding tidal waves.  A win-win situation for him and his clients.

“ . . . gold is going to go higher because people want refuge, Schiff told King World News, yesterday.  “In fact the other safe havens in the currency world, like the Swiss franc or the yen, the central banks there are trying to undermine their currencies.”

Investors thinking that they can avoid the decision to acquire the politically incorrect asset, gold, by buying Swiss francs, instead, will ultimately be disappointed, according to Schiff.  A very strong currency can be almost as troubling to portions of an economy than a weak one is other part of the economy.

Both Japan and Switzerland have taken measures to halt the rapid appreciation in its currencies against the two major reserve currencies of the U.S. dollar and euro.

“I mean the Swiss are actually thinking about pegging their currency to the euro,” Schiff continued.  “One of the reasons people were buying the Swiss Franc was to get out of the euro.  Now they are threatening to turn the Swiss Franc into the euro.  So what’s the one asset that central banks can’t print?  That’s gold and so gold is the last man standing and everybody is going to be piling into it.”

Next, James Turk of, the man who is presumably closest to the bullion market than either Peter Schiff or Richard Russell given his experiences of running a bullion storage business on a day-to-day basis.  Turk has been as accurate with his short-term predictions as one can with the information, deep knowledge and vast experience he possesses.

“Gold has been rising against all national currencies, and that’s significant,” Turk told IB Times, Monday.  “Politicians and central bankers are making decisions that debase national currencies, and the resulting bad monetary policies they are following are causing the gold price to rise.”

Turk continued, “When there are problems with a national currency … (investors) begin to worry about the value of their money, whether they’re going to lose purchasing power because of inflation or other problems. As a consequence, they look for safe havens.”

And last, but certainly not least, Richard Russell, the publisher and editor of Dow Theory Letters, has been successfully guiding subscribers of his investor newsletter for more than 50 years.  The 87-year-old survivor of the Great Depression, WWII, and many recessions as well as a few inflationary scares told his readers to hunker down like no other time of the past 65 years.

“ . . probably 90 percent of living Americans have never seen or lived through what I call really ‘hard times,’” Russell noted in his newsletter last week, implying that many investors suffer from a term floating around recently, a normalcy bias.

“When chaos reigns, people look for certainty,” he continued.  “When all is lost, only one item stands supreme and has been supreme for thousands of years. That item is gold.”

And if it wasn’t for Russell’s stellar reputation as a man of rigorous reason and steady hands, the notion of the gold price reaching the cost of a used Ford sedan at the end of the bull market in the world’s safest of safe havens would appear to most unfamiliar with the true meaning of money as ridiculous.

“At 2,000 [gold price], the next objective would be 2,500, and from there, 5,000, and from 5,000 – 10,000.  As gold marches higher, it’s playing the death knell for fiat money. And every central banker knows it.”

That statement, coming from the Godfather of financial newsletter, is not to be taken for the purpose of entertainment.