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 zerohedge.com) 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, zerohedge.com published another chart courtesy of John Lohman.  It’s definitely worth a look.

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

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