Silver to Breakout Amid Odd Forecast—Ben Davies

By Dominique de Kevelioc de Bailleul

“We’re trend ready, Eric.  I think it’s a prescient time to come on the show,” Hinde Capital CEO Ben Davies begins his interview with King World News (KWN), referring to a resumption of the upward trend in the gold market.  But, where gold goes, silver follows at a ‘double-time’ pace—at least.

Davies proprietary model for pricing silver suggests to him a move higher of 25 percent, citing reasons of a slight upturn in the U.S. economy, the return of easy-credit European politicians from vacation, and, possibly, truth in the rumor that Spain will ask the ECB for a bailout during the weekend, ending Aug. 19.

On the news of a Spanish capitulation, alone, silver prices could move higher this week, according to Davies.

Though Davies doesn’t expound upon his ‘odd’ thesis of U.S. growth next year, or even suggest where that growth will come from, he does expect, however, more monetary accommodation by central banks to buoy silver prices—an expectation echoed by currency and monetary policy expect Jim Rickards, who, so far, has been on the money with his prediction of ECB easing ahead of the Fed.  Now, it’s the Fed’s turn, according to Rickards.

Incidentally, Rickards anticipates Fed Chairman Ben Bernanke to announce further QE at the annual central bankers meeting at Jackson Hole, Wyoming in early September.  He tweeted, Sunday, that recent weakness in the Chinese renminbi against the dollar weighs more heavily with the Fed than U.S. jobs and GDP, and that downdraft in the Chinese currency, beginning from the first days of May, will push Bernanke to make the long-awaited QE announcement at Jackson Hole.

Moreover, it turns out the rumor that Spain would ask for a bailout, that Davies alludes to, is fact-based, in part.  The Wall Street Journal reports, Sunday, Spain’s Finance Minister Luis de Guindos “would like to see the European Central Bank commit to massive, open-ended sovereign-debt purchases” before Spain asks for a new bailout from the central bank—a request that former Goldman Sachs operative Mario Draghi would only be too happy to accommodate.

However, Spain and the other nations which make up the PIIGS will await Germany’s high-court ruling on whether an exception to Germany’s constitution will be granted on behalf of the ECB and its sovereign debt purchases.  That critical ruling is scheduled for Sept. 12.

Back to Davies.

When asked by KWN host Eric King about the short-term prospects for the silver price, Davies didn’t hang his hat on the central-banker-easing mantra as the primary reason for his anticipation of higher silver prices.  Instead, Davies emphasizes a disconnect between elevated equities prices and depressed silver prices as his reasoning for silver to play catch up.

He also suggests that U.S. economic growth will add to the several known catalysts to a substantial move higher in the silver price, a shocking departure from the 2013 Armageddon scenario advanced by Jim Rogers, Marc Faber, Peter Schiff and a legion of well-informed, talented and ‘unencumbered’ market handicappers, including, too, economist John Williams of ShadowStats, who would take grand exception to Davies’ U.S. economic forecast.

Flying in the face of Davies’ forecast of economic growth comes an American Petroleum Institute (API) article which reports global fuel deliveries for all products dropping through the floor—not a good sign.

From API:

Demand for gasoline, the most widely used petroleum product, dropped 3.8% from a year earlier, to 8.624 million barrels a day, the lowest July level since 1997. Gasoline use in the heart of the peak summer driving season was 2.2% lower than in June. January-July gasoline demand averaged 1.1% below a year earlier, at 8.671 million barrels a day, the API said.

Kerosine-based jet fuel use fell 0.8% in July from a year ago, to 1.455 million barrels a day, while demand for heavy residual fuel, used in power plants and industrial burners, dropped 7.1% year-on-year, to 294,000 barrels a day.

Production of all four major products–gasoline, distillate, jet fuel and residual fuel–was greater than demand for those products. As a result, petroleum imports decreased and exports increased. Total imports of crude and refined products fell by 9.6% to average 10.4 million barrels a day in July. Exports of refined products increased 11.1% to a record high for July of 3.244 million barrels a day, and year-to-date exports were up 14% compared with the same period in 2011.

Refineries operated at 92.7% of capacity in July, the second month in a row above 90%.

Crude oil production rose 13.6% year on year in July to 6.225 million barrels a day, the highest July level since 1998. Year-to-date output averaged near the July level and was up 11.9% from the same period in 2011.

Nonetheless, Davies likes silver, in the short-term.

“Silver is the ugly duckling at the moment.  Isn’t it?  It’s definitely performing very badly, and I think it’s tantamount to the same as gold,” says Davies.  “But I think I would err slightly on the side of more silver bullish.

“I think that with recent equity and S&P 500 performance, I think that the strong correlation there and optimism for growth, and, actually, our analysis is actually [sic] for a pick-up in U.S. growth in nine months time.  So the overlay there, for us, is that silver could perform well here.”

Davies’ timing for a move high in the silver price pretty much sacks up with Goldmoney’s James Turk and other frequent guests of KWN.  It’s a breakout any day in both gold and silver, they say, with silver expected to catapult quickly and close the 57-to-one ratio of the two metals.

“I think we’re threatening to make a move here and it could come in the next few weeks if not sooner,” proffers Davies.

“Optically [chart], I’m looking for the low-to-mid-30′s, and that is as far as our trend system will take us in the interim—in the short term, I should say.”

His target for gold of $1750 and silver of $33-$35 equates to a gold:silver ratio of between 50 and 53.

Peter Schiff: A Much Bigger Collapse is Coming

By Dominique de Kevelioc de Bailleul

Euro Pacific Capital CEO Peter Schiff received top headline on Yahoo Finance News Tuesday, encouraging investors to loading up on gold and silver before the rush from global investors into precious metals becomes the only game in town.

The global financial crisis will inevitably move to the other side of the Atlantic to the U.S., as the focus on the dollar’s terrible fundamentals once again puts pressure on the Treasury market.  And when that day comes, the selling of US debt and market turmoil it will ignite will dwarf Europe’s sovereign debt catastrophe, according to him.

“We’ve [U.S.] got a much bigger collapse coming, and not just of the markets but of the economy” Schiff tells Yahoo’s Breakout host Jeff Mack. “It’s like what you’re seeing in Europe right now, only worse.”

In agreement with Swiss economist Marc Faber and commodities trader Jim Rogers, Schiff predicts the Depression of the U.S. economy will deepen some time in 2013.

As the Fed responds with more aggressive QE to prop up banks, in addition to maintaining historically record low debt carrying costs to Treasury, investors will most likely come to realize that the Fed has become powerless to affect any positive outcome to the crisis.  More jobs will be lost, tax revenue to the Treasury will fall, and deficits will soar even higher than the $1.5 trillion deficit expected for fiscal 2013.

“That’s when it really is going to get interesting, because that’s when we hit our real fiscal cliff, when we’re going to have to slash — and I mean slash — government spending,” says Schiff.

“Alternatively, we can bail everybody out, pretend we can print our way out of a crisis, and, instead, we have runaway inflation, or hyper-inflation, which is going to be far worse than the collapse we would have if we did the right thing and just let everything implode,” Schiff continues.

But Bernanke will most likely make good on his promise to economist Milton Friedman (1912-2006) during a speech the Fed Chairman made at Friedman’s 90thbirthday celebration.  In his speech, Bernanke relived the Fed’s monetary policy responses to the financial crisis of the 1930s, and praised Friedman for pointing out that the Fed’s restriction of money supply to stem the flow of gold out of the United States was a mistake.  The Fed, instead, should have increased money supply to save the banking system and move off the gold standard (as Britain did earlier in the crisis).

“This action [raising of interest rates] stemmed the outflow of gold but contributed to what Friedman and Schwartz called a ‘spectacular’ increase in bank failures and bank runs, with 522 commercial banks closing their doors in October alone,” Bernanke said At the Conference to Honor Milton Friedman, University of Chicago, Chicago, Illinois .

“The policy tightening and the ongoing collapse of the banking system caused the money supply to fall precipitously, and the declines in output and prices became even more virulent.  Again, the logic is that a monetary policy change related to objectives other than the domestic economy–in this case, defense of the dollar against external attack–were followed by changes in domestic output and prices in the predicted direction [down].”

In 1931, the gold price was fixed at $20.67, making it a bargain to holders of U.S. dollars if the Fed had acted by debasing the dollar.  But instead, the Fed decided to protect the dollar from “attack” by domestic and foreign holders, a policy move that Schiff believes is in the best interest of the U.S. economy, today.

That’s not likely to happen, however.  It’s clear from the passage, above, of Bernanke’s entire speech that Bernanke will sacrifice the U.S. dollar in the hopes of saving the banking system; he believes it’s a small price to pay to prevent the decimation of the banking sector—the very point of Friedman’s lifetime of work.

“Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve,” Bernanke ended his speech.  “I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry.  But thanks to you, we won’t do it again.”

And Schiff takes Bernanke at his word, and recommends that investors buy gold and silver before “Helicopter” Ben makes good on his promise to Milton Friedman of 10 years ago.

CNBC Interview: Warren Buffett Shows Fear

By Dominique de Kevelioc de Bailleul

In one of the most revealing interviews with the man who has always been optimistic for a continued prosperous America, Berkshire Hathaway Chairman Warren Buffett, for the first time, appears noticeably fearful about the future of the U.S. economy.

Buffett cult members must have noticed his more-than-usual speech stammer as he searched for the right words in response to questions posed by CNBC’s Becky Quick—who, incidentally, is one of CNBC’s softest of softball interviewers.  In contrast, a Buffett interview with Rick Santelli would most likely drop the Dow 1,000 points within the first few minutes of questioning.

There’s little doubt, if you read between the lines of Buffett’s responses to questions from stick-figure journalist Becky Quick, it’s time to head for the hills and buy gold, gun and take up God.  The 81-year-old investor had nothing good to say about the U.S. economy—a first for the Orifice of Omaha.

When Quick asked whether Buffett’s optimistic assessment of the U.S. economy of six weeks ago is still on track, Buffett began with a mea culpa nervous laugh, as if to say, ‘Oops, I misread the tea leaves.  Sorry fans; this thing is going down.’

Stripping out the filler and avuncular chit-chat ‘Uncle Warren’ persona, the cold-hearted Nebraskan is saying that the outlook for the U.S. economy is not good—just as Jim Rogers and Marc Faber have warned investors many months ago.  In fact, if Buffett wasn’t such a cheerleader for the establishment—the establishment that has feathered his nest for so many years—he’d stop treating investors with disdain though his condescending obfuscations to direct questions and hokey homilies of America the Beautiful—and come clean with investors.

Not Warren.  Joining the Washington mafia is for life.  No exceptions.

“Well, I’ve got a little different story this time,” Buffett chuckled, and went on to say that he’s been looking for a turnaround in the economy for more than two years, but nothing stands out as a potential catalyst of future growth.  The GDP stall, back to flat-line, hasn’t been led by any particular sector; “ . . . it’s pretty general,” he said.

Quick asked, “Well with everything else — not a reversal, a slowdown in the growth, what happened? What happened six weeks ago to spook people, to spook businesses?”

Buffett responded, disingenuously, of course,  “I don’t know the answer to exactly why it’s happening. And I don’t know what it will be three months from now or six months from now because three months ago I didn’t know what it would be today.”

The Sergeant Schultz of billionaires doesn’t know what Jim Rogers knows, or Marc Faber knows, or Peter Schiff knows—and Max Keiser, Eric Sprott, John Williams, Ben Davies, James Turk and about a dozen regulars of Eric King’s King World News.  Buffett knows nothing, the Hogan’s Goat of Washington.

As the mountain of sovereign, corporate and personal debt chokes the economy—while the Fed won’t allow the markets to clear with its ZIRP policy—while the dollar debases at rates never seen since the Civil War, Buffett knows nothing of why the U.S. economy isn’t miraculously recovering from the post-Minsky Moment.

Lies through omission are still lies, Uncle Warren.

In short, the 81-year-old ‘legend’ has turned into a ‘has-been’ overnight.  Or better yet, Buffett the oligarch is about to tank along with the U.S. economy, American exceptionalism, his Cadillac, his ice cream cones, See’s peanut brittle, and his phony blue-collar flag-waving imitation.

Instead of fighting the good fight throughout his storied career to prevent the U.S. from sinking into a fascist plutocracy, like the humble Texan Ron Paul has for three decades, maybe Buffett would gain some respect from other analysts who’ve been too busy being told they’re doom-and-gloomers, nut cases and extremists by the ‘prestitutes’ of main stream media.  While Ron Paul was telling it straight, refusing Medicare payments from his elderly patients during his time as a practicing physician, Buffett smiled, chuckled and played paddy fingers with Charlie Munger and the boys in Washington who bailed him out with TARP.

Recall Uncle Charlie Munger’s comment about goldbugs.  May 7, he said on CNBC, with who else, but the Tokyo Rose of the oligarchy, Becky Quick, “Gold is a great thing to sew onto your garments if you’re a Jewish family in Vienna in 1939 but civilized people don’t buy gold – they invest in productive businesses.”

And another oligarch, George Soros, should know exactly what Munger is talking about.  Through his own admission, the teenage Soros turned in Jews to the Gestapo during the reign of the Third Reich in the 1930s.  Soros is civilized, but people escaping the tyranny of Nazi Germany or 21st century America are uncivilized cattle.  But, then again, Soros owns gold, hedging again from tyranny.

What a cast of characters.

Back to Buffett, who said this about JP Morgan gold cartel kingpin Jamie Dimon, “I think Jamie Dimon is one of the best bankers in the world.”

Sure, and Bernie Madoff was one of the best fund managers, too, until it was discovered that Bernie’s phony profits were just that, phony, a smaller Ponzi scheme than the one managed by a man at the helm of America’s largest bank.

“There’s No Way You Can Bet Against America & Win,” Buffett had said in his previous interview with Quick of six weeks ago, which begs the question: What America is he talking about?  Central America?  Those are the strangest words from a disgrace of a man who was ashamedly Made in America.

Source: CNBC

Peter Schiff’s Latest Advice to Investors

Dominique de Kevelioc de Bailleul

Gold and silver investors watching metals prices move back down near to the Dec. 29 lows of $1,523.90 and $26.15, respectively, should seriously consider accumulating the metals now.   The ‘Big Reset’ of the global financial, slated for no later than 2014, will reward precious metals holders as the big winners among investors, according to Peter Schiff.

Speaking with Cambridge House International, the CEO of Euro Pacific Capital said, “The United States is in a lot of trouble.”   After the Fed presumably embarks on QE3, and that stimulus wears off, “I think we’re going to have a crisis.  I don’t think we’re going to have time for QE4 or QE5.  I mean, ultimately, that’s where we’re headed, because that’s all QE does.  Each QE sows the seeds of the next QE.”

And global money looking for a safe haven won’t stand for another repeated currency debasements through debt monetization by the U.S. central bank.  Because Europe’s woes have forced politicians to make tough choices there, the spotlight has been taken off, temporarily, the even-more dire circumstances of debt loads and deficits of the U.S., according to Schiff.

Schiff’s time line for the Armageddon scenario of a U.S. dollar crisis matches predictions made by commodities legend Jim Rogers and ShadowStat’s economist John Williams, with each man projecting 2014 as the year the U.S. dollar no longer maintains its former role as the world’s premiere reserve currency—implying a severe decline of its global purchasing power and much higher metals prices.

In 2014, that’s the year the U.S. economy is expected to reach fresh new lows and the year politicians will finally be forced to face the tough choices regarding proposed cuts to federal, state and local government budgets, according to the three men.  It will also be the year that ushers in severe social unrest, similar to what is happening in Greece, in the case of Jim Rogers’ prediction for 2014.

Ironically, Schiff believes that if the U.S. economy miraculously digs its way into real economic growth, the bond market will sell off due to concerns of inflation from two massive QE programs from the Fed, driving interest rates much higher, along with U.S. borrowing costs—costs that will explode the federal budget deficit beyond the already red-line levels of 10-plus percent of GDP.  The dollar cannot survive under that scenario, according to Schiff.

“We don’t want to allow a real recovery, because that means real bitter-tasting medicine needs to be swallowed,” he said.  And added, no later than the year 2014, we’ll see “higher interest rates.  There’s going to be lower real estate prices, stock prices, some banks are going to fail, and the government is going to have to seriously cut spending dramatically to everybody.”

Under a Schiff scenario of deeper economic recession/depression, dramatic cuts to all levels of U.S. government spending will create a similar and immediate economic and financial death spiral, now faced by Greece, with reduced GDP coming from total U.S. government spending—presently 40.3 percent of GDP—further limiting the U.S. economy to pay on its local, state and federal debt, thereby initiating a feedback loop of further cuts and GDP declines, and so on—an unraveling of the Ponzi-like scheme warned of by Russian economist Nikolai Kondratiev in 1925, and later, by Austrian economist Ludwig von Mises, among others.

By the year 2014, like Jim Rogers’ longstanding ‘heads-you-win-tails-you-win’ investment theme as a result of continued stimulus (currency debasements) to fight the Kondratiev Winter (depression) or the immediate inflation unleashed from years of Fed balance sheet expansion, Schiff recommends holding real money—gold (and silver)—the only money that will survive the loss of confidence in all fiat currencies and the ability of the U.S. to make good on debt obligations.

“There is no short-term fix anymore, because we’ve been doing these short-term fixes for a along time,” Schiff concluded.  “We got a little extra rope from this European crisis . . . Something is going to happen in Europe, because this cannot go on indefinitely.  And the numbers are just so big for the U.S.  Interest rates have got to rise, or the Fed is going to have to print so much money to keep them from rising that inflation is going to flare up in a way that government numbers can’t hide it anymore.”

Therefore, Schiff’s advice: Avoid dollars and euros.  Buy gold, real “money”.

Peter Schiff’s Latest Comments About Gold and Gold Stocks

With the dismal performance of gold stocks testing the patience of even hardcore gold bugs, Euro Pacific Capital CEO Peter Schiff believes investors should not panic and sell, but hold on, the bottom in the gold mining stocks is probably in.

And if the bottom is not in, hold on anyway.

“We could see another 10% pop in a week or two in the mining shares,” Schiff told King World News on May 23.  “There’s a very good chance that the bottom is in, especially if we can get a rally in gold.”

At this time, it may be worth repeating a famous quote from economist John Maynard Keynes: “The market can stay irrational longer than you can stay solvent.”  On the way up and on the way down, markets can mis-price assets to ridiculous levels for longer periods of time than appears rational.  Today, it’s the U.S. dollar, U.S. Treasury market and gold, which have been mis-priced for so long.

“Right now the U.S. dollar has been rising because of worries about Europe, but the dollar is sicker than the euro,” Schiff said.  “So both currencies should be falling against gold and gold should be taking off here.”

To put into better context how “sick” the U.S. dollar really is, consider an article penned by USA Today journalist Dennis Cauchon, who outlined in his May 23rd piece the horrific fiscal shortfalls in Washington—a fiscal debacle so large that economist John Williams of ShadowStats.com expects hyperinflation in America some time in 2014 as global investors might eventually witness 100 percent Fed monetization of fresh U.S. Treasury debt.

Under the Generally Accepted Accounting Principles (GAAP) rules of reporting financial disclosures, “the [U.S. budget] deficit was $5 trillion last year under those rules,” stated Cauchon.  “The official number was $1.3 trillion. Liabilities for Social Security, Medicare and other retirement programs rose by $3.7 trillion in 2011, according to government actuaries, but the amount was not registered on the government’s books.”

Whether investors are aware of the fraudulent U.S. Office of Management and Budget (OMB) accounting, or not, the reality of millions of baby boomers retiring each year and the growing budget deficits that come with an aging population will reach an inflection point, whereby investors of all stripes come to expect money printing as a way of life and begin trotting, then running, to gold and the gold shares in an effort to protect from a Greece-like financial collapse.

And the quick-fix to Washington deficits through Fed ‘stimulus’ and the higher tax receipts that result from a U.S. “bubble economy” has finally reached that ‘Minsky Moment’, according to Schiff.  After trillions of dollars of Fed stimulus since 2009, the economy just isn’t responding like it had for nearly 70 years of Fed intervention—a prediction made by 20th century economists Hyman Minsky and Ludwig von Mises, among others, of the ramifications of chronic central bank money supply injections.

“The market is just rolling over, as it’s coming to grips with the fact that the fantasy they believed in is just that: fantasy,” Schiff said in an earlier KWN interview of May 18th, referring to the recently reported poor economic numbers from Washington and private sources.  “It’s not reality.”

Schiff went on to say that gold—and by extension gold shares—will rise “as investors realize that QE3 [quantitative easing] is coming, because the Fed has already said that.  If the economy needs it, it’s going to get it.  And the economy is addicted to it [stimulus].  I mean, this economy needs QE like a heroin addict needs another fix.”

Back to the May 23rd interview:  Schiff suggested that the relative strength of the HUI index of mining shares to the gold price so far this week indicates to him a bottom is in and a buying opportunity is at hand.   As far as the gold mining shares, “we could have a pretty serious up-move in the gold stocks in a very short period of time.”

Jim Rogers & Peter Schiff Agree, U.S. Treasury Crisis in 2013

Commodities guru Jim Rogers and Euro Pacific Capital CEO Peter Schiff have recently gone on the record that the next harrowing event in the ongoing global financial crisis will most likely take place after the presidential election, with the crisis in Europe spreading to Japan and the U.S. Treasury market sometime in 2013.

In recent weeks, the 69-year-old Rogers has said politics and the natural downside of the ‘business cycle’ will determine the timing of the next big drop in most financial assets. Sign-up for my 100% FREE Alerts

“This is an election year in the United States, as you well know, and there are something like 40 to 45 elections over the next 12 months, including France, U.S., Germany,” Rogers told Opalesque Radio.  “So we have a lot of elections, a lot of politicians who want to be re-elected.  So there’s going to be a lot of good news.

Rogers added, however, historical data show that the ebb and flow of business activity suggest to him that the rebound from the crushing lows of corporate profits, stock prices and GDP during the 2008-9 economic and financial collapse has run their course.

As negligible as the rebound of the economy has been, with GDP still not back to the peak of $13.1 trillion for 2008, the time has come for the next leg down, according to him.

“The overall situation is getting much worse because the debt is going through the roof for all of us,” he continued. “You should be worried about 2013, 2014, but overall, 2012 won’t look so bad.

“In America, we’ve had an economic slowdown, or recession, every 4 to 6 years since the beginning of the Republic.  So you can do the addition, by 2013 or 2014 we’re going to have another . . . we’re overdue for another recession.  And if it comes, the markets are anticipating that . . .”

Within the context of the so-called two-year ‘recovery’ that still has yielded less U.S. GDP for 2011 than was achieved for 2008, along with higher overall debt at the federal level, the downside to the U.S. dollar, and by implication a U.S. Treasuries sell off, could be severe, Rogers has said in previous interviews.  He still holds to that thesis.

“There’s going to be more currency turmoil in the next year or two. . . as these imbalances are sorted out,” he concluded.

Though Rogers didn’t mention his short position of U.S. Treasuries during the Opalesque interview, he did announce earlier in the year that he has taken a short position on U.S. Treasuries debt, citing limitations to the upside in prices (lower rates) while the Fed maintains its dominate position as the ‘buyer of last resort’, and due to waning demand, to outright decreased holdings, from foreign buyers.

Echoing Rogers’ outlook of the U.S. Treasury market is Peter Schiff.  In a telephone interview with financial publication Forbes, he said ultra-loose monetary policy at the Federal Reserve only serves to exacerbate the snap back to the imbalances Rogers spoken about in the Opalesque Radio interview.

“The more you delay it, the bigger it will be,” Schiff told Forbes, Tuesday, “so we need to raise interest rates during the recession to confront the inefficiencies.”

“We consume more than we produce and we borrow abroad, but we are never going to be able to pay them back,” Schiff continued, a conclusion that appears to have been drawn as well by the nations responsible for driving global growth for more than a decade, the BRICS.

Heads of state from the nations of Brazil, Russia, India, China and South Africa signed an agreement in New Delhi, Thursday, making way for a credit facility as a means of extending credit between the five-nation block in their own currencies, thereby bypassing the U.S. dollar for international trade.

The fourth BRICS summit is the latest in a rapid trend by developing nations to disengage from the dollar/euro reserve currency protocol.  In addition to the agreement, the five-nation block also called for reforms to the World Bank and International Monetary fund (IMF).

Since as early as 2000, Schiff has warned that the world’s producers of goods and raw materials will one day stop extending credit to the debtor nations as the debt levels become unserviceable.  That means it’s inevitable that the U.S. dollar falls further and interest rates rise to reflect the added risk of holding U.S. Treasuries.

At that time, few in mainstream media (MSM) took Schiff seriously, while some scorned him, when he warned of a dollar collapse.  But today, he has been partially vindicated.  Gold has risen sharply against the two reserve currencies, the U.S. dollar and euros, since 2000.

However, contrary to what Schiff’s pundits now say, the worst has not passed; there’s much more currency debasing to come, including a U.S. Treasury market collapse.

“All of the people who were 100% wrong [back in ‘08] are saying that everything’s okay [now],” Schiff said.  “I am telling them they didn’t solve the problem and are making it so much worse.”

According to Schiff, the U.S. Treasury market is set for a big fall in 2013, and he expects to be right once again. Sign-up for my 100% FREE Alerts

Peter Schiff’s Critical Advice to Retirees

Speaking with Yahoo Breakout, Euro Pacific Capital CEO Peter Schiff chastised the Federal Reserve for maintaining ultra-low interest rates at the expense of retirees.  But the outspoken critic of the Fed has a strategy for older Americans to survive the crisis in the U.S. dollar without taking on unnecessary risk.  Sign-up for my 100% FREE Alerts

First, Schiff warns all investors of the trend of the U.S. dollar.  It’s down.  The Fed, in its effort to prevent a sovereign debt and banking collapse, is on course to print the dollar “into oblivion” to replace the financial hole left from bad debt still maintained on the books of the banks and at the Fed, according to him.

“I think what retirees need to understand, is that when the dollar is wiped out, all dollar denominated debt instruments are going to go with it,” Schiff stated.  “So what they have to do is get out of the dollar completely.”

That means, though ‘safe’ assets denominated in U.S. dollars, such as U.S. Treasuries, municipal and corporate bonds will most likely return the face amount of the bond to maturity, the value of those bonds will drop rather rapidly over time, according to Schiff.

A return of two percent on a 10-year U.S. Treasury won’t keep up with food and energy costs, if those commodities appreciate at an average rate of, say, 6 to 8 percent per year.  In other words, Schiff believes the U.S. will continue a repeat of the ‘stagflation’ of the 1970s, but during this decade, the rate of inflation could turn out markedly worse.

Moreover, due to the low rates paid on dollar denominated bonds, Schiff sees a troubling trend by some fund managers who offer retirees ‘higher yielding’ U.S. Treasury funds.  These higher yields can only be achieved by ‘leveraging up’ the fund, a risky proposition to retirees, according to him.

“A lot of them [retirees] are buying longer-term U.S. Treasuries, you know, maybe 30 years to get extra yield.  In so doing, they’re taking enormous risk,” Schiff explained.  “In fact, many of the funds that are out there are actually levering up longer-term debt.  That’s incredible risk.  Other people are buying overpriced stocks.”

Schiff outlines the dilemma presently facing retirees (and other investors), that the financial media refers to as ‘financial repression’, a term used to describe Federal Reserve policy of coaxing investors into assets as a potential means of achieving a meaningful yield by taking on more risk.

Schiff thinks Fed policy is wrong, but he also believes there is a way out for retirees.

“So retirees need to buy gold and silver,” he said, a recommendation also made by famed author Richard Russell of Dow Theory Letters.  “If they want more current income, they need to look toward foreign sources.  I particularly like high-dividend paying foreign stocks.

“But if you can’t take that risk, you can still buy bonds denominated in foreign currencies.  But what you don’t want to do is make the mistake of buying long-term U.S. dollar denominated bonds, because I think the biggest losses in this financial collapse are going to be absorbed by ,felt by, the bondholders.  Even those who own U.S. government bonds or municipal bonds, bonds that are thought to be low risk are still going to be wiped out as the dollar collapses.”

As a summation of the Schiff strategy for retirees, he suggests that the techniques of wealth preservation today differs from a more ‘normal’ investing environment in that assets held should be denominated in foreign currencies, not U.S. dollars.

Allocations between stocks and bonds may not necessarily need to vary from a typical retiree portfolio of investments; it’s the currency in which the assets are denominated that matters in a Schiff strategy.

He likes the currencies Swiss franc, Australian dollar, Norwegian krone, Singapore dollar and Canadian dollar.

Additionally, Schiff suggests that gold and silver should be held as a hedge against all currency risks to a portfolio allocation between foreign stocks and bonds.  Sign-up for my 100% FREE Alerts

Source: Yahoo Breakout

Peter Schiff’s Latest Gold Price Prediction

Speaking with GoldSeek Radio host Chris Waltzek this week, Euro Pacific Capital CEO Peter Schiff expects the re-inflation trade to dominate in an unprecedented way in 2012, as money mangers send oil, gold and other dollar-sensitive assets much higher in price, or at record prices, in their effort to flee the dollar.

In particular, the former U.S. senatorial candidate from Connecticut expects gold to reach its inflation-adjusted high of approximately $2,300 this year, citing the Fed’s reaffirmation on Wednesday that it intends to further suppress rising interest rates for another three years.  Sign-up for my 100% FREE Stock Alerts

Schiff contends that the dollar will suffer greatly as a result, “fizzling” out of investor portfolios as the market realizes that the alleged dollar strength last year has been nothing but an illusion brought about by the euro’s relative weakness against the Greenback.

“In fact, it [U.S. dollar] is already fizzling,” Schiff told GoldSeek Radio.  “In fact, it’s fizzling quite a bit today after Ben Bernanke basically said zero percent interest rates will be here until the end of 2014, so we got an extra year or so of zero percent interest rates.  Although I think it [dollar collapse] is going to hit the fan before 2014, but, that’s got gold up $40 today [Wednesday].”

According to Schiff, professional traders will view the Fed’s most recent language as a signal that more debt monetization by the Fed is planned for 2012, with a lower dollar as the price paid for a Fed monetary policy of affecting artificially low interest rates in the U.S. Treasury and corporate debt markets.  But Schiff doesn’t see how the Fed getting a free lunch from its actions.

Within 24 hours of the Fed’s statement of Wednesday, the USDX has already broken below its 40-month MA support of 79.72 and has accelerated downward on Thursday to 79.21 in early afternoon trading.

“They [Fed] have to create massive inflation to keep interest rates that low, especially as prices are rising, they will continue to rise,” Schiff added.  “I think we could see record high oil prices this year.  It’s clearly the consequences of all this money printing the Fed has to do to keep buying up the bonds to keep interest rates low.”

Schiff continued, “It’s reasons to buy more gold, buy more silver,” as a weaker dollar elicits more central bank buying of gold as a hedge against heavily-weighted dollar bank reserves.

While the euro was weak against the dollar throughout the second quarter of 2011, central banks began aggressively accumulating the yellow metal as its price, in dollar terms, dropped.

However, also during the second half of 2011, U.S. money supply has again stalled, according to economist John Williams of Shadowstats.com.   That stall remains as the telltale signal to central bankers that the Fed, indeed, needs to step up purchases of future Treasury issuances, on top of maturing U.S. debt and illiquid mortgage-backed securities, if Bernanke has any chance of achieving his objective of negative real interest rates.

On Jan. 23, India-based The Economic Times stated, “The WGC, an industry-backed group, said in November it expected central banks to add some 450 tonnes of gold to their existing reserves in 2011, driven mainly by purchases from emerging economies that are seeking alternative investments to the U.S. dollar.”

Many gold analysts expect central banks to accelerate purchases of gold, led by China’s central bank, whose gold reserves continue to rise along with imports of gold from its principal supplier, Hong Kong.

Though Beijing reports its gold reserves at a considerable lag to its central bank’s activity in the marketplace, gold consultancy firm GoldCore reported earlier this month that China imported a record 102 metric tons of gold in November, as the that latest print shocked the gold community into reassessing their price targets for 2012.

GoldCore continues, “Informed speculation” suggests that some of Hong Kong’s gold exports to China include the People’s Bank of China, with one analyst telling Bloomberg following the news, “there is always the possibility that some purchases were made by the central bank.”

Gold’s $200 move off its bottom in December and breakout above the $1,700 point to a resumption of the gold rally.  The gold pundits are wrong, according to Schiff.

Without naming any analyst in particular, Schiff suggested that talk of the end of the gold market bull, as heralded by economist Nouriel Roubini and Kitco’s Jon Nadler during the December plunge, is pure nonsense.

Data show that American investors own so little gold, which indicates to Schiff and gold expert Peter Grandich (in an interview with GoldSeek this week) that the gold price has further room to run much higher before the manic stage ends at a top.

“We’re a long way from a blow-off top that you would get at the end of a bubble,” Schiff said.  “We might eventually get there, but we’re years away and thousands of dollars an ounce away.”  Sign-up for my 100% FREE Stock Alerts

Silver price: Hey Silver Bugs, You Cryin’ Yet?

The more silver bugs cry as they watch the latest breakdown in the silver price the better it is for the rest who will make it through to the other side of the biggest financial crisis since the Civil War.  Sign-up for my 100% FREE Alerts

Take in the economic scenario the Fed faces, then ask yourself what the Fed will do about it and which planet will the silver price orbit after the dust settles.  Here are the facts that should calm investor fears:

“Let us be honest. The U.S. is still trapped in a depression a full 18 months into zero interest rates, quantitative easing (QE), and fiscal stimulus that has pushed the budget deficit above 10pc of GDP,” The Telegraph’s Ambrose Evans-Pritchard penned in a Jul. 4, 2010 article.

Now look at Shadowstats economist John Williams’ chart, below.  GDP is again dropping, 18 more months later, from Evan-Pritchard’s last year’s Independence Day article. (The real GDP is calculated by Williams, shown by the blue line.)

Now, take a look at the number of U.S. food stamps recipients?  Does the graph, below, square with an employment rebound?

If the economy has been on the mend, slowly creating jobs for nearly a year now, why have there been 4 million more food stamps recipients in the U.S. since July 4, 2010?

Note the blue line in John Williams’ graph, below.  That’s the real unemployment rate (approximately 22.5 percent)—the rate that would have been reported by the BLS during President Ronald Reagan’s first term (1981-85).

And the jobs created which blunted a crashing jobs market have been the throwaway kind.  See BER article, Gerald Celente:  Brace for Economic 9/11.  The trends forecaster describes the type of jobs created, mostly the type of local jobs that you would find on the tropical island of Fiji, not the high quality jobs found in Germany or Switzerland.

And it’s about to get worse, as Celente predicts.

The U.S. is “tipping into a new recession,” ECRI’s Lakshman Achuthan told Bloomberg Radio on Sept. 30  “We don’t make these calls lightly. When we make them, it’s because there’s an overwhelming objective message coming out of our forward-looking indicators. What is going on with the leading indicators is wildfire; it’s not reversible.”

Since Sept. 30, Achuthan hasn’t budged from his dire forecast.  (See Economic Cycle Research Institute—ECRI, here and, of Dec. 9, here.)

Okay, the Fed faces a U.S. economy that’s rolling over—again—from an already negative GDP, according to John Williams.

So, what will the Fed print to prevent an economic collapse?

Watch it; it’s a trick question!  Jim Rogers explains in a Dec. 14 interview with TheStreet:

TheStreet Reporter: What should the Fed do at their upcoming meeting, aside from QE3?  We’ve seen more Fed presidents come out and call for more monetary easing.  What should they really do?

Jim Rogers: They’re already, Alex, they’re already . . . QE3 is already here, Alex.  Get out the numbers for non-seasonally adjusted M2, and you will see that Mr. Bernanke said, in the summer, we’re going to keep rates artificially low. You can’t just say the words, you got to do something.

Rogers goes on to say that the Fed hasn’t stopped printing money since QE2; it just wants people to think it has.  And thanks to a complicit media, whose been told to repeat the con over and over in an effort to prevent a bona fide run on currencies, some investors still believe the Fed has stopped printing.

Look at the chart, below.  A couple of months ago, the Fed was expanding M2 money supply by 20 percent!  That’s a rate that even former Fed Chairman under President Nixon, Arthur Burns, would blush at, as the maestro of the 60s and 70s presided over the highest U.S. inflation rate since the Civil War.

The Fed never stopped printing!

Silver investors now wait for Bernanke to announce even more printing! That’s when the top blows off the gold and silver market, according to Jim Rogers, Peter Schiff, Jim Rickards, Marc Faber, James Turk, James Sinclair and FX Concepts John Taylor.

That signal could come in late January, maybe tomorrow, or next week, but it’s coming.  Let’s see what more Fed money printing will be called this time.

Back to the Rogers interview.  Notice how the scripted question by TheStreet reporter was written in a way to fool the public into thinking that the Fed hasn’t been printing money since so-called QE2 ended on June 30?

It’s the ol’ leading the witness trick, with a false premise to plant a lie in the minds of the observers, to throw them off the track to the truth.   At least TheStreet reporter didn’t stoop to the, “Well, of course you’re going to say that, Jim, you sell your Rogers Commodity Fund” line, or something along those lines.

Here’s another example of the vicious propaganda thrown at some pretty smart guys who warn of a coming tsunami of commodities price inflation in 2012:  Witness the Marc Faber interview on CNBC, last week.

In his interview with CNBC’s ‘working girl’, Maria Bartiromo, Marc Faber got the better of the dullard Bartiromo, working her over pretty well (if she noticed).  Faber’s had 20+ years experience dealing with such nonsense during his time living in Thailand.

Do a Google Images search on the term, “Maria Bartiromo.”  You’ll see endless poses in the search results.  That’s what CNBC thinks of you—a 20-year-old drunk on a Thai vacation.

Bartiromo, after hearing Faber’s gruesome assessment of the world economy, said, “Okay, you think the world is ending, so which five stocks would you buy?”

By the way, if you didn’t listen to the Bartiromo interview, Faber outdid himself with yet another one his great Faberism.  He retorted, “I Have A Very Special Stock Tip For You. The Symbol Is G-O-L-D.”  Now, that’s a great Faberism!

And finally, and more dramatically, The Hat Trick Letter’s Jim Willie explains the Fed con in a really classic Jim Willie style—his style is the rambling and information-packed rant!  See BER article and link to audio interview here.  Willie covers almost everything in this interview that silver investors should know.

So we see sub-$30 silver.

Now for the question that’s on everyone’s mind . . . drum roll please. . . how far will the silver fall?

And the answer is the same as it has been since the bull market began in 2002: When every last ripe apple falls from the shaken tree.  That’s when the price will stop falling.

And right now, the tree needs to be shaken as hard as the Fed can shake it, because the next move up in silver will most likely be akin to the last one.

You remember, the move from $17.50 to $49.94, from August 2010 to April 2011, a 177 percent price explosion higher within 8 months?!

The Fed would just prefer the base of the next move for silver (gold, too, as well as oil and other commodities) is lower before the massive catapult higher.  Also, remember, north of $50 in the price of silver unleashes the metal; there is no resistance levels above that price.  This is the last stand for the Fed, and it will make the best of it.

MF Global Case Exposes JP Morgan COMEX Fraud

With 19 days left in the year 2011, one would think that the famous Ann Barnhardt interview, posted Dec. 1, on the FinancialSense Newshour website was a shoo-in for the most important interview about your money this year.  Sign-up for my 100% FREE Alerts

But, it appears that Jim Willie of The Hat Trick Letter takes Barnhardt’s gruesome assessment of the financial industry several steps forward in classic Jim Willie style.  Marc Faber, Jim Rogers and, even Gerald Celente, Peter Schiff and Max Keiser, don’t do quite the justice to the topic of: the tag team effort by the bankers, regulators and politicians who conspire to fleece the American people, like Jim Willie can do.

For those already familiar with Jim Willie, go right to a most fascinating interview with the man, who, prior to the Lehman collapse, was unfairly referred to as ‘Crazy Jim’ for his ‘ridiculous’ prediction for systemic financial collapse at a time when the compelling evidence for such an event could only be appreciated by those few among us steeped in all the academic disciplines of money, history and of human behavior, rolled up into one.

Jim Willie interview, click here.

For those unfamiliar ears to the Willie experience, his presentations sound no less crazy than they’ve sounded of the past.  His presentation of the facts, the events of past and present, as well as the conclusions he draws, appear ‘nutty’ to the layperson.

But no one can ever say that the man has ever been wrong about what he has for many years envisioned—and expressed in no uncertain terms, proving once again the adage: It’s not, what a man says; it’s the posture in which the man says it, that appeals to the man-on-the street.  See Milgrim Experiment.

Though Willie earned a Ph.D. in inferential statistics, he won’t wear a suit and tie or a lab coat.  You’ll have to take in the data and draw your own conclusions, because he sounds exasperated from those around him who won’t listen—even his own family members.

Jim Willie, PhD., now, presumably, lives a peaceful life in Costa Rica, where he publishes his famous Hat Trick Letter.