Peter Schiff: U.S. Rally Is Doomed, Gold Will Hit $5000

Discussion in 'Money Talk$' started by KenH, Sep 25, 2009.

  1. KenH

    KenH
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    Interesting.


    Peter Schiff: U.S. Rally Is Doomed, Gold Will Hit $5000

    Posted Sep 24, 2009 09:25am EDT by Aaron Task

    Unlike the "legitimate bull markets" of many foreign markets, Peter Schiff believes the U.S. is merely experiencing a "rally in a bear market," and is lagging the rest of the world "for a reason."

    The worst is not over, according to Euro Pacific Capital's Schiff, who predicts the Dow will fall another 90% from current levels when measured against gold.

    A longtime dollar bear and gold bull, he foresees gold hitting $5000 per ounce "in the next couple of years," and predicts the Dow and gold will trade on a one-to-one ratio vs. the current level of around 9.7-to-1.

    Schiff believes gold is currently "climbing a wall of worry" but will eventually become as hot as tech stocks in 1999 and start moving up $100 per day.

    - more at http://finance.yahoo.com/tech-ticke...M,GDX,^GSPC&sec=topStories&pos=8&asset=&ccode=
     
  2. TomVols

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    I see no evidence that (1) Gold markets could support such an inflation; (2) That gold supply is going to drop markedly so to support such prices, and (3) that the stock market (more importantly, as anyone should know, oil markets) would have this kind of effect on gold or vice versa (again, oil markets tend to parallel much, much more efficiently and congruently).

    That said, I am not convinced we're not in a classic bear rally either, though the increases are at very high levels for a bear rally. Nor am I ready to rule out that we're in a full orbed recovery, though I believe the former is much more likely than the latter. Too many other variables account for much of traders' behavior. Right now, I don't know how well past models can predict what can happen. One thing is constant and that's been the oil-gold link. For gold to hit that high, oil might have to drop to $20 a barrell. Not happening. So the other explanations for gold to hit $5k and oz just don't pan out from where I sit and analyze.
     
  3. TomVols

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    I don't think comparing gold to tech stocks is a fair comparison. Apples and oranges. Tech stocks were part of small cap growth and sector growth stock funds. We already have these with gold in them and nothing's happening. With an annualized ROI of around 1.5%, gold cannot appreciate astronomically as this person argues. We see any kind of abnormal and astronomical spike in Gold, I;d be afraid we'd see a Dutch Tulip collapse.

    You must love this part, Ken :)
    Conflict of interest? :) And with China's GDP of $2billion (a fraction of ours) I don't see China being what he portends.
    Exactly. China is way too vested in the dollar. We go down, they go down with us.
     
    #3 TomVols, Sep 25, 2009
    Last edited by a moderator: Sep 25, 2009
  4. KenH

    KenH
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    If our economy collapses under the weight of our overstretched foreign interventionist foreign/military policy I would not be surprised at all to see China become the world's next economic power.
     
  5. TomVols

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    I don't see how they could survive if our economy collapses. Our "overstretched foreign interventionist foreign/military policy" (Did Ron Paul sign on under your name) :laugh: is not going to be the deathknell, but it's a shot no doubt. Our weak fiscal policy, due in no small part to our reliance on flawed Keynesian models that Bush liked and Obama loves and that Greenspan worshipped (shhh...don't tell him he's no longer Fed chair) and Congress salivates over, will be the major nail in the coffin.
     
  6. billwald

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    Sems to me that every time the economy gets wierd enough someone starts a world war. The Crusades were economic/political, not religious. A big enough war is like "passing go."
     

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