King World News interviewed Peter Schiff, CEO of Europacific Capital. When asked about the action in gold Schiff stated, “Well, how are you going to see a big drop in the price of gold when everybody wants to buy it?
The whole world is desperate for gold because governments are printing too much money, interest rates are too low, the only safe haven is gold. As more and more people figure this out, they want to buy it.”
Peter Schiff continues:
“The good thing for gold is that most people don’t own any yet. Right now there are very few people who own it relative to all of the people who are going to own it eventually. The problem is the longer people wait to buy it, the more expensive it’s going to be.”
When asked about the tremendous action in the mining shares as of late Schiff replied, “Yeah, gold stocks are at a new all-time high today if you look at the HUI index, even though gold is not. So the gold stocks are now really starting to perform, whereas in the past few years they have underperformed.
So now they are outperforming (gold) and yes I think (fund) managers who have no gold stocks at all in their portfolios are going to be falling behind others (fund managers) who have at least some exposure to the sector. 2% or 3% (allocation from mainstream fund managers) is a big deal and so if you don’t have any of these stocks, you are going to underperform your competitors.
So there is going to be some pressure now on fund managers to start putting an allocation into the mining sector, even if it’s a small allocation, 2% or 4% or 5%. Newmont Mining is at a new record high, but it’s only about $3 higher than it was at its peak in early 2006 when gold prices were $520 an ounce....
“So the price of gold has more than tripled and the only gold stock in the S&P 500, one of the biggest gold companies in the world, the shares are not even up 5% during the time when the price of gold has tripled. So obviously these stocks like Newmont have a long way to run.”
When asked about how the great money printing experiment will end Schiff responded, “It’s going to be a disaster for everybody who put their faith in this system, in the fiat monetary system. There are people who are going to be wiped out, completely wiped out. People jumped off of rooftops in the crash (of 1929). Lives are going to be ruined because of this fiat monetary system. What if we end up moving towards a complete totalitarian, centrally planned economy? These are some dangerous times we are headed for.”
When asked about bullion bank short positions in silver that can’t be covered Schiff replied, “I can’t think of a reason why anybody would want to be short silver, but these banks were dumb enough to buy sub-prime mortgages, so I guess they are dumb enough to short silver.”
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