With gold and silver prices declining along with global stock markets, today King World News interviewed Peter Schiff, CEO of Europacific Capital. When asked if the downdraft in the metals reminded him of 2008, Schiff replied, “Yeah it does, it is definitely reminiscent of that time period, lots of selling. I think emotional or forced selling is probably what’s driving it. It’s a sale as far as I’m concerned for people who want to buy, but it does show the dangers of using leverage.”
Anyone who bought silver on leverage last week probably already has a margin call, so that’s difficult. But for the cash buyer who is buying to preserve their wealth from inflation, yesterday was a great day. Days like that are opportunities.
I know for some people they are thinking, ‘Oh no, my gold has lost value.‘ Your gold is still your gold, your silver is still your silver. Yes, if you had to sell it today you couldn’t get as many dollars or euros for your gold, but we’re not selling it today so what difference does it make?
We’re holding it because we’re probably going to need it for tomorrow and so the forced selling is a good opportunity for the people who aren’t forced to sell and still are looking to buy.
I have a feeling that all of this volatility is on the speculative end. It’s the leveraged players, it’s the hedge funds, the big money that’s gambling. The physical market is not driven by speculators, it’s real demand by people from all around the world who want to save and who don’t want to do it in currencies where the interest rates are at zero and where the printing presses are running at full speed.
I think physical buyers are going to respond to the drop in price by increasing their purchases. That’s how the market works, when prices are lower, you want to buy more….
Continue reading the Peter Schiff interview below…
“It’s only the speculators that are looking to buy high and chase momentum. Then when it goes down they look to bail out.
They (speculators) are not there to be long-term investors and as soon as the momentum goes, they are out the door. If I liked silver last week at $40 an ounce, I’ve got to like it even more at $30 an ounce. It’s the same silver, so if I can get it for less money, why wouldn’t I buy it?”
When asked what he is doing with his own money Schiff stated, “I bought some mining shares in my personal account in the last couple of days and even some non-mining shares. I like to take advantage of lower prices. You always have to be looking at these declines as buying opportunities.”
When asked about the plunge in the stock market Schiff responded, “We’re still in a bear market long-term. I think when Ben Bernanke came out and basically had a gloomy assessment of the economy, yet had no QE3, just ‘Operation Twist,’ that probably disappointed a lot of people.
When people realized we are not getting any help from the Fed, the banking sector just rolled over because ‘Operation Twist’ is going to put the squeeze on the banks. I think if Bernanke stays true to form, he’s going to come to the rescue with QE3, the printing press. When that happens, gold and silver should be off to the races.”
Eric King