Posted on 04/14/2013 10:21:02 AM PDT by Diana in Wisconsin
I had the opportunity this afternoon to connect with Peter Schiff, CEO and Chief Global Strategist of Euro Pacific Capital. It was a fascinating conversation, which took place while gold was absolutely collapsing.
During the interview, Peter explained that today’s sell-off, triggered by a Goldman Sachs sell recommendation was based on the “false idea” of European Central Bank gold sales hitting the market. Instead he explained, gold is preparing its move “from weak hands to strong hands”, before heading to new all-time highs.
When asked his thoughts on the complete panic in the market this afternoon, Peter commented that, ”Gold had [previously] sold-off on false anticipation of [economic] recovery bringing an early end to QE. But when Goldman Sachs came out with the sell recommendation…sentiment was already negative…so I think there’s a lot of stops being hit [right now]…[However], the lower prices will create an opportunity for buyers…wanting to accumulate large positions without moving the market. The only way to do that, is to have a lot of selling...Goldman Sachs certainly could have done a lot of favors for people interested in accumulating gold, because now you’ve got the selling that makes [it] possible.”
With respect to Cyprus’ selling of its gold reserves, Peter said that,“The European community is trying to force Cyprus to sell-off its gold…and now you have the anticipation that other highly-indebted European nations like Greece, Spain, Portugal, and Italy, that [all] have lots of gold, [will have to do the same]. Portugal has I think 90% of it’s reserves in gold—that’s about the highest in the world…[So] these countries [being] forced to sell their gold has really [spooked] the market, and people are selling in anticipation of this avalanche of selling by European central banks…[but] that’s a false idea…The reality is none of that gold is going to be sold into the ‘market’…[because]the ‘buyers’ will be other central banks.”
According to Peter those ‘other’ central banks, will be the “strong-hand” central banks of emerging economies. The indebted Western countries he indicated, “[Are] going to be forced to liquidate…[and] what’s going to happen, is that broke countries are going to be selling off their gold to ‘rich’ [BRIC] countries.”
He further noted that, “Moving gold from weak hands to strong hands is very positive for the gold market…[and] when people realize where the gold ends up, [they're] going to scramble to buy back what they’ve sold.”
As a concluding remark on the gold price, Peter indicated that, “We have to get through this sell-off and [then] I think we’re headed [to] new highs. I’m surprised at the degree to which we’ve already sold-off, but I don’t think that changes the fundamentals…the bigger the sell-off is, the bigger the [subsequent] rally is going to be.”
Trust me, I’m watching gold closely. I’ll be all in if it’s starting to fall below what I need to pay off my farm.
I want to be completely debt-free when TSHTF. I’m thinking my timing is right. 13 years is a long time to wait - and frankly, what I’ve been waiting for isn’t going to be good for any of us!
That’s about 3 days of central bank buying at current velocity and it’s certainly possible that “the market” in the form of ^GSCI saw this and deliberately jumped on it. Like Soros shorting the GBP into the weakness that existed back then.
I’m not saying “this is the bottom” or anything like that. From my research, the cost of extraction is about $1000. and the price could go there or even a tad below there. Fuel is a big part of that and fuel prices could also collapse. But literally everything else we see in the MSM is an illusion or quickly turns into one, and the “gold press” has an inordinate number of kooks as we both know.
Anyone who has ever tried to flip gold or buy it for the purpose of reselling it in a modest amount of time has been made aware of the vicious spreads involved. So I don’t think that anyone but small-amount amateurs (who have little effect on market prices) bought gold for that purpose. Thus they are not in it to flip it. That does not mean it can’t go lower, as I said.
It also seems unlikely that anyone wanting to sell large amounts of gold would telegraph their intentions so as to crush the market and thus mash the amount of money they would get from the sale. Although we don’t expect genius from bankers, particularly from a small country like Cyprus.
Our brains see a decline in price and somehow expect it will continue until the price is zero, just like we see a price rise and expect it to continue into infinity. Neither occurs.
What happens next, next-next, and next-next-next in gold is what matters to folks or entities who bought it. I can’t predict that any better than anyone else. But it would not surprise me to ultimately find out that this was a financial gang-rape of Cyprus.
FYI, not sure what impact this will have on the precious metals market, but a gold and silver mine just collapsed.
What investment is not a fools game?
Jim Sinclair has alot of respect for the views of Alf Fields.
The latest from Fields is here: http://www.jsmineset.com/
A comment on the article says the mine is a copper mine. Check out the comments following the article.
meanwhile, every other corner has a “We buy Gold “ sign.
When they begin to disappear, we will be at the bottom
HOW THE HECK DID I SCREW UP A SIMPLE CUT AND PASTE!!!! Sorry people. Trying again.
http://www.theburningplatform.com/?p=52552
Hmmm, was it Goldfinger or Zoran?
This is absolutely an example of the dirtbag neighbor selling off his Harley to pay for LAST month’s rent.
According to this, 10% of US annual silver production just vanished overnight.
http://silverdoctors.com/10-of-us-annual-silver-supply-just-vaporized/#more-25002
Make that 16% of the US annual silver production just collapsed
http://silverdoctors.com/10-of-us-annual-silver-supply-just-vaporized/#more-25002
http://www.paulcraigroberts.org/2013/04/13/assault-on-gold-update-paul-craig-roberts/
another theory
That link was uplifting. Thanks
That’s a very interesting conflation of events.
90% silver is disappearing fast and the premiums are going thru the roof.
It’s actually pretty easy to see when a bubble is about to pop. When you see promotions on tv (or in Parade magazine) trying to sucker the ignorant, it’s about at the end. Flipping houses, buying gold, day trading, foreign exchange. Just watch for late night TV ads or other promotions.
Fair enough, but how long has that (for gold) been going on? Gold has just lost 2 years of gains but is still more than a double over the last 5 years.
I’m not especially trying to invalidate your comment, I’m just saying that if I take it as the only salient truth involved, then one must define the “bubble window”. I sold a piece of property in 2002 that I thought had achieved its maximum conceivable value, only to see it more than double over the next 5 years.
And, there are bubbles and there are bubbles. If I take the low low price of gold in 2001 circa $250 and the highest high of $1900 a couple of years ago and average those prices I get $1075. Nobody can predict the future, but could gold go that low? Maybe, it would be at almost the cost of extraction.
I am concerned about the double top formation on gold, I will admit, but the velocity of the rise in gold has been very, very gradual, very non-bubble like. Silver is a different story, especially its behavior over the low 30’s.
Meanwhile, there is no shortage of vendors selling stock market trading courses, so is that a bubble?
Some have mentioned the “cash for gold” thing. Those stores typically pay about a third of what the gold is worth and are a pure sucker play. They can handle a serious price whack buying 70% under market!
I don’t think one can take only a single data point, and that goes for just about anything.
Besides, who would go to the trouble of forging dimes, quarters and half dollars, then aging them.
As such they would be a natural for any barter or black-market trade that sprung up.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.