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Monetary Heroin: SchiffGold Friday Gold Wrap 04.19.19

1 day ago

Just a few weeks ago, the mainstream was worried about economic growth. Now, all of a sudden, the mainstream is bullish about economic growth. It seems like the high from the Fed’s monetary heroin has fully taken hold. And it’s not just in the US.In this episode of the Friday Gold Wrap, host Mike Maharrey talks about how central bank monetary policy and government economic stimulus is impacting economies. It’s fun being high … until you’re dead. He also covers some interesting developments in the gold market.The SchiffGold Friday Gold Wrap podcast combines a succinct summary of the week’s precious metals news coupled with thoughtful analysis. You can subscribe to the podcast on iTunes.Tune in to the Friday Gold Wrap each week for a recap of the week’s economic and political news as it

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Romania a Step Closer to Repatriating Its Gold Reserves

2 days ago

Romania moved another step closer to bringing all of its gold home this week.According to Romanian news outlets, the Chamber of Deputies Budget and Finance Committee released a favorable report on legislation that would require the country’s central bank to repatriate its gold and hold it within the borders of the country.As originally introduced, the bill would have required the National Bank of Romania to hold 95% of its gold reserves in the country. An amendment to the bill upped the level to 100%.Currently, Romania holds about 65% of its 103.7 tons of gold at the Bank of England.The bill’s legislative findings assert:Nothing about Romania’s current economic landscape justifies keeping such a large quantity of gold reserves abroad, which incur quite significant costs, considering

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China’s Keynesian Experiment

2 days ago

While President Trump nags the Federal Reserve to reinstitute Obama-era monetary stimulus, China has already taken off down that path. And it actually has some people in the mainstream concerned.According to a Reuters report, the Organisation for Economic Cooperation and Development (OECD) is warning that while Chinese government stimulus may boost the country’s economy in the short-run, it “may undermine the country’s drive to control debt and worsen structural distortions over the medium term.”Sound familiar?The Chinese economy has been slowing in recent months due to weaker domestic demand and the ongoing trade war with the US. In an attempt to boost the economy, the Chinese government has launched a massive stimulus program. According to , local government will be allowed to issue

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Kicking the Can Down the Road

3 days ago

We got more signs that the economy is slowing down this week. And yet pundits and policymakers keep insisting everything is great.In his latest podcast, Peter Schiff says he thinks people like Donald Trump and Larry Kudlow know deep down that things aren’t that great, but they want to keep kicking the can down the road for political reasons.[embedded content]US manufacturing remained flat in March after two straight months of declines. It was the first quarterly drop in production since Pres. Trump took office.  Economists had expected a slight rise in manufacturing in March.Factory production dropped at a 1.1% annualized rate in the first quarter.According to , “Soft manufacturing and slowing economic growth reflect the ebbing stimulus from a $1.5 trillion tax cut package and supply

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European ETF Gold Holdings Hit Record Level

3 days ago

The amount of gold held by Europe-based ETFs hit a record high in the first quarter of 2019, according to a report by the World Gold Council.European funds now hold 1,121.4 tons of gold.The WGC pinpoints three primary drivers of European gold investment.Loose monetary policy and negative yields. The warning lights have been flashing for some time: the global and European economy is slowing.Geopolitical uncertainty. Political uncertainty across the continent is also front and center of investors’ minds.Financial market performance and volatility. Over the past three years, European equity market performance has significantly lagged that of other major western marketsNet inflows of gold into European ETFs started in 2016 with a record 281 tons. That year turned out to be the beginning of

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The Fed Is Chasing Unicorns

4 days ago

Last November, Fed Chair Jerome Powell said interest rates were “just below the broad range of estimates of the level that would be neutral for the economy.” This was the excuse for the central bank’s monetary policy 180 and set the stage for the “Powell Pause.”Central bankers are perpetually on a quest to find the elusive neutral interest rate, but in fact, it’s an impossible goal, as economist Frank Shostak explained in an article published on the .Basically, the Fed is chasing unicorns.As Sostak defines it, the “neutral interest rate” is one that is consistent with stable prices and a balanced economy. The quest for the Fed is to find this mythical rate. By targeting the federal funds rate toward the neutral interest rate, central bankers believe they can navigate the economy toward

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Debt and Taxes

4 days ago

Yesterday was tax day. We’d like to think the money we hand over to the IRS is paying for stuff – things like roads, education and national defense. But an increasing number of tax dollars are simply going to pay interest on the national debt. According to Committee for a Responsible Federal Budget president Maya MacGuineas, the average taxpayer forked over more than $2,000 this year just to cover their share of the interest on the national debt.In other words, we’re not paying for stuff today. We’re paying for the spending of the past. In an op-ed published by , MacGuineas and former Pensylvania Gov. Ed Rendell said interest payments on the debt rank as the fastest growing part of the federal budget. It will be bigger than Medicaid next year and larger than the military budget by

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Peter Schiff: The Political Theater of the Absurd

5 days ago

In his most recent podcast, Peter Schiff talked about recent Congressional hearings that featured Rep. Maxine Waters scolding bankers for creating the student debt crisis, ignoring the fact that the student loan program was nationalized a decade ago.Peter described it as the political theater of the absurd.[embedded content]Waters grilled the bank CEOs, asking them what they were going to do about all of the students they had saddled with all of this debt. Peter called it the “height of hypocrisy and denial.”Why did all of these banks make all of these student loans? Because the government guaranteed the loans. That is the only reason the loans were made. Basically, the government went to these banks and said, ‘Hey, we want you to make these loans to these kids and just to make sure

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Production Plunges for World’s Largest Silver Miner in Q1

5 days ago

The world’s largest primary silver producer reported a plunge in production in the first quarter of the year, continuing a global trend of declining silver output.Total silver production at Fresnillo PLC dropped by 15% in Q1. The company blamed falling mine output on lower ore grades and reduced volume of processed ore. Fresnillo ranks as the world’s largest producer of silver from ore.Total silver production for the company came in at 13.1 million ounces through the first three months of this year compared to 15.4 million ounces in Q1 2018. According to a company press release, output at its flagship Fresnillo Mine plunged by 31%. Production at its San Julian Mine fell by 17%, and its Saucito Mine saw a 10% drop in silver production.Fresnillo PLC wasn’t the only silver mining company

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Wash, Rinse, Repeat: SchiffGold Friday Gold Wrap 4.12.19

8 days ago

Gold has been rangebound for months, gyrating up and down around the $1,300 mark. In this episode of the Friday Gold Wrap, host Mike Maharrey talks about this “wash, rinse, repeat” cycle we’re seeing in the precious metals markets and then pivots into a discussion of some more fundamental dynamics. Mike touches on the financial condition of the US federal government, surging central bank demand for gold and the positive dynamics he’s seeing in the silver market.The SchiffGold Friday Gold Wrap podcast combines a succinct summary of the week’s precious metals news coupled with thoughtful analysis. You can subscribe to the podcast on iTunes.Tune in to the Friday Gold Wrap each week for a recap of the week’s economic and political news as it relates to gold and silver, along with some

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Silver Demand Hit 3-Year High in 2018 as Supply Fell

9 days ago

Silver demand was up 4% and hit a three-year high in 2018, according to the released by the Silver Institute this week.Physical demand for silver came in at over 1 billion ounces last year.Meanwhile, silver mine production fell for the third straight year, dropping 2% in 2018 to 855.7 million ounces.According to the Silver Institute, a modest rise in jewelry and silverware fabrication, and a healthy jump in coin and bar demand helped drive overall demand for the white metal higher.Silver jewelry fabrication increased for the second straight year, rising 4% to an estimated 212.5  million ounces. India was a big player in the silver jewelry market. A surge of buying in the fourth quarter drove annual consumption up 16% and set a new yearly record.Investment demand, including physical

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Could Platinum Serve as Money?

9 days ago

While investors often treat gold as a commodity, at its core, gold is money. Silver also has a long history as a monetary metal. But what about other rare metals? Could they serve as money as well?In the following guest column, SchiffGold client Antony Pouros makes the case for platinum. Gold and silver are important and valuable in their role as stable money throughout history, but I also find platinum fascinating. I don’t believe we have considered whether platinum could truly be money in the future like gold and silver.I will try to outline the case of why platinum could be future money and address some of the common objections.One argument that I have heard is that platinum was never used as money in the past; it’s not money today and therefore it will never be money in the future.

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Peter Schiff: Capitalism Isn’t the Problem Here

10 days ago

How are all of these unprofitable companies staying afloat and even making big splashes with media-hyped IPOs?Peter Schiff addressed this question, along with the supposed “failure” of capitalism in his most recent podcast.[embedded content]The rideshare company Lyft had its lowest close since going public yesterday (April 9). In fact, the company has only closed above its IPO price twice – the day it went public and last Friday. This probably shouldn’t shock anybody, given that the company has never turned a profit.Meanwhile, social media company Pinterest is gearing up for its IPO with a lot of media hype. The company has been around since 2010. It’s never made any money either.Peter asked a poignant question. What makes people think these companies will ever make any

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Central Bank Gold Purchases Hit Highest Level Since 2008

10 days ago

Central bank gold purchases hit a level not seen since 2008 through the first two months of 2019.Central banks added 90 tons of gold in the first two months of this year according to the latest report by the World Gold Council. This compares to 56 tons through the first two months of 2018 and ranks as the highest rate of growth since 2008.Globally, central bank gold holdings increased by a net 51 tons in February.  It was the largest net increase in central bank gold reserves since October 2018.According to the WGC, a move to diversify reserves is driving the increased pace of central bank gold accumulation.Diversification remains the key motivation for central banks to buy gold, as ongoing geopolitical and economic uncertainty continue to cast a shadow over the future.”Gross gold sales

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The US Government’s Net Worth Comes in at Negative $21.5 Trillion

11 days ago

The net worth of the US comes in at $21.5 trillion.This according to the Financial Report of the United States Government recently released by the Treasury Department.The report is a summary of the financial condition of the United States. In a nutshell, it’s less than ideal.Total net worth — the country’s assets minus its liabilities — is just one of many disturbing data points you will find in the report.The US government owns $3.8 trillion in assets. The largest asset is $1.4 trillion in “net loans receivable.” These are primarily government-backed student loans totaling $1.08 trillion. In an article published by Sovereign Man, Simon Black it neatly into perspective.In other words, the government’s #1 asset is the debt owed to it by young people across America. That’s pretty

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China Buys More Gold as It Seeks to Minimize Exposure to the Dollar

11 days ago

China bought gold for the fourth straight month in March, adding another 11.2 tons of the yellow metal to its reserves, according to the latest data released by the People’s Bank of China.With the most recent purchases, the Chinese official gold reserves stand at about 1,884 tons or 60.62 million ounces. The Chinese have been adding gold to their reserves over the last several months as they continue to minimize exposure to the US dollar.In December, the People’s Bank of China announced the first increase in its gold holding since 2016. The Chinese have a history of going long periods without any official announcement of its gold holding and then suddenly revealing a large increase in its reserves. In 2009, the People’s Bank of China stopped reporting its gold holdings. Then in June

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Trump Calls for Obama-Era Monetary Stimulus

12 days ago

The “Powell Pause” is not enough. President Donald Trump not only wants interest rates cuts; he wants to put quantitative easing back in play.During an interview Friday, the president once again complained about the Fed’s 2018 interest rate increases, saying “they really slowed us down.” Trump wants stimulus and called on the Fed to resume Obama era QE.Well, I personally think the Fed should drop rates. I think they really slowed us down. There’s no inflation. I would say in terms of quantitative tightening, it should actually now be quantitative easing. Very little if any inflation. And I think they should drop rates, and they should get rid of quantitative tightening. You would see a rocket ship. Despite that, we’re doing very well.”The Fed has already committed to ending tightening

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Gold Holdings in Gold-Backed ETFs Up in March

12 days ago

Total gold holdings in ETFs grew marginally in March, resuming an upward trend that started last fall. Total holdings of the yellow metal globally rose 3 tons, with increases seen in every region, according to the most recent data released by the World Gold Council.ETFs worldwide currently hold 2,483 tons of gold valued at approximately $103 billion.North American funds took in the most gold last month, increasing holdings by 2.5 tons. Early in the month, about $2.5 billion in gold flowed out of North American funds, but that reversed later in the month, coinciding with a rally in the price that was linked to the Federal Reserve’s continued dovishness during the March FOMC meeting.The World Gold Council said it believes economic and market dynamics will continue to support gold

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Who’s Gonna Save Us? SchiffGold Friday Gold Wrap 04.05.19

15 days ago

In this week’s Friday Gold Wrap, Mike Maharrey covers some more bad signs in the economy, including rising oil prices, an unexpected drop in retail sales and a surge in negative-yielding government bonds. At best, it looks like the economy is slowing down. Or it could be the prelude to the next crisis. This raises an important question: who’s going to save us? Mike suggests we probably shouldn’t be counting on the politicians or the central bankers.The SchiffGold Friday Gold Wrap podcast combines a succinct summary of the week’s precious metals news coupled with thoughtful analysis. You can subscribe to the podcast on iTunes.Tune in to the Friday Gold Wrap each week for a recap of the week’s economic and political news as it relates to gold and silver, along with some insightful

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Central Banks Are Messing With Your Mind – Literally

16 days ago

In the March 8 episode of the SchiffGold Friday Gold Wrap podcast, Mike Maharrey emphasized the importance of understanding sound economic theory. And as economist Frank Shostak explained, facts and figures aren’t enough to digest what’s going on in the economy.In order to really make sense of the data one must have a , which stands on its own feet, and did not originate from the data. By means of a theory, one could scrutinize the data and could then try to make sense out of it.”In a recent article published on the Mises Wire, economist Dr. Thorsten Polleit builds on this body of knowledge, explaining how central bank manipulations of interest rates not only distort the economy, the actually mess with our minds.. People value present goods more highly than future goods. For instance,

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The Days of Quantitative Easing Are Back and We’re Not Even in a Recession Yet

16 days ago

Ever since the beginning of the “Powell Pause,” Peter Schiff has been saying it won’t be enough.If the Fed doesn’t want to upset the markets, soon it will be forced to go back to QE and zero percent interest rates.”Peter isn’t alone in saying this. After the most recent FOMC meeting, Ryan McMaken at the Mises Institute echoed Peter’s message.Put simply: the days of quantitative easing are back, and we’re not even in a recession yet.”Of course, a lot of people in the mainstream are cheering the Fed, saying the central bank is making the right move. The stock market certainly likes the dovish Fed. But as Peter said after the last FOMC meeting, “The Fed is not getting it right.”What the Fed is doing now just proves how much they got wrong in the past. The reason the Fed had to abort the

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The Anything But the Dollar Club

17 days ago

We’ve been following a number of central banks that have been buying gold recently, specifically the Russians and Chinese. But these two central banks aren’t alone. In fact, central bank gold-buying has surged over the last couple of years. What’s behind this trend?In total, the world’s central banks accumulated 651.5 tons of gold last year. The World Gold Council noted that 2018 marked the highest level of annual net central bank gold purchases since the suspension of dollar convertibility into gold in 1971, and the second highest annual total on record. Russia was the leading purchaser of the yellow metal in 2018. Central banks in Turkey and Kazakhstan were also big buyers. We even saw increases in gold reserves from two EU banks – Hungary and Poland.As we’ve been saying, these banks

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Yellow Metal Versus American Mettle? Nothing Matches Warren Buffett’s Brass

17 days ago

As you probably know, Warren Buffett has never been a fan of gold and has publicly disparaged the yellow metal on more than one occasion. About a year ago, he compared investing in gold and stocks, arguing that over the long term gold is an “unproductive asset” that “doesn’t produce anything.” So, why have it, unless you just want something to “fondle.” At the time, we argued that Buffet’s comments fall apart when you realize that gold is money. After all, I doubt you would ever hear him say “never hold cash because it’s an unproductive asset.”Well, Buffet is at it again. In a recent letter to Berkshire Hathaway shareholders, Buffet patted himself on the back for not buying gold back when he started investing in 1942. As he tells the story, he invested in an American business – buying

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Gold and Silver Demand Have Surged in the Decade Since the 2008 Financial Crisis

18 days ago

The conventional wisdom is that demand for gold and silver has been somewhat tepid over the last couple of years. In fact, global gold demand grew by about 4% in 2018 and was in line with the five-year average. Much of that growth was due to a surged in demand through the fourth quarter as stock markets tanked, and concerns about debt and the global economy grew.We tend to be pretty short-sighted when we look at market trends. Most investors focus on the day-to-day gyrations. As a result, we often completely miss significant long-term trends. For instance, investment demand for gold and silver has increased dramatically in the decade since the financial crisis.According to data compiled by SRSrocco, investors purchased 16,200 tons of gold and 57,800 of silver from 2009-2018. That

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The Fight for $15: Good Politics, Bad Economics

18 days ago

Raising the minimum wage might be good politics, but it’s bad economics – despite what some economists say.Last week, the Maryland legislature overrode the governor’s veto and adopted a $15 per hour minimum wage. It was a major victory for the “Fight for $15” crowd, but it almost certainly won’t be for low-skilled workers — at least not the ones who whose maximum wage will be $0 per hour because they cannot find jobs. The minimum wage debate takes place within a swirl of emotion that tends to blind us to basic facts. Wages are nothing but prices. And when the price for something goes up, demand for that thing drops. This is one of the most fundamental laws of economics. But for some reason, huge swaths of the population think this economic law ceases to operate just because you apply it

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Peter Schiff: A Gift From the Federal Reserve

19 days ago

The Dow Jones closed out Q1 2019 with its best quarterly gain since 1998, rising 10.3% through the first three months of the year. And the Dow Jones wasn’t alone in its bang-up first quarter. The S&P 500 rose 12.3%. The Russell 2000 was up 13.8%. And the Nasdaq led the entire pack with a 15.6% gain.As Peter Schiff said in his latest podcast, the entire rally was a gift from the Federal Reserve.Had the Federal Reserve stayed on its course that it had set out on last year, or several years earlier, had the Fed continued to indicate that more rate-hikes were coming, three of four this year, had the Fed continued with its planned autopilot reduction in the size of its enormous balance sheet, the stock market would be considerably lower. In fact, we probably would have added to the losses

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Negative Yielding Government Debt Surges to Over $10 Trillion

19 days ago

Last week we reported that the yield curve on US Treasurys had inverted after the yield on the 10-year fell below the yield on 3-year bonds for the first time since 2007 – the cusp of the Great Recession. This has historically been an early-warning sign signaling a recession.Now we have some more bad news for bond markets – this time on a global scale. The amount of government debt with negative yields has vaulted back above the $10 trillion mark and now makes up a full one-fifth of the global bond market.According to , the amount of debt trading at nominal yields below zero has hit $10.7 trillion. That’s nearly double from a low of $5.7 trillion in early 2018.The Federal Reserve’s sudden policy reversal and the “Powell Pause” has pushed yields lower worldwide. According to the , “The

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Spending Us Into Oblivion Is a Bipartisan Sport: SchiffGold Friday Gold Wrap 03.29.19

22 days ago

The federal government set an all-time record budget deficit in February. And this is with a Republican in the White House. The GOP is supposed to be the fiscally responsible party. In this episode of the Friday Gold Wrap, host Mike Maharrey offers some interesting analysis that reveals spending money in Washington DC is really a bipartisan sport. He also talks about Thursday’s selloff in gold and silver, explains why dollar strength is something of an illusion and illustrates how the way “the market” thinks is often pretty dumb.The SchiffGold Friday Gold Wrap podcast combines a succinct summary of the week’s precious metals news coupled with thoughtful analysis. You can subscribe to the podcast on iTunes.Tune in to the Friday Gold Wrap each week for a recap of the week’s economic and

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A Vote for Ron Paul and Sound Money: It’s Your Dime Interview with “Faithless Elector” Bill Greene

23 days ago

Bill Greene’s biggest claim to fame is spurning Donald Trump and voting for Ron Paul as a member of the electoral college in 2016. But Bill is more than just a “faithless elector.” He’s an assistant professor of political science at South Texas College, and an expert on “constitutional tender” and sound money.In this edition of It’s Your Dime, host Mike Maharrey talks to Bill about his experience as a member of the electoral college and the importance of reestablishing gold and silver as legal tender in the United States. TOPICS DISCUSSED Bill’s experience in the Electoral College.Why the Electoral College is an important feature in the US constitutional system.The current movement to abolish the Electoral College and choose the president by national popular vote.The problem with fiat

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The Economy Is Great? American Consumers Aren’t Buying It

23 days ago

Every time the folks at the Federal Reserve talk about the “Powell Pause,” they assure us that the US economy is still strong. The president assures us that the US economy is still strong. The pundits on the financial news networks assure us that the US economy is still strong. But the US consumer doesn’t seem to be buying it.US consumer confidence declined for the fourth month out of five in February, surprising economists who expected an increase in optimism. The Conference Board’s consumer confidence index fell from 131.4 to 124.1. This missed every economist’s estimate in a survey. They were expecting a rise to 132.5. Meanwhile, consumers’ views on the present situation fell to the lowest level in almost a year, and the expectations index weakened as well.The consumer confidence

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