Sunday, February 16, 2020

Peter Schiff: Market Is an Inflation-Driven Bubble Ready to Pop

Euro Pacific Capital CEO and economist Peter Schiff’s outlook for the U.S. stock market in 2020 isn’t very optimistic, and it’s not because of the coronavirus — yet.

“Look, obviously, it’s too early to tell if there’ll be any kind of impact or meaningful impact on global trade, GDP or the markets as a result of this virus,” Schiff said in a recent interview on RT Boom Bust.

The perennial gold bull thinks the real issue with the market is that stocks are extremely overvalued, thanks to the Federal Reserve, which he argues has created a fake rally through its “stealth quantitative easing” action that’s pumping fake money into the system.

“It should be coming down. The only thing really supporting it is the Federal Reserve and all the money they’re printing with their stealth QE program, although it’s not stealth really,” Schiff said. “Everybody knows they’re doing it. They just refuse to admit it.”

Dallas Fed Chief Robert Kaplan even admitted that the central bank’s action is affecting assets earlier this month.

“My own view is it’s having some effect on risk assets,” Kaplan said. “It’s a derivative of QE when we buy bills and we inject more liquidity — it affects risk assets. This is why I say growth in the balance sheet is not free. There is a cost to it.”

Schiff thinks the market isn’t being bolstered by factors that normally drive a rally, and soon enough the bubble is going to burst.

“There’re no earnings behind this,” he said. “There’s no strong economy behind this. This is an inflation-driven bubble, but the air should be coming out.”

And speaking of bubbles, Schiff points to another bubble in the U.S. auto industry that has been enabled by none other than … the Fed.

“I think the U.S. auto sector is another bubble that was made possible by the Fed,” Schiff argues. “You have Americans who are buying cars with seven or eight-year loans, where they’re lying about their incomes just to qualify. So I think you have a dangerous auto bubble here.”

Schiff thinks that auto bubble will lead to a contraction in the U.S. auto market — where delinquencies are at an eight-year high — but foreign auto markets may actually get stronger.

“Particularly in places like China, where people don’t borrow money to buy cars. They buy cars they can actually afford using the money they actually have,” Schiff jabbed.

And he doesn’t think U.S. President Donald Trump’s threat to hit the EU with auto tariffs will work simply because the U.S. isn’t competitive in the sector.

“When you live in glass houses, you’re not supposed to throw stones,” Schiff said of the tariffs. “And we haven’t been playing fair in that part of the market.”

The U.S. gross domestic product for 2019 hit a three-year-low 2.3%, and Schiff thinks the ongoing recession in U.S. manufacturing is bound to hit the service sector soon.

“It’s long overdue,” Schiff argued. “Obviously, there’s a lot of politics involved now in whether they can kick the can down the road long enough to kick the recession past the 2020 election.”

Schiff thinks that if a recession does happen this year, there’s no way Trump wins his reelection bid in November. And he pointed out that if Democratic Socialist Bernie Sanders were to take the presidency, it would “be very dangerous for the U.S. stock market,” but he said Monday it would be great for gold.

“There is a lot of risk to the U.S. economy,” he said, “and the U.S. market that everybody is ignoring at the moment.”

Friday, February 14, 2020

Peter Schiff: Nothing But Bullish News for Gold, Yet Prices Have Gone Down

"Gold isn’t just an inflation hedge. It is predominantly that. The main reason gold is going up is because of the Fed. But obviously, in a world where you have heightened geopolitical risk, which could adversely affect bond markets and stock markets, you would expect to see greater demand for gold as a hedge in your portfolio. And that’s why the price of gold was up better than $20 an ounce today (Friday).

History shows that under most outcomes gold will likely rally to well beyond current levels. That’s consistent with our previous research, which shows that being long gold is a better hedge to such geopolitical risks.

When you factor in ongoing uncertainty with respect to US-China trade talks and heightened security issues with Iran, gold really is a no-brainer.

We’ve had nothing but bullish news for gold stocks. We have a $30 move up in the price of gold. We have heightened geopolitical risk associated with gold. Yet the gold stocks have gone down. Why is that? Again, I think you’ve got a lot of fearful traders. There’s a wall of worry in this bull market. There’s a lot of skepticism in the gold rally, which I regard as being healthy. You don’t have a devil-may-care, throw caution to the wind type of attitude the way you have it in the S&P 500. People are nervous in the gold stock market."

- Source, Peter Schiff

Wednesday, February 12, 2020

News Bites $2000 gold price by election night is possible

Political changes from the U.S. presidential election in November could see gold prices soar, this according to Peter Schiff, CEO of Euro Pacific Capital. 

“I think if Trump is not re-elected, if we get like, President Sanders, gold should go above $2,000 this year, and if it’s not above $2,000 by election, it should be $2,000 election night once we get the results,” Schiff told Kitco News on the sidelines of the Vancouver Resource Investment Conference.

- Source, Kitco News

Tuesday, February 11, 2020

Oil Prices Are Going Up and Costs Are Going to Have to Increase

"My initial feeling is because we took out this guy, the world is a little bit less safe than it was the other day. And the risk premiums have to go up, because the odds of some type of hot war in the Middle East go up.

Sure, the US economy isn’t as vulnerable as it once was because we’re not importing as much as we used to. But consumers still have to buy oil. They still have to pay for things. 

Prices are already going up, and this is going to add upward pressure on already increasing prices, which is going to be a negative for people who have to buy energy, or buy things that are transported using energy, or things that are manufactured with energy. I mean, costs are going to be going up and this is a negative.”

- Source, Peter Schiff

Sunday, February 9, 2020

Gold price will skyrocket if Bernie Sanders wins 2020 presidential election, says Peter Schiff

The price of gold, which hit its highest level in seven years, reaching almost $1,600 an ounce this week, will continue to rally, says veteran stock broker Peter Schiff.

According to him, gold bugs may see further gains thanks to Senator Bernie Sanders.

The Democratic Party 2020 hopeful’s chances are on the rise, a Fox News poll released on Sunday showed. It found that 23 percent of Democratic primary voters prefer the Vermont senator, up from 20 percent in December. He matched up favorably against President Donald Trump, leading 48 percent to 42 percent in a head-to-head matchup. Former Vice President Joe Biden remains the frontrunner for the Democratic nomination at 26 percent, but that is down from last month’s 30 percent.

“If Sanders becomes president in 2020, the price of gold will be well above $2,000 on the day after election night,” Schiff, the CEO and chief global strategist at Euro Pacific Capital, told FOX Business. The precious metal could reach $2,000 before the election if the market decides that Sanders is going to win, he said.

“What a Sanders win means is much bigger government deficits, and much more money printing by the Fed because there is no way to finance all of the spending that will happen with tax hikes on the rich,” Schiff said. “We’ll get tax hikes on the rich, but they’re not going to provide the revenue to pay for the programs.”

According to the economist, the US budget deficit will balloon even further under a Sanders presidency.

“There is going to be no Republican opposition to the deficits that would finance the spending because after all, the Republicans didn’t object to record deficits under Trump when the economy was supposedly the greatest ever,” Schiff said. “The deficits could be three or four trillion dollars a year and the money printing will be off the charts.”

According to him, “There’s no way the dollar’s reserve status will survive a Sanders presidency.” He says: “America is going to be a much, much poorer nation. Our standard of living is going to implode, but the money printing is going to be crazy.”

Talking about the China coronavirus, Schiff said that gold was rallying before the outbreak and that it is “not why” the price is going up even though metals are considered a safe-haven amid uncertain times.

- Source, Russia Today

Friday, February 7, 2020

Peter Schiff: Gold Climbs Wall of Worry

Gold surged above the $1,550 mark in the wake of a US airstrike that killed a prominent Iranian general and has hit levels not seen since 2010. Monday morning, gold was trading above $1,575. As Peter Schiff put it in his podcast Friday, the yellow metal is climbing a “wall of worry.”

- Source, Peter Schiff

Monday, February 3, 2020

Peter Schiff: Cheap Monetary Policy and Bad Trade Deals

The Chinese yuan has been gaining strength against the dollar in recent weeks, in part because of optimism that there will eventually be a resolution to the trade war. But the Chinese currency is still over 17% lower than it was when the US imposed its first tariffs. Does this mean the markets are cautiously positioning for a deal, or is there still skepticism about the phase 1 deal? Peter focused on the bigger picture.

"Well look, a phase one might happen because a phase one is insignificant. The real deal is supposedly phase two. That’s the one that’s not going to happen. So, if anybody thinks we’re going to have a substantive deal, they’re wrong. But the reality is, I think the Chinese yuan is undervalued relative to the dollar and I expect it to rise rather dramatically over time.”

Peter said this is not good news for the US.

"It’s going to make imports more expensive for Americans, so it’s going to reduce our standard of living. And I do think ultimately, it’s going to push up interest rates as well, as the Chinese and a lot of other creditors are no longer lending money to Americans, and so we have to draw from our own savings pool, which is extremely shallow. It means the Federal Reserve is going to be printing a lot more money as it monetizes the debt that the Chinese and other nations no longer want to buy, and this is further going to lower the American standard of living.”

Horwitz said it’s hard to get a read on the yuan because it doesn’t trade freely. It’s always pinned by the Chinese government. He said he thinks the Chinese will keep their currency low as long as they can to offset tariffs and keep Americans buying their goods. He said he doesn’t agree with Peter at all that the yuan will explode to the upside.

Peter said, be that as it may, the Chinese have made a mistake undervaluing their currency and they’ll eventually figure that out.

"They did that deliberately because they wanted to maintain exports to the United States. But I think that was a key mistake. I mean, it helped America because we got to live beyond our means. But I don’t think it did anything for the Chinese economy. It helped undermine it. Because they accumulated a huge pool of US dollars and they ended up doing things with that – created malinvestments and other distortions. I think the best thing that can happen to China is simply to allow their currency to appreciate, to reduce their exports to the United States because we can’t afford to pay for those products, to let their own nation consume that production so that their own people can benefit from their hard work. But unfortunately, Americans are going to have a rude awakening when all of a sudden we have to live within our means. And our means have been dramatically diminished over the years. We haven’t been investing. We haven’t been saving. We’ve been relying on an overvalued currency to import what the rest of the world produces. And we haven’t saved very much. We’ve just been borrowing to consume and all this is going to come back to bite us.”

The stock markets continue to go up, despite a lot of bad economic data. Horwitz said stocks will continue to go up until they don’t, but at some point, the markets will melt down. Cheap monetary policy has created an environment where investors really have no place else to go. Horwitz said there is no way to time the crash, but people will have time to get out if they don’t panic when it starts selling off.

Peter said he doesn’t think people will have time to get out.

"I think with this — this is a bubble. It’s going to pop. I agree. there’s no way to know how much air they’ll successfully blow into it. The minute it drops, everybody says the correction is over, you gotta buy the dip. So, I think most people are going to watch all their paper profits vanish … It’s not just going to be that people are going to lose dollars when the stock market bubble pops, but the dollar bubble is even bigger. And when that pops, even the dollars you haven’t lost are going to lose most of their value. So, I think Americans are going to be wiped out in the US stock market and the bond market. I mean, people are going to be surprised at how much of their wealth they lose playing it safe in the bond market. Because you’re not playing safe. You’re playing with dynamite there. There are no US dollar-denominated assets that can be considered safe right now. It is a giant casino. And yeah, you know, people think the economy is good because they managed to blow more air into the stock market bubble and the bond market bubble, but the economy is in worse shape now than it’s ever been. It’s in far worse shape than it was before Trump took office, mainly because he continued to pursue the failed policies of Obama, who pursued the failed policies of Bush.”

The show opened with a discussion of Boeing and the impact lower aircraft sales could have on the US economy. Horwitz said this is what happens when a company gets in bed with the government and gets a plane out too fast. He said he thinks it will hurt US GDP going forward.

The host noted that Boeing has already lost $62 billion off its market cap and asked Peter if the company can recover?

"Well, I’m sure over the long term, there will be a recovery. But in the short run, certainly, this will weigh on our exports, which also could weigh on the dollar. You know, I’ve been thinking the US dollar was headed lower anyway, but if we end up with bigger trade deficits in part because we have fewer exports of aircraft, that is going to be another factor of many that I think will be weighing down the dollar and the US economy.”

- Source, Schiff Gold

Saturday, February 1, 2020

Crypto critic Peter Schiff loses access to his bitcoin wallet

(Video cannot be embedded, click image to watch)

Crypto critic and gold bug Peter Schiff told Twitter followers on Sunday that he'd lost access to his Bitcoin holdings after his wallet was "corrupted." The Final Round panel discusses these claims, and what it could mean for Bitcoin investors.

Friday, January 31, 2020

Peter Schiff: President Bernie Would Send Gold Surging to $2000 Overnight

Bernie Sanders has been cutting into former Vice President Joe Biden’s lead in the Democratic primary race, and economist and noted gold bug Peter Schiff says the precious metal would surge if the self-proclaimed Democratic Socialist were elected to the White House.

“If Sanders becomes president in 2020, the price of gold will be well above $2,000 on the day after election night,” Schiff said in a Monday interview with Fox Business.

Gold was trading around $1,573 per ounce Tuesday morning after touching a seven-year high $1,594.70 Monday. The price has slowly crept up amid recent tensions in the Middle East and the outbreak of the coronavirus in China.

He actually thinks the precious metal could hit that $2,000 mark before the election if the market is already projecting a Sanders win over incumbent President Donald Trump. In a head-to-head vote, Sanders beat out Trump 48% to 42% in the most recent Fox News poll.

“What a Sanders win means is much bigger government deficits, and much more money printing by the Fed because there is no way to finance all of the spending that will happen with tax hikes on the rich,” Schiff said. “We’ll get tax hikes on the rich, but they’re not going to provide the revenue to pay for the programs.”

The U.S. budget deficit is on track to top $1 trillion this fiscal year, which would be the first time it has hit that mark since the Great Recession. Schiff thinks the deficit would balloon even more under Sanders because he wouldn’t face enough opposition when it comes to spending, which has been the case under Trump as well.

“There is gonna be no Republican opposition to the deficits that would finance the spending because after all, the Republicans didn’t object to record deficits under Trump when the economy was supposedly the greatest ever,” Schiff said. “The deficits could be three or four trillion dollars a year and the money printing will be off the charts.”

Some of Sanders’ other proposals include eliminating $1 trillion in student loan debt and funding hugely expensive projects like the Green New Deal to fight climate change, which would only increase the deficit even further.

Schiff doesn’t think the coronavirus outbreak has been much of a factor in the price of gold rising, despite the tendency for investors to flee to the precious metal as a safe haven when uncertainty hits the market.

When looking back at the SARs outbreak in 2003, JPMorgan analysts found gold rose more than 8% in the three months after the World Health Organization issued a travel advisory. But they found the U.S. invasion of Iraq and the Federal Reserve’s easy-money policy at the time “muddy the water immensely.” Their projections for gold’s future were not nearly as optimistic as Schiff’s, with the price hitting $1,655 per ounce or maybe $1,715.

Looking at the Federal Reserve, which meets this week to discuss monetary policy, gold investors will want to watch for how the central bank intends to reign in its action in the repo markets.

The Fed will most likely keep its key interest rate policy steady at a range of 1.5% to 1.75%, but it has expanded its balance sheet by around $400 billion recently through the purchase of Treasury bills to help stabilize the short-term repo market in what some are calling “stealth quantitative easing.”

The CME FedWatch Tool predicts an 87.27% chance the Federal Reserve sticks to the current 1.5% to 1.75% interest rate at this week’s FOMC meeting.

And Schiff thinks the Fed will continue its easing and even cut rates to zero at some point, which he says will make the balance sheet “explode to much higher than the four-and-a-half trillion that they tapered from.”

That in turn will kill the U.S. dollar, and a Sanders presidency won’t help its case either, Schiff argues.

“There’s no way the dollar’s reserve status will survive a Sanders presidency,” Schiff said. “America is going to be a much, much poorer nation. Our standard of living is going to implode but the money printing is going to be crazy.”

Sanders has a solid hold on second place in the latest RealClearPolitics polling average with 23.3% of the vote. Biden remains the front-runner with 28.7% of the vote, while Elizabeth Warren rounds out the Top 3 with 14.9% of votes.

Monday marks the first Democratic caucus in Iowa, which could paint a picture of how the rest of the primary race will shake out going forward.

Wednesday, January 29, 2020

Peter Schiff: Chinese Trade Deal Could Cause Price Increases in the United States

Donald Trump and Chinese Vice Premier Liu signed the Phase 1 trade deal on Wednesday. The mainstream was generally bullish on the news, but there was some underlying concern because the deal did not bring substantive tariff relief. Peter Schiff broke down the deal in his latest podcast, saying that despite all the hype, the deal was really much ado about nothing.

The Chinese pledged to buy an additional $200 billion worth of American goods over two years. The Chinese will primarily buy US agricultural products and energy, but the deal includes $80 billion worth of US manufactured goods, including aircraft, autos and car parts, agricultural machinery and medical devices. According to Reuters, “Commitments include $54 billion in additional energy purchases, $78 billion in additional manufacturing purchases, $32 billion more in farm products, and $38 billion in services.”

Trump called the deal a “big, beautiful monster.”

“Our farmers will take it in. I keep saying, ‘Go buy larger tractors, go buy larger tractors,’” Trump said during a rally in Ohio last week.

The US will roll back some, but not all of the tariffs it imposed over the course of the 18-month trade war. The deal canceled planned tariffs on cellphones, toys and laptops. It also cut levies on about $120 billion in Chinese goods to 7.5%. But the 25% tariffs on $250-billion in Chinese industrial goods and components will stay, along with China’s retaliatory tariffs on over $100 billion in American goods.

Trump said the tariffs will be removed in a Phase 2 deal.

“I’m leaving them on because otherwise, we have no cards to negotiate with. But they will all come off as soon as we finish Phase 2,” Trump said at the signing event.

The markets reacted positively to the news. The Dow Jones closed about 29,000 for the first time ever, and other major indexes including the Nasdaq and S&P5000 made record highs.

Peter said some of the recent stock market gains were certainly driven by the Phase 1 trade deal.

But the majority of the gains are clearly are the result of the Fed. The Fed’s policy reversal, its taking away the rate hikes and delivering rate cuts instead, its quietly returning to QE — even though its officially denying it’s doing it, it’s clearly doing QE. And that is what has been driving the market. Although, I think the anticipation of the trade deal has acted as a rumor that traders continuously bought, bought, bought.”

Now that we have a deal that investors can actually scrutinize, it will be interesting to see if the markets begin to sell off.

There really is nothing to look forward to anymore. I mean, the so-called good news is now in the past. In the meantime, traders can start focusing on all the bad news they’ve been ignoring and the even worse news that’s likely to come in the future. So, we could see a selloff, particularly when people really start to think about the deal and what it actually delivers.”

The hyperbole surrounding the signing of the Phase 1 deal was at level 10. It’s the greatest deal ever. Nobody has ever seen a deal like this. Peter said that may be true.

There’s never been a deal so inconsequential and insignificant as this deal.”

Peter said when the deal was announced that it wasn’t a “real deal.” There was nothing in the details that caused him to change his mind.

The Chinese have primarily agreed to buy US commodities – agricultural products and energy. Peter pointed out that could mean they buy less from other countries. Or, they could stockpile these commodities.

Which would be a lot better than stockpiling US Treasuries. In fact, it would be a huge win for China if it does end up buying extra commodities to store, and it pays for it by selling US Treasuries — if it takes money that it otherwise would have loaned to the United States government by buying Treasuries and instead buys actual stuff that they can really use and has value — that is a win for China. It’s a double win for China. They get rid of Treasuries that are going to collapse and they buy more real commodities that are going to go up in value.”

It is also possible that by sending more commodities to China, domestic supplies could shrink, causing prices to go up for US consumers.

The Phase 1 deal doesn’t do much to bring back US manufacturing. Peter likened it to a colonial relationship where the US just grows stuff and harvests things while China does the high-end manufacturing.

So, we’re not going to get more manufacturing jobs. We’re just going to keep our lousy, low-paying service sector jobs. But now those service sector workers, rather than getting better jobs, they’re just going to have higher bills when they go to the supermarket, when they go to the gas station; they’re just going to be paying higher prices.”

Tariffs will basically be frozen at a moderately reduced level. Peter called this bad news given that American consumers are primarily bearing the brunt of these taxes.

Peter pointed out that there is a clause in the deal that stipulates if either party complains about the other not living up to the deal, the party that is complained against can terminate the deal if it determines the complaint was in bad-faith. Peter said this isn’t really a deal at all.

This is just a list of suggestions. This is just a list of things that either party may decide to do or may not decide to do. And if one party doesn’t do what the other party thinks it’s supposed to do, and then that party complains, well, it doesn’t have to do anything at all because it just drops out of the deal. So the deal is much ado about nothing … It’s not a big positive for the economy. It’s not a game-changer.”

Furthermore, Peter said he doesn’t think there will ever be a Phase 2 deal.

- Source, Schiff Gold

Tuesday, January 28, 2020

A Simple Mistake: Peter Schiff’s Locked Wallet Issue Has Been Solved

You may recall last week we published an article about Peter Schiff where he couldn’t get access to his bitcoin wallet and rather than trying to find the right password to access it, he attempted to shame the leading cryptocurrency on Twitter. Of course, the community responded in hilarious ways including many prominent figures calling him out for being a ‘boomer’.

Schiff is a well-known crypto hater. Specifically, bitcoin being the one that he particularly hates - the whole industry is subject to his wrath on social media. Crypto Twitter has had a field day with Schiff during his rant on the leading cryptocurrency. It’s no surprise that many people assumed he simply forgot his password and blamed it on the Wallet rather than his memory. I mean, it isn’t hard to forget a password! No one would blame him for forgetting it however, trying to blame the wallet and industry itself lead to quite a lot of hate towards the businessman.

It turns out everything has been figured out though now as the mystery of the wallet password has now been solved. It turns out that the entrepreneur mistook his pin for his password, hence not being able to access the Wallet. Peter did admit that he made a costly mistake of confusing the two but also added that he never had a copy of his seed phrase.

Whether you love him or hate him, I respect him for admitting part of the blame was on his end. Clearing the air alone was just a brave thing for him to do, given the amount of hate he got from the Crypto Twitter community. Typically when you create a blockchain wallet account like Peter has, you will be asked to provide an email address and password. You’re obviously then asked to re-enter such a password for confirmation.

- Source, Crypto Daily

What Are Gold Stocks Telling Us About the Gold Market?

The price of gold is up by about 2.7% so far in 2020. But gold stocks are down on the year. Why is this happening and what is this telling us?

When we talk about gold stocks, we’re referring generally to stock in companies involved in gold mining and exploration. The valuation of these stocks as a group typically track with the price of physical gold. When the price of gold is going up, the miners typically follow along.

So, why this recent divergence?

Peter Schiff says the gold market is climbing a “wall of worry.” While gold is already in a bull market, investors still haven’t gone all-in.

Peter did some research and the last January that he could find where the price of gold went up and gold stocks dropped was in the year 2000.

So, what was happening at that time?

It was the peak of the dot-com bubble.

At its top in 2000, the Nasdaq rose above 5,000 and then lost about 80% of its value over the next two years. It bottomed out at just over 1,100 in 2002.

The year 2000 was also the bottom of a 20-year bear market in gold. Peter talked about it in a recent podcast.

"So, in January 2000, because you had this boom in the dot-coms, and this boom in the stock markets and the Nasdaq, because everybody was so excited about the new economy, they were bidding up the stock market. But they were also negative on gold because gold had been in a bear market for 20 years and even though the price of gold was rising a little bit early in January, there was still so much bearishness left over from this deep bear market that traders didn’t even care. They ignored the rise in the price of gold and they dumped gold stocks anyway. Well, that’s happening again today. It’s the same attitude. Everybody is very optimistic on the US stock market and despite the rise in the price of gold, they’re pessimistic and they’re dumping their gold stocks.”

Gold peaked at $1,900 an ounce in 2011 and then went through a significant correction over the next several years as the markets bought into the myth that the Federal Reserve would be able to raise interest rates and unwind QE. Gold began to rally again when the Fed started raising rates in December 2016 and really took off with the Powell Pause and rate cuts last year.

If you followed the trend in early 2000, ignored gold stocks and invested in the S&P 500 or Nasdaq, you made a big mistake. If you bought into the US bubble in January 2000, you lost a lot of money. Meanwhile, gold stocks followed the price of gold in a major rally.

"The fact that this January is very similar to that January and there are no Januaries in between that look anything like it, I think that’s another positive sign that we have a similar sentiment extreme on stocks when people should be bearish and people should be bullish on gold stocks when they’re not.”
Peter talked about the wall of worry during a recent interview on Kitco News, again pointing out these similarities between January 2000 and January 2020.

"Why are [investors] so negative now? Even though we’ve had a big increase in earnings in gold companies and gold stocks have been doing well, they’re climbing a wall of worry. People are rushing into the Nasdaq when they should be buying gold stocks. So, I think this is probably a harbinger of good things to come. I would take this as a contrarian indicator.”

And during a podcast after the US missile strike that killed an American general, Peter said he thinks the skepticism in the mainstream is actually a good sign.

"We’ve had nothing but bullish news for gold stocks. We have a $30 move up in the price of gold. We have heightened geopolitical risk associated with gold. Yet the gold stocks have gone down. Why is that? Again, I think you’ve got a lot of fearful traders. There’s a wall of worry in this bull market. There’s a lot of skepticism in the gold rally, which I regard as being healthy. You don’t have a devil-may-care, throw caution to the wind type of attitude the way you have it in the S&P 500. People are nervous in the gold stock market.”

Should you invest in physical gold, or gold stocks, or both? Peter explained the difference between the two during his Kitco News interview.

"Physical gold is a very secure, conservative store of value. It’s an alternative to keeping cash. Rather than keeping dollars or euros, keep gold. Once you get into mining stocks, you’ve got a whole new element of risk. You’re an investor in a mining company. There are a lot of different things that can go wrong.”

Both physical gold and gold stocks have a place in your portfolio. Peter and many others advise keeping about 10% of your portfolio in physical gold.

- Source, Schiffgold