Gold’s 50-Dollar Sunday Night Collapse Explained – Ep. 97

  • Today’s Podcast is entirely devoted to gold and gold stocks
  • Last night, in just a few minutes, gold dropped $50
  • One or more major sell orders hit the market at the same time and gold went down below $1100
  • It was down $20 by the time New York trading opened and by market close gold was down around $37 on the day
  • Silver was down only about .15 today
  • Why was all that gold dumped? The goal could not have been to get a good price – the goal was to knock the price down
  • The HUI was down 10% on the day
  • This bear market in gold stocks is now bigger than the one from 1996 to 2000
  • Gold stocks are much cheaper today than they were at the end of the dot com bubble
  • If this a measure of trust in central bankers, the market is expressing greater confidence in Janet Yellen than it did in Alan Greenspan in 1999-2000,
  • We know how badly that turned out for stocks and how bullish it turned out for gold
  • The timing of this selloff comes on the heels of the media’s spin on Janet Yellen’s recent Congressional testimony
  • But the real news that ignited the sell-off was China’s admission that they have gold reserves and in fact they intend to add to those reserves, surprising the market
  • If China was lying about how much gold they have had for the last six years, why does anyone believe they are telling the truth now?
  • I think they are still lying – being strategic
  • They want to get the price of gold down because they still want to buy a lot more gold
  • If China still needs more gold, eventually this will bring the price of gold up
  • Also a very negative WSJ article compared gold to the “pet rock” craze
  • This is the same nonsense that proliferated in the 1990’s
  • The WSJ article describes gold investment as “a leap of faith” relative to dollar or stock investments
  • Gold should not be compared to stocks – it is currency, a commodity
  • Gold has intrinsic value, whereas the dollar is a fiat currency, backed by faith alone
  • Gold has had value for 5,000 years – you don’t need ot have faith, you just own it
  • There will always be a use for gold
  • Why have faith in central bankers when everybody who has put their faith in central bankers in the past has been burned
  • An article on Zero Hedge compared the WSJ op-ed to a similar one from 1999
  • The title was, “Who Needs Gold, When You Have Alan Greenspan?”
  • They called him “the maestro”
  • He gave us the dot com bubble, the real estate bubble and the financial crisis of 2008
  • That’s what happened to the people who put their faith in Alan Greenspan
  • Over the next 12 years after that article was written, gold appreciated 650%
  • Who needs gold when you have Alan Greenspan? Everybody
  • Today Alan Greenspan recommends gold
  • If we’ve got Janet Yellen, then we need gold
  • Greenspan wrote the playbook that Bernanke and Yellen are expanding and he knows it does not work
  • When you have Janet Yellen, you need all the gold you can get
  • Fortunately, it’s a lot cheaper to buy gold and it is a lot cheaper to buy the companies that mine it
  • What could go wrong? Everything – what went wrong in 1999 and in 2008?
  • The same thing that went wrong then will go wrong now, because it is the same central bankers
  • And the same players on Wall Street either don’t recognize the danger or are pretending it doesn’t exist and abandoning everything we know about monetary policy
  • This is the biggest bubble yet – the entire economy is dependent on bubbles
  • Just when people trust the central bankers the most, that’s the best time to buy gold
  • When this market turns it’s going to be vicious
  • Once the market turns, it will move quickly that very few people will have an opportunity to buy

Peter Schiff is an economist, financial broker/dealer, author, frequent guest on national news, and host of the Peter Schiff Show Podcast.



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