Tuesday, October 14, 2014

Peter Schiff: China's Boom and Lust for Gold

Highlights from the clip:

0:20 – The dollar has rallied on the false premise that the United States is the only major central bank in the world that will be ending its quantitative easing.
1:53 – The US economy is weaker than the economies of Europe and Japan. When investors realize this, they will return to gold.
2:30 – China is the world’s largest holder of US dollars. In preparation for a devaluation of the dollar, the Chinese have been moving their reserves into gold.
3:09 – The launch of the iPhone 6 highlights the difference between the US and Chinese economies.
5:02 – China’s official gold holdings are unknown, because the Chinese don’t want the world to know how much more gold they intend to buy.
6:00 – There will be support for gold at the $1200 level, because there are big buyers for the metal in emerging markets across the world, not just China.
6:32 – When confidence in the US dollar disappears, people will turn to gold. When that happens, $1200 per ounce gold will seem cheap.


  1. Supply and Demand WILL Matter!

    Going one step further we can add roughly 1,000 tons of demand which comes from India bringing the total demand to 3,000 tons versus new global production of 2,700 tons. This is only 2 countries! What about demand from North and South America? What about Europe and the rest of Asia? Or even Australia? Do you see where I am going with this? “Where” is the extra gold coming from? Please don’t tell me “scrap” as I am sure you have already seen your local “cash for gold” shop pull up stakes and close …because grandma’s old earrings have already been sold.

    The supply can only be coming from where it is (was) held, the central banks themselves. Another “please don’t tell me” would be that central banks would never ever sell gold to suppress the price and create enough supply to portray “plenty.” The central banks have already done this and done it in a public manner. Remember the “London gold pool” back in the late 1960′s? Do you remember August of 1971 when Nixon closed the gold window and we found out that our holdings went from 20,000 tons to just over 8,000 tons? We “lost” 60% of our holdings back then in an effort to keep gold at $35 per ounce, why is it now impossible that central banks have again tried to suppress the price of gold? Do you believe central bankers have matured, grown consciences and learned by their mistakes of the past? All you need to do is look at money supplies and the amounts of debt the central banks have underwritten to see this is not so. Or better yet, what have their responses to the financial crisis been? Exponentially higher doses of the poisons that got into the mess in the first place, that’s what!

    Let me ask you this, what price would the stock of IBM be trading at if someone was able to print up a few billion extra yet “fake” shares out of thin air and sell them as real? How can 50% of global silver production be sold on one market (COMEX) within 36 hours and then shortages suddenly appear?


  2. People are going to be astonished at the price action in precious metals when this Ponzi scheme ends. Gold will go to the moon. Silver is going to leave the galaxy. $17 an ounce for silver! Amazing.

  3. If China thinks the dollar is going to fall, they buy dollars. They need the dollar strong relative to their currency. This analysis reeked of desperation. He is always telling people to buy gold and the "china is going to buy a bunch of gold" storyline is about as ridiculous as it gets.