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Peter Schiff’s Urgent Update To Gold and Silver Investors (GLD, SLV, AGQ, GDX, IAU)

December 2nd, 2011

Dominique de Kevelioc de Bailleul: Following the surprise move by the Fed and five other central banks to lower  the interest rate of dollar swaps by 50 basis points, through Feb. 1, 2013, Euro Pacific Capital CEO Peter Schiff issued a special and urgent update to investors.

“There’s an old expression that nobody rings a bell when it’s time to buy or  sell,” Schiff began his video message of Wednesday.  “ . . . Well, I think  the world’s central banks rung a pretty loud bell today to buy precious metals.”

As the Dow opened on Wednesday, soaring more than 400 points, gold vaulting more than $30 per ounce and silver adding more than a buck following the Fed announcement that the world will soon  be flooded with more dollars due to the coordinated cut in the swaps rate, the  US currency dropped sharply against its peers which comprise the UDX. Get my next ALERT 100% FREE

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“I believe that it [the dollar] is going to lose a lot more value, not just  against other fiat currencies, but against real money, gold (NYSEARCA:GLD) and silver (NYSEARCA:SLV),” Schiff continued.  “I think investors should be buying.  Those of you  who’ve been on the sidelines waiting for an opportunity to buy, I would not wait  much longer; I would just buy.”

Wednesday’s ringing endorsement by central banks to sell dollars and buy  precious metals—so far—has fit well into the call Schiff made in October for a  lower dollar by year end—a bold call, indeed, in that, it flies in the face of  famed FX Concept Founder John Taylor’s prediction for a euro collapse.  Not  many traders want to take the other side of a Taylor trade.

“What’s really frustrating is that we’re supposed to do well in a lousy world  market,” Taylor told Bloomberg in an Oct. 12 interview. “We’re doing very  badly.”

Nearly two weeks later, on Oct. 25, Schiff defiantly told KWN, “Our  short-term target for the euro, maybe by year end, will be up near 1.48,” adding, “I think that’s going to catch a lot of people off guard who were  writing the obituaries for the euro, to see the euro approaching the 1.50 level.  The dollar index should be headed back down to the 72 level.”

Schiff recommend to KWN listeners to buy gold and silver as the hedge against the coming drop.  So far, Schiff is holding up quite  well to senior Taylor.

“I think we will come pretty close to hitting $2,000 on gold this year,” Schiff predicted. “It would be hard for gold not to be above $2,000  in 2012.  I really think it would be unlikely that we wouldn’t see prices  north of $2,000 next year.”  See BER article, Peter  Schiff’s Boldest Call Ever.

Fast forward to today, Schiff recommended to his video audience that new  positions should be taken in gold and silver,  with first-time buyers who’ve been waiting for a pullback to jump aboard.

“You have gold at around $1,700, silver around $32,” Schiff said,  Wednesday.  “I think these are good positions to buy gold for the first  time, if you still haven’t bought, or add to your positions if you already  own.”

In addition to his recommendation to buy precious metals, Schiff reminded  investors of the ongoing disinformation campaign waged against investors by  central bankers and the media all through this crisis.  Schiff has  continually stated, as far back as the early 2000s, that central bankers and ‘respected’ media outlets, to put it bluntly, “lie” to investors about the  intentions of the Fed; it’s all part of, what famed trends forecaster Gerald  Celente has said is, a CON-fidence game the Fed plays with the markets.

“Here’s the deal, Eric, they are suckering in the people to keep playing the  market. This solved nothing,” Celente told KWN,  Thursday.  “So when I see this, this is just a con game.  And anybody  that sees the game, all they have to do is follow the money.  Where is the  money going?  Look at what gold did, zoom it shot up!  Look what  silver did, bam!  Everybody knows what’s going on, they are devaluing our  currency.”

Schiff provided more detail than Celente about the latest Fed rouse, citing  the curious timing of the Bernanke announcement of the day following the  Standard & Poor’s large list of bank downgrades, underscoring what both  gentlemen have been warning investors for a long time—and that is, that the game  is “rigged” against investors of dollar-denominated paper assets and to buy  gold.

“A lot of people think that what is going on is a bailout for the  eurozone.  It’s not; it’s a bailout for the banks on both sides of the  Atlantic,” Schiff explained.  “It’s not a coincidence . . . last night Standard & Poor’s downgraded credit ratings for about 20 major banks, including  banks like Bank of America [and] Morgan Stanley.”

Moreover, Schiff noted a similar observation to zerohedge.com‘s  post regarding Warren Buffet’s Bank of America’s share price, which, as of  Tuesday, traded briefly and dangerously below the $5 mark—a mark at which  pension funds and other large institutions must sell the stock, which would no  doubt cause another Citigroup-like meltdown in shares of BAC.

“Before the bell [Wednesday], Bank of America shares were under five bucks, a  new 52-week low, and this announcement came and the banks rallied,” Schiff  said.  “I think this is a bank bailout, a la QE2.  This is not about  economic growth; it’s about propping up insolvent financial institutions by  creating inflation.”

More evidence of Schiff’s contention came from U.S.-based Forbes Magazine on  Wednesday morning.  Forbes stated that it had observed central banks taking  unusual steps to liquefy an unknown (undisclosed?) European bank in ways  reminiscent of the 2008 financial system meltdown.

“It appears that a big European bank got close to failure last night,” stated  Forbes.  “European banks, especially French banks, rely heavily on funding  in the wholesale money markets.  It appears that a major bank was having  difficulty funding its immediate liquidity needs. The cavalry was called in and  has come to the successful rescue.”

Experienced Wall Street observers, such as Schiff, the staff of zerohedge.com  and the journalists of Forbes understand the motives and obfuscations  disseminated through communiques of central banks all too well.  And those “who do understand this dynamic will buy gold,” said Schiff.

And how high could the price of gold go?

Ironically, France-based Societe Generale issued a note to clients on Monday,  a couple of days too soon from the Wednesday’s Fed’s bombshell announcement, in  which, it stated, “A major liquidity crisis should not occur this time, as we  think we are on the eve of major QE in the UK, U.S. and (a bit) later on in the  EZ.”

If the analysts at SocGen had read zerohedge.com’s  Friday post regarding a curious and massive blip on the Fed’s “Non-Reserve  Balances” statement of an additional $88 billion to its “other” category, they  may have wondered if another bank was about to blow up in the system and most  likely would have suspended their analysis for a little while longer.

In any event, SocGen also stated it expects the price of gold to soar to  nose-bleed heights in the wake of more central bank quantitative easing, as they  need to catch up to the unprecedented rate and amount of debt destruction on  both sides of the Atlantic.

“Buy gold ahead of QE3 as money creation has a strong impact on prices,” according to the SocGen  release.  “Gold is highly sensitive to U.S. QE, as every dollar of QE  goes into M0, triggering the debasement of the USD.  Gold = $8,500/Oz: to  catch up with the increase in the monetary base since 1920 (as it did in the  early 80s).  Gold = $1900/Oz: to close the gap with the monetary base  increase since July 2007(QE1+QE2).”

Related ETFs:  ProShares Ultra Silver (NYSEARCA:AGQ), SPDR Gold Trust (NYSEARCA:GLD), ProShares UltraShort Silver (NYSEARCA:ZSL), iShares Silver Trust (NYSEARCA:SLV), Market Vectors Gold Miners ETF (NYSEARCA:GDX), iShares Gold ETF (NYSEARCA:IAU)

By Dominique de Kevelioc de Bailleul From Beacon Equity Research

BeaconEquity.com is committed to producing the highest-quality insight and  analysis of small-cap  stocks, emerging technology stocks, hot penny stocks and helping investors make  informed decisions. Our focus is primarily OTC stocks in the stock  market today, which have traditionally been shunned by Wall Street.  We have particular expertise with renewable energy stocks, biotech  stocks, oil stocks, green energy stocks and internet stocks. There are  many hot penny stock opportunities present in the OTC market everyday and we  seek to exploit these hot stock gains for our members before the average  daytrader is aware of them.


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