Peter Schiff: This Is The Calm Before The Storm (GLD, SLV)
Jared Cummans: It should come as no surprise that Peter Schiff has been very vocal about his opinions on the most recent election results. While he notes that he feels that neither candidate would have fixed the United States’s overarching problems, he was disappointed with Obama’s victory. His main point was the fact that the United States kept the same president, the senate is still democratic and the house is republican; a virtual carbon copy of the last four years. With that in mind, Schiff called today’s economy the calm before the storm.
If you thought markets were weak when Obama got into office in 2008, Schiff believes they will be even worse by the end of his second term. A bold statement, but certainly not impossible. Schiff’s primary reasoning is that an approaching dollar crisis will take down the U.S. economy sometime in the next few years.
Markets suffered some volatility once the election results came in, but it should also be noted that consumer sentiment has reached a five-year high. The fiscal cliff has many worried, Schiff included, but congress has assured the nation that it will reach a reasonable agreement by the time 2012 expires. Markets should see a healthy jump in that event, but Schiff stated that passing such a measure will only delay the inevitable decline of the economy.
Prepping For Collapse
Schiff did outline two ways in which investors can protect themselves from what he feels will be a catastrophic market event: silver and gold. Schiff stated that these two assets will offer great safe haven appeal as well as prey on a weakening dollar that will become continually debased as the Fed prints more currency. Investors looking to make a play on Schiff’s commentary can choose from a number of options and we outline two of the most popular below:
- SPDR Gold Trust (NYSEARCA:GLD): The world’s largest commodity ETF, this fund tracks physical gold bullion, has amassed more than $73 billion in assets and has become an investor favorite for exposure to this precious metal.
- iShares Silver Trust (NYSEARCA:SLV): Another physically-backed product, the most popular silver ETF recently cracked the $10 billion mark in total assets.
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