Peter Schiff: Gold Is Your Only Alternative
The comments below are an edited and abridged synopsis of an article by Tyler Durden
Peter Schiff joined a debate at the Orlando Money Show. Peter teamed up with Rick Rule to argue for gold, against Louis Navellier and Jeffrey Saut, who contend the stock market is still the place to be. Mark Skousen moderated.
Interestingly, even Navellier admitted that the stock market is getting ‘a little bubbly.’ He said it looks like 1999 all over again—the year before the dot-com bubble popped. But he still thinks there’s money to be made.
Skousen noted that Mark Mobius advises buying gold at any price because interest rates are so low, and gold is relatively cheap.
Rule said the gold vs. stocks debate is silly; it’s not necessarily one or the other. The stock market is a place to buy and sell stocks. Why would you be against the market? Why would you be against every individual company? On the other hand, Rule said he thinks gold is under-owned. He pointed out that even a reversion to the mean in gold investment would quadruple demand for the yellow metal.
Peter pointed out that gold is beating the S&P 500 this century. The key is to look at what is going on in the broader economy.
Peter took issue with Navellier when he said the Fed is worried about the lack of inflation. Peter said: “That’s nonsense. And in fact, what they are happiest about is that inflation has not shown up in a bigger way in the CPI. The last thing the Fed wants to have to do is fight inflation because it can’t. The way the Fed is able to justify keeping interest rates as low as they are is by claiming there is no inflation, claiming that we’re below 2%. Well, what happens if we actually get to 4%? Or 5%? How is the Fed going to put that genie back in that bottle? How is the Fed going to take interest rates up to six or seven or eight percent when we have all this debt? They would force the US government into default.”