Schiff on Fox Business: The Whole Mining Sector is Cheap
Peter recently appeared on Fox Business to comment on the precious metal sector’s record-breaking price action. With the yellow and white metal both reaching new all-time highs and the futures market showing no sign of slowing, Peter explains the rally and analyzes its broader significance to American savers and world governments.
He starts by putting both metals’ performance in perspective, noting their outsized gains this year:
This is an all-time record high for silver. It has eclipsed the peak from 1980– now not adjusted for inflation, but just the nominal price is now higher than at any price. And in fact, gold year-to-date is up 56%. Silver’s up more than that, but gold’s up 56%! That is the biggest one year gain since the 1970s, and we still have two and a half months left.
56% is great for gold holders, but it’s a bright red flag for banks and governments holding dollar-denominated assets:
But I think what we’re seeing now is a warning sign similar to the warning that we got in 2006, when sub-prime blew up. That was warning about the financial crisis that hit the following year. I think what we may see next year is a US dollar and sovereign debt crisis. The world is divesting of US dollars. Central banks are unloading dollars and treasuries, and they’re buying gold.
Peter’s advice? Throw a dart at a metals asset and enjoy a safe hedge against inflation:
But pretty much now you can just throw a dart. I don’t see how you don’t make money buying any gold stock or silver stock. I think the whole group is ridiculously cheap, and the earnings are exploding. There’s no other sector of the market that has the earnings growth that gold and silver companies have, and Wall Street has completely missed the boat so far. They haven’t been invested. In fact a year ago– year and a half ago– they were putting “sell” signals out on the mining companies, because when gold was at $2,000, they thought it was the top!
Check out Peter’s in-depth analysis of last week’s rally on the latest Gold Wrap!