Peter Schiff on record gold prices: I told you so!

With the decline of the world economy, many investors are flocking to the precision metal: gold. Many say buying gold is a safe haven from worldwide inflation and gold will keep its value over any paper money. Will gold continue to increase in value? Peter Schiff, president of Euro Pacific Capital, tells us more about the precious metal.

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[TWSceptic]

@a32223 Yes, most people who first talk to him have massive cognitive dissonance. The ones with big egos will start to laugh at him, others will get angry. It's all very painful to watch, and then it turns out he is right, time and time again. But this guy is an economic genius, unfortunately people will only recognize that when it's too late and they already screwed up.

[MONOPOLY35]

@florianalexbaaden A bubble in gold formed not because of fear, but because they were flipping it like real estate. In 1980 interest rates were raised to over 20% to fight the stagflation of the 70's. Back then we were the world's largest creditor nation. Now we are the world's largest debtor nation. In the 2008-09 crisis, the money supply was DOUBLED. With a national debt of 15 trillion and counting, if we bring interest rates up to 20% to fight inflation, the United States would go bankrupt.

[jezza1789]

@florianalexbaaden Are you serious or dumb people buy gold to store value. In the Carter days the economy wasnt so dependent on cheap credit or indebted like it is today so Carter was able to raise interest rates drastically and save the economy. With 14.6 Trillion in debt do you know what will happen to the US if they raise interest rates today? The interest on the dept which is at about 1 trillion a year would sky rocket and the economy would collapse in chaos. Gold is safety in this scenerio.

[MrBanker2222]

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[cookmatthewr]

lol inflation at 10%.  the bond market comment was even better.

[cookmatthewr]

hi

[captaindiesalot]

@florianalexbaaden

ah, falling inflation and a RISING Dollar...fact. The RISK of inflation goes down, gold follows. Why? Because inflationary risk to your fiat currency falls, a situation where we have SOUND money. Reagan brought back a period of sound money, a slowing of government spending as a % of GDP, and a significant decrease in inflation, which is the ultimate price of government.

[florianalexbaaden]

Unfortunately, the facts simply do not support this view. That’s because gold is a great store of value—except when it’s not. Had you become fed up with the inflation of the Jimmy Carter years and moved your savings to gold in 1980, you would have watched your “store of value” fall by 70% in the two decades that followed. And this would have happened during a period of persistent (though falling) inflation.

[florianalexbaaden]

Gold is not an investment. It pays no dividends or interest and produces nothing. It’s an inert metal that you have to pay to store and insure. And yes, your ability to profit from it depends on your being able to sell it to someone else at a higher price than what you paid, plus selling commissions and expenses. Is this a bet you’re comfortable making when it has already risen by a factor of four in a matter of years and the trade is looking increasingly crowded?

[Cloudrunner1]

@jbarba Since Fall of 2010 the Federal Reserve has been buying US Treasury securities for $100 billion a month for about 8 months or so ending in June 2011. That is not money created from profits or wealth creation, it is money that appears out of nothing. They don't actually print money, it's more or less created with pixels on a computer screen.