Peter Schiff Video Blog Report April 13th, 2009

Peter Schiff video blog. April 13th, 2009

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[dcs5150]

The massive capital injections into the banks hasn't really hit our part of the money supply yet. But eventually that money will be loaned and spent, and will end up in our hands. With no increase in the supply of goods, "price inflation" will go to the double digits, and as Peter says, "The first number isn't going to be a 1 " Gold rising to $800 in 1980 was a blip on the radar. But in the last 8 years, it has been in an upward trend and most likely will be as such until policies change.

[dcs5150]

The Federal Reserve is the key here. Raising interest rates has the effect of tightening the money supply. The dollar's value will be perceived to as being strengthened, so people will see less of a need to hold an inflation hedge such as gold. This time is a different story, however. Interest rates are currently at near zero percent. The only thing holding prices down is the credit contraction. Once the banks start lending again, "velocity of money" will increase, leading to increase in prices.

[dcs5150]

Assets can rise and drop in value very quickly. This seems to be a common theme in our Keynesian economic driven world. Boom and bust. Panic and fear. To best answer your question; the 1970's was a period of high inflation. Gold traded higher on the spot market as a response. Fear of destruction of our currency led to panic. Massive flows of money poured into gold as a result. Interest rates went up to over 20% to combat the inflation, and fears subsided. Gold was sold off and the price dropped.

[eesloan4]

But it doesn't make sense that it would go from 800 bucks an ounce to 300 in just a few years time. The dollar did not become more valuable during that time. Sorry, I am missing this key point :(

[dcs5150]

Read his books and you will be enlightened. But I may be able to satisfy your questions. Gold got into a bubble in 1980, way ahead of itself. See Peter's top 10 signs of when Gold is in a bubble, and that will give you an indication of when to sell. Gold has gone up on average through the years, from $35 per ounce in 1971 when we were taken off the gold standard, to almost $900 currently. That should give you some idea of the magnitude of devaluation of the dollar in the last 38 years. Peace...

[TXG8R]

Great commentary and analysis as always. Top marks for getting the new PC and Video equipment. It's really great. Thanks again, Peter.

[c007dude]

Thanks Peter for your terrific analysis.

[hamtuber]

Thanks Peter and keep up with the good work! I really enjoy listening your analysis and at the same time having some really good laughs...

[7532730]

Peter - thanks for upgrading your video equipment; now it's music to my ears.

[joneselius]

into office are elected into both the Corporation and the Government offices at the same time,

thus they are in a conflict of interest, which is Treason again.