ACTIONABLE ADVICE FOR FINANCIAL ADVISORS: Newsletters and Commentaries Focused on Investment Strategy

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2014-07-25 Yellen: Where No Man Has Gone Before by Peter Schiff of Euro Pacific Capital

Although Fed Chairwoman Janet Yellen said nothing new in her carefully manicured semi-annual testimony to Congress last week, her performance there, taken within the context of a lengthy profile in the New Yorker (that came to press at around the same time), should confirm that she is very different from any of her predecessors in the job. Put simply, she is likely the most dovish and politically leftist Fed Chair in the Central Bank's history.

2014-06-23 The Bond Trap by Peter Schiff of Euro Pacific Capital

The American financial establishment has an incredible ability to celebrate the inconsequential while ignoring the vital. Last week, while the Wall Street Journal pondered how the Fed may set interest rates three to four years in the future (an exercise that David Stockman rightly compared to debating how many angels could dance on the head of a pin), the media almost completely ignored one of the most chilling pieces of financial news that I have ever seen.

2014-06-13 Debt is No Salvation by Peter Schiff of Euro Pacific Capital

Thus far 2014 has been a fertile year for really stupid economic ideas. But of all the half-baked doozies that have come down the pike (the perils of "lowflation," Thomas Piketty's claims about capitalism creating poverty, and President Obama's "pay as you earn" solution to student debt), an idea hatched last week by CNBC's reliably ridiculous Steve Liesman may in fact take the cake.

2014-06-06 Snow Job by Peter Schiff of Euro Pacific Capital

Economists, investment analysts, and politicians have spent much of 2014 bemoaning the terrible economic effects of the winter of 2014. The cold and snow have been continuously blamed for the lackluster job market, disappointing retail sales, tepid business investment and, most notably, much slower than expected GDP growth. Given how optimistic many of these forecasters had been in the waning months of 2013, when the stock market was surging into record territory and the Fed had finally declared that the economy had outgrown the need for continued Quantitative Easing, the weather was an absolu

2014-06-05 The Platinum Supply Shock by Peter Schiff of Euro Pacific Precious Metals

Even investors who typically eschew precious metals have been hard-pressed to ignore the platinum industry this year. The longest strike in South African history paired with surging Asian demand is set to push the metal back into a physical deficit in 2014 - and could have repercussions for years to come. While gold remains the most conservative choice for saving, the "industrial precious metal" platinum is a compelling investment for those, like me, who are bullish on global net economic growth.

2014-05-29 Piketty's Envy Problem by Peter Schiff of Euro Pacific Capital

There can be little doubt that Thomas Piketty's new book Capital in the 21st Century has struck a nerve globally. In fact, the Piketty phenomenon (the economic equivalent to Beatlemania) has in some ways become a bigger story than the ideas themselves.

2014-05-23 See No Evil by Peter Schiff of Euro Pacific Capital

In this week's release of the minutes from its April 29-30 meeting, Federal Reserve policymakers made clear that they see little chance of inflation moving past their 2% target for years to come. In order to make such a bold statement, Fed economists not only had to ignore the current data, but discount the likelihood that their current stimulus will put further upward pressure on prices that are already rising.

2014-05-19 The Belgian Connection by Peter Schiff of Euro Pacific Capital

One of the biggest questions at the end of 2013 was how the Treasury market would react to the reduction of bond buying that would result from the Federal Reserve’s tapering campaign. If the Fed were to hold course to its stated intentions, its $45 billion monthly purchases of Treasury bonds would be completely wound down by the 4th quarter of 2014.

2014-05-07 And the Band Played On by Peter Schiff of Euro Pacific Capital

After three months of consistently disappointing jobs numbers, the markets were as keyed up for a good jobs report as a long suffering sailor awaiting shore leave in a tropical port. The just released April jobs report, which claimed that 288,000 jobs were created in the U.S. during the month, provided the apparent good news. But you don't have to go too far beneath the surface to find some troubling trends within the data. Even this minor excavation was too much for the media cheerleaders and Wall Street pitchmen to handle.

2014-05-01 The Gold Price is Fixed: So What? by Peter Schiff of Euro Pacific Precious Metals

We can't ignore it anymore - the markets are rigged. The LIBOR scandal broke almost two years ago, and the banks found responsible for manipulating that key index are still dealing with lawsuits. Meanwhile, allegations of gold market manipulation have been simmering for over a decade and grew into an inferno after the spot price dropped dramatically last spring.

2014-04-30 The Debate Debate by Peter Schiff of Euro Pacific Capital

While there is wide agreement that the cost of college education has risen far faster than the incomes of most Americans, there is some debate as to whether the quality of the product has kept pace with the price. Not surprisingly, almost all who argue that it has (college administrators, professors, and populist politicians) are deeply invested either ideologically or financially in the system itself. More objective observers see a bureaucratic, inefficient, and hopelessly out of touch ivory tower that is bleeding the country of its savings, and more tragically, its intellectual acuity.

2014-04-04 Meet "Lowflation": Deflation's Scary Pal by Peter Schiff of Euro Pacific Capital

In recent years a good part of the monetary debate has become a simple war of words, with much of the conflict focused on the definition for the word "inflation." The latest front in this campaign came this week when Bloomberg News unveiled a brand new word: "lowflation" which it defines as a situation where prices are rising, but not fast enough to offer the economic benefits that are apparently delivered by higher inflation. Although the article was printed on April Fool's Day, sadly I do not believe it was meant as a joke.

2014-04-03 The Stealth Rally: Gold Under the Radar by Peter Schiff of Euro Pacific Precious Metals

So far, 2014 has been a paradoxical year for gold. Many investors aren't even aware that it has rallied almost 8%. On the rare occasion that the financial media mentions the yellow metal, it is only in the context of comparing the recent rise to last year's decline.

2014-03-22 Debt and Taxes by Peter Schiff of Euro Pacific Capital

It seems that the majority opinion on Wall Street and Washington is that we have entered an era of good fortune made possible by the benevolent hand of the Federal Reserve. Ben Bernanke and now Janet Yellen have apparently removed all the economic rough edges that would normally draw blood. As a result of this monetary "baby-proofing," a strong economy is no longer considered necessary for rising stock and real estate prices.

2014-03-21 Debt and Taxes by Peter Schiff of Euro Pacific Capital

The red flags contained in the national and global headlines that have come out thus far in 2014 should have spooked investors and economic forecasters. Instead the markets have barely noticed. It seems that the majority opinion on Wall Street and Washington is that we have entered an era of good fortune made possible by the benevolent hand of the Federal Reserve. Ben Bernanke and now Janet Yellen have apparently removed all the economic rough edges that would normally draw blood.

2014-03-07 Weather or Not? by Peter Schiff of Euro Pacific Capital

Everyone agrees that the winter just now winding down (hopefully) has been brutal for most Americans. And while it's easy to conclude that the Polar Vortex has been responsible for an excess of school shutdowns and ice related traffic snarls, it's much harder to conclude that the it's responsible for the economic vortex that appears to have swallowed the American economy over the past three months.

2014-03-06 Gold Scams Revisited by Peter Schiff of Euro Pacific Precious Metals

Before Bear Stearns and Lehman collapsed, the market for physical gold was limited to a relatively small group of investors who understood the havoc inflation was wreaking on our savings and the US markets. As the financial crisis took hold, a flood of new and inexperienced buyers entered the market, creating an opportunity for unscrupulous metals dealers to swindle their way to massive profits. This is what drove me to launch my very own gold dealer, Euro Pacific Precious Metals, to provide a safe alternative for those who were taking my advice to diversify into sound money.

2014-02-20 WhatsApp With That? by Peter Schiff of Euro Pacific Capital

Two pieces of business news announced this week provide a convenient frame through which to view our dysfunctional and distorted economy. The first (which has attracted tremendous attention), is Facebook's blockbuster $19 billion acquisition of instant messaging provider WhatsApp. The second (which few have noticed) is the horrific earnings report issued by Texas-based retail chain Conn's. While these two developments don't seem to have much in common, together they shed some very unflattering light on where we stand economically.

2014-02-11 Obama Spins Subsidies Both Ways by Peter Schiff of Euro Pacific Capital

In our current age of spin and counter-spin, there is no contortion too great for a politician to attempt. On occasion, however, the threads of one story become entangled with another in a manner that should deeply embarrass, if the media were sharp enough to catch it. This happened last week in response to the Congressional Budget Office's (CBO) bombshell report on how Obamacare incentives could reduce the size of the labor force by more than two million workers by 2017.

2014-02-11 Obama Spins Subsidies Both Ways by Peter Schiff of Euro Pacific Capital

In our current age of spin and counter-spin, there is no contortion too great for a politician to attempt. On occasion, however, the threads of one story become entangled with another in a manner that should deeply embarrass, if the media were sharp enough to catch it. This happened last week in response to the Congressional Budget Office's (CBO) bombshell report on how Obamacare incentives could reduce the size of the labor force by more than two million workers by 2017.

2014-02-07 Dark Gold: Shedding Light on a Mysterious Market by Peter Schiff of Euro Pacific Precious Metals

Gold is the simplest of financial assets - you either own it or you don’t. Yet, at the same time, gold is also among the most private of assets. Once an individual locks his or her safe, that gold effectively disappears from the market at large. Unlike bank deposits or stocks, there is no way to tally the total amount of gold held by individual investors.

2014-01-21 The Deflation Menace by Peter Schiff of Euro Pacific Capital

Dedicated readers of The Wall Street Journal have recently been offered many dire warnings about a clear and present danger that is stalking the global economy. They are not referring to a possible looming stock or real estate bubble (the paper sees few threats there). Nor are they talking about other usual suspects such as global warming, peak oil, the Arab Spring, sovereign defaults, the breakup of the euro, Miley Cyrus, a nuclear Iran, or Obamacare.

2014-01-06 Too Big to Pop by Peter Schiff of Euro Pacific Capital

Most economic observers are predicting that 2014 will be the year in which the United States finally shrugs off the persistent malaise of the Great Recession. As we embark on this sunny new chapter, we may ask what wisdom the five-year trauma has delivered.

2014-01-02 The Long and The Short of Gold Investing by Peter Schiff of Euro Pacific Precious Metals

There are two types of gold investors: those trying to make money on short-term market timing and those looking for long-term asset preservation. It was the fear-driven trading of the former that helped gold break $1900 in 2011, and for good reason - stormy markets steer investors to safe havens.

2013-12-24 A Spoonful of Sugar by Peter Schiff of Euro Pacific Capital

The press has framed Ben Bernanke’s valedictory press conference last week in heroic terms. It’s as if a veteran quarterback engineered a stunning come-from-behind drive in his final game, and graciously bowed out of the game with the ball sitting on the opponent’s one-yard line. In reality, Bernanke has merely completed a five-yard pass from his own end zone, and has left Janet Yellen to come off the bench down by three touchdowns, with no credible deep threats, and very little time left on the clock.

2013-12-13 They Bravely Chickened Out by Peter Schiff of Euro Pacific Capital

Earlier this week Congress tried to show that it is capable of tackling our chronic and dangerous debt problems. Despite the great fanfare I believe they have accomplished almost nothing. Supporters say that the budget truce created by Republican Representative Paul Ryan and Democratic Senator Patty Murray will provide the economy with badly needed certainty.

2013-12-04 The Eastern Lust for Gold by Peter Schiff of Euro Pacific Precious Metals

Having replaced savings with debt on both the national and individual levels, I think it’s well past time for Westerners to take a few lessons from our creditors in the East. Many Americans consider gold a "barbarous relic," but in Asia, the yellow metal remains the bedrock of individual savings plans. This means that either greater than half of the world’s population are barbarians, or they’ve held onto an important tradition that our culture has forgotten.

2013-11-25 Ben's Rocket to Nowhere by Peter Schiff of Euro Pacific Capital

Herd mentality can be as frustrating as it is inexplicable. Once a crowd starts moving, momentum can be all that matters and clear signs and warnings are often totally ignored. Financial markets are currently following this pattern with respect to the unshakable belief that the Federal Reserve is ready, willing, and most importantly, able, to immediately execute a wind down of its quantitative easing program. How this notion became so deeply entrenched is a mystery, but the stampede it has sparked is getting more violent, and irrational, by the day.

2013-11-12 Janet Yellen's Mission Impossible by Peter Schiff of Euro Pacific Capital

Most market watchers expect that Janet Yellen will grapple with two major tasks once she takes the helm at the Federal Reserve in 2014: deciding on the appropriate timing and intensity of the Fed’s quantitative easing taper strategy, and unwinding the Fed’s enormous $4 trillion balance sheet (without creating huge losses in the value of its portfolio). In reality both assignments are far more difficult than just about anyone understands or admits.

2013-11-08 Janet Yellen's Mission Impossible by Peter Schiff of Euro Pacific Capital

Most market watchers expect that Janet Yellen will grapple with two major tasks once she takes the helm at the Federal Reserve in 2014: deciding on the appropriate timing and intensity of the Fed’s quantitative easing taper strategy, and unwinding the Fed’s enormous $4 trillion balance sheet (without creating huge losses in the value of its portfolio). In reality both assignments are far more difficult than just about anyone understands or admits.

2013-11-07 Gold: Hold It or Fold It? by Peter Schiff of Euro Pacific Precious Metals

It’s starting to feel like we are part of a giant poker game against the US government, whose hand is the true condition of the American economy. The government has become so good at bluffing that most people feel compelled to watch how the biggest players in the game react to determine their own investment strategy.

2013-10-28 The Website is Fixable, Obamacare Isn't by Peter Schiff of Euro Pacific Capital

Since Obamacare made its debut, discussions have focused on Ted Cruz’ efforts to defund the law and the shockingly bad functionality of the Website itself. Fortunately for Obama, polling indicates that Senator Cruz has lost, at least for now, the battle for hearts and minds. The President has not been nearly so lucky on the technological front.

2013-10-22 A Green Light for Gold? by Peter Schiff of Euro Pacific Capital

It is rare that investors are given a road map. It is rarer still that the vast majority of those who get it are unable to understand the clear signs and directions it contains. When this happens the few who can actually read the map find themselves in an enviable position. Such is currently the case with gold and gold-related investments.

2013-10-12 Debt Ceiling Delusions by Peter Schiff of Euro Pacific Capital

The popular take on the current debt ceiling stand-off is that the Tea Party wing of the Republican Party has a delusional belief that it can hit the brakes on new debt creation without bringing on an economic catastrophe. While Republicans are indeed kidding themselves if they believe that their actions will not unleash deep economic turmoil, there are much deeper and more significant delusions on the other side of the aisle.

2013-10-03 The Taper Fakeout by Peter Schiff of Euro Pacific Precious Metals

Anyone who bought the media buzz about a September reduction of QE - called the "taper" - was very surprised when the Federal Reserve announced that stimulus would continue unabated. According the the official narrative, inflation is under control and the labor market is steadily improving. Why wouldn’t a modest taper be announced?

2013-09-19 The Taper That Wasn't by Peter Schiff of Euro Pacific Capital

The Fed’s failure today to announce some sort of tapering of its QE program, despite the consensus of an overwhelming percentage of economists who expected action, once again reveals the degree to which mainstream analysts have overestimated the strength of our current economy. The Fed understands, as the market seems not to, that the current "recovery" could not survive without continuation of massive monetary stimulus.

2013-09-04 Off to the Races by Peter Schiff of Euro Pacific Precious Metals

Summer is traditionally a slow season for precious metals, but this summer started with a rout. In the last week of June, gold and silver hit 2-year lows of $1,192 and $18.61 respectively. Fortunately, after staggering along the lows, the precious metals are off to the races once more - with gold rallying more than 18% and silver 31%. This remarkable performance continues even in the face of the Fed’s sustained tapering threats.

2013-08-30 The Unfriendly Skies by Peter Schiff of Euro Pacific Capital

As if the federal government were not already doing enough to kill the U.S. airline industry with restrictive workplace rules, over-regulation, and a monetary policy that supports higher fuel prices, earlier this month anti-trust authorities at the Justice Department blocked the merger between American Airlines and US Air.

2013-08-20 The GDP Distractor by Peter Schiff of Euro Pacific Capital

Albert Einstein, a man who knew a thing or two about celestial mechanics, supposedly once called compound interest "the most powerful force in the universe." While the remark was likely meant to be funny (astrophysicists can be hilarious), it sheds light on the often overlooked fact that small changes, over time, can yield enormous results. Over eons, small creeks can carve large canyons through solid rock. The same phenomenon may be at work in our economy.

2013-08-09 Futures Markets Signal Gold Ready to Erupt by Peter Schiff of Euro Pacific Capital

With gold recouping some losses in its most recent trading sessions, many are asking whether or not the bottom has finally formed for the yellow metal. Most of these gains have been simply chalked up to short-covering and dovish remarks by Bernanke during the recent Federal Open Market Committee meetings; however, there are some key indicators for gold which are overshadowed by the media hubbub. Two of them in particular are important to understand, because they reveal a renewed investment demand for physical gold over paper gold or fiat currencies.

2013-08-09 The Half Full Economy by Peter Schiff of Euro Pacific Capital

The marginal economic strength that was described in the most recent GDP release from Washington has caused many to double down on their belief that the Fed will begin tapering QE sometime later this year. While I believe that is a fantasy given our economy’s extreme dependence on QE, market observers should have learned long ago that the Bureau of Economic Analysis (BEA) initial GDP estimates can’t be trusted. A perusal of their subsequent GDP revisions in the last five years reveals a clear trend: They are almost twice as likely to revise initial estimates down rather than up.

2013-08-07 What's in the Vault? by Peter Schiff of Euro Pacific Capital

Given that the demand for physical gold among private investors has remained strong throughout 2013, the significant price declines in recent months took many investors by surprise.

2013-08-06 What Doesn't Kill Gold Makes it Stronger by Peter Schiff of Euro Pacific Precious Metals

I’ve been emphasizing for months that the current correction in the gold price is a result of speculative money fleeing the market and not any reflection of gold’s long-term fundamentals. Unfortunately, there is so much money to be made (and lost) by day trading that my cautions have once again fallen on deaf ears.

2013-08-02 Detroit Broke City by Peter Schiff of Euro Pacific Capital

It should come as no surprise that the lessons that should be learned from the bankruptcy of Detroit, a city that once stood as the shining example of America’s industrial might, are being ignored by the American political establishment and its allies in the docile press corps. While the death spiral of the Motor City may be extreme in relation to conditions throughout the country, it is a difference of degree rather than design.

2013-07-19 Print the Legend by Peter Schiff of Euro Pacific Capital

The Trayvon Martin/George Zimmerman tragedy has become one of those transcendent events that dominates the national discourse and throws light on dimly lit aspects of our society. Obviously, the case touches most closely on issues of race relations, media culture, and the politicization of the justice system. It also reveals how preconceived emotional commitments to a narrative can consistently trump demonstrable facts. These tendencies are also present in the polarized discussion about the persistent weakness of the U.S. economy.

2013-07-18 Powerful Case for Silver by Peter Schiff of Euro Pacific Precious Metals

I am a well-known "gold bug" because of my strongly voiced opinion that gold has been one of the best assets for protecting yourself from the US dollar’s prolonged decline.

2013-07-01 The Golden Cycle by Peter Schiff of Euro Pacific Capital

The New York Times had the definitive take on the vicious sell off in gold. To summarize one of their articles: Two years ago gold bugs ran wild as the price of gold rose nearly six times. But since cresting two years ago it has steadily declined, almost by half, putting the gold bugs in flight. The most recent advisory from a leading Wall Street firm suggests that the price will continue to drift downward, and may ultimately settle 40% below current levels.

2013-06-26 Sock Puppet Kabuki; Nikkei Today Parallels Dot-Com Bust by Peter Schiff of Euro Pacific Capital

The Japanese stereotype of excessive courtesy is being confirmed by the actions of prime minster Shinzo Abe who is giving the world a free and timely lesson on the dangers of overly accommodative monetary policy. Whether or not we benefit from the tutorial (Japan will surely not) depends on our ability to understand what is currently happening there.

2013-06-21 Tapering the Taper Talk by Peter Schiff of Euro Pacific Capital

As usual the Federal Reserve media reaction machine has fallen for a poorly executed head fake. It has been fooled by this move many times in the past and for its efforts it has tackled nothing but air. Yet right on cue, it took the bait once more. Somehow the takeaway from Wednesday’s release of the June Fed statement and the Bernanke press conference is that the Central bank is likely to begin scaling back, or "tapering," it’s $85 billion per month quantitative easing program sometime later this year, and that the program may be completely wound down by the middle of next year.

2013-06-04 The Gold Bull vs The Paper Tiger by Peter Schiff of Euro Pacific Precious Metals

That’s all, folks. One look at the headlines will tell you the gold bull market is officially over: the stock market is booming, a modest recovery of the US economy is underway, and the dollar is dominating the forex. Time to sell your bullion and get back into US stocks!

2013-05-31 The Great Reflation by Peter Schiff of Euro Pacific Capital

This week economists, investors and politicians were treated to some of the "best" home price data since the frothy days of 2006 when home loans were given out like cotton candy and condo flipping was a national pastime. The Case-Shiller 20 City Composite Home price index was up a startling 10.9% for the 12 month period ending in March. Prices in all 20 cities were up, with some (Las Vegas, Phoenix, and San Francisco) notching gains of more than 20%. Meanwhile the National Association of Realtors announced that April pending home sales volume reached the highest level in nearly three years.

2013-05-24 The Biggest Loser Wins by Peter Schiff of Euro Pacific

While the world’s economies jockey one another for the lead in the currency devaluation derby, it’s worth considering the value of the prize they are seeking. They believe a weak currency opens the door to trade dominance, by allowing manufacturers to undercut foreign rivals, and to economic growth, by fighting deflation. On the other side of the coin, they believe a strong currency is an economic albatross that leads to stagnation. But the demonstrable effects of currency strength and weakness reveal the emptiness of their theory.

2013-05-10 Symptoms Don't Lie by Peter Schiff of Euro Pacific Capital

A good doctor will not simply make a diagnosis based on measurements. The symptoms and complaints expressed by the patient are at least as important in making a determination as the data provided by diagnostic tools. When the data says one thing and the symptoms continuously say another, it makes sense to question the reliability of the instruments. This would be particularly true if the instruments are furnished by a party with a stake in a favorable diagnosis, say an insurance company on the hook for treatment costs. The same holds true for the U.S. economy.

2013-05-02 The Great Gold Redemption by Peter Schiff of Euro Pacific Precious Metals

The most puzzling part of the investment business is seeing how the vast and largely economically illiterate masses interpret any given piece of news. Take the recent gold selloff: many large players were motivated to sell by news that Cyprus will have to liquidate its gold stockpiles to pay off acute debt obligations. But just a moment’s reflection shows this reaction to be knee-jerk. The real story behind Cyprus’ deal has much more profound ramifications - and they are positive for gold.

2013-04-26 Changing the Conversation by Peter Schiff of Euro Pacific Capital

It has been estimated that if the government used the same methodology to measure inflation that it used during the 1980’s, we would be currently dealing with official inflation that would be many times higher than today’s official 1.5% rate. But now the government appears ready to distort the figures even further.

2013-04-19 Japan Steps into the Void by Peter Schiff of Euro Pacific Capital

In the years following the global financial crisis, economists and investors have gotten very comfortable with very high, and seemingly persistent, government debt. The nonchalance may be underpinned by the assumption that globally significant countries that can print their own currencies can’t get trapped in a sovereign debt crisis. However, it now appears that Japan is preparing to put this confidence to the ultimate stress test.

2013-04-16 Gold in the Crosshairs by Peter Schiff of Euro Pacific Capital

In the opening years of the last decade, most mainstream investors sat on the sidelines while "tin hat" goldbugs rode the bull market from below $300 to just over $1,000 per ounce. But following the 2008 financial crisis, when gold held up better than stocks during the decline and made new record highs long before the Dow Jones fully recovered, Wall Street finally sat up and took notice.

2013-04-05 The Stockman Backlash by Peter Schiff of Euro Pacific Capital

This week, while economists should have been closely considering the implications of the actual bankruptcy of Stockton, California, they instead heaped scorn on the perceived ideological bankruptcy of David Stockman. In other words, Stockman trumped Stockton.

2013-04-02 Flying High on Borrowed Wings by Peter Schiff of Euro Pacific Capital

After selling off an astounding 56% between October of 2007 and March 2009, the S&P 500 has staged a rally for the ages, surging 120% and recovering all of its lost ground too. This stunning turnaround certainly qualifies as one of the more memorable, and unusual, stock market rallies in history. The problem is that the rally has been underwritten by the Federal Reserve’s unconventional monetary policies But for some reason, this belief has not weakened the celebration.

2013-04-02 Cypriots In The Streets by Peter Schiff of Euro Pacific Precious Metals

The news of the month comes from the large Mediterranean island of Cyprus, where Keynesian economic planning left the economy facing complete bankruptcy. The result was an unprecedented step forward in the financial collapse of the West: direct forfeiture of bank deposits. Despite official protestations to the contrary, this fallout will spread to a bank near you.

2013-03-26 The Stimulus Trap by Peter Schiff of Euro Pacific Capital

For years we have been warned by Keynesian economists to fear the so-called "liquidity trap," an economic cul-de-sac that can suck down an economy like a tar pit swallowing a mastodon. They argue that economies grow because banks lend and consumers spend. But a "liquidity trap," they argue, convinces consumers not to consume and businesses not to borrow. The resulting combination of slack demand and falling prices creates a pernicious cycle that cannot be overcome by the ordinary forces that create growth, like savings or investment.

2013-03-22 Cyprus Lifts the Curtain by Peter Schiff of Euro Pacific Capital

This week financial analysts, economists, politicians, and bank depositors from around the world were outraged that European leaders, more specifically the Germans, currently calling many of the shots in Brussels and Frankfurt, could be so politically reckless, economically ignorant, and emotionally callous as to violate the sanctity of bank deposits in order to fund a bailout of Cyprus.

2013-03-01 The Fed's Tightening Pipe Dream by Peter Schiff of Euro Pacific Precious Metals

Testifying before the US Senate this past Tuesday, Fed Chairman Ben Bernanke made an extraordinary claim about its bloated balance sheet: "We could exit without ever selling by letting it run off." What Bernanke means here is that the Fed could simply hold its Treasuries and agency bonds until they mature, at which point the government would then be forced to pay the Fed back the principal amount. Through this process, the Fed's unprecedented and inflationary position will be gradually and placidly unwound.

2013-02-19 The Pound Gets Pounded by Peter Schiff of Euro Pacific Capital

As the global currency war intensifies, the majority of attention has been paid to the 17% fall of the Japanese yen against the U.S. dollar over the past few months. The implosion has given cover to the sad performance of another once mighty currency: the British pound sterling. But in many ways the travails of the pound is far more instructive to those pondering the fate of the U.S. currency.

2013-02-08 Messing with the Bull by Peter Schiff of Euro Pacific Capital

With the announcement this week of its massive $5 billion lawsuit against ratings agency Standard & Poor's, the Federal Government took a bold step to squelch any remaining independence of thought or action in the financial services industry. Given the circumstances and timing of the suit, can there be any doubt that S&P is paying the price for the August 2011 removal of its AAA rating on U.S. Treasury debt?

2013-02-04 The Bernanke Shock by Peter Schiff of Euro Pacific Precious Metals

The financial world was shocked this month by a demand from Germany's Bundesbank to repatriate a large portion of its gold reserves held abroad. By 2020, Germany wants 50% of its total gold reserves back in Frankfurt - including 300 tons from the Federal Reserve. The Bundesbank's announcement comes just three months after the Fed refused to submit to an audit of its holdings on Germany's behalf. One cannot help but wonder if the refusal triggered the demand.

2013-02-01 The Biggest Loser by Peter Schiff of Euro Pacific Capital

For the past few generations Switzerland has enjoyed some of the strongest economic fundamentals in the world. The country boasts a high savings rate, low taxes, strong exports, low debt-to-GDP, balanced government budgets, and prior to a few years ago one of the most responsible monetary policies in the world. These attributes made the Swiss franc one of the world's "safe haven" currencies. But in today's global economy, no good deed goes unpunished.

2013-01-16 The Trillion Dollar Trick by Peter Schiff of Euro Pacific Capital

The birth, and the apparent death, of the trillion dollar platinum coin idea may one day be recalled as a mere footnote in the current debt crisis drama. The ultimate rejection of the idea (which was to use a loophole in commemorative coinage law to mint a platinum coin of any denomination) by both the President and the Federal Reserve seems to offer some relief that our economic policy is not being run by out-of-touch academics and irresponsible congressmen. In reality, our government has been creating more than one trillion dollars out of thin air every year for the past five.

2013-01-10 Inflation Propaganda Exposed by Peter Schiff of Euro Pacific Capital

Economists who hold the popular view that expanding the money supply will provide the best medicine for our ailing economy dismiss the inflationary concerns of monetary hawks, like me, by pointing to the supposedly low inflation that has occurred during the current period of rampant Fed activism.

2013-01-03 Treasury's Last Pillar Crumbles by Peter Schiff of Euro Pacific Precious Metals

With the return of Shinzo Abe and his Liberal Democratic Party to power in Japan, the market for US Treasuries may be losing its last external pillar of support. Re-elected on September 26th, Abe has quickly set a course for limitless inflation, saying Japan must "free itself from deflation and the strong yen." This is significant to the global economy as Japan is the largest foreign power left with a strong appetite for US Treasuries. If this demand falters, the Fed may be the only remaining buyer of new Treasury issuance.

2013-01-03 Congress Avoids the Cliff by Selling Us Down the River by Peter Schiff of Euro Pacific Capital

With the possible exception of the New York Times' editorial board (and the cast of The Jersey Shore), everyone on the planet understood that the United States Government needs to cut spending, increase taxes, or both. Instead, after months of political posturing and hand wringing, the Federal Government has just delivered the exact opposite, a deal that increases spending and decreases taxes. The move lays bare the emptiness of budget legislation, which can be dismantled far easier than it can be constructed.

2012-12-14 No Way Out by Peter Schiff of Euro Pacific Capital

By upping the ante once again in its gamble to revive the lethargic economy through monetary action, the Federal Reserve's Open Market Committee is now compelling the rest of us to buy into a game that we may not be able to afford. At his press conference this week, Fed Chairman Bernanke explained how the easiest policy stance in Fed history has just gotten that much easier. First it gave us zero interest rates, then QEs I and II, Operation Twist, and finally "unlimited" QE3.

2012-12-12 Mish Shedlock Exposed by Peter Schiff of Euro Pacific Capital

In January 2009, just as the "Peter Schiff was Right" YouTube video that catalogued my previously derided predictions about a coming financial collapse was racking up views and attracting mainstream attention, a blogger and investment advisor named Mike Shedlock (aka "Mish") saw an opportunity to make an unethical grab at my current and prospective clients by breaking the nascent wave.

2012-12-06 Ditching Before the Fiscal Clif by Peter Schiff of Euro Pacific Capital

Turn on the TV and this is what you'll hear: The US budget is heading for a fiscal cliff. If a deal isn't reaching in Congress by the end of this year, a combination of automatic tax hikes and budget cuts will sink America into economic depression. There is no escape. Of course, my readers know that the fiscal cliff is merely an example of the piper having to be paid. The problem isn't the bill, but that we ran it up so high in the first place.

2012-11-21 Patriotic Millionaires Unmasked by Peter Schiff of Euro Pacific Capital

Despite the breathless post-election "think pieces" that have drawn sweeping and deeply considered conclusions about the political drift of the country, at its core President Obama's re-election is easy to understand. He essentially promised millions of middle and working class voters that if he were to be re-elected, they would receive benefits paid for by the rich.While most people would assume that the wealthy would chafe at such a heavy burden, some affluent individuals have apparently organized spontaneously to express their willingness to help the country.

2012-11-12 Extend and Pretend by Peter Schiff of Euro Pacific Capital

Now that President Obama has been re-elected, the media is finally free to focus on something besides the clueless undecided voters in Ohio, Florida, and Colorado. The brightest and shiniest object that has attracted its attention is the "fiscal cliff" that we are expected to drive over at the end of the year unless Congress and the President can agree to turn the wheel or apply the brakes.

2012-11-09 Extend and Pretend by Peter Schiff of Euro Pacific Capital

Going over the fiscal cliff is not the problem, it is part of the solution. Our leaders should construct a cliff that is actually large enough to restore fiscal balance before a real disaster occurs. That disaster will take the form of a dollar and/or sovereign debt crisis that will make this fiscal cliff look like an ant hill.

2012-10-22 Lessons from Black Monday by Peter Schiff of Euro Pacific Capital

25 years ago, on another Monday in late October, the financial world seemed to disintegrate in a heartbeat. Though the 205 point drop in the Dow last Friday (the technical anniversary of the '87 Crash) was somewhat reminiscent of its 108-point drop on Friday, October 16, 1987, the real action in '87 was on the Monday that followed. And while this Monday is not nearly as black, it is important that we use the opportunity to recall the circumstances that nearly sent the stock market into cardiac arrest.

2012-10-16 Inflation: Washington is Blind to Main Street's Biggest Concern by Peter Schiff of Euro Pacific Capital

Journalists, politicians and economists all seem to agree that the biggest economic issue currently worrying voters is unemployment. It follows then that most believe that the deciding factor in the presidential race will be the ability of each candidate to convince the public that his policies will create jobs. It seems that everyone got this memo...except the voters.

2012-10-09 Riding Into The Sunset or a Brick Wall? by Peter Schiff of Euro Pacific Precious Metals

A month ago, I presented the case for why Fed Chairman Bernanke would have strong motivation to launch another round of quantitative easing (QE) before the election. In short, it would save him his job. Now, I didn't predict with certainty that he would do so - only the few men at the FOMC knew that for sure - but it seemed likely. Shortly thereafter, Bernanke not only announced more stimulus, but promised to keep it flowing to the tune of an additional $40 billion a month until conditions improve.

2012-10-03 The Fed Plays All Its Cards by Peter Schiff of Euro Pacific Capital

There never really could be much doubt that the current experiment in competitive global currency debasement would end in anything less than a total war. There was always a chance that one or more of the principal players would snap out of it, change course and save their citizenry from a never ending cycle of devaluation. But developments since September 13, when the U.S. Federal Reserve finally laid all its cards on the table and went "all in" on permanent quantitative easing, indicate that the brainwashing is widely established and will be difficult to break.

2012-09-14 Operation Screw by Peter Schiff of Euro Pacific Capital

The Fed will try to conjure a recovery on the backs of currency debasement. It will not stop or alter from this course. If the economy fails to respond to the drugs, Bernanke will simply up the dosage. In fact, he is so convinced we will remain dependent on quantitative easing that he explicitly said he won't turn off the spigots even if things noticeably improve. In other words, the dollar is screwed.

2012-09-10 As the Euro Tumbles, Spaniards Look to Gold by Peter Schiff of Euro Pacific Precious Metals

The unremitting deterioration of the eurozone's sovereign debt landscape continues to fuel uncertainties about the longevity of the euro as a strong currency. Such uncertainties are not only leading to capital flight from the EMU's periphery to the core and destabilizing markets worldwide, but they are also beginning to frighten southern European savers into seeking refuge outside their 10-year-old currency.

2012-09-07 The Fed's Campaign by Peter Schiff of Euro Pacific Precious Metals

This past Friday, as Fed Chairman Ben Bernanke delivered his annual address from Jackson Hole - the State of the Dollar, if you will - I couldn't help but hear it as an incumbent's campaign speech. While Wall Street was hoping for some concrete announcement, what we got was a mushy appraisal of the Fed's handling of the financial crisis so far and a suggestion that more 'help' is on the way.

2012-08-28 The Gold Standard Gets Another Look by Peter Schiff of Euro Pacific Capital

As Republicans convene in Tampa to nominate Mitt Romney and hammer out their party platform, one of the planks that could attract the most attention is the Party's official position on the gold standard. As it is now being considered, the platform stops short of recommending a return to the gold standard, but does advocate a commission to consider the possibility.

2012-08-17 Republicans Hope, but Don't Change by Peter Schiff of Euro Pacific Capital

While I appreciate that Ryan has the courage to take a position at the vanguard of his party in the campaign for fiscal responsibility, the modesty of his plan is just the latest reminder of how utterly divorced from reality Washington politicians remain. Like all of his brethren, Ryan is pinning his budget battling plans on the pain free "grow your way out of it plan." But as long the government consumes so much of the nation's productivity, the conditions to create that growth will never occur. Hope is not a strategy.

2012-08-07 The Not So Super Hero by Peter Schiff of Euro Pacific Capital

The past week provided clear lessons not just in how central bankers have a limited ability to positively influence the economy but also how they are limited in their capacity to deliver the shortsighted policy actions that investors currently crave. The developments should provide new reasons for investors and economy watchers to abandon their faith in central bankers as super heroes capable of saving the economy.

2012-08-03 Priced for Collapse by Peter Schiff of Euro Pacific Capital

Where is the gold price today? If you're like many Americans, you have no idea whether it went up, down, or sideways. Fortunately, I know my readers to be more informed - you likely know that after falling from almost $1900, gold has been trapped around $1600 since early May. But you may still be curious why despite continued money-printing and abysmal US economic reports, gold hasn't been able to hit new highs.

2012-07-31 Justice Roberts is Right: The Plan Won't Work by Peter Schiff of Euro Pacific Capital

Now that the Supreme Court has given its narrow blessing to the Affordable Care Act, the big question is whether it will deliver the benefits that its proponents promise. Unfortunately, as it is now constructed, the plan will backfire causing fewer healthy people to buy insurance, raise premiums for those who do, destroy employment opportunities, cripple the health insurance industry, and weaken the economy.

2012-07-10 The Real Fiscal Cliff by Peter Schiff of Euro Pacific Capital

The media is now fixated on an apparently new feature dominating the economic landscape: a "fiscal cliff" from which the United States will fall in January 2013. They see the danger arising from the simultaneous implementation of the $2 trillion in automatic spending cuts (spread over 10 years) agreed to in last year's debt ceiling vote and the expiration of the Bush era tax cuts.

2012-07-03 Supreme Errors by Peter Schiff of Euro Pacific Capital

In the wake of my last commentary on the horrendous Supreme Court decision upholding Obama's health care plan, several people have pointed out that I erred in saying that the income tax is a "direct tax." While it is technically correct that the Court ultimately declared it to be an excise, not a direct tax, it is important to understand how it arrived at that opinion and why the decision has no practical relevance to the way the tax has been enforced.

2012-06-29 Legal Gimmickry Rescues Obama by Peter Schiff of Euro Pacific Capital

Despite the celebrations among Democrats, yesterday a majority of Supreme Court justices ruled that the Constitution does not allow the government to force Americans to buy health insurance. However in providing the swing vote to uphold the Affordable Care Act (aka Obamacare) Chief Justice John Roberts broke with the four other justices who shared that view by declaring that the methods chosen to get individuals to buy insurance were not penalties but taxes.

2012-06-22 Trickle Up Economics by Peter Schiff of Euro Pacific Capital

The political left wing has long tried to cast doubt on the fairness, and even the efficacy, of free market capitalism by branding it as a "trickle down" system. This epithet is meant to show how the middle and lower classes are dependent on scraps of wealth that happen to fall from the buffet table of the rich. This characterization of an unfair and inefficient system has helped them demonize policies that lower taxes (if they also extend to the wealthy) and reduce regulation on business.

2012-06-14 Out of Order by Peter Schiff of Euro Pacific Capital

I was invited to testify about the Federal Housing Administration's (FHA) policy in the apartment lending market. Although this was a fairly narrow issue, I told the congressmen the same thing I did last year when I was invited by a different subcommittee to testify about job creation: government programs don't solve problems, they just create new ones. While I thank the Committee for inviting me, I believe the congressmen may have gotten more than they bargained for.

2012-06-08 Damn the Torpedoes by Peter Schiff of Euro Pacific Capital

Given what most economists now know, few would actively argue that Greece's entrance into the Eurozone back in 2001 was a good idea. Much has been written about how the fundamental misfit between Greece's economy and currency gave birth to a deeply flawed system that was destined to run off the rails.xThe same "damn the torpedoes" mentality dominates economic thinking with respect to the U.S. economy as well.

2012-06-02 Economic Reality Bites by Peter Schiff of Euro Pacific Capital

Many people became convinced that data releases earlier this year indicated that "recovery" in the U.S. was imminent. But as I have been saying for months, this evidence would ultimately be shown to be as reliable as sightings of Bigfoot. Lots of people claim to say they have seen it, some even produce plaster footprints, but in the end all we have is a guy in an ape suit. The economic recovery, that has been discussed so loudly and often in recent months, will be shown to be similarly mythical.

2012-05-24 The Real Crash by Peter Schiff of Euro Pacific Capital

I first came to national attention back in 2008 and 2009 when the housing and credit markets imploded. I became known as the guy that other market "experts" laughed at when I warned of trouble brewing in the seemingly indestructible American economy. After the wheels ground to a halt in mid-2008, people noticed that my bookCrash Proof, originally released in early 2007, read like a detailed preview of many of the events that eventually unfolded.

2012-03-21 Trade Rains on the Jobs Parade by Peter Schiff of Euro Pacific Capital

Back in the late 1980s, when annual trade and budget deficits were but a small fraction of today's levels, the markets were rightly concerned about America's ability to sustain its twin deficits. This anxiety helped lead to the stock market crash of 1987. More recently, large and persistent trade deficits were a significant factor in building the imbalances that caused the U.S. economy to implode in 2008. But in recent years, most Americans have lost their concern with gaping trade deficits. I believe it will soon come back with a vengeance.

2012-03-15 Stress Tests No Sweat by Peter Schiff of Euro Pacific Capital

The Federal Reserve ran another "stress test" on major financial institutions and has determined that 15 of the 19 tested are safe, even in the most extreme circumstances: an unemployment rate of 13%, a 50% decline in stock prices, and a further 21% decline in housing prices. The problem is that the most important factor that will determine these banks' long-term viability was purposefully overlooked - interest rates.

2012-03-06 Why Buy the Cow? by Peter Schiff of Euro Pacific Capital

The communist revolutions in the 20th century sought to nationalize the wealth generated by privately held industries back to the exploited workers on whose backs the profits were supposedly derived. America has made the rejection of this idea and its support of free market principles the centerpiece of its economic narrative. However, as a result of our current and proposed tax policies towards corporate shareholders, our government collects a portion of industrial output that would inspire envy in even the most rabid Bolshevik.

2012-02-29 No Easy Fix for Gas Prices by Peter Schiff of Euro Pacific Capital

Oil and gas prices are high now for a very simple reason: the Fed has gone on a campaign to push up inflation and push down the value of the U.S. dollar. Just last week on CNBC James Bullard the President of the Federal Reserve Bank of St. Louis, stated this unequivocally. What is overlooked is the degree to which an inflationary policy at home creates inflation abroad. Many countries who peg their currencies to the U.S. dollar need to follow suit. As China prints yuan to keep it from appreciating against the dollar, prices rise in China. This is especially true for commodities like crude oil.

2012-02-14 Keynesians Jump The Gun on Inflation by Peter Schiff of Euro Pacific Capital

Regardless of what the triumphant Keynesians would have you believe, my analysis continues to be that the current combination of monetary and fiscal stimulus is driving us toward disaster. Instead of a real recovery, the US will experience an inflationary depression. Europe, on the other hand, will suffer much less, precisely because it was not seduced by the short-term appeal of stimulus.

2012-01-27 Waist Deep in the Big Muddy by Peter Schiff of Euro Pacific Capital

As long as interest rates remain far below the rate of inflation, the U.S. economy will fail to equitably restructure itself for a lasting recovery. As a secondary effect, U.S. savers will likely continue to suffer from a lack of yield and a weakening currency. In the end, the collapse of the U.S. economy will be that much more spectacular due to the great lengths we have gone to postpone it.

2012-01-10 The Dollars Lucky Streak by Peter Schiff of Euro Pacific Capital

All self-perpetuating virtuous cycles are vulnerable to a sudden break in the positive feedback loop. When reality rears its ugly head, and the spell breaks, the reverses can be vicious. It happened with dot com stocks, it happened with real estate, and I believe it will happen with the dollar and Treasuries. Even if Europe does not resolve its problems, the day of reckoning will still eventually arrive. The unfortunate truth is that the longer it takes, the worse it will be, as we will have that much more debt to reckon with.

2012-01-06 What Happened in 2011Whats up for 2012? by Peter Schiff of Euro Pacific Capital

This all lends itself to a volatile, but nearly flat trend for stocks and bonds in 2012. Fundamentals dont yet support a run-up, but easy money may put a floor underneath assets over the short run. Unless the situation were to change, we believe aggressive dips in stock markets represent buying opportunities. We tend to think bonds will underperform equities in 2012, given their dramatic outperforming in 2011.

2011-12-09 Obama Gets Real by Peter Schiff of Euro Pacific Capital

History has proven time-and-again that capitalism works and socialism does not. Taking money from the rich and redistributing it to the poor does not grow the economy. On the contrary, it reduces the incentives of both parties. It lowers savings, destroys capital, limits economic growth, and lowers living standards. Maybe Obama should take his eyes off the teleprompter long enough to read some American history. In fact, he could start by reading the Constitution that he swore an oath to uphold.

2011-11-23 Whose Fuse is Shorter? by Peter Schiff of Euro Pacific Capital

Any significant reversal of the current upward dollar trend could provide a long awaited catalyst for nations holding large dollar reserves to diversify into other currencies. My guess is that Merkel understands the great advantage the U.S. has enjoyed as the issuer of the worlds reserve currency. I believe she covets that prize for Europe, and based on her strategy, it is clearly within her reach.

2011-10-28 In Defense of the 1% by Peter Schiff of Euro Pacific Capital

Last week, I spent the afternoon visiting the Occupy Wall Street demonstrations in lower Manhattan. I brought a film crew and a sign that said 'I Am The 1%, Let's Talk.' The purpose was to understand what was motivating these protesters and try to educate them about what caused the financial crisis. I went down there with the feeling that much of their anger was justified, but broadly misdirected.

2011-10-27 President Obama Announces Plan to Boost College Tuitions by Peter Schiff of Euro Pacific Capital

President Obama today announced a plan that will ensure students are able to commit to higher levels of federally backed student loans. By limiting student obligations to repay, and by passing more of the repayment burden onto taxpayers, colleges and universities will be able to continue to raise tuitions at a rate that outpaces nearly every other cost center in the American economy. The move will come as a great relief to an education establishment increasingly concerned that students might no longer be able to afford skyrocketing tuition rates.

2011-10-19 Herman Cain's Hidden Nine by Peter Schiff of Euro Pacific Capital

Herman Cain has been gaining much traction with his 9-9-9 Plan, a bold proposal to replace our dysfunctional tax code with what could be a simpler and more economically stimulative. While I don't agree with the full spectrum of Mr. Cain's policy choices, I applaud his courage on the tax front. Judging by his rising poll numbers, this appreciation is shared. However, the plan has deep flaws the most glaring of which is its creation of a hidden payroll tax which represents a fourth "nine" This serious pitfall has been unmentioned by Mr Cain and overlooked by those who have analyzed his plan.

2011-10-04 Currency: The Hidden Portfolio Risk by Peter Schiff of Euro Pacific Capital

In the spirit of sharing our favorite dollar-alternatives, I recently sat down with Axel Merk, founder and president of Merk Investments, who is a well-known authority in the international currency arena today. That conversation resulted in a new report, entitled Peter Schiff's and Axel Merk's Five Favorite Currencies for the Next Five Years, which is now available for free download. In a world where gold is in the quadruple-digits and the S&P has downgraded US debt, we both feel it's high time every American consider diversifying his or her portfolio to mitigate currency risk.

2011-09-23 Twist Paves the Way for QE III by Peter Schiff of Euro Pacific Capital

But many of those who oppose QE3 do so because they believe the economy doesnt need more stimulus not because the stimulus itself is causing the economic weakness. As a result when the economy deteriorates, support for QE III could grow. In the end QE3 will likely be far more popular than another bank bailout, which may be on the table if the Fed fails to rescue the banks it may be pushing over the edge with Twist. But our zombie economy does not need to be perpetuated by more QE. It must be allowed to die so that a living, breathing, self-sustaining economy can replace it.

2011-09-16 Big European Leaders Flex Muscle by Peter Schiff of Euro Pacific Capital

Today marks the third anniversary of the death of Lehman Brothers, not the first, nor the last, bank or broker-dealer to require emergency meetings of exalted officials to take place over a weekend, but it is the only one that resulted in a complete loss for shareholders and significant losses for bondholders. Whether you see this as the example of the officials getting it right or stunningly wrong really depends on where you sit, and it should color your perspective on everything that has occurred since.

2011-09-13 How the Government Can Create Jobs by Peter Schiff of Euro Pacific Capital

On Tuesday, September 13, Peter Schiff will testify before the House of Representatives Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending. The hearing entitled, "Take Two: The President's Proposal to Stimulate the Economy and Create Jobs" will examine federal job creation efforts. Mr. Schiff is well known for his views on how federal regulatory activism and irresponsible monetary and fiscal policy is actively destroying jobs in America. The following statement from Mr. Schiff will be read into the Congressional Record this morning.

2011-09-09 More of the Same by Peter Schiff of Euro Pacific Capital

No real economic growth or job creation is going to occur until the failed policies of both Obama and Bush are reversed. In his speech the President mourned the death of the American dream. Obama should stop killing it. To revive that dream we need to revive the American spirit that produced it in the first place. That means returning to our traditional values of limited government and sound money. Unfortunately we are still headed in the wrong direction.

2011-09-02 Job Killer in Chief by Peter Schiff of Euro Pacific Capital

This morning many on Wall Street were stunned by the big fat zero put up by the August jobs report, the worst showing in 11 months. The data convinced many previously optimistic economists that the United States will slip back into recession. I believe that we have been in one giant recession all along that was only temporarily interrupted by trillions of useless and destructive deficit and stimulus spending. Unfortunately, the August numbers will increase the talk of government efforts to stimulate the economy.

2011-08-25 There They Go Again by Peter Schiff of Euro Pacific Capital

Picking up where they left off in 2008, the media is in the midst of a campaign to ignore and undermine the presidential candidacy of Ron Paul. Political pundits just do not know what to do with a candidate who fails to fit into the blue and red boxes that form the simple narrative of American politics. They are perturbed by the grass roots nature of the campaign, by the strange honesty and earnestness of the candidate and his supporters, and the odd mixture of conservative values and liberty-minded policies. And like most adolescents, they reject what they don't understand.

2011-08-12 The Fix is In by Peter Schiff of Euro Pacific Capital

Until interest rates are allowed to rise to appropriate levels, more resources will be misallocated, additional jobs will be lost, government spending and deficits will continue to grow, the dollar will keep falling, consumer prices will keep rising, and the government will keep blaming our problems on external factors beyond its control. As the old adage goes, 'insanity is doing the same thing over and over again and expecting different results.'

2011-08-01 Debt Deal is a Blank Check by Peter Schiff of Euro Pacific Capital

I expect that as soon as our creditors decide that they are no longer willing to lend to us at ultra-low rates of interest, we will refuse to repay what they have already lent. Besides default or major cuts to domestic spending, inflation provides the only other means for the government to deal with this intractable crisis. Once we go down that path, we risk high inflation turning into hyperinflation, which would decimate the remainder of our economy. So, as our leaders congratulate themselves for saving the nation, the reality is that they may have just sold it down the river.

2011-08-01 Debt Deal is a Blank Check by Peter Schiff of Euro Pacific Capital

I expect that as soon as our creditors decide that they are no longer willing to lend to us at ultra-low rates of interest, we will refuse to repay what they have already lent. Besides default or major cuts to domestic spending, inflation provides the only other means for the government to deal with this intractable crisis. Once we go down that path, we risk high inflation turning into hyperinflation, which would decimate the remainder of our economy. So, as our leaders congratulate themselves for saving the nation, the reality is that they may have just sold it down the river.

2011-07-15 It Ain't Money If I Can't Print It! by Peter Schiff of Euro Pacific Capital

I have been forecasting with near certainty that QE2 would not be the end of the Fed's money-printing program. My suspicions were confirmed in both the Fed minutes on Tuesday and Fed Chairman Ben Bernanke's semi-annual testimony to Congress yesterday. The former laid out the conditions upon which a new round of inflation would be launched, and the latter re-emphasized ? in case anyone still doubted ? that Mr. Bernanke has no regard for the principles of a sound currency.

2011-07-08 Don?t be Fooled by Political Posturing by Peter Schiff of Euro Pacific Capital

As attention focuses intently on the negotiations to raise the debt ceiling, House Republicans have made a great show of drawing a line in the fiscal sand. They claim that they will not vote for any deal that includes tax increases to narrow the budget deficit. But we all know how the game works in Washington. With the 2012 elections looming the Republican bluster is merely a bargaining chip that they will quickly toss into the pot when they sense a political victory. In fact there are signs that such a compromise is already underway.

2011-05-17 Raising the Roof on Debt by Peter Schiff of Euro Pacific Capital

Today the U.S. government officially borrowed beyond its $14.29 trillion statutory debt limit. And even though the Obama administration has assured us that accounting gimmickry will allow the government to borrow for another few months, the breach has given seeming urgency to Congressional negotiations to raise the debt ceiling. Republicans are making a great show of linking their ?yes? votes with promises for future budget cuts. But as we go through the process, many wonder why we have a debt ceiling at all when our government has never shown any inclination to respect its prior limits.

2011-05-13 The Institutional Gold Rush by Peter Schiff of Euro Pacific Capital

I've worked on Wall Street my entire life, and one thing I've learned is that large institutional investors, like pension funds and endowments, rarely veer from the herd. They manage too much of other people's money to stick their necks out alone-if their investments go bad, at least they can point to everyone else who fared just as poorly. For this reason, these funds are often lagging in their perception of crucial market changes. While many of us are buying precious metals to hedge against the collapse of the dollar, gold and silver have been taboo investments on Wall Street for years.

2011-04-18 Late to The Party?Once Again by Peter Schiff of Euro Pacific Capital

The only thing more ridiculous then S&P?s downgrade of U.S. sovereign debt was the market?s severe reaction to the announcement. Has S&P really added anything to the debate that wasn?t already widely known? In any event, S&P?s statement amounts to a wakeup call to anyone who has somehow managed to sleepwalk through the unprecedented debt explosion of the last few years. Given S&P?s concerns that Congress will fail to address its fiscal problems, on what basis can it conclude that the U.S. deserves its AAA credit rating? If S&P has genuine concerns, the AAA rating should be reduced now.

2011-03-21 The Treasury Auction Shell Game by Peter Schiff of Euro Pacific Capital

Very few people have the time to sift through the data released by the Treasury Department in the wake of its bond auctions. But the numbers do provide direct evidence of the country?s current financial condition that in many ways mirror a financial shell game that typifies our entire economy. Despite continued deterioration of America?s fiscal health, the Treasury is still attracting buyers of its debt. Market watchers take these successful auctions as proof that our current monetary and fiscal stimulus efforts are prudent. But who?s doing the buying, and what do they do with the bonds?

2011-03-18 Quake Response Puts Yen on the Line by Peter Schiff of Euro Pacific Capital

One of the immediate financial consequences of the catastrophic Japanese earthquake is that Japan needs to call on its huge cache of foreign exchange reserves to rebuild its shattered infrastructure. To pay for domestic projects, Japan will require yen ? not dollars, euros or Swiss francs. In order to maintain Japan?s position as a net-exporter of manufactured goods and net-buyer of US debt, the yen needs to stay down. So, the G-7 group of the world?s leading economies has intervened in the foreign exchange market by selling yen holdings, thereby pushing the currency down.

2011-03-07 A Little Understanding Goes a Long Way by Peter Schiff of Euro Pacific Capital

As the world confronts one of the most critical periods of economic upheaval that it has ever seen, it is clear that our most influential economic stewards have absolutely no idea what they are doing. But, like kids with a new chemistry set, they are nevertheless unwilling to let that stand in the way of their experimental fun. As they pour an ever-growing number of volatile ingredients into their test tubes, we can either hope that they magically stumble on the secret formula to cure the world?s ills, or more pragmatically, we can try to prepare for the explosion that is likely to result.

2011-02-10 The Two Faces of Ben Bernanke by Peter Schiff of Euro Pacific Capital

When the rest of the world no longer links their currencies to ours, the Fed will truly not have to worry about fueling global inflation. Instead, all of its inflation will burn through our banks accounts right here at home. And that blaze, so concentrated, will burn a lot hotter than the fires we see abroad.

2011-01-28 A Mockery of a Sham by Peter Schiff of Euro Pacific Capital

We do not need more regulation. Government interference has done enough damage already. We simply need to return to a sound monetary policy and get the government out of the mortgage and housing markets. Unfortunately, that?s not going to happen.

2011-01-19 China's Inflation Problem Looms Large by Peter Schiff of Euro Pacific Capital

The global economy has become so unbalanced that government ministers recognize that something has to give. To a very large extent the distortions are caused by China?s long-standing policy of pegging its currency, the yuan, to the U.S. dollar. But as China?s economy gains strength, and the American economy weakens, the cost and difficulty of maintaining the peg become ever greater, and eventually outweigh the benefits that the policy supposedly delivers to China. In the first few weeks of 2011 fresh evidence has arisen that shows just how difficult it has become for Beijing.

2011-01-13 Stuart Rothenberg and the arrogance of honesty by Peter Schiff of Euro Pacific Capital

In retrospect, it wasn't just me whom Mr. Rothenberg overlooked, but the entire Tea Party movement. I'm sure, back in 2009, he said many similarly dismissive things about the campaigns of Rand Paul and Marco Rubio. Fortunately, he was wrong. Hopefully, as more and more voters finally get sick of politics as usual, pundits like Mr. Rothenberg will have to find a more honest line of work. After the campaign was over, I had a job to go back to. As a creature of Washington, I doubt Mr. Rothenberg has similar choices.

2010-12-31 Forever Stamps Tell Us Much by Peter Schiff of Euro Pacific Capital

Sure, without a federal bailout there is a chance the Post Office will go under, and forever stamps will end up lining bird cages. However, given the track record of government bailouts and the clout of unionized postal workers, chances are very high that the Post Office will always get the bailouts it needs. As a result, forever stamps are a better bet than Treasury debt. They also have prettier pictures.

2010-12-17 For Whom the Bell Tolls by Peter Schiff of Euro Pacific Capital

What lies ahead is a new era of rising interest rates, soaring consumer prices, increasing unemployment, economic stagnation, and lower living standards. Instead of stimulating the economy, quantitative easing and deficit spending will prove to be a lethal combination. Bondholders beware, the bell tolls for thee.

2010-12-10 Washington Orders Another Free Lunch by Peter Schiff of Euro Pacific Capital

This week Washington displayed the kind of ?bipartisanship? that will bankrupt our country and wreck our currency. Coming at a time when both parties say they want to address our long-term fiscal imbalances, the compromise extension of the Bush era tax cuts should be a wake-up call to anyone who somehow expected the American leadership to ever have an ?adult conversation? about the country?s long term economic health.

2010-12-03 More Stimulus Means Fewer Jobs by Peter Schiff of Euro Pacific Capital

Unless politicians can be roused from their stupor, we will soon confront an imminent sovereign debt and currency crisis that will make the credit crisis of 2008 look like a happy interlude. Hopefully, when the first major shock strikes in the US, as is currently happening in Ireland and Portugal, it will finally provoke a 180-degree change of policy in Washington. Hopefully, it won't be too late to spare millions from a life of subsistence, or worse. These are my hopes, but my fear is that we are on the cusp on the largest economic downfall in modern history.

2010-11-24 The Duel over the Dual Mandate by Peter Schiff of Euro Pacific Capital

Given the opposing views of the potentially parsimonious new Congress and the continuously accommodative Federal Reserve, there is a movement afoot among Republicans to eliminate the Fed?s ?dual mandate.? Prior to 1977, the Fed only had one job: maintaining price stability. However, the stagflation of the 1970s inspired politicians to assign another task: promoting maximum employment. This ?mission creep? has transformed the Fed from a monetary watchdog into an instrument of social policy. We would do well to give them back their original job.

2010-11-09 There Was a Fed Chairman Who Swallowed a Fly by Peter Schiff of Euro Pacific Capital

In reality, quantitative easing will produce the exact opposite of its intended result. In the short-run, it may create the illusion of economic growth and temporarily add some service sector jobs, but once the QE ends, the growth and jobs will vanish. Then, the Fed will most likely try once again to douse the fire it started with another round of QE gasoline, creating an even larger and less manageable inferno.

2010-10-29 Keep Your Head Above Dollar by Peter Schiff of Euro Pacific Capital

The intent of QE2 is to lower interest rates to promote job growth and avoid the growing threat of deflation. The very idea that the economy is weak because interest rates are too high, however, is laughable. Deflation is the market's cure for asset bubbles that have recently burst, and any attempt to avert it will only weaken the economy further. What we need now is to make hard choices, not engage in more easing - to deleverage, not borrow more.

2010-10-19 Taxes Won't Cut It by Peter Schiff of Euro Pacific Capital

Congressional Republicans and Democrats are engaged in a heated debate over which Americans deserve not to have their taxes raised, with both claiming that some form of tax cut will stimulate the economy. The real impediment to economic growth is not taxes, however, but the government spending that makes high taxes necessary in the first place. Rather than trying to disguise another misguided round of stimulus in the cloak of a tax cut, we should deliver what the economy really needs - genuinely smaller government.

2010-10-08 The Hail Mary by Peter Schiff of Euro Pacific Capital

The Fed must raise interest rates aggressively, shrink its bloated balance sheet, and allow the real recession to finally run its course. It will be much more painful now than it would have been in 2008, but at least this time the pain will end and real recovery will take hold. By forcing the federal and state governments to slash spending, sound monetary policy will allow market forces to rebuild a solid foundation upon which future prosperity may be built.

2010-10-02 Schiff Responds to Dudley, Fed by Peter Schiff of Euro Pacific Capital

NY Fed President William Dudley's outrageous statements Friday closely conform to recent pronouncements from other Fed officials and confirm that a massive round of dollar devaluation is poised to begin. Seemingly overnight, the Fed appears to have altered its mandate, ditching its former goal of "price stability" in favor of "moderate price inflation." While no one is under the illusion that the Fed has kept prices stable over the last century, it used to be that the governors would at least pretend to fight inflation. Low inflation used to be the aim, now it's the enemy.

2010-10-01 Race to the Bottom by Peter Schiff of Euro Pacific Capital

At one time, a strong currency was viewed as a reward for the reliability, competitiveness and growth of a national economy. Now governments look to take market share from competitors by lowering the cost of their exports through a beggar-thyself policy of habitual currency debasement. Although such a policy may benefit those who buy the products, it is a burden to the country's own workers, who have to get by on subsistence wages. More successful economies will compete on quality and innovation, rather than price alone.

2010-08-27 Flying Blind by Peter Schiff of Euro Pacific Capital

Today's weak GDP numbers have finally caused the mass of economists to revise downward their formerly optimistic recovery forecasts, with many finally entertaining the possibility of a "double dip" recession. It should be obvious by now that these economists only have the capacity to describe where the economy is moving in the short-term...they have no ability to explain the reasons behind the macro trends or make predictions that go beyond the next data release.

2010-08-24 Carts and Horses by Peter Schiff of Euro Pacific Capital

In a CNBC debate last week, former Labor Secretary Robert Reich presented a set of contradictory beliefs that unfortunately reflect the conventional wisdom of modern economists. In a discussion with Wall Street Journal columnist Stephen Moore, Reich correctly and comprehensively listed the reasons why American consumers could spend so lavishly before the crash of 2008 and why they can no longer keep up the pace.

2010-08-18 Dr. Keynes Killed the President by Peter Schiff of Euro Pacific Capital

Modern-day Keynesians seek to significantly increase debt levels in an effort to boost aggregate demand. In their view, only once recovery takes hold due to government spending, money printing, and borrowing does a discussion of deficits become appropriate. The U.S. has persisted under this theory for close to a century. As a consequence, Washington is now entirely dependent on the reserve currency status of the dollar and the continued hibernation of bond vigilantes. It's almost as if the federal government is daring its foreign creditors to pull the plug.

2010-08-13 No Exit - Stage Left or Right by Peter Schiff of Euro Pacific Capital

The coming doses of quantitative easing from the Federal Reserve will finally spark adverse reactions, first in the dollar and later in the bond market. When a falling dollar forces consumer prices and long-term interest rates to rise, the Fed's actions will be rendered impotent. The Open Markets Committee will have to make a horrific choice: fight inflation by tightening policy into a weakening economy, or fight recession by allowing inflation to burn out of control. It's obvious that they will choose inflation, all the while pretending that it doesn't exist.

2010-08-10 Monetary Cards on the Table by Peter Schiff of Euro Pacific Capital

The economic world seemed to be drifting into two opposing camps: the Washington-based 'stimulators,' who insist that more government debt is the best means to end the financial crisis, and the Berlin- and London-based 'austerians,' who argue that debt is the crisis itself. If recent economic data and currency movements can be considered votes of confidence, then the stimulators should be sweating.

2010-07-20 Why Not Another World War? by Peter Schiff of Euro Pacific Capital

There is overwhelming agreement among economists that the Second World War was responsible for decisively ending the Great Depression. The truth is, however, that America cannot spend its way out of the current crisis, no matter how great a spectacle it creates. Even if the government spent on infrastructure rather than war, it would still have no means to fund it, and there would still be no guarantee that the economy would grow as a result. Instead, what the country needs is more savings, more free enterprise, more production and a return of American competitiveness in the global economy.

2010-07-02 The New Ideological Divide by Peter Schiff of Euro Pacific Capital

Despite the apparent deficit-cutting solidarity that emerged from this weekend?s G-20 meeting in Toronto, it is clear that the great powers of the industrialized world have not been this philosophically estranged since the end of the Cold War. Ironically, in this new contest, the former belligerents have switched sides ? the capitalists are now the socialists, and vice versa.

2010-06-08 The Phantom Recovery by Peter Schiff of Euro Pacific Capital

Once the euro finally stabilizes against the dollar, commodity prices should resume their rise, especially oil. Normally, the uncertainty created by the disastrous oil spill in the gulf and the resulting moratorium on deep-water drilling would have sent crude oil prices skyrocketing. However, fears of a global slowdown, euro weakness, and general risk aversion have held prices in check. As Asia continues its growth and Europe regains its footing, there should be a delayed surge in oil prices, which will put yet another obstacle on the road to US recovery.

2010-05-07 Is Sovereign Debt Crisis Contained to Subprime? by Peter Schiff of Euro Pacific Capital

When mortgage-backed securities started to go bad, it wasn't as if the problems emanated in subprime and subsequently 'contaminated' the rest of the market. All borrowers were infected with the same disease, but the symptoms merely expressed themselves sooner in subprime. The same is true on a national level, whereby Greece plays the part of the subprime borrower. Even though the U.S. is considered to be the highest order of 'prime' borrower, our debt-to-GDP levels are at crisis levels compared to historic precedents, and are not that much lower than those of Portugal or Spain.

2010-04-23 To Peg or Not to Peg? by Peter Schiff of Euro Pacific Capital

Just as it is always better to be rich than to be poor, it is always better to have a strong currency than a weak one. The effect of current Chinese currency policy is to make the U.S. dollar more valuable and the yuan less valuable. Whenever the Chinese government decides to end the peg, the Chinese economy will benefit as a result. While as citizens we can hope that U.S. leaders respond with the right policies to enable our economy to regain its former glory, as investors we should position ourselves to benefit from the more certain outcome.

2010-04-15 Europe Fiddles, Gold Sizzles by Peter Schiff of Euro Pacific Capital

Much to the relief of jittery global markets, Greece's chronic debt problem has been papered over in a burst of European solidarity and apparent magnanimity. This act of mercy, however, may cost Germany its key position of financial dominance over the European Central Bank, which, in turn, could be detrimental to the long-term health of the euro. And so even though the euro stiffened once the immediate default fears abated, the price of gold was pushed to a new all-time high in euro terms, and a five-month high in dollar terms.

2010-04-09 Krugman Strikes Again by Peter Schiff of Euro Pacific Capital

Like most of his academic peers, New York Times columnist Paul Krugman believes that falling prices are the economic equivalent of kryptonite, guaranteed to bring low even the mightiest economy. He is wrong. We need deflation. As a result of a phony boom in assets, prices levels are still too high relative to the earning power and productivity of American workers. Falling prices will cushion the blow of recession by allowing people to buy more with their paychecks and savings, and will eventually encourage people to spend when prices fall low enough.

2010-04-01 The Fed's Last Hurrah by Peter Schiff of Euro Pacific Capital

When the tech bubble burst, the Fed inflated a larger one in real estate. Now that the real estate bubble has burst, the Fed is inflating the biggest bubble of all - a bubble in government. The government bubble will cripple the economy and deliver widespread misery to the majority of Americans. As government grows, it deprives the private sector of the resources it needs to survive and grow. In the end, when runaway inflation and skyrocketing interest rates burst the government bubble, there will be no more bubbles to replace it ? just one hell of a hangover.

2010-03-19 Paul Krugman Versus Reality by Peter Schiff of Euro Pacific Capital

Paul Krugman is right about one thing - China's currency peg is destabilizing the world economy and it must end. If China reversed its role in the U.S. Treasury market, however, China would emerge as the long-term winner. The value of the Chinese currency would rise sharply, causing prices to tumble in China. Americans, meanwhile, would lose the ability to buy cheap goods overseas. The U.S. must formulate a plan that weans the country off its dependence on Chinese Treasury bond purchases without forcing change too quickly.

2010-03-13 Dollar Bulls Beware by Peter Schiff of Euro Pacific Capital

The market is perfectly positioned for a massive dollar sell-off. The fundamentals for the dollar in 2010 are so much worse than they were in 2008 that it is hard to imagine that people will keep buying them once political and monetary stability returns to Europe. Indeed, the euro has recently stabilized. Once the dollar breaks decisively below last year's lows, many traders who jumped ship in the recent rally will look to reestablish their positions, and this will bring attention back to the financial disaster unfolding in the U.S.

2010-03-01 Don't Bet on a Recovery by Peter Schiff of Euro Pacific Capital

Consumer spending increased 0.5 percent in January, but contrary to popular belief, this is not evidence of a bona fide economic recovery. Incomes and credit are still down, while the savings rate fell to its lowest level since 2008. Our government's plan for economic recovery is to print a bunch of money and give it to consumers to spend. This is not a plan for recovery but a recipe for disaster.

2010-02-13 Fear Takes the Wheel by Peter Schiff of Euro Pacific Capital

Peter Schiff of Euro Pacific Capital says in his economic commentary that the recent strength of the stock market may be more attributable to fears of inflation than an improving economy. Growing U.S. debt levels threaten to swamp to dollar, and are leading investors away from dollars and treasury bonds.

2010-01-30 The Precarious State of Our Union by Peter Schiff of Euro Pacific Capital

?In this week's much anticipated State of the Union address, President Obama again demonstrated his poor understanding of the fundamental problems that confront our nation. By following the advice of the same people who helped guide our economy to the precipice of total collapse, Obama now threatens to push it over the edge.? Schiff criticizes Obama?s policies as being anti-free market, specifically excessive regulation and federal spending.

2010-01-23 Congress Sacks Samoan Economy by Peter Schiff of Euro Pacific Capital

Schiff argues that the increase in the US minimum wage caused the closing of the tuna packing industry in American Samoa. 'This just serves to highlight, once again, how inflexible central plannin

2010-01-16 Poland's Economy is No Joke by Peter Schiff of Euro Pacific Capital

2010-01-11 It's Not Our Fault by Peter Schiff of Euro Pacific Capital

It seems that the primary qualification needed by any chairman of the Federal Reserve is the ability to never admit error, no matter how damning the evidence. During his tenure on the job, Alan Gree


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