Monday, September 16, 2013

Peter Schiff : Gold is predominantly a hedge against Inflation

Peter Schiff: Gold is predominantly a hedge against Inflation, or against debasement of fiat currencies. You have a choice. If you don’t want to buy an asset like stocks or real estate, if you just want to store your purchasing power so that you can buy assets in the future or consumer goods, are you going to hold dollars; are you going to hold euros; Swiss francs; or are you going to hold gold?
I think more and more people will choose gold when they look at the supply of these fiat currencies that are hitting the market or are going to hit the market. And they’ll look at the supply of gold, which is growing very slowly—a lot of the miners are having a lot of problems; production costs are rising. So you’re not getting a lot of new gold being mined and demand is growing all around the world. I think it’s a better store of value.
Meanwhile, the yield on gold is pretty much the same as on dollars or euros or yen or Swiss francs—the yield is zero. It used to be that if you owned gold, you were missing out on 5, 6, 7 percent. But you’re not missing out on anything now. There’s no opportunity cost for owning gold because you don’t get interest owning another currency. So you might as well own real money, as opposed to these fiat currencies. That’s going to drive demand. - in IndexUniverse

Peter Schiff is a well-known commentator appearing regularly on CNBC, TechTicker and FoxNews. He is often referred to as "Doctor Doom" because of his bearish outlook on the economy and the U.S. Dollar in particular. Peter was one of the first from within the professional investment field to call the housing market a bubble. Peter has written a book called "Crash Proof" and a follow-on called "The Little Book of Bull Moves in Bear Markets". He is the President of EuroPacific Capital, which is a brokerage specializing in finding dividend-yielding, value-based foreign stocks.

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