Now that gold has pulled sharply off it's highs, while remaining strong for the year, "buying opportunity versus bubble" is pretty much the only debate taking place in the precious metal space these days. The conversation is all gold, all the time, which means it was time for Breakout to welcome back our old friend, Peter Schiff of Euro Pacific Capital.
A longtime gold bull and critic of the Federal Reserve, Schiff says the recent gold sell-off has merely taken "some of the speculative froth off the market," and has not sounded the death-knell for the gold bull. That means the cocktail party crowd that was piling into gold earlier this year has departed, leaving the die hard gold bugs to pick up value. This is in sharp contrast to silver, Schiff notes, which is under pressure due to its industrial component. "Central bankers aren't buying silver; they're buying gold", he says.
Gold acting as a save harbor currency being accumulated by institutions worldwide has been the story for years. The other side of it, at least for U.S. fans of the barbaric metal, has been the complete and utter abuse of the dollar by the Federal Reserve under Bernanke and his predecessor. Schiff says gold's dip was in part driven by "disappointment" that Bernanke didn't unleash QE3 on September 21. The disappointment may have been real, but will prove fleeting, he says.
Schiff concludes by saying the Fed and government officials are going to "keep destroying our economy, destroying jobs, and printing money and that is very bad for the dollar and good for gold." He believes QE3 is basically in the works, and it's unleashing will eventually push gold to new highs, and the semi-precious silver will follow along for the ride.
That's the bullish case for gold and silver. Have something to add or care to take the other side? We welcome your comments in the space below.
- Peter Schiff