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Peter Schiff: U.S. Rally Is Doomed, Gold Will Hit $5000
Posted Sep 24, 2009 09:25am EDT by Aaron Task in Investing, NewsmakersThe worst is not over, according to Euro Pacific Capital's Schiff, who predicts the Dow will fall another 90% from current levels when measured against gold.
A longtime dollar bear and gold bull, he foresees gold hitting $5000 per ounce "in the next couple of years," and predicts the Dow and gold will trade on a one-to-one ratio vs. the current level of around 9.7-to-1.
Schiff believes gold is currently "climbing a wall of worry" but will eventually become as hot as tech stocks in 1999 and start moving up $100 per day.
Schiff's forecast is based on his view the U.S. dollar is going to collapse under the weight of our massive deficit and reckless policies of the Obama administration, which he compares to the massive spending programs of the 1960s, which paved the way for gold's ascent in the 1970s. "Obama is making the same mistakes as Bush, but he's doing them on a grander scale," says Schiff, who is running for U.S. Senate in Connecticut as a Republican.
In addition to gold, Schiff remains bullish on Asia, most notably China. His firm recently launched the Euro Pacific Halter China fund, and Schiff believes "there's a lot of value" in China and thinks the renminbi could "double or triple" when it's depegged from the dollar.
That will make Chinese assets more valuable when measured in dollars, he says.
Schiff presciently called the bursting of the debt bubble and subsequent rout in financial assets, and his current forecasts may very well come to fruition. But Schiff's confidence that the rest of the world (notably Asia) will prosper as the dollar loses its reserve status and America's economy collapses seems dubious, at best.
Then again, Schiff is nothing if not (supremely) confident.
377 Comments
Rey - Thursday September 24, 2009 09:35AM EDT
Ohhhh // Here we go again Hey America we only lost another 530,000 Jobs /// Jesus that's 21,000 less than we expected // Holy Cow this country is recovering Whooopeee...... This country is so sick It's not funny ..... WAKE UP AMERICA
charles - Thursday September 24, 2009 09:36AM EDT
I think silver is the ticket, along with the US stock market, for the next few years. Obama has lost it and he can,t find it. OBlaming the previous admin is over.
taopraxis - Thursday September 24, 2009 09:38AM EDT
Gold is going higher but any fixed target price is a fantasy. As for the so-called foreign markets, there are none. There is only one market: The global Earth market.
Yahoo! Finance User - Thursday September 24, 2009 09:39AM EDT
Japan is in the throes of a decade plus-long depression. China's economic fortunes were tied to the US consumer. With the US consumer unable to absorb further debt, China will struggle as well. They recognize the struggle which is why their government has recently introduced its own "stimulus" plans. What China has are oceans of foreign reserves and limited debt which will help them in the economic crisis, but they are not out of the woods. The following story illustrates the state of world trade presently.... http://www.examiner.com/examiner/x-18442-St-Louis-Investing-Examiner~y2009m9d23-Economic-Recovery Also check out www.TheSentinel.biz
upndown - Thursday September 24, 2009 09:40AM EDT
let's see, hawking gold and china, and running for the senate....this guy has conflicts of interest all over the place......zero credibility
j - Thursday September 24, 2009 09:40AM EDT
... but you've got to remember that even though Schiff predicted the meltdown early in 08, his investments were worse than if you would have just bought the SPY.
marx - Thursday September 24, 2009 09:40AM EDT
Reagon was the first of the big spenders by increasing our national debt from 800 Billion to 2.7 Trillion,so not sure why Schiff would reference him.
Yahoo! Finance User - Thursday September 24, 2009 09:41AM EDT
Who is this clown and why did TechTicker feel like this was even worth publishing?! Please stop wasting my time Yahoo.
Steve - Thursday September 24, 2009 09:43AM EDT
Obama does the same economic policies as Bush but does them 4X bigger. Yet the people who hated Bush love Obama for doing much much more of the same. Same old scam people. Need to wake up and realize that instead of things getting better (in reality) we just got a new boss (same as the old boss) sucking up way more of the tax dollars from the productive sector of the economy. But they would rather just blame it all on the rich! Same old tired rhetoric. Just keeps getting worse.
Yahoo! Finance User - Thursday September 24, 2009 09:45AM EDT
don't discount anything Peter says, he's one of the few economists that actually understands economics ...
upndown - Thursday September 24, 2009 09:46AM EDT
Let's see, hawking old and china, and running for US Senate...this guy had COI's everywhere.....zero credibility
Anthony - Thursday September 24, 2009 09:46AM EDT
Go Schiff!!! You're the man! Tell it like it is, just the other day i got a five dollar bill from McDonalds, someone wrote all over it buy gold, silver and guns. The sheep are starting to wake up. 5,000 gold?!?! F*#@ YEAH!!!!!
Whit Chambers - Thursday September 24, 2009 09:46AM EDT
Only time will tell. You can't defend yourself with gold though.
RobertK - Thursday September 24, 2009 09:46AM EDT
Positive GDP is worse than negative GDP, right? Oh, I guess not. Perhaps Schiff is just a moron.
Jose S - Thursday September 24, 2009 09:47AM EDT
mmazak, gold is money. I'd rather own gold than paper money, which is nothing more than fiat currency. Go ahead and buy in the US stocks and see how much your money sinks.
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Mike - Thursday September 24, 2009 09:31AM EDT
What a freakin' joke... stop pimping gold!