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Peter Schiff Buy Gold it could go to $10 000/oz CNBC 05-11-10



May 13, 2010 – Comments (19)

19 Comments – Post Your Own

#1) On May 13, 2010 at 2:42 PM, chk999 (99.96) wrote:

You are kinda scaring me. This is the sort of talk you get right about the top of a bubble.

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#2) On May 13, 2010 at 3:08 PM, YodaBuffett (< 20) wrote:

Leaning towards Answer B or A.

Fairly valued or slightly over valued based on market sentiment. 

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#3) On May 13, 2010 at 3:12 PM, Griffin416 (99.97) wrote:

Most people on the street or who watch do not understand Shiff. Gold has absolutely not topped. Most people on TV are traders and a week is a long time. When Schiff is talking, he is talking about years. Gold has been going up about 30% a year for 5 or 6 years. If that continues, in 5 years it will be $5000. If gold hits $5,000, Schiff is then saying the Dow will be frightful and drop down to 5,000.

Just adding some clarity

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#4) On May 13, 2010 at 3:19 PM, ozzfan1317 (73.31) wrote:

Hes such an ignorant douche I just wasted 6 min of my Gold look bubblcious just like china

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#5) On May 13, 2010 at 4:02 PM, Griffin416 (99.97) wrote:

Yes, ozzfan1317, an ignorant douche who has been right for 3 or 4 years straight on housing declines and gold moving up.

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#6) On May 13, 2010 at 4:47 PM, JakilaTheHun (99.92) wrote:

This is why Peter Schiff is a total fraud.  He's a salesman and politician; not an investor and certainly not an economist. 

10 years from now, this guy will universally be regarded as a joke (if he's remembered at all).  

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#7) On May 13, 2010 at 4:49 PM, JakilaTheHun (99.92) wrote:

P.S.  The best bet on gold is Seabridge (SA) --- which most goldbugs inexplicably hate.  But if one truly believes that gold is going to $3000/oz, then Seabridge is probably worth something like 10X - 20X what it's worth now.  Hell, if gold goes to $10000/oz, mining in the most remote corner of the Northwest Territories suddenly becomes massively profitable, so bet on the Northwest Territories.

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#8) On May 13, 2010 at 4:54 PM, portefeuille (98.91) wrote:

#7 which is more or less why SA is the gold stock in my list of current favourites. still a stupid shiny metal and more likely to go to $100/oz than $10000/oz, hehe ...

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#9) On May 13, 2010 at 7:54 PM, kdakota630 (28.79) wrote:


I believe this is the second time now I've seen you call Peter Schiff a politician.  Frankly, I don't understand your criticism.

While he is running for a seat in the U.S. Senate which does technically currently make him a politician, it's only for roughly the last 6 months.  He's been on finanical shows making predictions since at least 2003.  Are you suggesting that the entire time he's been angling for the opportunity to run for political office since then?

He's also been recommending buying gold since 2003.  Seems like a pretty good call to me, at least so far.  Are you suggesting that his being a politician that this was all part of his master plan?  To buy gold at a low to give him credibility to run for office, and then while in power he's going to do something to try to influence the price of gold to his advantage?

Or are you suggesting that like most politicians he'll say what needs to be said to get elected, and that somehow telling people that gold is a good investment and that the U.S. dollar (and economy) is weak is a means to do that?  Is he being disingenuous in his being bullish on gold?

And even if one were to accept the fact that he is above anything else a politician, how exactly does that discredit his prediction regarding gold, or other predictions for that matter?  What does it say about others with a similar mindset regarding gold and the U.S. economy who aren't currently running for political office, like Marc Faber or Jim Rogers?  What is your criticism of them?

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#10) On May 13, 2010 at 8:14 PM, BlackshearFund (< 20) wrote:

I don't dislike shiff, but I think his gold-mongering is a bit far out.

Some of his other opinions are agreeable.

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#11) On May 13, 2010 at 10:42 PM, JakilaTheHun (99.92) wrote:


Schiff has been a politician for awhile --- at least since 2007 or 2008.  I recognized that well before he started running for office, because he always spoke using populist rhetoric rather than reason.  Even in the video you post, he begins to cut off his "opponents", rather than actually hear what they have to say --- politicians don't care what others have to say, because their message is immune to reason.  

When people can't counter the arguments of their opponents and must rely on pre-hearsed dramatic rhetoric, then there's an inherent weakness in those arguments and politicians and demagogues (which are often one in the same) are the creatures most likely to use this method.  

His interviews in 2005 and 2006 don't seem quite as ridiculous and he seemed less prone to exaggeration, so maybe he *became* a politician somewhere between then and 2008.  I do think his analysis of the credit problems were more based on reason, but his argument for "gold to $10000/oz" seems to be based on nothing substantive --- it's a political call to get the ideological supporters of gold in his camp.  Nothing more, nothing less.  He's smart enough to know that gold isn't going to $10000/oz --- and that's why I don't like him. 


Gold was an ideologically popular choice in Libertarian circles by around 2003.  Of course, fundamentally speaking, gold was undervalued at that point in time.  Gold miners were barely profitable through most of the early to mid '00s; even in 2008 many were close to break-even.   And their biggest production cost --- oil --- was skyrocketing due to increasing demand from China and India, coupled with scarcity of oil. 

At this point, most gold miners are profitable.  And they'd be absurdly profitable at $10000/oz.  Apple would be envious of their profit margins at that price.  The only way gold goes to $10000/oz is if oil goes to something like $1000/barrel. 


I don't trust politicians or demagogues and I wouldn't listen to their investment advice under any circumstances.  Schiff is a "politician"; Faber is more of an attention-whore (I'd ignore him, too; he reminds me more of Alstry).  

Rogers is just an exaggerator.  Six months ago, he was saying Dow 10000 and that 'he wouldn't short anything with coming hyperinflation'; now he's saying to pull out of the market and short things.  Go figure.  Yet, he's a pretty good investor --- he just exaggerates everything.  I guess hypberbole is his style.

Schiff has a dismal track record.  Even when he's been "right", he has underperformed the market.  The guy is a total fraud. 

Of the Libertarian political bunch, I have much more respect for Ron Paul and Gary Johnson.  I don't trust anything about Peter Schiff; the guy is a liar and a demogogue.

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#12) On May 14, 2010 at 10:24 AM, russiangambit (28.67) wrote:

Schiff has a smart ass air about him, which most people can't stand. I think this why Jakila doesn't trust him. However, most conartists and politicians look like earnest likable guys with an honest face. I'd be rather wary of those.

Myself, I am immune to the superiority attitutde, having had to deal with it through most of my years at the university. Schiff is very sharp. Also, you have to acknowledge that he didn't waver in the face of all the critisizm in 2005-2007 and even now. We need more people like that, not less.

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#13) On May 14, 2010 at 10:48 AM, ryanalexanderson (< 20) wrote:

I'm a Peter Schiff fan - his crash proof book was an enjoyable read that really nailed it:

Low Interest Rates > Asset Bubble > Implosion > Economic Pain > Currency Crisis > Inflation

Soundly reasoned, and we're currently at the last ">" mark. I'm not "trusting" him, but his logic seems reasonably robust. And, in the book form, there are no cringe-worthy interruptions. He is pretty damn rude in person. 

I like Eric Sprott, too - same thesis as Schiff, more or less, but slightly more dispassionate presentation. And his PHYS seems to be doing well...

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#14) On May 14, 2010 at 10:53 AM, Superdrol (32.37) wrote:

Peter Schiff may be a bit overboard on his estimates for gold going to $10,000.  Peter Schiff has a tendency to be excessively bearish and I wish he'd use a bit more prudent judgement in his analysis.  I do like him as well, and I do remember him back in 2005-2006 when a lot of people were criticizing him.  I don't see Peter Schiff as arrogant or egotistical, where do you get that from ?

He does have a tendency to keep rambling though, they always have to cut him short.

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#15) On May 14, 2010 at 11:09 AM, kdakota630 (28.79) wrote:

I never saw him as arrogant or egotistical at all.  I would call him confident more than anything.

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#16) On May 14, 2010 at 11:48 AM, russiangambit (28.67) wrote:

> I never saw him as arrogant or egotistical at all. 

I didn't say he is. I can't explain it, or may be I just don't know the right english word, but I know when I see it because I know too many people like that. They are very smart and they know it and they are not afraid to show it. Larry Summers would be another example. They are not humble, lets put it that way.  Many many people cannot stand it even though there is nothing wrong with being confident in your ability.

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#17) On May 14, 2010 at 2:27 PM, AbstractMotion (< 20) wrote:

David Rosenberg had some great arguments about prolonged deflation going forward as well.  I wasn't very confident about the treasury market going into 2010, but a lot of the data is pointing to a continuing flight to safety despite abysmal yield and inflationary policies.  Sovereign debt concerns abroad and weakness in the European and Asian markets are going to have a net positive effect on the dollar, it certainly has on this recent dip.   The Fed has wound down a lot of it's QE policies successfully as well, as long as they don't start unwinding the other 2 trillion in treasuries and agency bonds interest rates will probably continue to stay low.  


Jobs and wage inflation aren't exactly roaring back at this point either, so unless the banks really start lending again I don't know where the money to push gold to 10k/oz is going to come from.  I think we're still in for some pain down the road, but this is definitely the kind of environment that could push that date back some.  Despite the looming questions about future of deep sea drilling oil is down significantly today and has been for the last few days.  There's just a -ton- of deflationary pressure out there as well as a huge demand for 'safe' assets.  This currently benefits gold, but if there isn't prolonged fears of inflation or the perception that the floor might fall out again it will quickly it could very easily fall back down.  Municipal bonds are meeting with high demand and falling rates, especially in the short to mid term, which should help stave off concerns about their ability to service or roll over debt.  


Very little is certain at this point, but I'm curious to know where such a massive influx of money is going to come from over the next year.


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#18) On May 15, 2010 at 4:35 PM, hybridinvestor (74.66) wrote:

#3  The "it's been going up 30%+ per year and so will hit X by Y" sounds eerily familiar to the housing bubble.  People at some point make the often incorrect assumption that strong trends will continue.  But practically speaking, if the housing trends as an example continued within another year or two only the top wage earners in America (say top 10%) could actually even afford to buy homes.  Well, that is not what played out for reasons grounded in simple economics.

We should ask ourselves the same question with gold, candy bars, whatever.  If the price keeps going up that much at what point does it just simply become unaffordable to the point of demand destruction.

I will continue to look for investments at the opposite end of the spectrum.  Ones that have become SOOOOOO darn cheap folks are acting like it is not useful.  You natural gas.  I think that is a safer, more profitable longer term investment for anyone looking to buy at good prices right now. 

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#19) On May 15, 2010 at 4:37 PM, hybridinvestor (74.66) wrote:

p.s.  Gold is a good story right now.  We shall see for those buying in now at these elevated prices if it actually turns out to be a good investment.  I think there are plenty of other cheaper options out there including some large tech companies like MSFT, CSCO, etc. that are sitting on enough cash that a couple of them or so could literally bail Greece out.

Funny I don't see these companies hoarding gold....a relic of the they would rather continue to help invent the future.


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