Saturday, February 14, 2009
Peter Schiff Tells China How to Take Over the World
Seriously, can you imagine if the Chinese implemented Schiff's scheme (HT2 Tim Swanson)? (You don't need to watch the whole clip; you'll hear it in the beginning.) The Saudis couldn't do it realistically, because they can't repel a US invasion if push comes to shove. But nobody's invading China in the next ten years.
Comments:
I don't think China could get away with it either. Any serious disruptions, and their shares of these mining companies would not be recognized by the rest of the world.
Now, if they began buying gold itself, and putting that in a vault somewhere in China, then that would be a different matter.
Now, if they began buying gold itself, and putting that in a vault somewhere in China, then that would be a different matter.
# posted by 
: February 14, 2009 at 10:27 PM
: February 14, 2009 at 10:27 PM
To people who think that patriotism means assisting the government in ripping off every productive person in the world this sounds like traitorous speech.
Yancey, if that happened it would bring the farce out into the open, wouldn't it? They'd just play the "evil foreigner" card, like Rush did last week on his show.
Jim O'Connor
The Colony, Texas
Yancey, if that happened it would bring the farce out into the open, wouldn't it? They'd just play the "evil foreigner" card, like Rush did last week on his show.
Jim O'Connor
The Colony, Texas
# posted by : February 15, 2009 at 9:45 AM
: February 15, 2009 at 9:45 AM
Yancey,
Isn't that what he's saying? Schiff wants them to buy the mines, and then have all gold production sent to Chinese vaults.
Why would that be more reckless than leaving the mines in foreign hands, and then buying their product? Once others got spooked, it would be a much more obviously hostile move to violate Chinese ownership of mines, rather than simply refusing to sell them more gold.
Isn't that what he's saying? Schiff wants them to buy the mines, and then have all gold production sent to Chinese vaults.
Why would that be more reckless than leaving the mines in foreign hands, and then buying their product? Once others got spooked, it would be a much more obviously hostile move to violate Chinese ownership of mines, rather than simply refusing to sell them more gold.
OK
So the Chinese buy all the production, say, for the next 4 years, what's that 10,000 tonnes against a supply of all the gold ever mined (according to world gold council) of 165,000 tonnes.
So four years worth of massive buying wouldn't net them 10% of world gold supply. Good luck with that.
And as their currency soars, exports collapse and China is exposed as the poor country it is, they are then forced to sell the gold back just before the masses overthrow the govt for buying that gold and not food.
So the Chinese buy all the production, say, for the next 4 years, what's that 10,000 tonnes against a supply of all the gold ever mined (according to world gold council) of 165,000 tonnes.
So four years worth of massive buying wouldn't net them 10% of world gold supply. Good luck with that.
And as their currency soars, exports collapse and China is exposed as the poor country it is, they are then forced to sell the gold back just before the masses overthrow the govt for buying that gold and not food.
# posted by : February 15, 2009 at 9:58 PM
: February 15, 2009 at 9:58 PM
Knapp,
I am not following you. I can't tell if you're attacking Schiff's strategy of gold hoarding in general, or me for saying buying mines makes more sense than buying gold.
And with the soaring currency, they could afford to import more food. Schiff isn't saying, "Stop buying food and instead buy gold."
Rather, he's saying, "Stop buying US Treasurys and instead buy gold."
I am not following you. I can't tell if you're attacking Schiff's strategy of gold hoarding in general, or me for saying buying mines makes more sense than buying gold.
And with the soaring currency, they could afford to import more food. Schiff isn't saying, "Stop buying food and instead buy gold."
Rather, he's saying, "Stop buying US Treasurys and instead buy gold."
The case for gold is that it maintains its purchasing power over time.
And one reason it does so is because the stock of gold is so big relative to annual production.
So I don't think Schiff's gold hoarding theory holds up. The pool of gold is just too large for the Chinese to have more than a temporary effect on prices (see Hunt Brothers and Silver).
Gold could sky to $5000 even if the Saudis and Chinese SELL all of their gold, and it could sink like a stone even if they bought NEM, ABX, GG and AEM. All depends on what happens around gold: the dollar, euro, yen, stocks, bonds, etc...
Schiff can't have it both ways. If "Gold is Money" its because annual production doesn't materially add to the pool of gold and thus doesn't impact its price, so China "buying all the production" shouldn't matter.
And one reason it does so is because the stock of gold is so big relative to annual production.
So I don't think Schiff's gold hoarding theory holds up. The pool of gold is just too large for the Chinese to have more than a temporary effect on prices (see Hunt Brothers and Silver).
Gold could sky to $5000 even if the Saudis and Chinese SELL all of their gold, and it could sink like a stone even if they bought NEM, ABX, GG and AEM. All depends on what happens around gold: the dollar, euro, yen, stocks, bonds, etc...
Schiff can't have it both ways. If "Gold is Money" its because annual production doesn't materially add to the pool of gold and thus doesn't impact its price, so China "buying all the production" shouldn't matter.
# posted by : February 16, 2009 at 12:08 AM
: February 16, 2009 at 12:08 AM
The fly in the ointment is that foreign central banks, as well as the Fed, are sitting on massive gold supplies. What's to stop the US from opening Fort Knox and dumping gold on the market? That would drive the price down. Also, anyone who holds gold would want to sell at such a high price. That would also drive the price down.
-Victor
-Victor
# posted by : February 16, 2009 at 9:33 PM
: February 16, 2009 at 9:33 PM
Victor,
A lot of gold bugs speculate that those reserves are phony. They will say that the last audit of Fort Knox occurred in 19__ or whatever.
Anyway, the Chinese don't care what happens to the price of gold in the short-term. In fact, that would be GREAT if the U.S. and other governments dumped their own holdings. The Chinese could build up a reserve backing their own currency, that much more cheaply.
I.e. the point of this isn't to speculate on gold prices, but rather to acquire a huge stockpile of gold with which to back the yuan.
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A lot of gold bugs speculate that those reserves are phony. They will say that the last audit of Fort Knox occurred in 19__ or whatever.
Anyway, the Chinese don't care what happens to the price of gold in the short-term. In fact, that would be GREAT if the U.S. and other governments dumped their own holdings. The Chinese could build up a reserve backing their own currency, that much more cheaply.
I.e. the point of this isn't to speculate on gold prices, but rather to acquire a huge stockpile of gold with which to back the yuan.
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