David Morgan - Peter Schiff
In his latest installment, the Silver Investor follows the Austrian Economic Model, showing how an increase in money supply is the only cause of inflation. He answers the question: given the Feds profligacy, where is the runaway inflation? The reason why hyperinflation is not yet apparent to the masses is that most of the dollars are tied up in bank balance sheets and floating around the globe. Once they are liberated and repatriated the velocity of money could explode, resulting in sudden hyperinflation on an immense scale. In addition, amid the wake of the 2008 credit crisis, officials say that the economy has recovered. However, David Morgan thinks that our financial institutions failed to learn any lessons, continuing to apply excessive leverage via derivatives. Put paper silver securities in abeyance, which are merely promises that will evaporate and disappoint when the end game unfolds - instead consider bullion and shares, which have no liens and retain their value in difficult environments. It's just a matter of time before the currency collapse comes to pass and demand for gold and silver reaches infinity. At that point, Bob's your uncle for precious metals investors. David outlines his intrinsic value calculation for silver - approximately $100 per ounce.The head of Euro Pacific Capital and Euro Pacific Gold Fund (EPGFX) says the latest stimulus by the ECB, which resulted with a negative benchmark rate (-0.10%), is inflationary and bullish for gold. Much of the metals sold during the retracement were absorbed by deep pockets, with the intention of holding for the long haul and much higher prices. The net impact is a demand bottleneck that could pose big problems for short sellers, resulting with a short squeeze to the delight of gold bulls. The yellow metal posted a low last July and then re-tested it in December. Nonetheless, during the latest pullback, bears were unable to test either level. This price convergence is strongly bullish, especially given the sharp gold price rally this week. Government officials will pull out all the stops ahead of the upcoming elections to insure that voters are wearing rose colored economic glasses. He expects a new wave of monetary expansion - stimulus, creating the perfect melange of factors for higher precious metals prices. Considering a home purchase? Caveat emptor. Peter Schiff and the host ask cui bono - who benefits? The housing rebound appears to be a fata morgana, a mirage fomented by profligate stimulus efforts, low rates, government loans and Fed based MBS purchases, designed to lure in the unsuspecting public just before institutions unleash their huge inventories, causing the next 2007-like meltdown, trapping a fresh slew of unsuspecting mortgage buyers in overpriced McMansion debt shacks.
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