This is a transcript of Peter Schiff’s video about today’s silver opportunity.
Peter schiff says: “I am talking today on behalf of my company Euro Pacific Precious Metals. I have been encouraging people to buy gold & silver for years. I was particularly vocal about it in late August when the charts broke out in both gold & silver. It became apparent to people that QE3 was coming. I knew QE3 was coming the minute they launched QE2, because I knew that QE2 wouldn’t work. In fact, I knew QE1 was coming before they even coined the term. I didn’t know how they were going to call it, but I knew the Fed was going to print money in an attempt to bail out the economy and stimulate growth. I know it’s going to fail, although a lot of other people didn’t figure that out yet. Printing money destroys its value and if you want to protect your wealth, you need to buy gold & silver.
So when the Fed came out with QE3, I dubbed it “Operation Screw”. A lot of people are calling it “QE Infinity.” I don’t think the Fed can do it to infinity, because between now and then we’ll have a currency crisis. You can’t print an infinite amount of dollars without completely destroying the value of it. I don’t think it’s going to go that far, but the dollar is going to loose a lot of value before the Fed gets the message and stops the printing press. In the meantime, you have to protect yourself.
Gold and silver prices have been rising recently, but it’s not too late to buy. Specifically a lot of investors in precious metals are overlooking silver and focusing mainly on gold. I think precious metals involves both gold and silver. Gold typically outshines from a monetary perspective, but it doesn’t always outshines from an investment perspective. Right now you have an incredible opportunity in silver. If you missed the gold rally, one way to catch up is to focus on silver. As good as the gold chart looks, the silver chart looks even better. In particular if you look at the chart from its 2011 peak. If you look at gold, to get back at its high point of last year, it needs a 7% rally. Silver by contrast needs a 40% rally to get back to the high of 2011. It would be very hard for me to believe to see a new high in gold without a new high in silver.
Historically over the last 25 years, the ratio between the price of gold and the price of silver has averaged about 45%, right now it’s 52%. In order to get back to its average, you need a 20% rise in the price of silver without the price of gold going anywhere. Since I think the price of gold is going to rise, the price of silver is going to rise that much faster to get back its 25 year norm. But even the past 25 years have not been the real norm. If you go back to the 19th century, when gold and silver still were considered as money in the US, the average of that ratio was 16 to 1. Think about where silver has to be when the ratio becomes again 16 to 1. You will look at a silver price of 135 dollar an ounce assuming that the price of gold stays where it is. [...]
The gold to silver ratio shouldn’t stay to 52 to 1. In a real bear market, maybe the gold to silver ratio will move against silver in favour of gold. But we are in a bull market for 12 years now and it has a long way to run, especially since Ben Bernanke has promised to print money until it produces a vibrant economy and more jobs. Since I know that not only will money printing will NOT stimulate the economy and create jobs, it will actually inhibit both. We are not going to print money until the problems in the economy are solved, but we are going to print money until the economy collapses.
What you need to know is that this [gold] bull market is ongoing and history has to say that silver has much further to go than gold. I am not saying to only buy silver, but if you have buying mainly gold, than this is an opportunity to buy more silver than you have done.
Ben Bernanke is going to make sur that if you hold dollars, you are going to loose a lot of wealth and purchasing power. But if you want to avoid the inflation tax and the US currency, you need to find something else to own … that’s gold & silver.
That is why Euro Pacific has a special offer with a premium on silver coins as low as 99 cents over spot. A common mistake that a lot of people do, is that they pay inflated markups when they buy gold or silver. A lot of companies that mark their products up 25%, 50%, 75% or even more. That means you need an enormous rise in the price of the metal just to break even on your purchase. But if you are paying a markup of less than 3%, than a small move in the price of silver makes you to break even to your investment. More information on the scams that are out there on GoldScams.com.”
More info? Go to www.europacmetals.com/gold-video-blog.aspx