I got a harsh email last week saying I should “apologize” to my readers for telling them to invest in gold and silver. This person said he lost $40,000 in the silver market. I don’t give market timing calls and never will. I have said (since this site when on the Internet in 2009) everyone should have gold and silver coins in their portfolio as a long term investment. I am sticking by my guns, and so are plenty of other expert investors with a lot more money and experience than I have.
One is famed investor Jim Rogers. In an interview last week in The Economic Times, Mr. Rogers said he had “absolutely no idea” where the market was going in the next three months, but long term, all commodities are going up in price. He, also, is not worried about the recent correction in commodities and said, “These things correct 10-15-20-30% every year. Nothing unusual about that. That is the way the markets work. I do not see anything unusual. I expect there would be more correction during the course of the bull market. I hope that the bull market goes up, consolidates, goes up, consolidates, goes up and consolidates for years to come. That is my expectation for all commodities.” (Click here for the complete Financial Times interview.) Look at silver, for example.
The headlines say silver is off around 25% in a week, but even after a brutal market correction, it is still up around 25% for the year! This looks like a consolidation to me.
Expert investor Peter Schiff, CEO of Euro Pacific Precious Metals, is also not worried about the long term price of precious metals. Years ago, he was one of the first to predict gold and silver would rise in price dramatically. He, too, is sticking by his guns and has written an excellent post about gold to back up his point of view. Mr. Schiff has a stellar track record of predicting the markets, and I am very happy to welcome him as a guest writer to this site.
Please enjoy the article.—Greg Hunter–
THE INSTITUTIONAL GOLD RUSH
By Peter Schiff Guest Writer for USAWatchdog.com
I have worked on Wall Street my entire life, and one thing I’ve learned is that large institutional investors, like pension funds and endowments, rarely veer from the herd. They manage too much of other people’s money to stick their necks out alone – if their investments go bad, at least they can point to everyone else who fared just as poorly. For this reason, these funds are often lagging in their perception of crucial market changes – changes such as a doomed currency. While many of us are buying precious metals to hedge against the collapse of the dollar, gold and silver have been taboo investments on Wall Street for years. Fund managers are taught that gold is a “barbarous relic” – much better to stick with government bonds and blue-chip stocks. That’s what everyone else is doing.
But there are early signs that the herd is changing direction.
THE CURRENCY THAT CAN’T BE PRINTED
In a remarkably under-reported story, the University of Texas’ endowment fund – the second largest in the country, after Harvard’s – added about half of a billion dollars worth of gold to its portfolio just this month, on top of the half-billion it purchased several months prior. The university’s endowment now owns a staggering 6,643 bars of bullion (664,300 ounces), which have already appreciated by over $40 million since mid-April when the bars were delivered to a dedicated HSBC-owned vault in New York City. Not a bad start. Kyle Bass, the well-known Hayman Capital hedge fund manager and UT endowment board member, advised the university on the purchase. He stated his reasoning plainly: “Central banks are printing more money than they ever have, so what’s the value of money in terms of purchases of goods and services? I look at gold as just another currency that they can’t print any more of.” Apparently, the university agrees that sitting on a pile of fiat paper is an act of faith not befitting a prudent and enlightened institution.