Third Party Research July 18, 2013

Gold Poised To Rally

eResearch Corporation is pleased to provide an article written by Jimmy Mengel for the Outsider Club.

The article, which begins on the next page, is an interview with Peter Schiff, who is an American investment broker, author, and financial commentator. Mr. Schiff is CEO and Chief Global Strategist of Euro Pacific Capital Inc., a broker-dealer based in Westport, , CEO of Euro Pacific Precious Metals, LLC, a gold and silver dealer based in , and CEO of Euro Pacific Bank Ltd., a full service bank based in St. Vincent and the Grenadines. Mr. Schiff strongly believes that gold is poised for “a horrific rally”.

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Peter Schiff Interview: Gold Poised for "Horrific Rally" By Jimmy Mengel | Wednesday, July 17th, 2013

Monday we brought you a controversial analysis on the economy from Peter Schiff. In his interview, he explained why all the talk of the Fed's QE tapering was a total bluff, that there is no exit strategy, and that they may “step on the gas” and start pumping up to $250 billion a month into the economy. Obviously, this will all have serious ramifications for the precious metals market.

In part two of our interview with Schiff, we explore the bottom in gold — and why it is poised for a “horrific rally.” In addition, he offers an interesting solution for those worried about the falling value of the dollar.

Ok, Peter. So let's say your predictions come to pass and the Fed ramps up the money printing. What does that do to gold in the long and short term?

It is going to spike in price. It is setting itself up for a horrific rally. You have had so much speculative liquidation. A lot of the gold that speculators have bought in the last few years has been liquidated over the last couple months.

When the market turns around, as it will, when the people who sold it want it back again because the prices are rising again, when people realize that we are not in a recovery, the Fed will not stop easing, when people realize why gold has been going up for the last ten years, they will want to buy it back. But when they want to buy it back, where is going to come from?

I do not believe that the institutions and individuals buying gold over the last couple of months are interested in selling it. When gold goes to $1,500 or $1,600 again, they will not be blowing out their position. I think the gold being bought will never be sold.

There will be a huge rush to buy gold when the momentum turns. And we know miners are not going to be producing it. Production will not be there, and the supply was just bought up and taken off the market. I think this could be setting up for a spectacular, parabolic rise in the price of gold.

It has been a bloodbath for gold over the last year. Can you even begin to predict a bottom at this point?

It is hard to pick the bottom, because you are usually wrong. But what I tell people is, “It does not matter where the bottom is.”

What if it goes to $1,000 or $800? There are a lot of “what ifs.” It doesn't matter, because it cannot stay down there. Not for any length of time.

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If I am not planning on selling it until it hits $5,000 or $10,000, then does it matter that it went to $1,000? But if I sit here and say, "I am not going to buy until it hits $1,000," what if it hits $1,002 — and then goes straight up to $3,000? You may have been close, but you didn't get any of it.

So you do not know where the bottom is. And why would you try to be so cute about it that you would wait until it hits exactly $1,000? I am sure that gold is going higher than $5,000 an ounce, I just cannot be sure of when. I am not saying ten or twenty years from now, I think it will be far sooner. But it is hard to know. There are so many external events that can slow the growth of gold.

I am not clairvoyant, but I understand the macro fundamentals that will drive it. Just like when people were asking me about the housing bubble: “When is it going to burst, Peter?” I didn't know exactly when, I just know it is a bubble, I can describe exactly why it is a bubble, and therefore it is going to burst. And it did.

Gold is the opposite of a bubble. If you look at the cost of mining gold, the price of gold has not even kept pace with the increase of the cost of mining.

If gold were a bubble, then mining companies would be making money hand over fist, because the price of gold would be divorced from the cost of producing it. Price would fundamentally be way too high.

Gold companies are losing money because gold is the opposite of a bubble. Gold prices should have gone up more than they did, but they went down.

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BW: The remainder of the interview is Peter Schiff talking about his bank, Euro Pacific Bank, and what it does to allow investors to protect and grow their wealth.

You can read the entire interview at the following link: http://outsiderclub.com/peter-schiff-interview-gold-for-horrific-rally

If you need information on Euro Pacific Capital Inc., you can visit the website . However, you must be currently living outside of the United States to join any of Euro Pacific's programs.

To read the first part of Jimmy Mengel’s interview with Peter Schiff, you can do so here.

Information on the Author follows on the next page.

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About The Author: Jimmy Mengel

@mengeled on

Jimmy is a managing editor for Outsider Club and the Investment Director of the advisory The Crow's Nest. You may also know him as the architect behind the wildly popular finance and investing website Wealth Wire, where he's brought readers the stories behind the mainstream financial news each and every day. For more on Jimmy, check out his editor's page.

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