Peter Schiff of Euro Pacific Capital Sees Rocket Ship Being Set Beneath Gold Prices, the Next Crisis, and Review of Explor Resources Inc.

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Economist Peter Schiff, President and Chief Global Strategist of Euro Pacific Capital Inc, made public on March 18, 2012 his opinion on the economy with an explanation as to why recent economic data points are indicative of an unhealthy phony economy made up of service jobs and trade deficits. Schiff also sees a scenario of bond market collapse that will prompt the Fed to print money which will ‘put a rocket ship beneath gold prices’.

Economist Peter Schiff, President and Chief Global Strategist of Euro Pacific Capital Inc said this last week that the actions of the Fed and the US federal Government have taken are making the economy worse, not better, and the data points support his understanding. Schiff admits that temporarily when a bubble is being inflated some phony jobs are created, there is excess spending (consumer and government), and the impression of prosperity. “But, simply look beneath the surface, the economy is actually in decay and crisis, and being set up for the next big crisis that the Fed is not even prepared to handle.”

Peter Schiff has made a number of accurate economic prediction over the last decade from the real estate crash in December 2006 to the bullish rise of precious metals. Schiff pointed out that on the same day the ‘better than expected’ jobs data was released we got worse than expected trade numbers; the deficit for January swelled to $52.4B, that was the highest monthly trade deficit since the summer of 2008 just before the financial crisis. If the jobs that were added were ‘productive’ jobs the deficit would be getting smaller, but it’s not as we are creating more consumers not producers. Before too long people are going to appreciate that this is a phony recovery, that the rally in the stock market is simply a reflection of inflation, not economic growth, and as bond prices begin to move down, the fed is going to be under increased pressure to announce QE3 and when it does that will be music to the ears of gold traders. Schiff said people should be buying gold now before the Fed starts to ease more stating “In the mean time I wouldn’t be waiting for that, I think the dip [in gold] is already big enough to buy”.

Schiff also noted that The Fed’s recent bank stress test was anything but stressful; the test revolved around the ability of banks to withstand a drop in asset prices (housing and equities). Schiff said the next crisis will NOT look like that, the fed is erroneously assuming the next crisis will be a carbon copy of the last crisis. The one stress test the market did not request the Banks to stress test was a collapse in the bond market with soaring rates. Schiff believes the banks will not survive such a test and thus it was not tested. Higher interest rates are not only possible, they are entirely probable. Couple a rise in interest rates with the enormity of the trade deficit and the effect on the current account turning into a sever deficit due to required interest payments on foreign held bonds and ‘thing will just be spinning out of control’. The bond market and the dollar are on the verge of collapse and in order to prevent that from occurring the Fed is going to print lots of money, that will put a floor beneath asset prices, but it will basically put a rocket ship beneath gold prices and sink the dollar.

This time last year Peter Schiff offered insight into how he views ownership of physical precious metal versus ownership via equities (in related mining stocks) - Schiff believes people should own both and stated he is weighted towards equities; "I have more of my money in investments in gold mining companies than I do bullion." Schiff sees the physical metal as representing stored value (money), whereas mining companies are 'investments'; a precious metal mining company takes on risks in exchange for the reward that comes with discovery and value creation from when it takes gold and/or silver that is buried in the ground and brings it out of the ground where it has practical value. Schiff views his mining stocks as a shareholder in these companies saying "I own the ounces they have in their reserve in the ground, part of which you own".

Schiff did not offer specific investment vehicles to capitalize on however Market Equities Research Group offers below some possible ways for exposure to precious metals including a review of Explor Resources Inc. a unique Canadian-based mineral exploration mining company focused on building gold ounces at its Timmins Porcupine West gold deposit in the prolific Abitibi Greenstone belt of Ontario where it has proven its exploration model.

A full review of Explor Resources Inc. is available at online.

Simple ways to gain exposure to precious metals are to buy a senior producer focused ETF such as Market Vectors-Gold Miners (GDX), Global X Silver Miners ETF (SIL), or a junior focused ETF such as Market Vectors Junior Gold (&Silver) Miners ETF (GDXJ). However the problem with these ETFs is that they funnel attention to a select few companies whereas there is a large universe of junior exploration gold mining stocks that offer exceptional risk-reward scenarios. One such company that appears poised for upside share price appreciation in 2012 is Explor Resources Inc.; the current resource at Explor's Timmins Porcupine West gold deposit is 127,000 oz gold Indicated at 5.13 g/t + 704,000 oz gold Inferred at 3.97 g/t and that is expected to rise dramatically over the near-term; by the end of 2012 Mining MarketWatch Journal forecasts the resource to be advanced to ~1.5 million ounces gold, and by the end of 2013 advanced to ~3 million ounces gold -- that would represent only 10% of the deposits potential.

Explor Resources Inc. has a market cap under $40 million, and is poised for considerable share price appreciation as the reality of the accomplishment underway is appreciated by the market. The exploration model Explor has developed for the deposit is named after the nearby Hollinger and McIntyre gold mines that have a similar porphyry and produced 30 million ounces of gold. The porphyry is the heat engine that pushes the gold into weak adjacent (sedimentary and mafic volcanic) rocks -- the bigger the porphyry the bigger the potential deposit; Explor Resources' TPW porphyry is 5 times bigger than the Hollinger-McIntyre porphyry and all evidence to date has shown the exploration model to be accurate. The gold mineralization is concentrated in two mineralized limbs of syncline and so far Explor has concentrated its efforts only on top portion of the south limb, the north limb is believed to be as equally rich. There is a 2 kilometre long strike length open on both ends and at depth. Area mines are worked for high-grade gold to ~2,000+ metres, double the depth currently established on the south limb; the current resource established on the south limb was based on drilling to ~600 m, and recent drilling not yet incorporated into the resource is proving up high grades to ~1000 m (i.e. Jan. 31, 2012 release "114.8 g/t gold over 7.8 m", Feb. 23, 2012 release "7.36 g/t gold over 13.5 m). A new updated resource calculation is expected to be released in June 2012 incorporating recent drilling and, following summer exploration, yet another resource calculation is expected to be prepared for the end of 2012.

Mining MarketWatch Journal sees a comparison, exit strategy wise for Explor shareholders benefit, to the scenario that unfolded for Virginia Gold Mines with its sale of its Eleonore gold deposit to Goldcorp for close to half a billion dollars plus the retention of a rich sliding royalty. Virginia Mines proved up ~3M ounces and sold to Goldcorp which carried the ball for many times that. Explor has a very real similar potential outcome in store as the porphyry system at the TPW gold deposit is 5 times the size of the 30M ounces gold Hollinger-McIntyre, the exploration efforts to date support the exploration model, and a readily achievable target of 3 million ounces by the end of 2013 represents just the tip of the iceberg.

A full review of Explor Resources Inc. is available at online.

This release may contain forward-looking statements regarding future events that involve risk and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual events or results. Articles, excerpts, commentary and reviews herein are for information purposes and are not solicitations to buy or sell any of the securities mentioned. Readers are referred to the terms of use, disclaimer and disclosure located at the above referenced URLs.

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