Central banks are choosing to increase their gold holdings as a percentage of total reserves. They obviously think there is a reason to do that. It doesn't make sense to back up one currency with a hoard of other paper currencies. There needs to be a real anchor there. I think that central banks are well behind the curve. If you look at the percentage of above-ground gold controlled by central banks, it's historically low. Hence the fact that central banks are trying to increase their holdings. They've got a long way to go to get where they need to be.
Peter SchiffWe are an indebted family going out for an expensive meal to celebrate getting approved foe a new credit card. It might feel good (at the time), but we're still simply delaying the inevitable.
Peter SchiffOnce the dollar begins to collapse beneath the weight of all this new deficit spending, accumulation of contingency liabilities and the socialization of our economy, commodity prices and interest rates will head skyward.
Peter SchiffOne day we're going to look back at $1,700 with nostalgia. People are going to be shocked at how inexpensive gold was when it could be snapped up for such a bargain price.
Peter SchiffMost paper money initially existed as a substitute for gold. That's what gave it value. But right now what gives a currency value is other currency. Most countries hold reserves and the reserves are other currencies. If you are a backing up the euro with the dollar, what's backing up the dollar? I don't think it is going to go to a point where all you have is coins and bars of gold, but I do think that we are going to have to go back to a monetary system based in gold, not based on paper.
Peter Schiff