Schiff Warns: “Risks have never been larger…”

business graph and risks

With America’s bull market run now in its 9th remarkable year, it could be tempting to let your guard down with your portfolio or your IRA.

However, the bout of market volatility seen last week is shaking investors from their complacency. Last Thursday, and again today, the Dow Jones opened with a quick loss of over 100 points in just a few minutes, only to recover during the day at lower levels.

What could be going on? We went to hear what some of the stock market’s most celebrated crash-whisperers have to say.

Market experts like Peter Schiff, chief of Euro Pacific Capital, and Robert Schiller, a Yale economist, are known as two prognosticators who waved the warning flags about Wall Street just before the crash in 2008. Recently, they both sounded extremely nervous in an interview with USA Today.

What’s the problem? In their view, these factors have badly distorted the stock market:

1.An artificial, excessively-prolonged period of low interest rates that is ending

2. Surprisingly tame inflation, which could flare anytime

3. Historically low market volatility, which is likely to increase unexpectedly

This combination of market-fueling factors seems to have lulled investors into greater and greater overdependence on stocks, at least up to now.

“Risks,” Schiff says, “have never been larger” and Shiller seems to agree: “I am worried about a correction,” he says.

For Schiff, the biggest issue he sees is complacency. “Nobody is worried that the good times will end,” says the famed investor. “History has shown that such periods of unfettered optimism have often presaged major market corrections.”

The classic sign of an over-extended market is here: everyone seems to agree that stocks are too high, but no one wants to miss out on the final fumes of a nine-year bull run.

Despite the risks, it is unfashionable to be “out of the market” when it has surged so much this year. This odd combination of greed with growing fear can make for some sleepless nights.


If you’re feeling uneasy about the direction of things in general, you’re actually not alone.

The American Psychological Association released a survey last week that revealed an astonishing 59 percent of Americans consider today the lowest point in U.S. history. Even among Americans who lived through World War II, the Vietnam War, the Cuban Missile Crisis and 9/11.

In fact, the source of the greatest stress for Americans right now is the future of our country. That pressing concern ranks higher than work, money or crime. Americans of all political parties are stressed out as social divisiveness and political gridlock takes its toll.

What will happen to your retirement assets if the do-nothing Congress is unable to pass tax reform?

Owning gold might just be the perfect antidote to these stress-filled times. Physical precious metals offer diversification, less exposure to a volatile dollar and are safe haven assets if there is a sustained financial, military, political or economic crisis.


Gold demand from the world’s central banks as well as individual bar and coin investors strengthened in 3rd quarter 2017.

China is driving a big part of the surge in gold bar and coin demand growth. At the same time, the quantity of gold expended in the manufacture of technology increased for the fourth consecutive quarter.

Despite this rising interest in precious metals, total gold supply fell 2% in the third quarter of 2017 and mine production fell 1% year on year. You don’t need to be an economist to realize that the combination of rising demand along with decreasing supply is one reason why many people are looking closely at gold IRAs right now.


Keith Barron, chairman and CEO of Aurania Resources, predicts that with the average goldmine worldwide extracting gold below 1 gram per ton of ore, peak gold is probably here. As a result, large operations have emerged that rely on open-pit mining and economies of scale to reduce costs. Unlike oil, there is not any new technology on the horizon that could make finding it or extracting it any easier.

Consider also that gold mining, like oil production, has seen a rising tide of eco-resistance to traditional methods of production. Regardless of where you stand on this issue, it isn’t hard to see that it could be increasingly difficult to mine gold and silver in the years ahead.

World Gold Council chairman Randall Oliphant recently warned that the world might have already produced the most gold in a year it ever will. Oliphant believes gold production will likely level off from here and even decline while demand rises. Because of this trend, Oliphant thinks gold prices could climb as high as $1,400 an ounce in the coming year.

ABN AMRO commodity strategist Georgette Boele thinks gold has more upside potential. She expects it to move up towards $1,300 an ounce by the end of the year in line with further weakness in the dollar.


One River Asset Management chief investment officer Eric Peters warns stock market investors are no longer investing, they are speculating. Peters is convinced that people have forgotten 1987 when stocks dropped 22% in a single day.

If enacted, tax reform could add more than $10 trillion-plus rise in federal debt over the next decade. If it fails, it could pull the rug right out from under the bull market, which has benefited mightily from expectations of the huge windfall for business.

Yet the stock market is still trading near all-time highs and investors have abandoned caution. Greed and fear dominate the markets and Americans are frightened about the state of their country.

Gold has held its own in 2017. With anxiety on the rise, you need to consider having some of your portfolio or IRA invested in physical precious metals as the risks to your paper-based or electronic-based assets increase.


Get Your Free 2024 Guide
Most Recent News