CoinWeek President David Lisot was a Guest on Fox Business News’‘ popular Varney & Company this morning (4-16-13).
David spoke with Peabody Award winning host Stuart Varney about the dramatic pullback in gold over the last several trading days and the difference between the paper market and the physical market for gold.
Varney and Company is one of the premier financial news programs on television and is viewed by a nationwide audience weekdays between 9:20-11 AM/ET.
And yet David was “bemused” by my presentation in Chicago in 2011 when I said gold at $1900 was a very risky bet. Not looking so bad a forecast, is it? Here’s the skinny: I fundamentally don’t believe printing fiat money is per se inflationary. It all depends what it is spent on, not the actual creation of it. I know most Austrian School adherants think that’s blasphemy, and I admit that in the Austrian paradigm it IS! I think the Austrian pardigm is crap.
I agree on fiat money, which has been used any time a country was not on the gold standard, which is much of human history. But fiat money is one thing and QE is another. So far QE has not been inflationary, but Japan is explicitly trying to create 2% inflation with its new QE, and nothing on the scale of what the U.S. and Japan are doing has ever been tried. The jury is still out on what the effects will be and whether it can be pulled back in time.
You did indeed nail the essential point:”whether it can be pulled back in time”. That’s the $64,000 question, for sure. The Fed has pretty much proven that it is far more adept at choking off an economy than revving one up.
Interesting that the host thinks you would get $1150 for a 1-ounce coin from a legit dealer. It shows how even well-informed people misunderstand the gold market, and why they should be reading sites like this.
Actually, Stu is right IN MOST PLACES. Yes, the legit “retail gold trade” does indeed work on narrow buy/sell spreads, but for every legit guy out there, there are maybe 10 con men offering IF YOU’RE LUCKY $1150 today. The world of major coin shows, where you mostly WON’T get hosed, is the exception. Most retail buyers do want a 40% spread.
I laugh when I hear people panicking over this long overdue correction. My question is why is gold a bad investment at $1400 an ounce and was a great investment at $1700 – $1900 an ounce???? Buy, people, buy!!!
Simple Pete, it was a crummy investment at $1900 and I said so publicly at an ANA convention in a Numismatic Theatre talk in August 2011 at Chicago. It’s public record.