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Peter Schiff predicted the financial crash of 2008 – now he sees the complete destruction of digital currencies very soon. Here are 3 assets he likes instead

Peter Schiff predicted the financial crash of 2008 - now he sees the complete destruction of digital currencies very soon.  Here are 3 assets he likes instead

‘It’s crypto extinction’: Peter Schiff predicted the financial crash of 2008 – now he’s seeing the complete destruction of digital currencies very soon. Here are 3 assets he likes instead

With the price of crypto plummeting and the collapse of the FTX cryptocurrency exchange, the term “crypto winter” is now making headlines.

But Peter Schiff, CEO and chief global strategist at Euro Pacific Capital, doesn’t think that’s the right term to describe the situation.

“This is not a #crypto winter. This means spring is coming. This is also not a crypto ice age as even that ended after a couple of million years,” he tweeted. “This is the extinction of cryptography.”

This is a terrible warning. But this isn’t the first time Schiff has sounded the alarm.

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Last year, when bitcoin reached $50,000 and the upward momentum seemed unstoppable, he said: “While a temporary move to $100,000 is possible, a permanent drop to zero is inevitable.”

If you share the same point of view, you probably want to know where Schiff takes refuge in this ugly market.

Since Euro Pacific Asset Management has just released its latest 13F report – the report institutional money managers submit quarterly to reveal their holdings – let’s take a look at some notable themes in Schiff’s portfolio.

Gold

Schiff has long been a fan of the yellow metal.

“The problem with the dollar is that it has no intrinsic value,” he once said. “Gold will retain its value and you can always buy more food with your gold.”

In fact, when Schiff tweeted about the disappearance of cryptocurrencies, he also mentioned that gold would “rise again to lead the next generation of asset-backed cryptocurrencies.”

As always, he puts his money into what he says.

As of September 30, Euro Pacific Asset Management held 1.655 million shares of Barrick Gold (GOLD), 431,952 shares of Agnico Eagle Mines (AEM) and 317,495 shares of Newmont (NEM).

In fact, Barrick was the firm’s main holding, accounting for 6.8% of its portfolio. Agnico and Newmont were the third and sixth largest holdings, respectively.

Gold cannot be printed out of thin air like fiat money, and its safe-haven status means that demand tends to increase in times of uncertainty.

If gold prices rise, miners like Newmont, Barrick and Agnico are likely to make big profits.

Recession-protected income stocks

Dividend stocks offer investors a great way to generate passive income, but some of them can also be used as recession insurance.

Case in point: Euro Pacific’s second largest holding is cigarette giant British American Tobacco (BTI), which accounts for 5.3% of the portfolio.

Cigarette maker Kent and Dunhill pays a quarterly dividend of 74 cents per share, providing an attractive annualized stock return of 7.6%.

Read more: Trade up while the market is down: Here are the best investing apps to take advantage of once-in-a-generation opportunities (even if you’re new)

The Schiff Foundation also owns over 157,766 shares of Philip Morris International (PM), another tobacco king with a 5.4% dividend yield. Cigarette manufacturer Marlboro is Euro Pacific’s seventh largest holding with a portfolio share of 3.5%.

Demand for cigarettes is highly inelastic, meaning that large price changes cause only small changes in demand, and that demand is largely immune to economic shocks.

If you’re comfortable with investing in so-called sin stocks, you might want to look into British American and Philip Morris.

Agriculture

When it comes to protection, one recession-resistant sector cannot be overlooked: agriculture.

It’s simple. No matter what happens, people still need to eat.

Schiff isn’t talking about agriculture as much as precious metals, but Euro Pacific owns 124,818 shares of fertilizer maker Nutrien (NTR).

As one of the world’s largest suppliers of horticultural inputs and services, Nutrien is well positioned even in the midst of a severe economic downturn. In the first nine months of 2022, the company posted a record $6.6 billion in net income.

Nutrien stock is up about 3% in 2022, in stark contrast to the S&P 500’s double-digit decline since the start of the year.

Given the uncertainty facing the US economy, investing in agriculture can give risk-averse investors peace of mind.

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This article provides information only and should not be construed as advice. It is provided without any warranty.

Written by khirou

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