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

“This is Crypto Extinction”: Peter Schiff predicted the 2008 financial crash – now he sees the total destruction of digital currencies very soon.  Here are 3 assets he likes instead

“This is Crypto Extinction”: Peter Schiff predicted the 2008 financial crash – now he sees the total destruction of digital currencies very soon. Here are 3 assets he likes instead

With the massive drop in cryptocurrency prices and the collapse of crypto exchange FTX, 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 #cryptowinter. This indicates that spring is coming. This is not a crypto ice age either, as even that ended after a few million years,” he tweeted. “This is crypto extinction.”

This is an urgent warning. But it’s not the first time Schiff has sounded the alarm.

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Last year, as Bitcoin hit $50,000 and the bullish momentum seemed unstoppable, he said, “While a temporary spike to $100,000 is possible, a permanent drop to zero is inevitable.”

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

As Euro Pacific Asset Management just released its latest 13F filing — a report that institutional investment managers file quarterly to disclose 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 retains its value and you can use your gold to buy more and more groceries.”

Tweeting about the crypto extinction, Schiff even mentioned that gold “will rebound to lead a new generation of asset-backed cryptos.”

As always, he puts his money where his mouth is.

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 company’s largest 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 status as a safe haven means demand typically rises during uncertain times.

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

Recession-Proof Income Stocks

Dividend stocks offer investors a great way to generate a passive income stream, but some can also be used as a hedge against recessions.

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

The Kent and Dunhill cigarette maker pays a quarterly dividend of 74 cents per share, giving the stock an attractive annual yield of 7.6%.

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

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

If you’re comfortable investing in so-called sin stocks, British American and Philip Morris might be worth further research.

Agriculture

When it comes to defense, there’s one recession-proof sector that shouldn’t be overlooked: agriculture.

It’s easy. Whatever happens, people still need to eat.

Schiff talks less about agriculture than precious metals, but Euro Pacific owns 124,818 shares in fertilizer maker Nutrien (NTR).

As one of the world’s largest providers of agricultural inputs and services, Nutrien is well positioned even when the economy enters a major downturn. In the first nine months of 2022, the company generated record net income of $6.6 billion.

Nutrien shares are up about 3% in 2022, in stark contrast to the S&P 500’s double-digit year-to-date decline.

Given the uncertainties surrounding the US economy, investing in agriculture could provide reassurance for risk-averse investors.

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This article is informational only and should not be construed as advice. It is provided without any guarantee.

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