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Gold: The King of Currencies
The following is an
excerpt from our FREE Special Report on the current bull market in Gold titled, How to Buy Gold for $350 Per Ounce. Enjoy!
Do you own gold yet?
As I’m sure you’re aware, starting in July 2007, the
financial markets entered one of the most severe crises in history. In response
to this, the Feds (Federal Reserve, Treasury Department, etc.) have tried to
prop up the financial system with endless money printing and stealth bailouts.
And that’s a BRIEF recap (I’m sure I left something out).
At some point (and I cannot tell you when), the money
printing and bailouts will result in a horrific wave of inflation similar to
the one this country saw in the early ‘70s. No central bank in the history of
mankind has ever been able to print money ad nauseum without devaluing its
currency. And the US central bank is currently producing TRILLIONS of dollars
to aid their friends on Wall Street.
Indeed, inflation is actually already here as the headlines
attest:
Global Food-Price Index Hits Record
China
has raised interest rates twice in recent months to combat inflation. Euro-zone
inflation jumped past the bloc's target rate for the first time in more than
two years, data released this week showed, and economists said the rise was
likely due to higher food and energy prices.
UN body warns of ‘food price shock’
The
world faces a “food price shock”, the Food and Agricultural Organisation has
warned after its benchmark index of agricultural commodities prices shot up to
a nominal record last month, surpassing the levels of the 2007-08 food crisis.
The
warning from the UN body comes as inflation is becoming an increasing economic
and political challenge in developing countries, including China and India, and
is starting to emerge as a potential problem even in developed countries,
including the UK and the eurozone.
China Acts To Prevent Collusion On Prices
China's
economic planning agency unveiled regulations to prevent price collusion and
monopolistic pricing practices, giving the government more tools to rein in
inflation pressures… Under the new rules, competitors will be banned from
reaching agreements to fix prices, while business partners will be barred from
agreeing to minimum resale prices, the NDRC said.
China PBOC: To Give Higher Priority To Curbing Inflation
China's
central bank will give a higher priority to curbing inflation in 2011, the
People's Bank of China said Thursday, boosting expectations that it will adopt
more tightening measures, such as raising interest rates.
China
has adopted various measures in the past few months in a bid to rein in
inflation. The PBOC hiked benchmark interest rates on Dec. 25, the second time
since Oct. 19, which was the first rate hike in nearly three years.
Brazil pledges to stop US 'melting the dollar'
Brazil
has sounded a new note of warning in the international "currency war"
by pledging not to allow the United States to "melt the dollar".
Guido Mantega, the Brazilian finance minister, raised the prospect of
introducing greater controls on short-term flows of speculative capital into
his country.
All of these come from major media outlets (not exactly at
the forefront of investigative journalism). At this point I actually wonder if
Ben Bernanke can even read. I realize
that sounds harsh, but how on earth can he claim inflation is under control? I
mean, does this guy even bother reading anymore? He’s an academic right? Isn’t
his entire job supposed to consist of reading and thinking?
Let’s be clear here, inflation has already begun to rear its
head around the world, especially in food prices. This is a MAJOR problem for
emerging market economies where food comprises a higher percentage of consumer
spending than in the US. So expect to see food riots and greater civil unrest
in many emerging markets.
And you BETTER prepare for inflation in the US.
Indeed, We’ve already seen commodity prices spike across the
board in the US in the last year:
The next stage is the paper currency collapse: the stage at
which inflation accelerates as the US Dollar collapses, destroying purchasing
power while inflation hedges EXPLODE higher.
So it’s no surprise that the smart money (investing legends
like Jim Rogers, David Winters, and the like) have been preparing in advance
buying inflation hedges and companies that profit during periods of high inflation.
And nothing protects against inflation like GOLD.
Gold was, is, and always
will be THE ultimate storehouse of value. Mankind was prizing this stuff during
the prehistoric period, long before the concept of stocks, mutual funds, or
paper money even existed.
Today, with world central
bank’s printing paper money day and night it is no surprise that Gold is now
emerging as the ultimate currency: one that cannot be printed. Small wonder
then that it has recently hit new all-time highs against ALL major world
currencies.
And despite its historic
rally Gold is still cheap on historic standards.
Indeed, while a lot of commentators have noted that gold is
already trading above its 1980 high ($850 an ounce) they failed to note is that
thanks to inflation, $1 in the ‘70s has a heck of a LOT MORE purchasing power
than $1 today.
For gold to hit a new all time high adjusted for inflation,
it would have to clear at least $2,193 per ounce. If you go by 1970 dollars
(when gold started its last bull market) it’d have to hit $4,666 per ounce.
Now the question is, should you buy physical Gold or invest
in one of the paper-based Gold ETFs (GLD and the like)?
Two Golds: One Paper &
One REAL
Gold is somewhat unique amongst investments in that it
trades both in physical form (bullion, or the actual metal) and a “paper” form
(the Gold ETF (GLD) and COMEX). The differences between the two are striking:
To my way of thinking, you only own Gold if you OWN Gold. By
this I mean you have REAL ACTUAL GOLD in your hands, NOT a claim on Gold that
someone else CLAIMS is exists. After all, the paper-based Gold ETFs are all run
by large banks that claim to have enormous warehouses of Gold. Seeing as these
institutions are all lying about the toxic debts, off-balance sheet assets, and
more… what’s to stop them from lying about their bullion reserves?
So when it comes to buying Gold, you HAVE to own some actual
physical Gold. And regardless or whether you’re investing in gold as an
inflationary hedge, a backup source of wealth should the world’s financial
markets collapse, or because gold remains one of the few means of hiding one’s
wealth from unwanted attention, there are several key rules you should always
follow:
Only buy from a dealer you know and trust. And buy bullion
that is liquid enough that you can buy or sell it quickly.
How much you purchase is up to you. But you should have
several months’ worth of expenses in gold and silver bullion. Why Gold AND
Silver? Because if the banks are closed or if paper money is worthless, you
don’t want to be walking around with an ounce of gold (worth $1k+) to buy
groceries. No, you will want some precious metals of smaller denomination to
purchase/ barter with, hence the need for some silver.
In terms of actual gold coins, there are three coins that
comprise the bulk of the bullion market. They are Kruggerands, Canadian Maple
Leafs, and American Gold Eagles. I’ve been told to avoid Maple Leafs by both a
trader and a bullion dealer as they can easily be scratched which damages the
gold and reduces the coin’s value.
In terms of silver, the easiest way to get it is in pre-1965
coins (often termed “junk” silver). The bullion dealer I spoke to prices them
at 50 cents over spot. However, you can also get silver one-ounce rounds
(coin-like medallions) and 10 ounce bars both of which can be bought at 95
cents over spot. Finally, you can buy Silver Eagles at $2.50 over spot.
Again, I cannot tell you which dealer to go with, but look
for someone who’s been dealing for years (not a newbie). You should also ALWAYS ask for
references from the dealer (former clients you can talk to about their
purchases/ experiences).
Some warning signs to avoid are dealers who try to store
your bullion. NEVER, I repeat, NEVER store your bullion with someone else.
ALWAYS store it yourself. Also, be sure to talk to the dealer for some time and
ask him or her numerous questions about the industry, the coins, etc. If they
can answer everything you ask in a knowledgeable fashion, their references
check out, and you verify everything they say with a 3rd party, you
should be OK.
In terms of storing your bullion, you can store it in a safe
deposit box or buy a decent home safe from Target or Wal-Mart (or a specific safe
store). If you go the safe deposit box route, make sure it’s with a bank that
has as little exposure to derivatives as possible.
To continue with the rest of our FREE report on Gold swing
by http://www.gainspainscapital.com
and click on FREE REPORTS. This 17-page report details not only what’s likely
to come, but how to prepare for it. And it’s all 100% FREE.
Good Investing!
Graham Summers
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Not sure about traders not taking in Maples if it scratched. My dealer here
Kitco takes it even if it is scratched or nudged at spot price. This guy is wrong.
Paint your wife in golden paint and buy her a pair of golden boobs and butts. She'll feel heavy and valuable and you'll sleep better after the roll in the hay...
It helps to live on a farm which has accumulated junk metal everywhere, under ground and above ground, for over 100 years.
As someone said above, be creative. Take a view of a burglar who would know there is PM around.
Do not hang your gold in a plastic bag behind a wooden pillar inside a dilapidated barn with no locks. (oops!)
does numismatic value matter? Do coins matter over rounds / bars? I'm in Canada, and apparently fine gold/ silver has no tax, whereas anything less than 99.9 has 12% here, so i went with 1 oz Johnson Matthey over a double eagle. good call / bad call?
what brand of safe is recommended, if going that route?
"does numismatic value matter?"
Many counterfeits around, mostly from China. Many people rely on grading services but there are counterfeits there too. Stick with items that are easily recognizable.
Moi? I would stick with US Gold Eagles (if in USA). Sure, you pay a slight premium vs. Maple Leafs and Krugerrands, but so what. Eagles are Legal Tender (and so counterfeiting them invites Secret Service investigation) and are well known here.
I would avoid numismatic gold coins (except for coin collectors) for various reasons including the counterfeiting problems as well as paying more for the gold, among other reasons.
Gold: the money of kings
Silver: the money of merchants (perfectly OK)
Copper: the money of peasants (bummer)
Debt: the money of slaves
If you are really paranoid about hiding your precious metals just make sure someone knows where they are besides you. You can bury them three or four feet deep stacked vertically to minimize the surface area. Then if you are really naughty you can spread a bunch of steel shot around your yard, BB's or machine tool filings. I'm not to keen on machine tool filings cause I have kids, but a bunch of bb's or steel shot is really cheap. In a dozen other places in your yard bury pieces of junk steel. Vary the size and depth.
I don't know about this....wouldn't they be able to find my metals then? isn't it supposed to be secret? That seems like bad advice....
Don't forget the market hitting new 52 week highs. Don't let the bearish sentiment out there fool you/mask the facts:
http://www.hedgefundlive.com/blog/bears-in-the-midst-of-new-52-week-highs-a-paradox
Put your stash in a 5 Gall (#2 non pvc) food grade bucket with lid, dig a hole 2' deep, drop bucket in hole, cover up,.. and don't tell anyone.
Ok, enough already. Here's the best kept secret (or was until now) that there is for those who have: 1.) Their own home 2.) A crawlspace or basement 3.) Half-way handy with tools.
Install a couple of false plumbing DWV (drain/waste/vent) lines under your house that look like the normal plumbing waste system. If black ABS use the same, if white or off-white PVC, use same. Use 4 inch with a screw-in cleanout on the end for easy access. Just use your imagination. All looks normal and there is not a thief known who will take a peep down your shit piping. You could even put some of that plastic fake dog turd in the pipe last!
I would use something smaller in the pipe as a decoy turd.. like racoon turd.
Question: has the world ever seen commodity prices rise like this in the past?
Yep. Every time a fiat currency was in the process of dying.
A billion Confederate dollars wouldn't buy an ounce of gold in 1866.
Same pattern repeating here.
stupid question, I know. But can someone recommend which websites they go to buy bullion for the best prices. I'm sure this has been answered before but can't find any articles relating to it.
Also, do you guys prefer silver or gold?
" ...can someone recommend which websites they go to buy bullion for the best prices."
I'll probably get junked for this but I have found eBay a good place to buy PM. Got screwed once but PayPal reimbursed me for the loss. (no I don't have shares)
Before bidding, check some of the online bullion dealers for pricing, then bid a bit lower than the dealer sell price about 15 seconds before the end of the auction. Sometimes you get lucky as I recently did, paying less than spot.
As for storage, safety deposit boxes might be good for gold (although I would be concerned about confiscation) and even the larger SDB sizes don't hold much in the way of silver. Take a foot long section of pvc pipe. Cap one end, fill with PM, then cap the other end. Bury for future use. (write yourself a note in case of memory loss)
Be creative and think like the bad guy.
http://www.goldmastersonline.com/
scottsdalesilver has been pretty good for me (they have ads on this site now)
best prices are still at your local dealer.. at least they should
And remember. There is no such thing as a stupid question.....only stupid people!
Just kidding. I have a real answer below.
On the internet golddealer.com has the smallest margin between buy and sell. They are trying to be the market maker in physical. Tulving may occasionally sell something with a lower mark up but he is ...shall we say....hard to work with sometimes.... and at least when I bothered to deal with him often didn't have inventory. Maybe things have changed with tulving. It's probably the second best place, but I still think golddealer.com has the best margins. Check out several places and always remember to include shipping and insurance in your calculations if they aren't free.
If you get through the "tulving" himself .... which isn't that difficut really, then expect him to be wonderfully straightforward.
Taciturn ... Yes.
Don't expect to 'chat' or quiz him about whether you're making the right choice at the right time.
But if you know what you want, and want to deal with a solid, reputable concern that can execute in a timely manner .... then you're at the right place.
thanks, will do!
APMEX.com
Tulving.com
is it me is it tulving completely sold out of everything....
Wouldn't say "sold out".
Product is there ( I just went to tulving.com and looked .. though everyone be advised tulving has a miminum)
What did strike me was that premiums are noticeably climbing.
The "premimun" of course being the difference between the phantom claim of paper gold and the real in-your-hand thing.
FOFOA had some articles outlining this. Expect the paper & physical prices to diverge to the point where perhaps 'paper gold' has freefalled in price. That might seem on the surface to be the perfect time to buy. But then you try ... and find very few or even (gasp!) NO ONE ... will sell to you (well ... except for some chinese on ebay who claim to have bought their pieces from warren buffet)
Almost like WTI vs Brent Crude....
No it is not just you. Seriously try golddealer.com That's the only place I deal with now and I've been doing business with them for over ten years. Sold my last physical to them just recently.
? Why would you see physical now?
As far as safes. Don't think that is you bolt it to the floor or it is heavy that it will help. I know a friend of a friend and they unbolted the safe and took it very quickly. The decoy idea sounds good.
Some cities have these private safe deposit box companies but I doubt they are much better than a bank.
serouisly...woah. No kidding. I have about 70oz inherited from my family. There spot rates look good. thanks for the advice.
Lefty's Pawn Shop on Ventura Blvd sells at spot.
The easiest way to get gold today is to rob Mubarak's family in London or Ben Ali's family in Jeddah. All you need is the camel brigade in Cairo to give you a ride to Jeddah. Or a Mubarak jet to London with his spare key to let you into his family flat. Maybe Tony Blair could help out on second option. He just visited with Mubarak in Cairo.
U forgot: Can be taxed by government / Can be hidden from government
My dad used to tell me about the 70's and 80's where he got a 30 to 50% raise A YEAR!
For him, that where the golden years.
I always complained that I would never get that chance....
MAYBE NOT!! :)
If you are going to store your PM at home in a safe, buy two safes. Put one in a fairly obvious but nevertheless hidden place and stick maybe 5-10% of your PMs in it plus other stuff like junk jewelery and a camera. Then put safe #2 in a REALLY hidden place and put the rest of your stash in it. That way when/if the bad guys break in and threaten you and your family you can hold out as long as possible and then before real harm is done you can break down and tearfully lead them to safe #1, make a big scene about not remembering the combo, then finally open it and wail piteously as they haul off your treasure. And hope they don't decide to kill you anyway - but if they do make sure your will ( kept in a safe deposit box) contains the location and combo to safe $2 so that whoever you care enough about to leave them your estate gets the bulk of your goodies.
There's also the option of just shooting the motherfuckers before that point is reached.
I do that with my guns too! I have a couple of crappy broken sks rifles and a russian mosin nagant and an old twenty two that I leave out in a glass display gun cabinet!
I carefully opened a claymore and filled it with broken glass, iguana feces and iocane powder. Then I wired it to the hinges of my fake safe. When opened, it will spray the room and shred the robbers, leaving me safe but with a big clean-up.
Presuming we still have a cohesive society and a police force that gives a shit, you will go to jail for booby-trapping. It's against the law. IF the robbers live they will own your house, and everything else that the courts can get their grubby hands on to settle the suit. Just some friendly advice.
That concept is not new, check out TrueCrypts Hidden Container feature ; - )
- Or you can save the money for the second deposit and buy some guns instead
but Simon Black says you should have gold in 10 different countries so do we need 20 safes?? 10 extra cameras? should some be in condos and others perhaps a castle or two??
You have made me laugh.
Mr. Black must cater to that exceedingly rare group of people who are smart enough to be self-made millionaires, but dumb enough not to figure out you need to disperse your gold across 8 jurisdictions, 10 time zones, and 11 dimensions.
Just fire up your fractional jet. A few stops here and there around the globe and you are set!
Just fire up your fractional jet. A few stops here and there around the globe and you are set!
A typical 1KG "gold bar" is 8 x 4 cm. That means you need 312 of the kilobars to "tile" each square meter of your kitchen floor. Presently a kilobar is about 31,000 euros.
So that's about 9.7 million euros per square meter. Give or take.
A compact kitchen is about 3 x 3 meters (10 foot by 10 foot). So you are talking right on one hundred million euros to tile a small kitchen with kilobars.
(Note too that this would weigh some 3000 kilos .. 3 metric tonnes. You'll need a strong floor.)
Other gold bars are thinner. It might be more sensible to use 100 gram bars, which are about one fifth the thickness of kilobars. So it would only cost 20 million to tile a small kitchen.
You might be able to walk on it barefoot. Any hard heels would instantly bend and deform it.
And I thought my remodel was expensive.
Why'd you have to go and ruin it by getting all practical!
Safe deposit -- nope, banks, bank reporting, lock outs and confiscation.
Home safe -- not good enough, but still useful as a decoy.
Tile your kitchen floor with gold bars and paint it a neutral color.
Starter kits for back splashes are available and so easy, a caveman can do it.
You still wouldn't be able to sell your house in today's market.
Bada boom - try the veal...
I buy it in the form of jewlery. Don't forget TPTB have very good tools to find any PM of value. This is a fact.