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“I Own Krugerrands” Says Legendary Jim Grant
“I Own Krugerrands” Says Legendary Jim Grant
- He is “very bullish indeed” on gold
- Gold is “investment in financial and monetary disorder” - says Grant
- It thrives in current environment - “uncertainty, turbulence and disorder”
- “One of the most radical periods of monetary experimentation in the annals of money”
- “Gold…is now the conjunction of price, value and sentiment”
- Reminds owners of gold that the original reasons for buying gold have not gone away
- Believes Fed will raise rates despite deflationary environment
- Explains detrimental effect of excessive debt on an economy
- Grant light-heartedly destroys Jason Zweig’s “pet rock” gold jibe
Jim Grant, publisher of Grant’s Interest Rate Observer says that gold is “an investment in financial and monetary disorder.” He believes that today we are experiencing “uncertainty, turbulence and disorder”.
When asked how he liked to own gold he said he owned physical, generic, non-numismatic coins - specifically mentioning South African Gold Krugerrands and also mining shares.
Krugerrands are one of the cheapest and most cost effective ways to buy gold with very low premiums. Clients in Ireland, the UK, the U.S. and internationally are currently buying Krugerrands at extremely low premiums of just 2.5%. They remain some of the most popular bullion coins in the market due to their durability (harder 22-carat gold coin), recognisability, portability and liquidity throughout the world.
He warns:
“You look around the world and you see exchange rates are properly disorderly, when you look around the world of lending and borrowing -- we are in a regime of price control by another name, so-called zero percent rates and quantitative easing by the world central banks”.
He adds, “We are in one of the most radical periods of monetary experimentation in the annals of money”, with a “low probability” of a favourable outcome.
Given the disorder he sees in the world due to monetary experimentation and the very low gold price Grant says,
“You want to have exposure to the reciprocal asset of the paper assets that are the most popular - so gold, to me, is now the conjunction of price, value and sentiment, and I am very bullish indeed.”
He describes the recent fall in prices as “terrifically vexing but a wonderful opportunity” and reminds owners of gold that the reasons for owning gold have not gone away. He emphasises that gold thrives in periods of turbulence and disorder and uncertainty adding “I think we have all three of these things.”
On interest rates Grant believes that the Fed - having talked interest rate rises for so long - must soon take action to maintain “institutional pride”. However, it may be economically counterproductive given the deflationary forces still extant.
“The Fed feels it must act just for institutional pride; but, money supply growth is dwindling, the turnover rate of money likewise, the only thing that is dynamic in the world of money and credit is the issuance of more and more dubiously sourced debt, and more and more lenient terms”.
Grant takes a light hearted pop at Jason Zweig’s theory that gold is simply a “pet rock”. He jokes that gold can make people say ridiculous things they may soon regret - pointing out that Zweig had written a piece “within two weeks of the top of the bullion price” in 2011 extolling the virtues of gold mining stocks.
During the course of the interview he also explains how excessive debt can be detrimental to an economy.
“What debt does is two things: it pulls forward consumption and pushes back evidence of business failure”.
Debt allows us to spend more on what we want today at the expense of what we need in the future. Businesses which should fail are kept alive by easy credit leading to a backlog of bankruptcies and more loan defaults in the future.
While optimists in general, we share Jim Grant’s pessimism with regards to the health of the global monetary and economic system. and the usefulness of gold as to protect one’s wealth in the current environment.
We also believe that physical bars and coins including Krugerrands, should form the bedrock of any gold investment strategy. We offer delivery and storage of Krugerrands at the most competitive prices, in the safest vaults in the safest jurisdictions in the world.
Jim Grant interview with Kitco on Value Line can be watched here
Gold Krugerrands at record low premiums of just 2.5% here
MARKET UPDATE
Today’s AM LBMA Gold Price was USD 1,095.60, EUR 990.06 and GBP 702.13 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,098.60, EUR 992.41 and GBP 708.39 per ounce.
Gold and silver fell 0.4% and 0.8% respectively yesterday - to $1,094.00/oz and $14.56/oz.
This morning in European trading, silver for immediate delivery was 0.2 percent higher at $14.66 an ounce. Spot platinum fell 0.4% percent to $982 an ounce, while palladium rose 0.8% percent to $621 an ounce.
Must-read bullion guide: Gold and Silver Storage Must Haves
Must-read bullion guide: Gold and Silver Storage Must Haves
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I contend the primary reason that inflation has not raised its ugly head or become a major economic issue is because we are pouring such a large percentage of wealth into intangible products or goods. This includes currencies, bonds, pensions, and stocks. If faith drops in these intangible "promises" and money suddenly flows into tangible goods seeking a safe haven inflation will soar.
We can only ignore for so long the massive debt being accumulated by governments and hoe the central banks have expanded the money supply. It is important to remember that debts can go unpaid and promises be left unfilled. If this happens where does it leave us? Chaos and major disruption would result from such a scenario. More on this subject in the article below.
http://brucewilds.blogspot.com/2014/04/inflation-seed-of-economic-chaos....
5.56 x 45 is a much better investment in my opinion.
i would say gold is an investment in financial and monetary ORDER. if people preferred gold to fiat we would have financial order
well said.
Here's a great little android ap to test all types of bullion coins including krugerrands.
https://www.youtube.com/watch?v=5pZnqp3bl3A
It tests using resonance frequencies and is dead on accurate. Don't go shopping without it.
What about bullion bricks? Any tests for that?
not that I know of
Latitude25
You can also use the "Quarter Test". Balance a 1 oz alloyed gold coin an othe tip of your finger, and tap it with a quarter (or Susan B. Anthony "quarter"). An Eagle or a K-Rand has a beautiful ring. Lead and tungsten just give you a click or a thud.
The pure Au coins like Maples or Aussies will ring slightly, but they do ring.
Fakes may ring also but at what frequency? Your ear may not be sensitive enough to distinguish a fake. The android ap gives you the resonant frequencies, what they should be and what they are with an allowance for small error.
Well, that's true. But for 1 oz bullion coins, your ear is good enough. For NUMISMATIC gold coins and exotics, your advice suggestion is most excellent. Last I checked, though, iPhones did not have that. SOme DID have a silver ring app, but you had to pay for the gold one.
Palladium coins ring very nicely too. Check it out...
(Greetings from elsewhere in far S. Florida) :)
Your ear but not my ear unless maybe I had a sample of a good one of each type I was looking at.
For an easily distinguishable ring, try the Ringer from Fisch.
http://thefisch.com/whyitworks#ringer_principle
Where can one get a Krugerrand for 2.5% over spot? The largest online dealers only go as low as 3.5% currently.
2.5% is for large orders only. 3.5% for less than 5 is a good price.
You can get them at very low premiums through the Nucleo exchange of bulliondirect.
BullionDirect is bankrupt, didn't you hear?
I still like Jim Sinclair's comment on this market - do nothing. If you can do nothing, do nothing.
I wade through a dozen PM and energy-related articles and message boards daily - no one knows a goddamned thing about the future. No one can call it. Trust yourself.
vexing is a great word, too bad it isnt used more often. perfectly describes the situation we are in and how i feel about everything these days. this bro is thoroughly vexed.
I am with Hongcha and Sinclair on this call (+ 1). Very true about no one knowing the future. Besides, I now have enough Au (much of it bought at higher prices). My wife has now banned me from buying more gold, so I will comply. But, now no BTFD for me...
* * *
His name was DoC..., oh never mind what his name was.
How much would gold (or diamonds) be worth if it was not for the artificially created market for them?
There is very little practical use for some commodities, including gold.
There is a clear dependence on bank established and maintained markets and assumed infinite liquidity ... a buyer of last resort. If the buyer of last resort goes away, what is gold worth?
Gold and silver facilitate free trade. That's worth a lot right there.
Banks facilitate manipulated, fraudulent trade.
The only time that gold and silver facilitate free trade is when they are used in barter.
So you've never 'bartered' a couple of FRN's for a cup of coffee? You're real bright, aren't you?
Probably more than that pile of debt paper which the buyer of last resort just stopped buying.
The only real thing that differentiates gold from debt-paper, when used as money, is that the banks have a monopoly on creating infinite amounts of debt-paper. Both gold and debt-paper are trading instruments with little actual utility to those who possess them.
So, you're saying that market derived money isn't practical?
Who says that gold is market derived money? Originally gold was money derived by force ... as fiat-paper is today and electronic money will be in the future.
BoPeople, where do you have this "Originally gold was money derived by force..." from? methinks you don't understand the difference between taxes and money
Seriously?
OK, so who determines what passes for money? Government, kings, monarch etc. right? (at least before the banks achieved infinite money creation power)
How do governments maintain control? Through force or threat of force. And, they control/dictate what must be used to pay taxes.
BoPeople, and what about smugglers, criminals and people that have only a "touch and go" with authorities of all kinds?
what kind of money did someone use that went with a caravan across the desert, only visiting countries for a short trade?
what kind of money did someone use that went with a ship across the seas, only visiting countries for a short trade?
the answer is: all kinds of them, but preferrably something of recognized value everywhere, easy to transport and durable
pearls, gemstones, weapons but also gold and silver come to mindYes of course barter. If any people of country has a use for gold or gems or jewels or has made them into money then trading for them in a barter arrangement happens.
I mention barter in a comment above.
However, you must realize that barter and money are different.
Pumping the "slope of hope", GoldCore..
After a dead cat bounce, gold could find support near 681..
The chart in the article shows the support.
Jesse Owens is smiling at Jim Grant from Heaven.
The Bow Tie....sorry...judgement questions always pop up first.....how about no tie?
Fool!
Learn the superiority if the bow tie!
https://m.youtube.com/watch?v=92YP_he4ugk
I melted down a Krugerrand a few months ago to make jewelry at a commercial jewelry shop in Colombia. It was A+ 22k to the core.
My understanding is that a Krugerrand is precisely one ounce of 24 carat gold. There are a few grains of base metal alloyed for hardness and durability, so the coin weighs slightly over one ounce.
correct.
The US Buffalo is 24k. The US Eagle is like the Krugerand 22k. Both have 1 troy ounce of gold (31.1 grams of pure gold. the 22k coins therefore are heavier due to the additional copper and other metals added for durability.)
The Canadian maple is also 24K, imo the new 2015 ones with the laser security feature and outward radials are beautiful, the really reflect the light and make it almost hard to look right at the coin.
Yes. The main difference between a K-Rand and our Eagle is that the Eagle has some 3% silver with the balance copper. Krugerrrands have ONLY copper as the alloy metal.
Wikipedia: The Krugerrand is 32.77 mm in diameter and 2.84 mm thick. The Krugerrand's actual weight is 1.0909 troy ounces (33.93 g). It is minted from gold alloy that is 91.67% pure (22 karats), so the coin contains one troy ounce (31.1035 g) of gold. The remaining 8.33% of the coin's weight (2.826 g) is copper (an alloy known historically as crown gold which has long been used for English gold sovereigns), which gives the Krugerrand a more orange appearance than silver-alloyed gold coins. Copper alloy coins are harder and more durable, so they can resist scratches and dents.
I always wonder why everyone's photo of krugerrands is always 30 years old
http://www.bgasc.com/product/1-oz-south-african-gold-krugerrand-bullion-...
Why no photos of the new ones? Why always 1984?
Somtimes I think photographers are making an Orwellian jok.
I'm not sure whether Krugerrands are minted any longer, but those minted thirty years ago by Old South Africa can be relied upon, and are certainly tungsten-free.
My coin store has an xray thingy and can tell the quantity of gold in jewelry and coins.
The tungsten content is only a worry for amatuers. (and ebay buyers)
Tradition?
Why own an antelope and Bohr when you can own an egg laying mammal?
a kangaroo??
we few, we happy few, we band of silver holders . . .
Occasionally I go Scrooge McDuck and play with my shiny. (Yes, I'm perverted that way) You just can't get that effect with paper promises.....