Precious Metal Bars

The upcoming summer months are projected to yield an new all-time record high for gold spot prices, as the precious metal is expected by many experts to surpass $1033 an ounce by mid-to-late summer. The record was set on St. Patrick’s Day, 2008, and many experienced investors are poised for potential short-term profits, as their investments in precious metal bars are traditionally used for financial independence, as well as possible gains in the wake of struggling dollar values. Gold prices and dollar values share an historic, inverse correlation, which means that gold spot prices tend to rise when dollar values continue to struggle. This inverse correlation is currently being demonstrated, as gold reached its’ three month high just late this morning, while the U.S. dollar reached its’ five month low.

The recent announcement by the Fed, that an indeterminate inflationary period will soon be upon us, only further threatens dollar values, which is why investments in precious metal bars are making more and more sense to potential investors. Current economic conditions are remarkably similar to those in the 1970’s, when a vicious long-term inflationary cycle nearly choked the life out of our economy. Conversely, gold investors who got involved early made over 1000% on their initial gold investment. Precious metal bars are easily and discretely carried and stored, which make them ideal candidates for physical possession. Physical possession is widely believed by many veteran investors to be wise, in the event of some unforeseen emergency, or a possible second run on our nation’s banks. Interested investors are advised to contact a reputable, large volume precious metal dealer, like Gold-Bullion.org for world-class consultation on precious metal bars with competitive prices.

Danny Burns

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Gold in the Fabric of Life

Indian investors don’t think of gold in the same way as Western investors…

WHILE ALL ANALYSTs agree that Gold Investment demand is and will be the driving force behind the market  in 2009, many feel that jewelry and Indian import demand are important too, writes Julian Phillips of the Gold Forecaster.

Both have declined for the foreseeable future because of the current high price for gold. But April and May have seen demand from these two areas start to pick up. Will this returning demand persist as the Gold Price rises? 

We feel that it would be a mistake to write off jewelry demand and Indian demand because of high Dollar prices. Here are our reasons for believing so.

In the West all investors place profits in the center of their investment screens. To date, investments are all about building wealth, so that as one bumps into old age one will have enough to carry one through the remaining years when faculties wane and are insufficient to provide for the future. Gold has not been part of that picture since the early Eighties, not until the last three years on the Pension front. Even now, as an investment, it is treated with caution, but that is changing.

Another Western perception is that gold in jewelry is used only to enhance the beauty of a piece, complimenting diamonds or other stones it supports. At the cheaper end of the market a gold appearance is enough. At this end of the market the gold content of a piece of jewelry is miniscule, likely only ‘rolled gold’ alloy covered in a fine layer of gold or 9-carat jewelry (only 9/24th pure gold). Better pieces rise to 18 carat (some 75% gold and the balance some alloy). A pure gold piece tends to be shunned because it is too soft for jewelry and over time, wears away.

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The Reliable Money Supply Spigots

Foreign central banks, proving that they are just as stupid and corrupt as I thought they were, continue to buy American Treasury and agency debt with both hands, and their holdings stashed at the Fed jumped a big $26 billion last week as a result!

I ended that with an exclamation point because when I multiply $26 billion a week times 52 weeks, I get $1.352 trillion, a headache and a feeling of impending doom, which I figure in some primordial, primitive way MUST be significant, thus explaining my use of the exclamation point.

The new total holdings of these foreigners, in that one account alone, is a huge clot of debt for which they have paid a cumulative $2.710 trillion, although with interest rates trickling upwards, they surely lost some money as the prices of bonds went down. Hahaha! Morons!

And so with all of this foreign money flooding into Treasury and agency debt, and all the new money pouring out of the Federal Reserve spigots, and then all this new money pouring out of the government spending spigots, it is not too surprising – although still more than merely terrifying – to see the monetary base jump to $1.801 trillion from $1.706 trillion just a couple of weeks ago.

(Editor’s note: There was a long silence on the tape, until finally it continues) “I hope that you can still hear me, as I am now in full lockdown mode in the Fabulous Mogambo Bunker (FMB), suddenly scared out of my mind in a panic attack because the money supply surged 5.6% in two weeks, a cancerous growth rate that, if annualized, suggests that the money supply will grow to $7.426 trillion in One Freaking Year (OFY)! OFY!”

And if you think that such terrifying increases in the money supply are not possible because responsible, intelligent people will not allow it, then I laugh – hahaha! – at your childish optimism and point out that the money supply, now $1.801 trillion, is monstrously up from one year ago when the monetary base was a mere $825 billion! Wow!

If the money supply can double in one year, why can’t it quadruple in one more year? Who’s going to stop them? You? Hahahaha! We’re so freaking doomed!

On the other hand, from another perspective, John Williams at shadowstats.com figures things the “old-fashioned” way, which is to say, in this case, the pre-Clinton way, and he figures that the M3 money supply is – sacrebleu! – falling, and is now down from its high of about 17 percent growth in 2008 to only about 7 percent now, which is still “terrifying”, but down from “suicidal.”

Then I read that Mr. Williams figures that the unemployment rate, measured the old fashioned way, is about 20 percent!

Naturally, my heart is thumping and I am panicked at the thought of 20 percent unemployment, which means either that I will soon probably be fired, too, or that I will be pestered by relatives who were fired and who now want to borrow money, like they have some secret plan to pay me back or something, and when I politely ask, “Where is all the gold, silver and oil that I told you to buy all those years, you morons?” they will say how they did not buy any gold, silver or oil, and then I will laugh – hahahaha! – in their stupid faces and tell them, “Then your misery is your reward for being stupid!” which will doubtlessly cause already-hateful family members to be even MORE hateful, like their incredible stupidity is MY fault or something! See the kind of crap I have to put up with around here all the damned time?

Desperate for better news, even in comparison, I am strangely relieved that shadowstats.com calculates that the inflation in consumer prices (when measured the pre-Clinton way) has plummeted from a blistering 9 percent in 2008, and now inflation has fallen to about 2.5 percent, which is still Very, Very Bad (VVB) in both absolute terms and historical precedent, but it’s at least a meager straw at which to clutch in panic and desperation.

Fortunately, by buying gold, silver and energy, you are never in a panic and you are never desperate because by owning them you are thusly guaranteed – guaranteed! – by 4,500 years of human history to be holding the only things that will hold their value as the idiotic ruling class destroys a fiat currency by creating too much of it simply because they want to and there is nobody that can stop them.

And that is also why it is all so, so easy, and why you, too, will say, “Whee! This investing stuff is easy!”

This article originally appeared in the Daily Reckoning. The Daily Reckoning, a FREE daily e-letter, offers a “uniquely refreshing” perspective on the global economy, investing, and today’s markets. Follow the Daily Reckoning on Twitter.

The Reliable Money Supply Spigots

Silver Soars to Best Month in 22 Years, Eagle Sales Rise

Silver continued its spectacular rise Friday, soaring another 45 cents in New York and scoring the best monthly gain in 22 years.

Silver futures for July closed to $15.61 an ounce, jumping 27 percent on the month for the biggest gain since April 1987. London spot silver ended at $15.52 an ounce earlier in the day, surging 64 cents.

 

"Extreme dollar weakness is adding to the momentum," Pradeep Unni, an analyst at Richcomm Global Services in Dubai, was quoted on Bloomberg. "Ascending oil prices, concerns of inflation and fears of massive U.S. debt have certainly been supporting" both gold and silver.

 

American Eagle Silver Bullion Coins experienced movement as well. Reports were abound earlier in the week on how authorized dealers for the U.S. Mint trimmed orders and left an inventory of bullion coins behind — a situation that had been unheard of since the Mint started rationing the coins and suspended production of the 2009 collector proof and uncirculated versions.

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US Mint Revives Last Chance Sale

The US Mint this week revived their Last Chance Sale, a practice which began last year to alleviate the Mint’s inventory of old coin products. The sale will last until June 30.

This year the Mint has re-branded the sale, calling it the "Last Opportunity." A red button with the same name will now greet visitors of their online store. Clicking the button launches a listing of nearly 20 products from 2008 — mostly 25c First Day Coin Covers, $1 Coin Covers and Denver or Philadelphia Coin and Die Sets.

Although the products are being liquidated, expect no special savings. The prices are identical to when they were first introduced in 2008. Any price reduction would have elicited a barrage of complaints from collectors who spent money on the coin products last year.

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Coin Friday: “Big Money”

May 29
Posted by John Dale

(Is it Friday already? What? Who am I? What am I doing here?… yes, it’s been one of those kinds of weeks, with the holiday at the beginning bringing it commensurate respite from labor that always has to be made up on the back end. It doesn’t get any more back end than Friday, so John Dale – always the valiant blogger – has volunteered to anchor the weekend with another of his coin posts… If he keeps this up I’ll just have to reserve Monday and Friday as coin days for our young numismatist… Today he tackles a rather humorous subject in terms of coins, and yes coins can be humorous. Just read on and you’ll see… and have a good weekend. My thanks to John Dale. – Noah Fleisher)

For more than 60 years, the highest denomination of U.S. currency printed has been the $100 bill, and despite the presence of larger notes in other denominations (such as the €500 note), the Treasury department has no plans to print anything higher. Interestingly, the largest coin struck by the United States also bears the $100 denomination: the one-ounce platinum American Eagle, represented by this 2007-dated proof specimen in our upcoming July 8-12 Summer FUN auction.

This status is subject to a couple of caveats: The first is the possibility that 2008 was the last year for the denomination. While all fractional platinum American Eagles and the uncirculated-finish one-ounce piece were discontinued after 2008, the proof one-ounce platinum American Eagle was spared, and though a release date has not been announced, I’ll mark $100 down as a “dead” coinage denomination only if I see an official statement about its cancellation or if none are minted before January 1, 2010. Until then, it counts!

Another potential quibble is that the one-ounce platinum American Eagles were never intended for circulation, from which the idea springs up that their $100 denomination shouldn’t count. It’s true that the coins were not meant to be spent; to quote from American Eagle Platinum Bullion Coins, a U.S. Mint brochure printed in March 2004, “Their face values are largely symbolic, because platinum’s market price … has historically been higher.”

The same brochure, however, emphasizes that the platinum American Eagles are real coins with the full backing of the U.S. government, specifically their “weight, content, and purity.” The standard term is non-circulating legal tender, abbreviated NCLT, but the Treasury emphasizes the legal tender aspect. (It’s worth noting that the American Eagles, like other bullion pieces struck by governments worldwide, are official coins to give them protection under anti-counterfeiting laws, in addition to other applicable statutes.)

The one-ounce platinum American Eagle may be the largest coin the United States has ever struck, but it’s hardly the largest-denomination coin ever produced. In 2004, the Austrian Mint created 15 examples of its popular Vienna Philharmonic coin in an oversized format containing 1000 troy ounces of pure gold in a .9999 fineness alloy, with a face value of €100,000.

Three years later, the Royal Canadian Mint claimed the world record. It produced a mammoth Maple Leaf bullion coin that contains an astounding 3215 troy ounces or 100 kilograms of .99999 fineness gold. Its official denomination: C$1,000,000. The Royal Canadian Mint has filled multiple orders for the million-dollar coin, though the publicity the coin has garnered has doubtless outweighed any actual profit made; as written on the Web site, “Why did the Royal Canadian Mint make the world’s purest and largest gold bullion coin? Because we can.”

Until Heritage’s World Coin department gets one of those million-dollar Canadian coins in a consignment, our bidders will have to content themselves with something…smaller. Might I suggest an ounce of platinum?

Click on the title of this post to leave a comment.

-John Dale Beety

Gold Off to the Races

Hickey and Walters (Bespoke) submit:

While rising Treasury yields, $65 oil, and the falling dollar are getting the most attention, the recent movement in gold has taken a back seat. The commodity doesn’t seem to mind, though, as it is currently approaching its highest levels of the year nearing the $1,000 mark. While previous runs toward $1,000 were widely watched, the current run has gotten less coverage. As they say, however, a watched pot never boils…

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Precious Metals Recap – May 29, 2009

A big range up extension in the gold contract on Friday caught the attention of the media and at times even seemed to be a drag on equity prices. However, with energy and precious metals pricing rising in sync and a massive Dollar slide also thrown into the equation, the bull camp in gold seemed to have a number of angles to justify the strength in prices.

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John Kaiser: Knocking on the $1,000 Door

Gold investors know all too well the psychological importance of $1,000 gold. The yellow metal’s been hovering frustratingly near that level for weeks after briefly surpassing it in February. According to John Kaiser, editor of the Kaiser Bottom-Fishing Report, “we’re getting very close.” In this exclusive interview with The Gold Report, John shares his “modest” price forecast of $1,300 – $1,400 within the next six months and presents strategies for gold companies looking to create value.

The Gold Report: John, you have said that you believe gold may go up to $1,300 to $1,400, but probably not higher. Can you give our readers an overview of how you achieved those targets?

John Kaiser: I think we’re ready for a real increase in the price of gold, which is why I am looking at more modest targets, such as $1,300 to $1,400, happening fairly quickly, probably bouncing plus or minus $200 or $300, around that level, but it’s a real price increase without a corresponding catastrophic collapse in the U.S. dollar or hyperinflation descending upon us.

TGR: What time frame are you looking at?

JK: I think we’re getting very close. We’re knocking on the door of $1,000, which is a very important psychological level. I would say in the next six months, as people realize that the banking system is still troubled and will be for a long time because an uptrend in real estate prices is not in the cards for a very long time. And, in order to make the banks solvent, the underlying collateral needs to have liquidity and a stable price.

I’m saying that in the next six months the realization will kick in that the world has changed in a significant way and the United States is losing its role as the overwhelming economic superpower and will continue to do so over the next 20 years as other countries such as China and India come into their own and pick up the slack that’s created by the collapse of consumption right now. If it breaches $1,000, I think it’ll very quickly go to $1,300-$1,500 and establish that as a new base.

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The End Is Near

We published a chart earlier in the year that showed Treasury Bonds were falling. Below is the chart updated thru May 28, 2009. Treasuries fell at the beginning of the year when the economy was still in freefall and have continued to decline despite the Federal Reserve’s announcement that it would buy $300 billion worth of Treasuries. When an asset class goes parabolic and then falls, no matter how favorable the news is, it is likely that the bubble is popping. The housing bubble illustrates this phenomenon. At the end of the housing bubble most commentators knew that housing prices had overshot yet many remained optimistic that prices would simply correct with slower growth or only slight declines. Treasuries are again demonstrating that bubbles do not end by correcting sideways.

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