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Free State Wyoming (FSW) Community => Swap Meet => Topic started by: planetaryjim on March 11, 2008, 02:27:09 AM

Title: Gold and silver coins for sale!
Post by: planetaryjim on March 11, 2008, 02:27:09 AM

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A very good client recently came to me with a problem. Her Roth Individual Retirement Account (IRA) had lost seven percent in the month of January 2008. She was very concerned.

She was right. Losses like that are not sustainable. At that same rate, she would have lost 84% of her retirement account by the end of the year.

She was not in control. Her IRA was not self-managed. She had no desire to continue trusting the people who were managing it. She got out.

Even with the substantial penalty for early withdrawal, typically 10%, plus the state and federal income tax withholding, she was better off, in her view, taking her money out than leaving it in. So, what did she do with the money? She bought gold and silver coins.

In the six months since 3 September 2007 the price of gold has gone from $672 to $980. That increase is 46% over the period, or 92% per annum. So, which would you rather have? Gold coins that increase in value by 92% or an IRA that loses value by 84% per year?

The exact same trend may be seen in silver. Silver was $12.10 and is now $19.91. That increase is 65% for the period, or 130% per annum. Again, which would you prefer? To lose 84% of the value of your retirement fund, or see it grow by 130%?

I am not saying that the managers of these programs are bad or wrong. They may be doing their best. They have certain limits to what choices they are allowed to take by the legislators who set up the programs, by the regulators, and by the banks for which they work. Closed end funds might have been the way to go when the managers of your IRA set up the qualified plan needed to meet approval from state and federal legislators, regulators, and financiers. But, I am saying that you should look carefully at the writing on the wall.

It may be that you would be able to convert your 401K to a self-managed IRA. It may be that you would get adequate results from holding gold and silver in your name as shares of exchange traded funds such as GLD. However, if you also have concerns about currency controls, sudden shifts in tax policy as the deficits get worse, hyperinflation of the money supply, or other catastrophes, you might also feel better having gold and silver coins in your possession. Because, when it comes right down to it, you can't control the economy, you can't control the banking system, you have no idea how the stock market is going to end up this year, and you have no reason to expect the government to react calmly to crisis.

An alternative to managing your 401K or IRA, which does not involve cashing out at a significant penalty, is to use it as collateral for a low interest loan. Suppose your IRA is not losing 84% per annum? But, you still want to own gold and silver coins in your possession, as a hedge against inflation and for emergencies. You can use your retirement account assets to borrow money. Obviously, doing so for general spending purposes, like going on vacation or a new toy, would be very unwise. Gold and silver coins in your home are another matter, since these represent an investment. If the value of gold and silver continue to rise, you should have no problem selling a portion of your coins to repay the loan after a few months.

For the months of March and April 2008, Vertoro will reduce our mark-up on coins for any order over $25,000 by 20%, for any order over $50,000 by 30%, and for any order over $100,000 by 40%. Place your order on our buy page. We'll contact you with instructions and specifics on how many more coins you get.

Title: Re: Gold and silver coins for sale!
Post by: malachirc on March 16, 2008, 01:50:25 PM

While I fully approve of buying gold and silver, it is a poor investment long term, as denominated by dollars at least.  It never expands, never pays dividends, etc.  It is a hedge, protection from the dollar losing value.  Yes, it's gone up spectacularly (and I curse myself for not buying at 600 like i meant to), it may not keep going up.  I doubt it will go up almost 100 percent per annum for any significant length of time.

Title: Re: Gold and silver coins for sale!
Post by: planetaryjim on March 16, 2008, 07:22:40 PM

Quote from: malachirc on March 16, 2008, 01:50:25 PM

While I fully approve of buying gold and silver, it is a poor investment long term, as denominated by dollars at least.

It is an excellent way of holding cash, compared to dollars.

Quote from: malachirc on March 16, 2008, 01:50:25 PM

It never expands, never pays dividends, etc.

There are lots of way so of investing gold and silver to earn income.  It is also possible to buy gold and silver in the ground by investing in mining stocks.

You aren't going to suggest owning blue chip stocks long term, are you?

Quote from: malachirc on March 16, 2008, 01:50:25 PM

It is a hedge, protection from the dollar losing value.  Yes, it's gone up spectacularly (and I curse myself for not buying at 600 like i meant to), it may not keep going up.  I doubt it will go up almost 100 percent per annum for any significant length of time.

Well, is six months significant? 

If we look at the inflation adjusted peak price of gold in 1980 dollars, at $850 or so, a couple of numbers come out.  Using the ever-changing Bureau of Labor Statistics value for consumer price index "inflation" the 2008 value of $850 1980 dollars is about $2300.  In which case, the inflation adjusted price of gold has a long way to go before it reaches the previous peak.  It could rise by 100% and still not quite get there.  (The price is about $1020/oz overnight.)

But, if you visit shadowstats.com and look at their calculation of inflation using the same methodology that had been used back in 1980 you find a much higher value, closer to $6300.  I believe that the government numbers on inflation are necessarily political.  Given that income taxes are collected based on inflation-adjusted exemptions and deductions, and given that government benefits are cost of living adjusted, the government is economically motivated to distort as much as possible the figure they present as "true" inflation.  I believe they are lying. 

I believe the dollar is collapsing.  Which means that the price of gold could do a lot more than double or sextuple.  The prices of gold and silver could go up by five quadrillion percent, if the USA merely reproduces the inflation of Yugoslavia in 1993-95. 

Sure, holding gold is not an income stream, and is "only" a hedge against monetary inflation.  But, it beats losing 84% of your portfolio per year.

I think you have to ask yourself what about the dollar you think worth holding in place of gold or silver coins.  What aspects of government policy contribute to a sound dollar right now?  Monetary policy is inflationary.  Just look at shadowstats.com for their calculation of M3 based on the published inputs.  Fiscal policy of deficit spending - when has the national debt been higher? - is inflationary.

Foreign policy? War is always inflationary.  Governments always print more money to make the cost of the war easier to bear in the short term.  Trade policy?  Current trade policies are very protectionist.  The USA is in violation of several World Trade Organization rulings, and is seeing all kinds of sanctions imposed on it.  Protectionism is inflationary. 

So, what would hold up the dollar?

Don't just take my word for it.  Check around.  Here's a headline from Monty Guild:

Quote from: Monty Guild

WE ARE WATCHING THE BIGGEST PANIC IN GLOBAL FINANCIAL MARKETS THAT HAS OCCURRED IN MY 65 YEARS OF LIFE AND 50 YEARS OF STOCK, BOND, AND COMMODITIES INVESTING

Title: Re: Gold and silver coins for sale!
Post by: alexspartan on March 17, 2008, 12:35:57 AM

Whew.  Thanks Jim.  I was thinking about starting a Roth soon (I'm only 21, so I figured I'd get a head-start) so, how would the devaluing of the dollar affect my Roth?  Gold is a better way to hold cash, but what can I do to actually save for the future.  Is it worth it for me to open a Roth?

I should subscribe to your Indomitus Report.

Title: Re: Gold and silver coins for sale!
Post by: planetaryjim on March 17, 2008, 01:50:42 AM

Quote from: alexspartan15 on March 17, 2008, 12:35:57 AM

Whew.  Thanks Jim.  I was thinking about starting a Roth soon (I'm only 21, so I figured I'd get a head-start) so, how would the devaluing of the dollar affect my Roth?  Gold is a better way to hold cash, but what can I do to actually save for the future.  Is it worth it for me to open a Roth?

I should subscribe to your Indomitus Report.

I should definitely write more issues of that report.

So, I would say, no, you should probably not open a Roth IRA at your age.  You'd have to wait, what, 38.5 years before you could withdraw any money without penalty?  C'mon!  What if the dollar is worth one ten millionth of an ounce of silver at that point?

Since that money is out of your hands, and, even with a self-directed IRA, limited to certain types of investment, what can you do about it losing money?  Well, if you do have a self-directed IRA (and most 401K programs can be rolled into such) you can invest in certain types of gold and silver coins, and in exchange traded funds such as GLD.  But, you cannot have possession of the coins, they have to be held in trust.  To my knowledge, there is no way to get personal control over them without violating the terms of the IRA laws.

Which means that if there is a forced conversion to a new currency, from dollars to, say, Ameros, or bancors, or whatever the banking gangsters stick us with next, your IRA would convert at the official rate, less allowed conversion fees, at whatever point the government mandates the conversion.  Would that be as good as having physical possession of gold and silver coins and converting at the point when you think you are best off?  I would say decidedly not.

One person recently contacted me about his Roth IRA saying that it was only appreciating in dollar (nominal) value because of the matching funds program from his company.  So, let's do an example program for 12 months, and try to project those results a ways into the future.

Let's say you earn enough money that you can have your employer set aside $100 per month.  And, your employer is sufficiently interested in your continued working there to match one for one the funds you put in.  So, that's like a $2400 per year savings program.

Now, let's set the WABAC machine to 17 March 2007 and see what we get.  We'll assume that the IRA is invested in a basket of stocks and bonds that earn a 10% return per annum.  But, starting in January 2008, that investment loses 7% per month.  You can run a simple spreadsheet calculation to figure the values.  I come up with the following:

date	start	You	Yer Employer	10%	End
03/17/07	0	100	100	0	200
04/17/07	200	100	100	1.66	401.66
05/17/07	401.66	100	100	3.34	605
06/17/07	605	100	100	5.04	810.04
07/17/07	810.04	100	100	6.75	1016.79
08/17/07	1016.79	100	100	8.47	1225.26
09/17/07	1225.26	100	100	10.21	1435.47
10/17/07	1435.47	100	100	11.96	1647.43
11/17/07	1647.43	100	100	13.72	1861.15
12/17/07	1861.15	100	100	15.50	2076.65
01/17/08	2076.65	100	100	-145.36	2131.29
02/17/07	2131.29	100	100	-149.19	2182.10
03/17/07	2182.10	100	100	-152.74	2229.36

               
Now, admittedly, that is a bit worse than my client reports.  The case shown above only increases in nominal value because of individual and employer contributions.  Then again, if your IRA were invested in Bear Sterns, what I've shown might be optimistic.

In comparison, if you had bought $100 worth of gold every month at the price of gold (see Kitco.com for historical prices) on the 17th of the month, you'd have about 1.75 ounces of gold at the end of the period.  (You can buy digital gold such as GoldMoney or Pecunix until you have enough to buy a quarter ounce coin.  I've assumed no load here.  Fees of 10% for converting to gold coins would be typical.)  At today's price, that's valued at around $1,784.  And, notice, that's without any employer contribution.  In other words, with your employer contributing $1200 you'd only be about $445 better off with the IRA.  And that's with only three months of losses.  By next year? Who knows?

The news with silver is usually better in a raging bull market for gold, and that is true this time, as well.  I ran the same calculation with silver and came up with $1949 in value. So, if you had bought silver coins - and you can get those right away without having to accumulate value - again assuming no load, your IRA would only be about $280 better off - even though your employer has sunk $1200 into it that you aren't putting into silver coins.

Does this make sense?  Does it make any sense to invest in an IRA, even with matching funds, when you:

• Don't control how the IRA is invested
• Don't have access to the funds until you are 59.5 years old
• Won't have the actual investment instruments in your possession, ever
• Are at the mercy of the bankers and the government on converting after the dollar collapses

Of these, you can control for the first.  You can self-direct your IRA.  But, you still cannot access the funds, and you cannot take possession of what you've invested in, and you can't be sure how the currency switch is going to affect you - but you have to expect to get burned.

Now, past performance is no guarantee of future results.  There's no way to know that gold and silver are going to continue up.  There's no way to know how fast nor how high.  And the stock market might turn around tomorrow. 

I wouldn't bet that way.  I am, in fact, eating my own advice here.  I'm completely divested of dollar-denominated stocks.  I'm significantly invested in gold and silver coins.  I have some stocks denominated in grams of gold.[/color]

Title: Re: Gold and silver coins for sale!
Post by: NoKnownPurpose on March 17, 2008, 03:44:02 PM

Quote from: planetaryjim on March 16, 2008, 07:22:40 PM

It is an excellent way of holding cash, compared to dollars.

It depends - the spread on buy/sells can be pretty big.  Not to mention that gold is relatively thinly traded and as such is highly volitile.  For instance, those who bought gold back in the early 80s (the last time we faced stagflation) are still under water.  That is nearly 30 years with a negative return of around 50%.

Quote from: planetaryjim on March 16, 2008, 07:22:40 PM

You aren't going to suggest owning blue chip stocks long term, are you?[/color]

Why not?  Over the last 200 years the stock market has outperformed gold.  When you buy quality stocks you're buying part of a business that can grow and earn profits.  Not so with gold.

Quote from: planetaryjim on March 16, 2008, 07:22:40 PM

If we look at the inflation adjusted peak price of gold in 1980 dollars, at $850 or so, a couple of numbers come out.  Using the ever-changing Bureau of Labor Statistics value for consumer price index "inflation" the 2008 value of $850 1980 dollars is about $2300.  In which case, the inflation adjusted price of gold has a long way to go before it reaches the previous peak.  It could rise by 100% and still not quite get there.  (The price is about $1020/oz overnight.)

There is no guarantee that the price of gold will continue to rise to meet it's old inflation adjusted high.  As I pointed out above, those who bought gold at it's peak made a terrible investment and would have done much better in stocks (or even treasuries).   

You may very well be right, I don't know (and nobody else does either.)  Certainly holding some precious metals/commodities may be a good hedge but I wouldn't put all my eggs in that basket.

Title: Re: Gold and silver coins for sale!
Post by: sbeckman on March 17, 2008, 07:15:32 PM

Quote

For instance, those who bought gold back in the early 80s (the last time we faced stagflation) are still under water.  That is nearly 30 years with a negative return of around 50%.

Geez, this is always the example given by the "anti Gold" crowd.

Everyone who bought Gold always bought at the peak and held on to their losses forever? 

No one ever sold at a small loss when the parabolic rise eventually had to stop going up?

No one ever bought before the peak and sold at a gain past the peak?

No one ever bought early and sold at a profit?

Nope, always the example is the guy that bought on that one fateful day and still has that gold collecting dust in his desk drawer whining and moaning over his loss.

This example is no different than pointing out those that bought at the top of the market in 1929 and (if they held) waited decades to recoup their losses as the reason never to get into the stock market.

No different than those that bought the NASDAQ in 2000 and (if they held) are going to wait until Hell freezes over to recoup those losses.

Or those that bought the DOW at 15,000 a short while ago and will again likely wait until Hell Freezes over to recoup their losses,

And all of these are in nominal dollars only, completely discounting the effects of inflation.

Never is it mentioned the people who wisely bought into the PM market, got in early, properly scaling in and out.

Just like in any market.

Sorry, rant over.  :-[

Title: Re: Gold and silver coins for sale!
Post by: NoKnownPurpose on March 17, 2008, 09:47:24 PM

Quote from: sbeckman on March 17, 2008, 07:15:32 PM

Quote

For instance, those who bought gold back in the early 80s (the last time we faced stagflation) are still under water.  That is nearly 30 years with a negative return of around 50%.

Geez, this is always the example given by the "anti Gold" crowd.

First off I am not "anti-gold" by any means.  A significant portion of my portfolio is in miners and physical metal(coins).  I also have large positions in domestic oil and gas.

and no, certainly everyone didn't buy at the peak....and of course many people have made significant returns by investing in metals.  My uncle is a huge gold bug and is doing very well at the moment.  But how can anyone be certain that we're not at or near another peak now?  Hint - you can't.  Just as I cannot accurately predict that gold is going to decline in price (if I could I probably wouldn't be holding any would I?)

My point was(is) that rushing into a concentrated position in any investment class is generally not wise.  You'll be wiped out far more often than you'll hit a home run.  Gold has had a tremendous run recently.  Will it continue?  I don't know.  So buy some if you like it but don't dump all your stocks, bonds and tulip bulbs to do it.

Personally I'm sitting on a pile of cash at the moment (about 50% of the portfolio).  If/When the credit mess starts to clear I'll

Title: Re: Gold and silver coins for sale!
Post by: planetaryjim on March 18, 2008, 05:43:17 AM

Quote from: NoKnownPurpose on March 17, 2008, 03:44:02 PM

It depends - the spread on buy/sells can be pretty big.

Not true.  The buy and sell spreads are very small for gold and silver.  Bid ask spreads on Kitco.com are fairly typical for the industry.  Currently bid is $1005.30 per ounce and ask is $1006.10.  This spread is $0.80 or 0.08%.

Fees for buying into a large position typically run one or two percent.  There are also small premiums for coin purchases, which go up as the size (and therefore usefulness) of the coins go down.

Quote from: NoKnownPurpose on March 17, 2008, 03:44:02 PM

Not to mention that gold is relatively thinly traded and as such is highly volitile.

Gold is very mainstream and trades quite heavily, on many markets globally.  It now has a nearly continuous market Monday through Friday. 

London's market now represents about a quarter of world gold sales, according to some private estimates we've done.  London's published trading volume per day is 25 million ounces for January 2008.  So, I think global trading is running about 100 million ounces per day.  So, at current prices, that's about $100 billion per day.  Figure around 250 trading days a year, or $25 trillion a year in gold changing hands.  Doesn't seem thin to me.

Gold's price is not highly volatile.  It is really not volatile at all compared to many stocks, some bonds, and other commodities.  It is much less volatile than silver, copper, zinc, or nickel, in my experience.  The price of gold has been on a very steady upward trend since late 1999.

Quote from: NoKnownPurpose on March 17, 2008, 03:44:02 PM

For instance, those who bought gold back in the early 80s (the last time we faced stagflation) are still under water.

Under water in what sense?  And what part of the early 1980s?  The last time we had stagflation was in the 1970s.  I know.  I lived through it.  The price of gold spiked in late 1979 and early 1980 due to global political events - the Iran embassy hostage crisis and the invasion of Afghanistan by the Soviet Union.  The freezing of Iranian assets by the USA caused a surge in gold buying throughout the Islamic world.  But, the peak prices were not long-lived.

A buyer in December 1983 at $400 per ounce would be in the black, according to the Bureau of Labor Statistics calculation, ever since gold crossed above $833 in December 2007.

Quote from: NoKnownPurpose on March 17, 2008, 03:44:02 PM

That is nearly 30 years with a negative return of around 50%.

I don't know anyone who bought gold in January 1980 and held it for 30 years.  I do know some people who bought Bear Sterns at $60/share, though. 

Are you planning to buy and hold any investment for 30 years?  If so, I have no guidance for you.  I think it is idiotic to buy anything and forget about it for three decades.  I would advise you only to look for more information and education on the topic of investing.

On the other hand, if you would reduce your time horizon to a decade, and look at the value of an investment in nominal dollars in, say, a basket of securities mirroring the Dow Jones Industrials in March 1998 and gold, guess which one would be better off?

18 March 1998 the Dow closed at 8,775.40.  Today, a decade later, it opened at 11,972.25.  An increase of 3,197 points.  An appreciation of 36.4% over the base.

On the same day in 1998, gold was $290.40.  At the moment, it is about $1005.  That's an increase of $714.60 or 246%.  Gee, I would have been better off holding onto gold coins and forgetting about the stock market.  For a decade.  (Do I recommend buying anything and holding it for ten years without thinking about it? Nope.)

18 March 1998 the price of silver was $5.80 per ounce.  Today it is $20.29.  That's an improvement of $14.49 or 250%.

Quote from: NoKnownPurpose on March 17, 2008, 03:44:02 PM

Why not?  Over the last 200 years the stock market has outperformed gold.

Were you alive 200 years ago?  For the last ten years, the stock markets have not outperformed gold.  What does that mean?  It means that the purchasing power of the dollar has fallen faster than the bubble in stock prices has risen.  And, since that bubble has clearly lapsed, which would you rather hold?  Stocks of dubious merit denominated in a fiat currency which is being inflated at an ever increasing pace?  Or something which holds its value over the long term?

Past performance is no guarantee of future results.  Just because a long term trend exists in stocks generally does not mean it is a great time to jump in right now.  Moreover, how many of the stocks that were around 200 years ago are around now? Very few.  Maybe Rothschild's in London.  A very few other financial houses, on different markets around the globe.  It would be preposterous to suggest buying stocks in any companies around today and holding them for 200 years.

Look at 1722, for example.  I think that's actually very pertinent to our times because of a number of macro economic similarities.  At the bottom of that stock market crash about 90% of the companies that were listed went out of business.  Something like 95% of the value of remaining stocks was destroyed in the panic.  Stock prices in London and Paris did not recover their previous highs until 1782 - sixty years later.

So, if you invest in stocks now, such as a basket of finance industry stocks, say, what makes you think those stocks are going to be around next year, let alone five years from now?  Possibly not 30, and certainly not 200.

Quote from: NoKnownPurpose on March 17, 2008, 03:44:02 PM

When you buy quality stocks you're buying part of a business that can grow and earn profits.

Yes, sure, and that's a good idea in certain economic conditions.  It would have been a great idea in 1982, say, when the Fear Index was very low.  (The Fear Index is a measure of uncertainty in markets based on the price of gold, the USA gold supply, and the M3 money supply.  It has been rising dramatically in recent years.  Tough to track, though, because the publication of M3 was turned off in 2006.  I guess the Federal Reserveless doesn't want you to know.)

However, I took a cold hard look at the stocks I was holding in 1986, and got out of the market.  I was seeing 20 times earnings in the price of old line manufacturing companies like General Tire and Rubber (GenCorp).  A price to earnings ratio of 5 or 10 would have been sensible.  Even then, there was clear evidence of a market mania.

Quote from: NoKnownPurpose on March 17, 2008, 03:44:02 PM

Not so with gold.

Holding gold is a hedge against inflation.  Holding stocks is not.

Quote from: NoKnownPurpose on March 17, 2008, 03:44:02 PM

There is no guarantee that the price of gold will continue to rise to meet it's old inflation adjusted high.

There's no guarantee of anything.  There's certainly no guarantee that a company which has made profits for 30 years is going to continue to do so.  There's no guarantee in the stock market, either.

It is not guaranteed that the price of gold would continue in the future to rise until it meets or exceeds its previous high adjusted for inflation.  But, that would be the way to bet.

Quote from: NoKnownPurpose on March 17, 2008, 03:44:02 PM

As I pointed out above, those who bought gold at it's peak made a terrible investment and would have done much better in stocks (or even treasuries).

But, your time horizon is completely off the wall.  If you are buying anything to hold for 30 years, you are quite mad.  Conditions in 1978 were vastly different.  Fax technology was not widespread.  Something like two million personal computers of any make or model had been sold altogether since 1975.  There were no cell phones.  Cable television was an exciting new idea.  Direct broadcast satellites were on the drawing boards.  The NASA boondoggle space shuttle had not yet flown, and guys like me thought it was a good thing.  It was a completely different economy.

Quote from: NoKnownPurpose on March 17, 2008, 03:44:02 PM

You may very well be right, I don't know (and nobody else does either.)  Certainly holding some precious metals/commodities may be a good hedge but I wouldn't put all my eggs in that basket.

I would like you to point out where I have said that anyone should put all their eggs in one basket?  Or hold anything for 30 years?

If you are not willing to hold gold or silver in place of dollars, I think you'll be worse off next year.

I'd be willing to wager an ounce of silver that the inflation adjusted price of gold meets or exceeds the Bureau of Labor Statistics adjusted value ($2300) for its previous peak sometime in the next two years (by 18 March 2010).  My best guess is that it'll exceed its inflation adjusted peak using the 1980 methodology for calculating inflation during that time, too, or soon thereafter.  But, I don't have confidence in the number I've got for that second value.

Now, who wants some of that wager?

Title: Re: Gold and silver coins for sale!
Post by: sbeckman on March 18, 2008, 06:52:04 AM

Quote

My point was(is) that rushing into a concentrated position in any investment class is generally not wise.  You'll be wiped out far more often than you'll hit a home run.

Sorry that I missed that point.  It is absolutely correct.

Title: Re: Gold and silver coins for sale!
Post by: NoKnownPurpose on March 18, 2008, 08:30:43 AM

Quote from: planetaryjim on March 18, 2008, 05:43:17 AM

...

Jim, I am humbled by the sheer volume of your words... :)

Title: Re: Gold and silver coins for sale!
Post by: alexspartan on March 18, 2008, 09:50:48 AM

Jim, and everyone else, thanks for discussing and explaining this for a newbie like me.  I have a much better idea of how to invest my money, methinks.

Title: Re: Gold and silver coins for sale!
Post by: planetaryjim on March 18, 2008, 01:46:28 PM

Jim Turk of GoldMoney.com recently wrote about another reason to own gold.  I think the link is still up at Kitco.com.

His basic point is that in addition to being a hedge against inflation, gold (and silver, I believe) is a hedge against catastrophe.  Why is that?

As he points out, it is because physical gold in your possession has no counter-party risk.  You don't have to rely on anyone else, on any part of "the system" to have the value of those gold and silver coins you own.  You don't have to have a working phone system.  The electrical power lines could be down.  You might not have access to the Internet.

The banks could be closed due to a "national banking emergency" as they were from time to time in the 1930s.  The government could be fighting a major invasion, or insurrection, or revolution.  Sub-prime mortgages could be obliterating the asset values of major financial institutions.  Derivatives with enormous values could be hedged against price, and therefore not against counter-party risk, or they could be hedged against counter-party risk but nobody is holding the price risk - very rarely can both be hedged.  But, all these things going on in other parts of the world don't shake your confidence, because you have gold coins in your hands.

Mr. Turk then makes the claim that holding gold or silver in a GoldMoney holding is not subject to counter-party risk, but only to performance risk.  That's possibly true, since the terms of the agreement with GoldMoney make it clear that the gold and silver in your holding is your property, not theirs.  But, performance risks can be substantial.  No Internet? No access to your holding.  Banking system holiday? No way to cash out of your holding if you need cash.  Government order or court order to seize the value in your holding? Nothing you can do to stop it.  Government seizure of all the gold held in London (see the closing of the Exchequer under King Charles II) is force majeure, and you probably cannot afford the insurance to cover it.

So, it is not the same thing.  There is, simply, nothing just like gold in your physical possession.  Even gold you mistakenly put in a bank's safety deposit box is not available if the bank is closed.

Now, do catastrophes happen every day? No, of course not.  Sometimes an entire year goes by without a major world war, typhoon, tsunami, tornado, earthquake, or other incident.  Most days, you can access electricity, phone service, the Internet, even that wireless router down the street. 

But, if you cannot, you just might want to have some gold and silver coins. 

Regards,

Jim
http://vertoro.com/ (http://vertoro.com/)

Title: Re: Gold and silver coins for sale!
Post by: NoKnownPurpose on March 18, 2008, 03:20:55 PM

I wholeheartedly agree that gold/silver coins are a good hedge against catastrophe, preferably in some recognizable form (I like Silver Eagles myself).  Gold could be used for larger purchases but silver will be much more manageable for day-to-day purchases.  (i.e. buying the weeks groceries would be difficult if all you have are 1 oz gold coins.)  Many preparedness types recommend pre-1965 US "junk" silver coins.  They are 90% silver and typically available at a discount to silver's spot price.

Also agree that you need to have physical possession in order for them to be a viable hedge.  Be sure you protect it by storing it in a secure location.  (theft is a risk that needs to be accounted for as well and this is another cost to consider)

Consider the nature of the catastrophe you're preparing for when making decisions.  If you are preparing for a earthquake, hurricane, blizzard or some other temporary (days or weeks) breakdown then cash should be fine (and even preferable since it is recognized and accepted by everyone.)  If you're preparing for war or insurrection where the entire country/gov't and banking systems might be incapacitated then I'd consider silver/gold coins (and probably food and ammunition too (beans and bullets :)).

I suspect if you want to buy gold/silver it will likely be cheaper in the next few weeks/months.  (just a hunch on my part, as always I could be (and likely am) wrong.) 

Title: Re: Gold and silver coins for sale!
Post by: planetaryjim on March 18, 2008, 08:32:42 PM

If you prepared for a crisis in the finance industry seven months ago you were not too soon.  Then, you could have bought gold for $650 an ounce, or so.

I don't know what the price of gold is going to be in six months, nor in six years.  But, I have heard this theory that it is near its peak and about to be cheaper.

I heard it when gold hit $300.

I heard it when gold hit $400.  Robert Prechter told an audience in 2004 at the New Orleans conference, a big gold bug show, that the price of gold was going straight down to $200.

I heard it when gold hit $500, and even saw it on a mainstream news show.

I heard it when gold hit $600.

I hadn't seen a lot of that idea since gold crossed $800, though, because that was not so long ago.

If you postulate a lower price to gold (and presumably silver, as well) you have an opportunity to tell me what it is about the price of gold that you think is so high.

Another, and I think better, question to answer is: what is it about the value of the dollar that you think is going to make a sudden dramatic shift up?

Yes, gold could be much lower next week.  By much lower, I mean it could go back down to $886.   There are a number of technical reasons to think it won't drop below $850.  But, if it does, that would be a huge buying opportunity which would not soon recur.

Seriously, though, what is it about the dollar that makes you think it is going to improve?  Trade policy? Fiscal policy? Foreign policy?  War policy? Monetary policy?  I can't think of a single fundamental factor that makes the dollar improve against gold or silver.

This week my buddy Jim Turk has written not only about the dollar price of gold, but its price against other currencies, here:
http://goldmoney.com/en/commentary.php (http://goldmoney.com/en/commentary.php)

Gold is rising against the dollar, the euro, the pound, and the Swiss franc.  We are seeing a global trend here which has been firmly in place for about a decade.

The trend is your friend.  Yes, take advantage of dips.  Buy gold chips on the dips. 

But don't expect the dips to last.

Title: Re: Gold and silver coins for sale!
Post by: rhodges on March 18, 2008, 09:40:26 PM

Some years back, I bought some gold when it was just under $400 per ounce.  Then the price plunged to just over $300.  Boy, do I feel so stupid for having paid such a high price.

Title: Re: Gold and silver coins for sale!
Post by: Boston on March 18, 2008, 10:51:32 PM

Yeah, but now, Richard, your $400 gold has more than doubled.

Folks, don't get in a dither if you didn't buy at the absolute bottom
or sell at the absolute top.  Within 20% of either is pretty good.

Boston

Title: Re: Gold and silver coins for sale!
Post by: rhodges on March 18, 2008, 11:00:16 PM

Quote from: Boston on March 18, 2008, 10:51:32 PM

Yeah, but now, Richard, your $400 gold has more than doubled.

Indeed.  I seem to have lost my sarcasm tag somewhere...

Title: Re: Gold and silver coins for sale!
Post by: planetaryjim on March 19, 2008, 12:42:43 AM

Quote from: rhodges on March 18, 2008, 11:00:16 PM

Indeed.  I seem to have lost my sarcasm tag somewhere...

It was at the camp site last year.  Actually, it might have been mine.

  8) 

Look! Gold today is below $1000 an ounce!  Quick, buy some!

Could it fall below $900?  Possibly, if we take the rise from August 2007 to be one complete unit.  If so, the rise was from $660 to $1030 or so.  On that basis, using a Fibonacci re-trace, it might run back to $794.

However, let's look at a one year chart, end of week closing prices, from our friend Bart Kitner and the crew at Kitco.com.[/color]

(http://www.kitco.com/LFgif/au0365nyb.gif)

You see the price up and down around $660 all the way until August 2007.  Then the price rises from that very long, strong support up to about $841 in early November. That is a rise of $181.  Figure a maximum Fibonacci  retrace of 62% and we should see the price drop back down by $112.  That would be $729. It didn't get that low, but it did drop to $779.  That would be a 34% re-trace.  Then what happened?

Then the price of gold built a nice support line around $800 an ounce.  You can see it up and down around that value from mid-November to mid-December.  A good solid month, the price fluctuates around $800.  It actually fluctuates less and less around that line, forming a technical pattern called a pennant.  (In mathematics, it is a damping function.  Just like hitting the damping pedal on a piano.) It is as clear and definite a pennant as the one around $660 which was the character of the first 8 months of 2007.  Not as long a pennant, but just as clear.

Which means that the current price rise builds from that base.  In which case the maximum drop we'd expect to see would be from $1030 (the intra-day peak) down to $887.

But, no, that isn't quite right either, because look at January.  The price curve shows another clear pennant in January, this time around $905 or so.  The pennant formation is not as long as the one before, but it is just as clear.  Which means that the price takes off on 18 February 2008 from a base of $903 and runs up to the peak of $1030.  Right?  So, if that's the case, the max re-trace we'd expect would be $951.

Nope. Still not quite there.  See the little pennant formation, even shorter, right after 25 February?  Almost absurdly, the price formed a pennant around $975.  Nuts!  How many pennant formations in this multi-year rally?  A whole bunch.

Was it long enough to be a technical pennant?  Yes, and actually used by the most prolific technical analyst in gold, JP May, to predict the crossing above $1000.  And?  We might expect the price to drop by around $34 per ounce from its peak.  But, well, it seems to have already done that, and more.

So, does technical analysis tell us anything?  I often have difficulty with it.  People point at "the Devil's Tower formation" and "the horse and saddle formation" and I think back to being a kid and looking for the bunny in the clouds.  Yes, I can see the shapes, but so what?

On the other hand, those support levels where gold did not drop at $975, $905, $800 - those are very real lines.  I've seen the price meet those lines time and time again during the corrections in this long term bull market in gold, and time and again the price bounces right back up.  Not at those particular price points, of course.

Is there enough central bank gold around to force the price down through any particular level?  Possibly.  There may, in fact, be a lot more refined gold than most governments admit.  But, there is also huge demand - which accounts for all these pennant formations.  People in government want to support the illusion that there is not much inflation.  People everywhere else want to buy gold at a good price.  The tension is in that damping function.

Title: Re: Gold and silver coins for sale!
Post by: NoKnownPurpose on March 19, 2008, 08:21:26 AM

It all comes down to perception.  Confidence in the dollar has dropped (for the reasons you mention).  If those practices continue then yes we will likely see the demise of the dollar.  In how long I don't know.  Maybe soon, maybe not in our lifetimes.  I can't predict it any more than I can predict the outcome of the next election (aside from the fact that I won't be thrilled with who wins.)  I think the public is slowly becoming more aware of the crap that's been going on and we may start to see some political and cultural changes to bring America more in line with 21st century reality.  I'm not counting on it however.

Personally I believe in diversifying to mitigate risk.  Ideally you want asset classes that have as little (or even negative) correlation to the other assets in your portfolio.  This is why I own gold AND stocks (in many industries and many countries) AND bonds AND cash and re balance the portfolio as my desired allocation gets out of whack.  This way I sell things as they get expensive (even if they don't feel expensive at the time) and buy things as they get cheap (even when they don't feel cheap).  Over time this strategy will win against nearly any concentrated portfolio (and yes I plan on being invested for better than 30 years - you should too unless you're about to keel over - and if so what do you care either way?).  If things do get "real bad" and we see the end of the world as we know it then it really isn't going to matter as long as I can grow my own food and generate enough income (in dollars or barter) to pay for the things I can't provide myself, which I've always been pretty good at.  On the off chance that the world doesn't end I may miss out on some fabulous gains here and there but my chances of successfully reaching my goals are much better than if I bet the farm on any one thing.  There is always a strong relationship between risk and return.  You can however, reduce overall risk without hugely affecting return by being diversified.

As for buying gold at $400 then watching it go to $300 (sarcasm understood) - it all depends on when you bought it for $400.  If it was in 2004, good for you!, consider selling half and diversifying into other investments, you're playing with the houses money now.  If it was in 1995/1996, eh better than treasuries I suppose...  If it was in 1982/1983 you would have been much better off in stocks or even treasuries.  Just because you can sell something for more than you bought it doesn't make it a good investment.  As an example, I felt pretty good when we sold our house in Michigan for $100K more than it cost, until I remembered the $50K in improvements, probably another $100k in mortgage interest and the fact that it had been 10 years.  At least we had a nice place to live... :)  People recently thought housing was going to continually rise in price, they've since been proven very very wrong and it's destroyed the finances of many families.  The same thing happened with stocks in the late 90s (and in other periods) and the same may be happening with commodities now.   I don't know but I'm not going to bet the farm on them.

You can always choose a time period that makes one investment class look better than another.  This is true of stocks, bonds, gold and other commodities (even tulip bulbs).  In the last few years commodities have most certainly done better than stocks.  That doesn't mean that the trend will continue forever, or even for very long.

Sorry for the long post...

Title: Re: Gold and silver coins for sale!
Post by: planetaryjim on March 19, 2008, 05:15:52 PM

It looks like gold smashed down past the support line at $975 and found the support from mid- to late-February at $940.  Another day or two should show whether that support is good for a few weeks, or whether the powers that be (and hold a lot of gold) want to have the price go further down (and hold less gold). 

I'm reminded of the long consolidation pattern (a very long pennant formation) after the spike up in May 2006.  The price did not again cross above $700 until September 2007.  I actually thought we'd see a long consolidation pattern after gold spiked past $800 in November 2007, but we did not.  There was a short consolidation, followed by the recent spike past $1000.

If you look at a five or ten year chart, you see the same thing again and again.  Gold crosses above a new level ($350, $400, $500, $550, $700, $800, $1000) and consolidates its gains for a few weeks.  For those interested in buying gold, it has been a very good thing.  More people get interested every time the price goes through another resistance level.  And the price drops conveniently for a few days or weeks so that buyers can get a good deal.

NKP, your statement of the modern portfolio theory of diversified and uncorrelated assets is excellent.  My only exception would be to your idea of holding cash.  I think a contemporary portfolio should treat gold or silver as cash, and hold as little fiat money as possible.  I believe that is also a good ethical position.   It is certainly clear that fiscal, trade, foreign, war, monetary, and other policies are wrapped around the purpose of  a declining value for the dollar, so holding cash is unlikely to be beneficial to your portfolio.

If you look seriously at the federal deficits, the national debt, the balance of payments, the balance of trade, the retiring millions, the policies against replacing older workers with foreign immigrants, the existing trade disputes, the growing sentiment for protectionism, and the other current policies of the government, as well as the announced intentions of the three major party candidates (Obama, Clinton, McCain) in the presidential race, I believe you are very, very hard pressed to see any prospect for a dramatic shift in any of these policies.

Now, I have no crystal ball.  I have no magical ability to see into the future.  I cannot tell what gold is going to do next week, nor next year.

For all I know, John McCain is going to have a coronary infarction or stroke out.  In whcih case, being dead, he would not be qualified to be the candidate for the Republican Party.  Several miracles occurring, including dramatic changes in economic affairs, might prompt the Republicans to pick Ron Paul after all.  In which case, dramatic policy shifts might be in the offing.  But, I am not holding my breath.

If there were clear evidence that the current trend in gold and silver were short lived, I would advise caution.  But, there are a lot of problems with supposing any such short term shift.  Gold and silver depend in part on mining production.  Well, the energy industry in South Africa, where a lot of gold comes from, has fallen apart.  Making it tough to mine there.  There was a 20 year doldrums in the price of gold and other commodities, which means that getting started in a career in geology in 1985 was not a top pick, and remained that way until about 2003.  An entire generation of geologists and geo-physicists retired without replacing themselves. 

Finally, lately, some geologists have started graduating, and others noticing the shortage in the profession and the high starting salaries, are getting degrees soon.  Exploration has picked up since 2003.  And it takes about 5 to 7 years to bring a new discovery to market.  It takes about 3 to 5 years to get permits for a new mine in most countries, though, so we are still looking to a supply trap.

There are good reasons to suppose that the current economic down turn is going to be bad for a lot of commodities prices.  But, people treat gold and silver differently, in that they are money.  So, the resource boom in gold and silver is likely to be prolonged.

As this thread continues to be one I started in the Swap Meet, I would like to continue to mention that Vertoro.com offers good prices on gold and silver coins.

Title: Re: Gold and silver coins for sale!
Post by: NoKnownPurpose on March 20, 2008, 01:58:02 PM

Commodity cycles are always long ones.

Jim - I know I seem to do point/counterpoint to your posts but please be assured that I don't completely disagree with your views and in fact believe that commodities (gold and silver in particular) belong in any diversified portfolio.  I always enjoy debate, especially on investing topics since there is no way to ever know it all.

What are your thoughts on gold vs. silver?  As I stated in a previous post, I prefer silver over gold for a couple reasons:

1) It is actually scarcer than gold
2) It has more industrial demand

Basically most of the gold that has been dug up in history is still around.  It doesn't rot, burn or generally get used in great quantity in industry.  Silver on the other hand has many many industrial uses and there is a real possibility of a shortage developing.  (i.e. the demand side is more stable)

I also like oil/gas because they are relatively scarce commodities that once burned are gone.  Since there is arguably (for you non-peak oil believers out there) a fixed supply of the stuff I believe the long-term trend can only go up.  It will need to be much more expensive before anyone seriously makes an attempt to wean society off of it.

Title: Re: Gold and silver coins for sale!
Post by: Daveasxx on March 20, 2008, 02:59:55 PM

Jim,

I got this from APMEX today.  Are you guys having the same suppy problems and if so, who is dumping gold and silver on the market to push down the price.  I know that the makets for metals is extremely small and can be manipulated by big banks and governments.  Are things really that bad right now?  Someone is extremely deserate if they think that they are better off dumping their metals and trying to push the price down.

The same letter is posted on their website at http://www.apmex.com


Dave

Dear David,

Due to the OVERWHELMING demand for precious metals, our online ordering system has been unable to keep up with our customers? needs.  We have had to disable the APMEX ordering system to allow us ample time to upgrade our site to accommodate the increased demand.  We apologize for this temporary problem.  In the mean time, we will be accepting telephone orders for the following items only as we have them available:

               ? 1 ounce Gold American Eagles
               ? 1 ounce Gold Canadian Maple Leafs
               ? 1 Ounce Gold Krugerrands
               ? 100 oz Silver Bars
               ? Misc Generic .999 Fine Silver
               ? 90% Coin Silver


During this time, we will have a minimum order of $5,000.  We regret we have had to make this drastic change to our ordering process and rest assured, we are working expeditiously to correct the problem.  As soon as we have our new site up and running, we will notify you via e-mail when you can again place orders online.

You may contact us during normal business hours Monday ? Friday 7:30 am ? 4:00 pm cst. (800) 375-9006

If you have existing orders with us, we have in-stock all items needed to fulfill your orders and are shipping them as scheduled.  Once our new site is functional, we will be able to activate our complete inventory line again.



Respectfully,

Scott Thomas
President & CEO

P.S.        We are actively looking for new bullion inventory to purchase.  If you have items that total $2,500 or more and are interested in selling, please call our trading offices at the number listed above.  We are paying strong numbers for ALL Precious Metals!

Title: Re: Gold and silver coins for sale!
Post by: planetaryjim on March 20, 2008, 03:30:17 PM

Quote from: NoKnownPurpose on March 20, 2008, 01:58:02 PM

1) It is actually scarcer than gold
2) It has more industrial demand

I like gold and silver about equally.  It is much easier to move into a position in silver, but it costs more to ship the same dollar amount.  The monetary density of gold is much greater, but, I do not favor platinum which has even higher density and greater price per ounce (owing to its similarity in appearance to silver).

For current investing, I think the way to go is clearly silver, unless storage issues are a real problem, in which case online silver such as the exchange traded fund or GoldMoney silver might be the solution.  Silver always responds much more significantly to inflation and hyperinflation than gold.  The classic example being 1964 to 1980 was $1.29 per ounce to $50 per ounce, or an increase of 38.75 times the base.  The 1971 to 1980 change for gold was $35 per ounce to $850.  So, 24.2 times the base.

I think one can certainly dispute the rarity of silver issue.  I do understand the arguments, but those silver molecules don't get used up.  They remain in the environment.  Past iron on the periodic table we can only guess about the distribution in the universe.  It stands to reason that carbon is more common in the universe than argon for the same reason we find more hydrogen in the universe than helium.  Helium is, we believe, generally a result of fusion of hydrogen in stars.  The elements up through iron are formed by fusion, but iron atoms don't fuse, which is why stars eventually die.

Of course, we don't really know about the primary source of all materials, including hydrogen, the Big Bang.  The evidence for the Big Bang has been fairly compelling.  But, of course, as a huge explosion, we cannot know what materials fused together.  We do think that much of the trans-ironic elements such as gold and silver are formed in supernova explosions.  My dad did a star survey tracing the gold line in the spectra of several hundred stars, trying to establish its prevalence in the universe.  I don't really know, but I don't think the results of the survey were ground breaking.  So, although we do think that many major ore bodies are asteroidal in origin - so called astroblemes - we cannot look to the stars to establish the prevalence of the two metals.

We can, and should, look to the ground.  And we find silver present in a lot more ore bodies than gold.  Silver is a by-product of a number of other mining activities.  It is found by itself and in compounds with sulfur, arsenic, antimony, and chlorine.  It is found in ore bodies with copper, copper-nickel, gold, lead, and zinc.

Gold is associated with some iron oxides in very weathered deposits, and found in ores with copper, tin, tungsten, and very rarely with molybdenum, antimony, and uranium.

So, we do a lot more silver mining, and we find huge pilings of silver-rich tailings associated with mines for many other basic metals (copper, nickel, lead, gold, and zinc).
I think if you look at the mining and refining of silver, you'll find the volume is much larger.  There is also a great deal more silver recovery from recycling.

Silver certainly has more industrial demand, and so a great deal of it is dispersed in all kinds of products, some where you would not expect to find it.  And, it is often not highly concentrated enough in those products to bear much effort to recycle.  On the other hand, the price volatility of silver is such that there seems to be large reservoirs, as it were, in the world, making it hard to sustain some price rises (e.g., in the 1990s).

One of those reservoirs is definitely peasants in India who have hoarded silver and copper for generations.  I believe some of this behavior traces back to the fiat money inflation under the Mongol Khans of the 13th and 14th Centuries.  So-called mulberry bark paper became quite worthless, and people who work the land have long memories.  I recall very distinctly an analysis after the price spike in 1998 to $7.80 an ounce.  Apparently a huge amount of silver came out of India right after, because peasants finally saw a comparatively free market in agriculture (the India government had been very socialist before then) and bought land with silver.  There are, of course, other substantial reservoirs.  The Communist Chinese government has a large amount of silver in its reserves.

I don't think the USA really does.  I believe most Western countries mint silver coins of silver they buy the same year.

There is no question that there are far more contemporary uses for silver in industry than gold.  However, there was a very recent story on nano-scale usage of gold in cleaning up trichloroethane.  http://www.scienceblog.com/cms/node/7065 (http://www.scienceblog.com/cms/node/7065)

I don't really take offense at your responses, NKP, but I will take the liberty of thinking about a suitable reply to any Swap Meet postings you list.  -grin-
 

Title: Re: Gold and silver coins for sale!
Post by: planetaryjim on March 20, 2008, 04:00:51 PM

Quote from: Daveasxx on March 20, 2008, 02:59:55 PM

I got this from APMEX today.  Are you guys having the same supply problems and if so, who is dumping gold and silver on the market to push down the price.

Yes, we are having problems with our suppliers.  Our leading vendor, who provides great prices to us, just increased their standard anticipated delivery delay from 21 days ( as of mid-February) to 30 days.  And they say we should anticipate delivery delays out to 40 days.

Dumping gold and silver to push down the price would not, of course, generate any delivery delays.  It ought to increase supply.  But, that would be assuming that actual physical delivery occurs.  There is a lot of "paper gold" in the world, starting with Special Drawing Rights amongst the international banking gangsters and working your way down.   I'm told that Street-tracks (sp?) is applying for delivery exemptions for its gold and silver ETFs.

Quote from: Daveasxx on March 20, 2008, 02:59:55 PM

I know that the markets for metals is extremely small and can be manipulated by big banks and governments.  Are things really that bad right now?  Someone is extremely desperate if they think that they are better off dumping their metals and trying to push the price down.

Really, I don't agree that the markets are all that small.  The London gold market trades 25 million ounces a day.  For various reasons, I think that is about a quarter of daily world gold trading.  If we assume 250 trading days a year, more or less, and 100 million ounces traded per day, and $905 for the price per ounce, I make it $22.6 trillion per year in gold trades.  I have a hard time thinking of tens of trillions of anything as small, though, I admit, I have not been adjusting for hyperinflation much, yet.

There are two good general theories on the price of gold and silver.  The conspiracy-type theory is extremely well substantiated, and there is enormous evidence for market manipulation, not only in gold, but in stocks and bonds by central banks and "the plunge protection team" and other entities.  Perhaps the best resource for data on that topic is GATA, the Gold Anti-Trust Action Committee, http://www.gata.org/ (http://www.gata.org/)  If you join, tell them I sent you.  Huge amounts of info are on all kinds of pages, like Jim Turk's GoldMoney.com and Freemarket Gold and Money Report fgmr.com and on Doug Casey sites.  Ed Steer blogs for CaseyResearch.com every day on the market manipulation of gold.

The wacky, zany, black helicopters theory is that there is a whole lot more gold (and silver) above ground than the central banks and World Gold Council admit.  Given how easy it is to pan for gold, and how much evidence there is for ancient gold mining and usage going back about ten thousand years, I do think the amount of gold in refined form is much greater than most people say.  I am particularly taken with archaeological finds in formerly Scythian territories.  And with the fact that refined platinum is found on a sarcophagus in ancient Egypt - platinum was supposedly "discovered" in the 18th Century, I think.

What makes the "lots of gold in the world" theory zany and wacky?  It refers to the Japanese Imperial Army and Navy ransacking East Asia for gold from 1895 to 1945 and moving many hundreds to many thousands of metric tonnes of the stuff to Japan, and to the Philippines when Japan was cut off.  Yamashita's gold.  Given the global flow of gold and silver to that part of the world, because silk and spices were there and not elsewhere, for thousands of years, I take this theory much more seriously than some.

But, you ask, who is desperate?  Are things really that bad?  Those in power evidently think so.  Yes, there is a great deal of evidence that central banks, sometimes with the cooperation of major bullion dealers like JP Morgan Chase, and as recently as 2003 with the cooperation of major mining companies like Barrick (see the Blanchard Companies lawsuit for details) are selling gold, lending it to sellers, and doing everything else they can to suppress the price.  In 1980, the silver market rally was ended by a change in margin requirements which forced the Hunt Brothers to sell - which was the signal everyone else had been waiting for.

The people in government and the people who pull their strings (I think of these marionette puppeteers as the international banking cartel and military industrial complex, but you can think of them as The Powers That Be if attacks on banking or defense contracting make you unhappy) don't want to lose control.  And, I think they are losing control.

The Internet means that information is totally out of control.  Since most economic activities are now flows of information (by dollar volume and soon by event volume) with one person taking possession of some information (a DVD, a .pdf, a book, a television advertisement) in exchange for digital transfer of information representing money (online banking, digital gold, etc.) the economy is about to go completely black.  Government efforts to force transparency past the technology of public key cryptography are over a decade too late. 

What does that mean, really?  Suppose you could buy and sell, every day, any day, any time and know, for sure, that you and the other party in the transaction were the only two who could know about it.  You buy and he sells, and nobody else knows.  Moreover, if there were a way to trust 90% of the people you would encounter as possible trading partners, you could trade with anyone.  And if it cannot be detected that you've made a trade:

* It cannot be taxed
* It cannot be regulated
* It cannot be prohibited (reserved for the exclusive use of the elite)

At that point, which I believe is actually a few months in the past, now, what can a government do to collect taxes to pay its debts?  What can banking gangsters (banksters) do to collect usury from governments and companies and individuals?  What market manipulations would be possible in a completely non-transparent (black) market to gain control?

Make no mistake, I'm crazy about this idea.  I think the stock market bust in 2000 was orchestrated to make sure that the big new tech firms were available for control by the same old bad families.  I think we can trace this desire for power, this love of other people's money, this essentially covetous greed, this sin, if you would, back to a number of 18th Century conspiracies, of Masons, Illuminati, Adam Weishaupt, and 19th Century hooligans like Cecil Rhodes.  Rhodes admits as much in one of his diary entries.

The greatest irony in this whole situation may be that the people who are intended beneficiaries of this long term program are white, English-speaking, and of European ancestry.  But it is the peoples in their own countries that those aristocrats (Dirty Sanchez scum) kept victimizing and traumatizing and robbing and killing who are the most determined to discover the sources of their power and destroy them.  Irony on that magnitude is, well, it is an acquired taste.  Like caviar, it looks and smells weird until you acquire the taste, and then you can't resist it.

Please buy gold and silver coins from Vertoro.com.  We also sell digital forms of gold and silver.  http://www.vertoro.com/buy.htm (http://www.vertoro.com/buy.htm)

Title: Re: Gold and silver coins for sale!
Post by: Daveasxx on March 21, 2008, 12:12:30 AM

Quote

But, that would be assuming that actual physical delivery occurs.  There is a lot of "paper gold" in the world, starting with Special Drawing Rights amongst the international banking gangsters and working your way down.

I was wondering about that!  Bastards!!

Quote

I'm told that Street-tracks (sp?) is applying for delivery exemptions for its gold and silver ETFs.

No kidding!?!  I thought this was not allowed under the rules that allowed the ETF to be created.

Quote

Yes, we are having problems with our suppliers.  Our leading vendor, who provides great prices to us, just increased their standard anticipated delivery delay from 21 days ( as of mid-February) to 30 days.  And they say we should anticipate delivery delays out to 40 days.

Thanks for the info Jim.

I just picked up a substancial amount of 90% silver coin on Ebay for under todays closing spot (a screaming deal to say the least).  I was lucky to do so...  I'll have to talk to you offline about what you guys can do.

Title: Re: Gold and silver coins for sale!
Post by: NoKnownPurpose on March 21, 2008, 09:10:13 AM

Quote from: planetaryjim on March 19, 2008, 05:15:52 PM

NKP, your statement of the modern portfolio theory of diversified and uncorrelated assets is excellent.  My only exception would be to your idea of holding cash.  I think a contemporary portfolio should treat gold or silver as cash, and hold as little fiat money as possible.  I believe that is also a good ethical position.   It is certainly clear that fiscal, trade, foreign, war, monetary, and other policies are wrapped around the purpose of  a declining value for the dollar, so holding cash is unlikely to be beneficial to your portfolio.

The problem is, I don't view commodities (including gold/silver) as cash.  Gold and silver in actual cash form (coins) carry a relatively high premium (with exceptions) that make them a bit less liquid than fiat cash.  The markets for metals are also highly volatile (as the last few days have shown).  All of this adds up to make Gold and Silver unsuitable for the purposes I hold cash (unexpected expenses and taking advantage of times when I feel that other assets classes are 'cheap'.  ex: right now we're entering a period where I think there are some good buys in stocks.  If I were to be holding gold my buying power would have declined by roughly 10% in the last couple of days.  The debasement of the dollar is typically over a slightly longer time span.  I do agree that holding cash in the long-term is a losing proposition.

Quote from: planetaryjim on March 19, 2008, 05:15:52 PM

If you look seriously at the federal deficits, the national debt, the balance of payments, the balance of trade, the retiring millions, the policies against replacing older workers with foreign immigrants, the existing trade disputes, the growing sentiment for protectionism, and the other current policies of the government, as well as the announced intentions of the three major party candidates (Obama, Clinton, McCain) in the presidential race, I believe you are very, very hard pressed to see any prospect for a dramatic shift in any of these policies.

Agree that things are not likely to get better in the short run.  I had hoped that Ron Paul's campaign and the support shown for it would have had some impact on the race.  McCain is probably the least evil of the three but I see him as basically a continuation of the Bush administration's policies where spending and fiscal responsibility are concerned.  At least the amnesty they will give "guest workers" will provide some additional tax income.  Although I'd much rather see us take a New Zealand-like approach to immigration where you either need to bring cash or specifically needed skills.

One interesting potential side effect of the decline in housing/stock prices is that I suspect many boomers will have to delay their retirement plans.  Their retirement portfolios have undoubtedly taken a hit and it is now far more difficult to use the home as an ATM.  Will be interesting to see if this phenomena actually comes to pass.

Quote from: planetaryjim on March 19, 2008, 05:15:52 PM

For all I know, John McCain is going to have a coronary infarction or stroke out.  In whcih case, being dead, he would not be qualified to be the candidate for the Republican Party.

Though sadly he'd probably be a better candidate because of it. ;)

Quote from: planetaryjim on March 19, 2008, 05:15:52 PM

As this thread continues to be one I started in the Swap Meet, I would like to continue to mention that Vertoro.com offers good prices on gold and silver coins.[/color]

Your prices for digital gold are quite reasonable...

Title: Re: Gold and silver coins for sale!
Post by: NoKnownPurpose on March 21, 2008, 09:45:42 AM

Quote from: planetaryjim on March 20, 2008, 03:30:17 PM

I don't really take offense at your responses, NKP, but I will take the liberty of thinking about a suitable reply to any Swap Meet postings you list.  -grin-

I wouldn't want it any other way. :) Part of being an honest businessman is being able to stand up to scrutiny/criticism of your products and company.  You do that admirably, I find that to be a rare quality.

Title: Re: Gold and silver coins for sale!
Post by: planetaryjim on March 21, 2008, 03:11:14 PM

Quote from: NoKnownPurpose on March 21, 2008, 09:10:13 AM

The problem is, I don't view commodities (including gold/silver) as cash.  Gold and silver in actual cash form (coins) carry a relatively high premium (with exceptions) that make them a bit less liquid than fiat cash.

There are always exchange rates for holding cash in one form versus another.  There are fees for holding cash as traveler checks, or as EU euros, or as Swiss francs.  I don't think the fees for moving into and out of gold and silver are out of line with these. 

One of the more interesting programs in regard to this issue is GoldMoney.com.  They offer a mechanism for moving into and out of gold and silver by using their facilities to wire funds.  I believe they have ACH in Canada and the UK, though they may have shut their USA facilities for doing so.  I'd have to check.  But, I believe a sell order goes through at spot, with no fee.  I could check into it further, if you wish.

Quote from: NoKnownPurpose on March 21, 2008, 09:10:13 AM

If I were to be holding gold my buying power would have declined by roughly 10% in the last couple of days.

I'm perfectly agreeable to the notion that the drop of gold from $1030 last Friday to $919 today represents a 10.8% drop in the purchasing power of your gold (in dollar terms) if, and only if, you agree that the cash you held in gold appreciated from $660 in August to $1030 last week, for a 56% improvement in buying power, or a 112% bonus in the period ending last Friday. 

One could combine the two comparisons and say that you are currently better off by 39% for any cash you held as gold from August 2007.  If you can show me a way to hold cash that improves at 78% per annum, I'd be well pleased.

For cash held as silver, even with this week's drop (which I regard as temporary profit-taking) the number is closer to 50% per annum.  Again, there are not a lot of money market accounts, nor certificates of deposit on small dollar deposits (less than $100K) which would pay that kind of return.

Let's say that you paid a 10% coin premium to get into gold, and a 10% premium to get out, you'd still be better off holding gold for the last six months than holding cash.

Quote from: NoKnownPurpose on March 21, 2008, 09:10:13 AM

Though sadly he'd probably be a better candidate because of it.

Your proposal that the only good candidate is a dead candidate has a certain appeal.  Reminds me of that line from the film "Starship Troopers."  "The only good bug is a dead bug."

Quote from: NoKnownPurpose on March 21, 2008, 09:10:13 AM

Your prices for digital gold are quite reasonable...

Thanks!

Title: Re: Gold and silver coins for sale!
Post by: NoKnownPurpose on March 21, 2008, 04:30:07 PM

Quote from: planetaryjim on March 21, 2008, 03:11:14 PM

There are always exchange rates for holding cash in one form versus another.  There are fees for holding cash as traveler checks, or as EU euros, or as Swiss francs.  I don't think the fees for moving into and out of gold and silver are out of line with these. 

Yes but if I hold cash in a money market, municipal reset, or a foreign currency ETF those fees are much smaller, and depending on which vehicle I hold, I get paid interest.

Quote from: planetaryjim on March 21, 2008, 03:11:14 PM

One of the more interesting programs in regard to this issue is GoldMoney.com.  They offer a mechanism for moving into and out of gold and silver by using their facilities to wire funds.  I believe they have ACH in Canada and the UK, though they may have shut their USA facilities for doing so.  I'd have to check.  But, I believe a sell order goes through at spot, with no fee.  I could check into it further, if you wish.[/color]

I've heard of GoldMoney, seems like a nice service.  The no ACH thing to/from the US is somewhat of a bummer.

I also have a small account at BullionVault (http://www.bullionvault.com/from/mypfblog) that I use to make trades.  The interesting thing about them is that they make a market even when the gold exchanges are closed.  You can buy/sell gold on in their New York, Zurich or London vaults.  You can also trade in dollars, Euros or Pounds.  The smallest amount you can trade is 1 gram I believe.   

As an added bonus they will give you a free gram of gold to trade with.  (there are a few hoops to jump through to get it.)  Watch the banner section on the right of the page you go to, the free gold banner will rotate in.)  The do charge a commission of as much as .8% but I've found that I can mitigate that by bidding somewhere below the ask price.

For longer-term holdings though I prefer physical (coins).

Quote from: planetaryjim on March 21, 2008, 03:11:14 PM

I'm perfectly agreeable to the notion that the drop of gold from $1030 last Friday to $919 today represents a 10.8% drop in the purchasing power of your gold (in dollar terms) if, and only if, you agree that the cash you held in gold appreciated from $660 in August to $1030 last week, for a 56% improvement in buying power, or a 112% bonus in the period ending last Friday. 

If I was holding 100% of my cash in US dollars I'd agree with you.  However I'm not, so it hasn't been quite that bad.  No question or argument though that, gold was a good place to be in the last six months.

Quote from: planetaryjim on March 21, 2008, 03:11:14 PM

One could combine the two comparisons and say that you are currently better off by 39% for any cash you held as gold from August 2007.  If you can show me a way to hold cash that improves at 78% per annum, I'd be well pleased.

For cash held as silver, even with this week's drop (which I regard as temporary profit-taking) the number is closer to 50% per annum.  Again, there are not a lot of money market accounts, nor certificates of deposit on small dollar deposits (less than $100K) which would pay that kind of return.

If you're willing to make me a promise that any gold I buy will appreciate 78% (heck even 50%) per annum from here on out I'll bite...and be more than well pleased.  Over a long enough time span - forget Wyoming, I'll start my own country. :)

If we could all invest in the past this would all be much easier.