Gold and silver coins for sale!

[rhodges]

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.

[Boston]

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

[rhodges]

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

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

[planetaryjim]

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

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

   

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]

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.

[NoKnownPurpose]

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...

[planetaryjim]

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.

[NoKnownPurpose]

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.

[Daveasxx]

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!

[planetaryjim]

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

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-
 

[planetaryjim]

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.

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/  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

[Daveasxx]

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!!

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.

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.

[NoKnownPurpose]

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.

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.

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.

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...

[NoKnownPurpose]

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.

[planetaryjim]

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.

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.

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."

Your prices for digital gold are quite reasonable...

Thanks!

[NoKnownPurpose]

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.

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 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).

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.

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.