Shalom
I am not a business man or a great investor but I do hear from the Lord and get words of knowledge. In 2001 I had a word to buy gold it was around $200 an ounce now it is over $1400 an ounce. Some say it will go to over $5000 an ounce. I am not sure but I do believe it will go to $2000-$3000 an ounce soon.
I recommended buying silver a year ago and it was $15 an ounce now it is $35. I keep warning regarding stock market, IRAs and the US dollar. Time is running out the window of preparation is closing.
Here are some articles on gold, silver and bartering that will help you.
Shalom, Clint
SPENDING YOUR STASH
by Peter Schiff
While gold and silver coins are nice to look at, and there's a certain sense of independence one gets from owning them, most purchasers buy physical precious metals with the goal of eventually spending them.
As they say, you can't take it with you.
Unfortunately, many purchasers buy without ever knowing how to spend, and that can cause problems down the road. The reason I say "spend" instead of "sell" is that selling your coins for dollars (or euros, yen, etc.) is only one way to spend them. The other is to barter directly for goods and services. Whichever method you choose, it's important to know all your options.
SELLING BACK TO THE DEALER
Most legitimate bullion dealers will buy back what they sell you for a few percentage points less, depending on the product, amount, supply, and demand for that product at the time of repurchase. This is called the "spread."
However, dealers who sell products like numismatics, proof sets, or commemoratives at extreme markups will either offer much less on buy-back or refuse to buy back altogether. This is a bad sign. Your dealer should be able to tell you in plain language what their buy-back policy is, so don't be afraid to ask. In fact, when buying coins, its always a good idea to ask your dealer what they would pay for those coins were you selling them instead. Better yet, call back under an assumed name and pretend you are selling just to make sure you are getting an honest answer.
SELLING ELSEWHERE
There is a large, very liquid global market for bullion coins and bars. No one requires you to sell back to the dealer who sold you the coins. If you need the absolute best price possible, feel free to shop around. Depending on a dealer's need for a particular type of coin at a particular time, they may be willing to offer a better price. For instance, the US Mint has been running low on American Silver Eagles due to high demand, so a dealer which doesn't have a large stock of those coins may be willing to pay more.
Another way to sell your coins is on auction sites like eBay. Since you'll be selling to another retail consumer, you should be able to achieve a slightly higher price. Don't forget, though, that auction sites will charge you a fee for their services, so this should be taken into account when considering your net return.
Finally, there is always an opportunity to sell among your community. Your neighbors may appreciate saving a bit on the markup and shipping costs, and not having to worry about finding a reputable dealer.
In reality, though, the small percentage you may save from shopping around or selling online will pale in comparison to your overall investment. If your time is as precious as your metals, it may not be worth your effort trying to save a few bucks on the sale.
BARTER IS BETTER
I encourage bartering as the best way to spend your gold and silver bullion. This way, precious metals take over the role that the government's monopoly money used to play in your life. You just earn dollars, convert some to bullion, then spend them as the opportunity arises. This means your savings spend less time in paper form, and are less vulnerable to inflation.
Oftentimes, you can get a very good value for your coins because people are naturally drawn to them, but may not know the best way to get them on their own. Of course, because banks don't accept gold and silver as deposits, major chains often will not barter. But smaller shops and individuals often will - and you'll be doing them a favor by adding to their inflation-proof savings.
METALS AS A MEASURE
The more I barter, the less important it becomes how many US dollars I might get for my gold than how many loaves of bread or boxes of Cheerios. What you'll find is that the prices of these goods in terms of gold tends to be pretty stable over time, or they may even get cheaper.
This illustrates that gold is a more stable form of money than paper dollars, and begins to explain why savings should be kept in precious metals rather than fiat currencies.
WHICH PRODUCTS ARE BARTER-READY
Well-known, common coins, like the American Eagle or Canadian Maple Leaf, are the easiest to barter. Rare, collectible, or other numismatic coins are virtually impossible to barter.
Also, you want to have coins with values in small denominations, typically silver, as well as large denominations, usually gold and/or platinum. One troy ounce is the standard size, but fractional coins from well-regarded mints are also fairly easy to trade.
Bars are much more difficult to barter because they often have larger values and are less recognizable to the average person. Since there is a very small incidence of counterfeiting, bars may have to be assayed before a non-dealer will accept them.
Coins face almost no counterfeiting, mostly because it's quite difficult to produce a coin with reeding and artwork to match a reputable mint. The one exception is the Chinese Panda coin, which has periodically succumbed to that country's notorious counterfeiters.
BETTER TO HAVE SAVED AND SPENT...
The point is that there are many, many ways to use your gold and silver coins besides storing them in a safe to give to your grandkids. Yes, precious metals are a reliable form of savings, but they are also money. Ultimately, much of your long-term savings should be invested in businesses that offer profits or interest. But short- and medium-term savings should be held in precious metals as opposed to doomed fiat currencies like the US dollar.
When it's time to spend your bullion, your choice will come down to convenience vs. best price. You can always sell to a reputable dealer at a small spread. This is usually the easiest and quickest way to achieve liquidity. But there can also be handsome rewards for those who barter their bullion directly for goods and services.
So, next time your poker buddies say "ante up," do them a favor and throw a Silver Eagle into the pot instead of a couple of crinkled Jacksons. Then, try your best to win it back.
VOLATILE TIMES AHEAD
by Mary Anne & Pamela Aden
Gold nearing $1500, silver nearing $40, oil well above $100! What a week... what a month... what a year!
Escalating violence in Libya is adding fuel to the already strong bull markets, especially with concern growing that turmoil could spread into even more countries.
The threat of possible supply disruptions is providing the real fire under oil, while demand continues to grow. Gold and silver, in turn, are the safe havens as inflation concerns and uncertainty prevail.
But from another angle, gold and silver are also being driven higher by the same force that is driving the unrest - namely, a sea of liquidity introduced by the Federal Reserve. Since the Fed has shown no sign of changing course, we expect much more volatility to come.
INFLATION STARVATION
In this market, the major danger is coming from soaring agricultural prices. Global food prices rose to a record in February. Rising food and oil are a deadly match because these "needs" make up a large portion of the budgets of the world's poor (see Chart 1). When someone loses their ability to eat and get to work, they have nothing left to lose by taking to the streets.
Just since last June, 44 million people were pushed into extreme poverty according to the World Bank. This alone explains why governments are being toppled in the Middle East and North Africa. The United Nations says other countries at risk of food riots are Bolivia and Mozambique.
CHINA'S PRUDENCE
In volatile times, protecting yourself, your family, and your assets is most important. China is smart. While the West debases its currencies, China continues to appreciate the bull market in gold. Most interestingly, the government is making it even easier for its citizens to buy gold.
Late last year, for instance, the World Gold Council (WGC) and the Industrial & Commercial Bank of China (ICBC) got approval to launch a gold investment product, called the ICBC Gold Accumulation Plan, where average Chinese can obtain gold-linked savings accounts. Over one million accounts have already been opened with over 12 tons of gold backing them.
One million people represents 0.07% of the total Chinese population. Assuming growth trends continue, this represents a very deep well of potential gold buyers.
CENTRAL BANKS STILL ON BOARD
Central banks are still buying and holding gold for the first time in 21 years.
Once again, China is the leader. Its demand for small bars and coins increased by 70% year-over-year in 2010, and new purchases have already climbed to 200 metric tons in the first two months of 2011.
The Middle East is joining in as well. Demand for bars and coins jumped 39% in Q4 from a year earlier, according to the WGC.
We only see this trend growing as countries seek some form of insurance in a fast-changing geopolitical landscape.
ON THE VERGE OF ANOTHER MILESTONE
In 2005, the first milestone in the bull run occurred when gold broke clearly above $500. This was the rise when it broke clearly away from the dollar and started soaring in all currencies (see gold in Swiss francs on Chart 2).
2009 was the next milestone when gold broke clearly above $1000. This started a stronger phase of the bull market, and since then, gold hasn't looked back.
With gold now approaching $1500, we're nearing another significant psychological level. Gold will most likely resist near $1500 before moving clearly above this level. The $2000 area will then be the next target.
Will $5000 - $6000 or more end up being the final destination? Time will tell. It looks like this is a possibility, but it's more important to keep an eye on the market and stay with the trend for as long as it lasts.
Right now, the gold bull doesn't even appear to have gone mainstream. Just ask your neighbors.
BRACE FOR IMPACT
Gold's 7.25% decline in January was very mild... barely a correction, which means a significant decline is still to come. For a broader look, since the 2008 meltdown, gold has gained 104% with only a 13.3% decline along the way. For now, global turmoil will keep a floor under prices, but there may be a pull back when the situation stabilizes.
As has been our recommendation, if you have no physical gold in your portfolio, it's a wise idea to start averaging in by making regular purchases. If you already have large holdings, you may wish to wait until the next correction to buy with both hands.
We see more volatility in the months and years ahead. It's safer to be in precious metals than to wait for the "right price" and be left without. Clearly, the world's major governments feel the same way.
Mary Anne and Pamela Aden are authors of The Aden Forecast, an investment newsletter now in its thirtieth year. They specialize in the precious metals and foreign exchange markets, as well as the US and international equity and credit markets.
SILVER IS GETTING TOO POPULAR... RIGHT?
by Jeff Clark of Casey Research
It's no secret that the silver market is white hot. As I write, silver American Eagles and Canadian Maple Leafs are sold out at their respective mints. Buying in India has gone through the roof, especially noteworthy among a people with a strong historical preference for gold. Demand in China continues unabated. Silver stocks have screamed upward.
So, as an investor looking to maximize my profit, I have a natural question: is the silver trade getting too crowded, meaning we're near the top? Have the masses finally joined the party such that we should consider exiting? After all, it's not a profit until you take it, and you definitely want to sell near the top.
There are several ways to measure how crowded the silver market might be. I prefer to look strictly at the big picture and not get caught up in the weeds. If you believe a mania is ahead, then we want to look for signs of market exhaustion or the masses rushing in. Nothing says "peak" more than an investment everyone is buying.
So, how crowded are silver investments right now? Let's first look at the ETFs.
At $35 silver, all exchange-traded funds backed by the metal amount to $20.7 billion. You can see how this compares to some popular stocks. All silver ETFs combined are not even a quarter of the market cap of McDonald's. They're about 10% of GE - a company that still hasn't recovered from the '08 meltdown. Exxon Mobil is more than 20 times bigger. And this isn't even apples-to-apples, as we're comparing the entire silver ETF market to a few individual stocks.
This is even more interesting when you consider that it's the ETFs where most of the public - especially those that are new to the market - first invest in silver. So while the metal has basically doubled in the past seven months, total investment in the funds is still far beneath many popular blue-chip stocks.
Okay, maybe all this money is instead going into silver mining stocks. How does the market cap of the silver industry compare to other industries?
While you fetch your magnifying glass, I'll tell you that the market cap of the silver industry is $73.1 billion. It barely registers when compared to a number of other industries that I picked mostly at random. It is roughly 19 times smaller than the gold sector. The dying newspaper industry is over 26 times bigger. Drug manufacturers are 213 times larger. And here's the fun one: the market cap of the entire silver market, with all its record-setting prices and stock-screaming highs, represents just one-third of one percent of the oil and gas industry.
To be fair, there are a number of sectors that are smaller than silver. Radio broadcasters ($43.2B), video stores ($10.9B), and sporting goods stores ($2.5B) have puny market caps, too. But then again, who's buying DVDs or baseball mitts to protect their wealth from a coming inflation?
In sum, silver hardly presents the picture of an investment that is too crowded.
I'm not saying one should rush to buy silver right now. After all, silver has doubled in seven months. Unless this is the beginning of the mania, prudence would certainly be called for at this juncture. The price will always ebb and flow in a bull market, and an ebb is overdue.
The question, of course, is from what price level it occurs. What if a correction doesn't ensue until, say, a month from now, and the price falls back to... where it is now? I remember some articles in January that insisted silver would fall to as low as $22, and, well, they're still waiting. In the meantime, they've missed out on some huge gains. For silver to fall back to $22 now would require a 40% drop; not impossible, but I wouldn't hold my breath.
Fixating on market timing takes your focus off the ultimate goal. In my opinion, instead of worrying about what will happen next week or even next month, focus on how many ounces you have, and then buy at regular intervals until you reach your desired allocation. This has the added benefit of smoothing out your cost basis. And don't forget to buy more if your assets or income increase.
As the silver market races forward, you'll want to be well ahead of the pack. So far, there is plenty of space in the field for new runners, but someday in the not-too-distant future, average investors will be tripping over themselves to join in. That's when we'll sell our positions and smile all the way to the bank.
Jeff Clark is the editor of BIG GOLD, Casey Research's monthly advisory on gold, silver, and large-cap precious metals stocks
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