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Thursday, December 6, 2012

An Ounce of Gold Will Be $800 Before $2500

A few points on my position:

First, in my estimation, over the next ten years gold will be a sound investment. Second, silver is not the equivalent of a cheaper gold, but should actually be considered an industrial metal, similar to copper, and thus avoided and even sold short. Third, I believe current U.S. economic policy is just staving off the inevitable economic collapse that has been foreshadowed by the downturn in 2008 and 2009.

Long story, short: faith in fiat currency will return, and soon.

The current economic situation feels all too familiar, and it's not for any good reasons. The Euro-zone is on the brink of economic collapse, the U.S. government is days away from being $16 trillion in the hole, and the Bush tax-cuts set to expire. Any semblance of a broad economic confidence in which businesses expand workforces, banks lend money, and consumers spend money is fading. Contrary to all the news-talk of a "recovery," the probability of an already fragile U.S. economy slipping into a new recession is still increasing each day.

Now, based on these reasons, one would think gold and precious metal demand would be on the rise, and thus, resulting higher prices for metals. Although rational, this is probably not going to be the case. For the past three months, gold and silver have been flat with a negative price bias. Only over the past week has gold moved more than a percent intraday in either direction. While the current move does seem to be higher, and I do anticipate this continuing in the very near term, this is more than likely just a head-fake and a prime opportunity to short the metals for a more extended decline.

Recent reports from the governments of China and India have disclosed declining gold purchases. While this usually wouldn't be cause for concern in "normal" economic times, these easily overlooked reports should be considered a warning sign to those who have become accustomed to the "gold price floor" of the last five years.

Next, and possibly the most important according to the market, the Eurozone leaders are showing a united front in keeping the economic union together, capitalizing banks, and protecting the economically lesser member nations. Even going a step further, hints of the Eurozone leaders considering political unionization are on the rise.

So, what does this mean for us? First, it means a false sense of confidence returning, at least for the next six months to two year time frame. What does this mean for trade positioning? Being long the Euro over the next six months, at least until 1.35/USD, and short gold and silver is a prudent strategy.

Keep in mind, we are always trying to be positioned properly for the six month time horizon, and planning our next six month period. Over the next two years, the black swan will emerge in Europe (and possibly here depending on monetary and fiscal policy in the first term of the next U.S. presidency) and the inevitable downward price adjustment will occur. Until 2014, there is much money to be made by playing emotions.

How to Know Where to Buy Gold What It Means to Start Investing in Gold Guidelines For Investments In Silver Buying World Coins With Confidence - (Do You Desire More Information on the Coins You Love?) Do You Own Mint Packaged or Graded Coins? China Is Producing Knock-Offs of These Too

Gold Price $3,500 To $5,000 - Within 1-1/2 Years

Money printing from the world's central banks will all need to come together as one, to prevent the major economies of the world from imploding. Events such as high unemployment world-wide could be a trigger to set off the printing presses. One sharp example here is unemployment numbers. Within many countries real unemployment rates are 25% with 50% for youths.

In America if you are not misguided by the main stream media and the governments "official unemployment estimates, you would find real unemployment within America at 23 percent. Alone, these statics suggest a ready made recipe for an economic global disaster. Currently it seems the world is not yet suffering enough high unemployment to cause the central bank printing presses to go berserk.

Once the trigger event happens all the central banks will ban together and let the printing presses run non-stop. The excessive buildup in the worlds currency supply will be enormous compared to the already enormous over-supply of currency already in existence. Inflation will mount tremendously and in the end, allow currencies all over the world to collapse. By now, a huge on-rush of gold buying will occur, regardless of its market price.

Here is the Kicker!

These huge banks, including the central banks don't have the gold reserves in their vaults that they claim. In no way could they satisfy their gold commitments should they be demanded too. While the Fed claims to have almost 8,000 tons of gold in their vaults and the IMF 3,000 tons chances are extremely high these two banking entities hold far less than what they claim.

Bottom-line this will become a problem. A problem that will generate a loss of confidence in the currencies. Once this happens people will be rushing in to buy gold regardless of its price. An important note here to understand; "A loss of confidence in a currency in the end, destroys it". This has happened with every fiat currency ever created throughout history. It is absolutely plausible to see the gold price rising between $3500 to $5,000 within the next 12 to 18 months.

Currently the silver/gold ratio could be at its top 58-59:1 and start falling once again. Silver in the end, still is poised to outperform gold. Silver within the next several months should take-off and start to approach its $50.00 highs. Within the next 12-18 months silver will be reaching far higher. Looking further ahead it's plausibly to see the gold price at $10,000 an ounce with silver following the ride up.

In the end, where just about any asset class imaginable is going to disintegrate, hard assets such as physical gold and silver will be two of the last men standing. The key is to hold physical gold and silver (no paper assets such as gold or silver futures or ETF's) outside the world's banking systems where there is no counter-party risk of any kind.

Tom Genot -

Avoid This Pitfall When Financing Your Coin Collection (Have You Made This Mistake Yet?)

Coin collecting is a fun, rewarding, and even profitable pursuit when done correctly. However, there are circumstances when it can have a chokehold on your finances and make life less enjoyable than it could be. There are many ways to purchase your beloved coins, but here is one snake you really don't want to get too close to.

Use credit cards sparingly Credit cards are so easy and convenient to use, that they also become easy to abuse. Many people don't know what interest their credit cards are charging and give little thought to it. It seems inconsequential on a month-to-month basis.

Credit card interest is almost always double digit and double digit interest compounds quickly. True, coins are an asset whereas most credit card purchases are liabilities, so at least you aren't losing from that aspect. But the interest paid on the card can easily outrun any appreciation you may get from the coin value.

Most coin dealers make you pay cash for gold and silver coins. That's good for me. That way I can see exactly how much the coin is costing at the time I purchase it. However, if that cash could have been used to pay down credit card purchases, the cash purchase is about as good as buying it on credit.

Get rid of the consumer debt and buy with cash. If you do need to borrow for a coin, get a loan that's single digit interest and not with the credit card. If you do use a credit card, pay it off every month, or as soon as you can.

The best way to manage coin purchases is by budgeting for them. Determine what you can reasonable afford to spend on coins and maintain your desired lifestyle at the same time. Then stick to the budget!

I have been willing to give up a lot to own coins, so they become a large part of my budget. I have also learned the value of planning and waiting for the right coin. I don't need them all right now, though that's how it feels a lot of times.

There is a freedom in being without debt That freedom is something more appreciated when you've felt the bondage that being over-extended can have on you. I love my coins, but I think I love my freedom from bondage more. Now, I practice self-restraint in my coin purchases. I use the word "practice" because sometimes I fail.

If you're in this situation 1. Sit down and figure your monthly living expenses. Then allow as much as you can for repayment of double digit debt. Be sure to allow some funds for coin purchases during this time, so you can survive the month. 2. Don't go where you're the weakest to spending, when you need to pay off debt. 3. Post reminders of why you're doing this activity and the rewards for staying the course. 4. Make payoff milestones and reward yourself when you meet them.

Investing in Silver - A Smart Move

Over the years, silver has always played second fiddle to gold. Considered a lucky metal to hold by some, silver may now be set to become lucky for its holders. Adding silver to an investment portfolio now, could see huge gains for its owners in the future.

Previously, when inflationary pressures were aloof, holding gold was always seen by investors as the best option to counter those pressures. However, gold has seen huge price hikes over the last few years, and now has become out of reach for many of those investors.

Silver is remarkably similar to gold, although with one big difference. It is a precious metal the same as gold, and is used for both jewellery and industrial purposes in the same way. But unlike gold, 95% of the worldwide silver that has been extracted, does not exist any more.

Gold has always been seen as an investment metal, with most of it being melted down into bullion bars, coins and jewellery, etc. Only a small percentage of it has actually been used for industrial purposes. Where as with silver, only a small percentage of it has been used for the production of jewellery, silverware, coins and bullion bars, etc. and 95% of it, has been used for industrial purposes.

Silver has been used for many years within the ever disposable electronics industry. It has been used as an essential material in the production of products such as computers, mobile phones, televisions and batteries etc. For even longer, silver has been used within the car industries and machinery industries.

As all types of technologies advance, old systems that become obsolete get thrown away. Fashion conscious beings also find the need to change at a whim everything that goes out of fashion, resulting in these products not existing any more, along with the silver that was used within them.

All of these factors have put pressure on the silver supply chain, which in turn have created a problem that could be difficult to deal with. Silver has become more difficult to find, and even more expensive to extract. Industry demands for the metal have also risen fast, which have all contributed to a situation where a future silver supply shortage could exist.

Although the world may have experienced these types of precious metal shortages before, this time, the silver is no longer there to be extracted. And with the silver that has been discarded over the years no longer available for re-use either, all points to a prominent hike in the price of silver over the next few years or so. Something that could make investing now, a smart move for the future.

Why Invest In Gold: How Will GLD Stock Help?

Wise investors all over the world know the significance of making wise investments in GLD stock. Nevertheless, along with great profits it also involves some risk factor. With adequate research and appropriate understanding, you too can manage to make more money with your investment and, with today's world of economic crisis, this can be an option for succeeding. Here are some reasons why investing in GLD stock will be beneficial.

1. Global Currency Degradation:

As you all know we are in the early age of global currency debasement which means that all the tangibles and especially gold will rise considerably in price and hence, buying GLD stock now will be wise.

2. The Accelerating Investment Demand for Gold:

Soon, the majority of the people will see the global currency degradation and eventually, they will strive for other alternatives which will further increase magnificent room for creating huge investment demand for gold and hence, keeping this in mind GLD stock which is a part of the gold ETFs (gold exchange traded funds) have been designed.Although many may consider that the price of gold to be unstable in the short - term yet it cannot be ignored that gold has known to maintain its value in the long - term. It can be considered as a significant part of a more diversified investment case.

3. Drastic Increase in the Inflation:

Everybody is aware of the dramatic increase in the money supply which has sprouted all over the world including the US. This is another reason why investing in gold stock market and buying GLD stocks will be a good idea as gold has always known to be a hedge against inflation. The five years after the World War II, are considered to be the highest inflation years in the US history. A soothing fact is that in those five years the return on stocks was much higher. Hence, investing in gold during inflation will make you feel like the nobles of the ancient times.

4. Gold as Money, as currency:

With the rapid investments made in the GOLD Dinar, time will not be far when gold will be used as money. This is a major asset that has increasing intrinsic value.

5. The Growing Population of Gold:

The accumulation of gold in the developing countries have seemed to rise enormously compared to previous years which creates higher demands in the GLD stock market. For instance, in China, the gold demand is expected to rise drastically in the next few years.

Should You Buy Gold Coins From Online Stores or From Banks?

Gold coins are a good investment as they not only help you to save your money, but also allow you to earn from your savings. You can buy gold coins either from online stores or purchase them from banks and other financial institutions.

Numerous online jewellery stores have sprung up on the internet in the recent past. As these e-stores have a comparatively less investment and more competition than physical stores, they offer gold coins at very low price. Moreover, most e-stores have a national or international presence, which means that they can provide more choice at less cost. Web jewellery stores offer both 22 karats and 24 karats gold coins that you can choose from depending on your budget. Moreover, these coins come with engravings of popular Gods, Goddess and saints. Some e-stores offer special collector coins with the image of great personalities engraved on them. If you are someone who would love to add them to your collection, then it will be a good offer for you. The downside of buying on the internet is that you cannot verify the quality and design of the coin till you pay for it. Though many e-stores have a good exchange policy, sending a coin back to the store may prove to be even more difficult than buying it on the first place.

Banks, on the other hand, are reputable institutions where you can trust your money. There are many nationalised banks that offer 24 karat gold coins at low price and you can take advantage of this opportunity to invest your money. You can also be assured of the quality of the gold you are receiving from the bank. The best part is that you can get to see and touch the coin before you pay for it. The downside in buying gold coins from here is that like all institutions, the whole process may involve a number of form fillings and could take up a lot of your precious time. Coins offered at banks may generally feature engravings of the logo or symbol of the financial institution, which means you hardly have designs to choose from.

In this fast-paced lifestyle, when everyone wants to finish their work in just a few minutes, online shopping could be a real life saver. Whether you buy gold coins from online stores or from banks depends on how much time you can spare and on the reliability of the place from where you plan to purchase.