Bullion Purchase

The cheerleaders are at it again.  "Wow look at that S&P soar.  It's about to break through 1200!"  Then there's gold.  "Gold has fallen $73 from its high - is it set to drop like a rock?"

These are headlines and comments made this morning by some of the talking heads.  The suggestion is clear, now is the time to own stocks and bail out of gold.  What's your call?

Before we even attempt to answer let's ad a little perspective to the issue of stocks versus gold.  Less than a month ago the S&P traded at 1345.  As it trades now it has fallen 11.5% from that level.  Gold on the other hand is up 8.7% in the same period.  That's after the $73 drop from its recent new record high.  

Now let's look at why the S&P is trading so far off its recent high.  Generally, I believe stocks are off because the risk of losing stimulus, (printed money) has risen.  In my recent article, the charts tell the story.  When the supply of printed money has been threatened, markets have dropped.  Since June, the threat has come from two fronts.  First, with the expiration of QE2 and then with the potential that the debt ceiling would not be raised.  All of this has left the S&P down more than 5% for the year.

Will the S&P recover some value as more stimulus programs are announced?  Probably!  But, do you see it as anything more than a short-term play?

Gold, on the other hand, is up 24% on the year as the act of printing money, in the long term, destroys the purchasing power of the dollar.  In this regard, both stocks and gold prices respond favorably to printed money.  But, here's what separates the two.  When you threaten to cut off the supply of printed money, gold still keeps rising as the potential for debt default now enters the scene. 

If you listen to the media, it seems, no matter what, it's always a good time to buy stocks and gold prices are always on the brink of dropping like a rock.  We've been hearing it for 10 years as we watched gold rise 500% and stocks barely hang on to zero gain. 

That's ZERO gain in 10 years for stocks, even less when you add some inflation into the formula!!

Now, take a look at all the conditions under which gold has risen and stocks have fallen over the last decade and project 3 years, 5 years or even 10 years ahead.   Do you see anything different than we have seen over the last 10 years?

If you see more of the same, why should we believe stocks are a good long term bet for your money and gold is not?  At the very least, the performance of stocks over the last decade, as it compares to gold, should be the best argument for diversification into precious metals.  Don't sell all your stocks.  Don't give up on America.  This is not the message.  The message is diversify.  Do the math.  A stock portfolio diversified into just 10% precious metals 10 years ago could be up 50% right now.  That's right!  Up 50%!!  Follow along.

Let's take a $10,000 self directed IRA.  In 2001 if you had $9,000 in stocks and $1,000 in gold bullion, the portfolio today, on the stock side, could still be worth about $9,000 but on the gold side your gold bullion (Yes you can own physical gold in your IRA click here for details) could be worth in the neighborhood of $6,000 depending on the exact type of bullion or bullion coin held. 

Is gold set to drop like a rock?  JP Morgan says $2500 by year-end, Deutsche Bank called for $2000 by year-end, and now Bank of America has raised its gold price prediction to $2,000 in 12 months.  So, if gold does drop like a rock watch out out cause it could turn around and rise like a rocket!





   




    



 

So what do you do when one of your price target gets met, just as you predicted?  Many experts say that's when it's time to sell.  Risks have been taken goals have been met and profit has been earned.  Next!  . . . Not so fast!

Prior to now, Goldman Sachs had a price target for gold at $1365 an ounce.  Today, that 12 month price target has been revised higher to $1650.  In other words - "Don't Sell."  

With the Fed's recent announcement to resume buying U.S. Treasuries, Goldman was quick to react in raising its gold price target.  Goldman believes the Fed will buy as much as $1 trillion worth of treasuries.  In other words we can't sell enough to foreign investors anymore to raise (borrow) enough money to fund all the scheduled spending.  I mean really, isn't that all we are doing?  

In my opinion this evidences the fact that the Fed has little confidence that raising taxes on the rich is enough to stimulate the economy and begin to pay off debt.  Frankly, news of another trillion in treasury purchases by the Fed, should have been enough to drive gold much higher than its current level.  I guess profit taking is always too tempting for some to pass up.

The bottom line here is that nothing has changed.  We will continue to borrow to stimulate and there really is no end in sight to the Gold Bull Market.  Global gold demand is still high, inflation fears are prompting investors to own gold, and this sentiment is now being shared by the world.  

It wouldn't surprise me if any minute there wasn't a major gold purchase announced, spiking the gold price and causing all kinds of commotion.  

Slow and steady wins the race.  Adding a small amount of gold or silver to diversify your savings and retirement accounts may be your best strategy to prepare for the day you get your gold watch.

As always visit LearCapital.com for real time precious metals prices, low online prices for bullion and for breaking gold news. 

Curing the Debt Crisis With More Debt

 

They always say, be careful what you wish for.  For months, inflation fears heightened as bailouts and stimulus became the order of the day.  Borrow and spend,  print to pay, that was the plan.  A plan that was to . . .

 

·         rescue a failing housing industry;

·         bring unemployment down to 8%; and

·         save a stock market whose bubble burst for the second time in less than a decade. 

 

It worked for awhile, as free money was injected into nearly every arm of the economy. 

 

Car sales peaked . . . Home sales spiked . . . Appliance sales got a boost . . . Even Window sales opened wider as cash flowed freely from government printing presses.

 

With the belief that more debt could cure the debt crisis, government asked for inflation and got it.  Demand for gold grew so fast,  reports of shortages began to surface as the gold price continued its sturdy rise to new highs.

BIG REASON #1 - Inflation Steals From Your Savings and Retirement Accounts     

 

If anything is inflationary it is the printing of FREE Money.  Like a thief in the night, inflation robs your savings and retirement accounts.  Learn how gold may provide you the best strategy to protect purchasing power, provide profit and become a powerful retirement building tool! 

 

Click here for your FREE Gold Guide and special reports  

At The Crossroads of Inflation and Deflation

 

Just as an addict endures withdrawal so is our economy withdrawing from the high of free money.  Personal bankruptcies are on the rise, housing starts on the decline and unemployment hovers near the 10% level -- maybe higher as the "still jobless" fall from unemployment rolls.

 

Oh yeah!  Then there's the stock markets.  They run up . . . they fall down . . . volatility may never have been higher than it is today. Uncertainty is winning the emotional battle.

 

Where once we feared inflation we now face the threat of deflation.

 

In a recent Wall Street Journal Report, Fed Minutes from the June FOMC meeting make known these early warning signs of deflation and cite the fading effects of stimulus.  A mid-year check on the performance of gold vs. the markets shows gold up a strong 9% unfazed at the prospect of either inflation or deflation.  The markets?  Dow - down!   NASDAQ - down!   S&P 500 - down!    

 

A choice must soon be made.  Choose your poison.  Inflation or deflation?   
 

BIG REASON #2 - Fed Fear of Deflation Could Trigger Pro-Gold Strategy     

 

The WSJ article says, "Fed May Consider Further Stimulus if outlook Worsens." We always say, inflation slowly steals your savings and retirement but deflation can steal it overnight.  Evidence shows  Fed is standing ready to fight deflation with more printed money.  Learn why gold may be best defense against both inflation and deflation.      

 

Click here for your FREE Gold Guide and special reports

The Debt Threat

 

Now, this administration is at a crossroads.  To continue down the free money path, in attempt to re-inflate the markets and our economy, could send America to its debt bed.  We fast approach a time when all the taxes collected still won't be enough to pay even the interest on our debt.

 

And the other path?  Deflation!  Spending cuts, higher taxes, and a stimulus-free economy are the bullets this administration is ready to fire in the fight against inflation and exploding debt.

    

First signs of this effort appeared when Congress denied the extension of unemployment benefits to millions of unemployed.  That policy may shift but the consensus is in - deflation is today's dominant trend.

 

In response, market volatility heightened and gold prices firmed as worldwide gold demand continued to rise.  The world awaits direction.  Will we deflate or will Fed fears override these efforts and return us to a print to pay policy of re-inflating our economy? 
 

BIG REASON #3 - Deflation Could Trigger Debt Bomb Explosion and Higher Gold  

 

Debt combined with deflation are more volatile than nitro-glycerin.  Why?  Because things you buy with borrowed money today will be worth less tomorrow.  With debt projected at $16.3 trillion by 2012,  is it any wonder the Fed is prepared to fight deflation with more stimulus?  Learn why cash is king during deflation and gold is cash.        

 

Click here for your FREE Gold Guide and special reports

Inflation and a Weak Dollar - Greatest Hope for Recovery

As ironic as it may seem, our once greatest fear of inflation may ultimately prove to be our only means to economic recovery. 

If it is believed deflation can trigger a debt bomb and bring a quick end to any hopes of preserving our savings and retirement accounts, we, indeed the world, may have no choice but to try to inflate our way out of this mess. 

You see, during inflationary periods, the dollar weakens.  A condition the markets love as both foreign and domestic profits begin to rise.  And because inflation leads to a weaker dollar, debts actually shrink as money you borrow today gets paid back with cheaper dollars tomorrow.     

Here's the secret:  Don't borrow to own or buy anything but tangible assets.  Real estate, precious metals and a host of other commodities, are appreciating assets, the debt for which can be repaid with a dollar worth less than when it was borrowed.

BIG REASON #4 - A Weaker Dollar Could See Gold Double or Triple Again  

 

Over the last decade, we've seen housing inflation rise to bubble proportions . . . stocks too.  Then crisis, as both bubbles burst.  And gold?  In less than a decade gold rose 400%.  Learn why experts say the real gold bull market is yet to begin and gold could double even triple from today's levels.         

 

Click here for your FREE Gold Guide and special reports

 

More Stimulus Sets Stage for Higher Interest Rates

 

If a Fed policy to inflate wins out over this administration's apparent efforts to deflate, this policy is not a risk free solution to our economic woes.  As more stimulus gets pumped into the economy,  inflation will surely rise.

 

With interest rates currently near zero, there is ultimately only direction rates can move . . . higher!  Especially, when stimulus dollars, once again begin to flow into a slowing economy.

 

Hyperinflation will become a threat and efforts to control the rate at which inflation rises will come in the form of rising interest rates.  Some say this will be a sign the real gold bull market has begun.

 

BIG REASON #5 - Rising Rates Signal $2400/oz. Gold  

 

To match its 1980 inflation adjusted high,  gold prices would have to double.  It was then that interest rates peaked after rising from inflation-inducing lows.  Will a stimulus-laden recovery drive inflation, weaken our dollar and cause history to repeat?  Learn why experts say Gold diversification may be your best strategy to protect and grow your wealth.           

 

Click here for your FREE Gold Guide and special reports

This could be your very best opportunity to take advantage of a gold bull market that may only be in its infant stages!!

According to a recent report from the Cheshire Republican Women,  outgoing Republican Senator Judd Gregg believes, within five to seven years, the US is heading for a debt-driven “financial meltdown!"

Lear Capital has been sounding this same warning for some time . . .

Globally, more and more people are turning to gold to protect and grow their savings and retirement accounts.  Central banks like China, Russia, Brazil and India are all buying gold.  And, as evidenced by reports over the last two years from the U.S. Mint, gold supplies are limited.

 

Even today, we find from the www.usmint.gov web site . . .  

"Due to the continued, sustained demand for American Eagle Gold Bullion Coins, 2009-dated American Eagle Gold Uncirculated Coins were not produced.

The United States Mint will resume the American Eagle Gold Proof and Uncirculated Coin Programs once sufficient inventories of gold bullion blanks can be acquired to meet market demand for all three American Eagle Gold Coin products."

Don't be caught short . . . timing is critical.

 

The U.S. is heading for a debt explosion and nothing seems able to stop it.  Over the last ten years, gold has been the beneficiary of volatile markets, bursting bubbles and a weakened dollar brought on by massive stimulus. 

 

Learn why more of the same is expected in the months and years ahead.

 

Click here to receive your FREE Survive-the-Meltdown Edition of Lear's Gold Advantage Investor Guide.  Do it now and while supplies are available to receive our latest special reports on Inflation, Deflation and How to Own Gold In Your IRA Accounts.


 

 

Don't take our word for it, compare for yourself.  If you want a source for gold bullion coins, LearCapital.com will likely wind up being your last stop.  Let me give you some examples by providing a spot comparison.  As this article is released the spot price of gold is $1212.40 per our displayed real time price.  

Let's first look at the American Gold Eagle Coin.  Lear Capital's on line price for this coin is $1267.17.   The South African Krugerrand is $1265.35 and the British Sovereign Gold Coin is $297.45. 

These are just a few examples of ways to hold gold coins as investment at prices very near the melt price of gold.  Some have asked, "what is the spot price and how is it fixed?"  Generally, the spot price of gold is based on the current prevailing gold spot price from the COMEX market during the U.S. trading day.  These prices are for Gold Bars typically of the 400 troy ounce variety or approved 100 troy ounce bars.

400 ounce bars comprise the typical Central Bank inventory and certain 100 ounce bars are also approved for trade on the COMEX.  People often wonder why an ounce of gold, such as the Gold Eagle, cost more than the quoted spot price.  The answer is simple.  There is obviously a cost incurred to take one of those 400 ounce bars and convert it to 1 ounce units.  It is that cost that must be covered in order to make the process possible.

In as simple terms as can be offered, the spot price of gold is basically a bulk price just as a truckload of grain has a bulk price as compared to a bushel. 

When reference is made to bullion coins, that is a general reference to coins that are mass produced for sale to the general public.  The U.S. Mint's 1oz. Gold Eagle is one of those coins.  It carries a face value of $50 but the mint sells it for significantly more based on the spot price of gold at time of sale plus any manufacturing costs (minting costs) associated with the coin's production . . . plus a profit.  Yes, the U.S. Mint earns a profit that is turned over to the General Fund of the Treasury.

In the case of some coins it relies on a network of Primary Dealers and Dealers to service the needs of the population.  In the case of others they sell direct to the public. 

In the case of coins minted for purposes other than circulation as legal tender, the Mint hopes you will buy coins to collect.  In the Collectors Club, a section of the Mint's official website, it acknowledges that, "Some people collect coins in the hope that they will appreciate in value. Some coins have intrinsic bullion value (such as silver, gold and platinum coins). Others become valuable because they are rare."

I think it is safe to say, the typical buyer of a "Bullion" coin is one who wants a stake in the spot market without making an investment into 100 oz. or 400 oz. gold bars.  If you owned large bars it would be hard to sell off small portions.  You can't just chip off a corner, weigh it and exchange it for cash or make a payment.  

Still others, do buy coins for the potential of some day owning something rare and much more valuable than it was when it was purchased.  Proof gold coins are one example of coins that the Mint says could "become valuable because they are rare."  The U.S. Mint puts a limited number of gold coins through a special minting process that turns them into a more brilliant specimen that the mint sells for a significant premium.  It knows there is a segment of the population that loves these coins and wants to own them for their potential to increase in value as collectibles.

Special Note:  Right now the mint has halted production of Proof Gold Coins as it can only procure enough gold to mint its required quota of regular gold eagles.

Coins that already carry collector value are said to carry numismatic value.  Generally, these are coins that once circulated as legal tender but now carry significantly more value in terms of bullion value as well as collector value.  Some hundred year old $20 gold coins, for example can carry tens of thousands of dollars in collector value, premium.  Yet they still only contain an ounce of gold. 

The history of value of many of these remaining coins shows outrageous potential to rise in value.  However, past performance can never be used to determine future value.  Yes, history can repeat but there is no guarantee it will.  Yet, it is this allure that causes people to want to own these precious bits of coin history.

My favorite example of a coin whose collector value was unimaginable, is the 1909S VDB Penny that sold for $92,000 in 2005. 

Regardless of what you see on TV with respect to fluctuations in the spot gold price, worldwide gold demand is growing by the minute.  And, it's physical gold that people want in their hands.  A strategy employed by many is to own some "Bullion" and some rare coins.  I invite you to check out our "Bullion" coins prices on line and if you want to talk to one of our coin experts call the Lear Capital Gold Hot Line to check out the latest rare coins have toi offer.
    
In the end, if you are just an average person, saving for retirement or just a rainy day, there is only one reason to own gold in any form and that is to invest in the preservation of wealth.   

Here's just a quick reminder for some of our new readers and visitors.  The real time precious metals prices that appear on this page, are in fact, exactly that.  Just click on a coin of choice and you will be brought to a page on LearCapital.com where you can place an order and buy gold at just 1% over dealer cost or maybe even slightly less. 

The gold coins you have to choose from, on this page, are all considered to be gold bullion, many of which are suitable for holding within a Gold IRA account.  Frankly, some of the coins like the British Sovereign Gold Coins, are dirt cheap - just barely over spot.  And if you have some kind of affinity to buying "foreign" gold coins because you deem it not so patriotic,  Don't!  I wish all of our citizens owned all of everybody's gold.

I invite you to shop and compare as well as you will find these prices are truly the best in the business.  And for those of you who are amongst the faithful, let me take a moment to remind you that you can become a referring member of Lear's referral/reward program. 

Just click on the small banner on the home page that says "Give Free Shipping and Get Free Gold" and you can sign up to receive offers you can forward via email to anyone you would like to introduce to the Lear family of gold experts.  All offers are coded so we know who sent each new customer.  Our system will track your referrals and automatically notify you each time someone you referred makes a qualifying purchase.

We believe gold may be the best way to hedge against coming inflation and rising interest rates.  We truly believe everyone should have at least a few gold coins of the bullion variety and by making them available at very low prices we believe we are doing our part to help protect America from imminent crisis.  

Make no mistake.  Gold demand is on the rise.  We've already seen signs of shortages of the physical metal in months past.  The American Eagle Gold Coin is one of them.  Happy investing!

From...........

The Daily Reckoning
Thursday, March 11, 2010

Eric Fry, reporting from Laguna Beach, California...

Stocks up, gold down.

Once again yesterday, investors demonstrated their preference for paper over the shiny yellow metal. The Dow Jones Industrial Average notched a slight 3-point gain, while gold tumbled about $17 an ounce.

This divergence between stocks and gold is not enormous, but it is telling. Most investors believe the credit crisis is a mere memory, and that an economic recovery is underway.

Your editor is not persuaded by this conventional wisdom. As a homegrown Californian, your editor is as eager to embrace a feel-good vibe as anyone. But this particular vibe doesn't feel that good...or logical.

The worst of the credit crisis may have passed, but serious credit problems continue to beset the US banking system. Everywhere you turn you see an impaired loan dressed up like an Academy Award nominee.

And the economic recovery that so many folks pretend to see is nothing more than a mirage wrapped in a chimera. This so-called recovery is not a recovery at all; it is a Fed-induced bounce from "superbad" to merely bad.

Your editor is not buying this storyline, dear reader.

If he were buying anything at all he would be buying gold and/or the shares of companies that haul monetary metals out of the earth. No matter whether the US economic recovery is real or not, the tsunami of cash and credit that the Fed has unleashed on the US economy is very real...and the consequences are likely to be very inflationary.

But even if this logic eludes the Ivy League educated minds on Wall Street, it does not elude the minds that control the national balance sheets of India and China.

"On February 24, Reuters reported that the Reserve Bank of India was 'set to be a buyer' of the 191.3 tonnes (6.74 million ounces) of gold the IMF is selling," reports Jeff Clark, Senior Editor, Casey's Gold & Resource Report. "Although the bank wouldn't comment directly on the possibility, they did say, 'We are closely looking at the gold market...gold is a safe bet.'

"The article then quoted an unidentified official from the China Gold Association as saying, 'It is not feasible for China to buy the IMF bullion, as any purchase or even intent to do so would trigger market speculation and volatility.'

"But the next day," Clark continues, "Finmarket news agency in Russia reported that China 'confirmed its intention' to buy the IMF gold. 'Chinese officials have confirmed previous announcements from IMF experts and said that the purchasing of 191 tons of gold would not exert negative influence on the world market.'

"While they've been silent since," says Clark, "both India and China have publicly hinted they want this latest batch of yellow bars from the IMF. There's no way to know if a competitive bid would spring up between these two countries, but...can you imagine the ramifications if one did?

"When India bought 200 tonnes of IMF gold last November 3, it set off a buying spree that saw gold rise 14.2% in 4 weeks. What if this time around, a couple central banks both want the gold for sale? What if China says to India, 'Not so fast, guys. We'd like to bid on that, too...' and word of that clash leaked out?

"Pure speculation, of course," Clark concludes, "but competing for gold purchases isn't a far-fetched idea. This sale is not pre-arranged; it's an open market sale. Also, there's only so much to go around. These two countries have only a tiny amount of their reserves in gold. Throw in the fact that central banks worldwide are already net buyers. A pretty intriguing thought, wouldn't you say?"

Yes...quite.

"A gold bull market – Eric Fry would agree. The gold charts – they tell the tale. Gold demand is expected to rise strongly in this environment."

In light of the much discussed debt crisis the U.S. finds itself diving deeper and deeper into each day, it seems a common theme for gold investors is to find affordable gold coins to add to their portfolio.  The Swiss 20 Franc is another gold coin that has collectible appeal at gold bullion prices.  

As always LearCapital.com is your gold hotline to affordable gold bullion and rare coins.  For real time prices and an opportunity to purchase these magnicent coins at affordable prices visit here.

Following is an interesting history of the Swiss 20 Franc

A long Proud History
Switzerland has a long, proud history of minting fine gold coinage since 1492. This series of coins was officially issued by Switzerland from 1897 to 1935. We highly recommend these Swiss 20 Franc gold coins, not only for their beauty, but for their history.

Beautiful Swiss Design
The ever popular Swiss 20 Franc is truly one of the most beautiful gold coins in the world! Each coin features a Swiss Miss among a background of the Alps of Switzerland on the obverse side. The reverse features the Swiss Cross, along with the date and denomination of the coin.

Last week I commented that the real gold bull market likely began when the credit crisis struck.  That's when millions of people, institutions even central banks began purchasing gold, literally by the tonne.

This week Jay Taylor, a well known gold market specialist and market analyst, concurred.  In his article titled "The Real Gold Bull Market has Just Begun" he points out that if we measure the value of gold by its purchasing power, we're just two years into a 20 year gold bull market.  That's when its value relative to its purchasing power really started to climb and gold as an investment became more widespread around the globe.

Coincidentally, that's about the time the U.S. Mint gave bullion dealers their first notice that gold demand was so high they ran out of American Gold Eagles.

Now with Ben Bernanke's Helicopter Money raining down on nearly everyone, only time will tell when we see gold prices fly to the outer limits of market imaginations.