The Sky is Falling, So is the Dollar

March 31, 2011

The Dollars Value Decline

Certain days it takes real research to find information needed to keep the Mind Your Money blog up-to-date. Other days there is a flood of information to keep us lasered on point. Today, was the latter, we went about checking the usual news outlets and here is what we found.

CNBC: Market Knows Dollar ‘Has No Clothes’: Asset Manager, an article bemoaning the Dollar not just declining, but on its way out. Daily Reckoning: When Gold Becomes Money Again, a warning to all fiat currencies that their days are numbered due to gold becoming the New Currency, reprinted in Forbes. The again Forbes with Stop The Madness: Make The Dollar As Good As Gold, a call to Bernanke & the Fed to bring the Dollar back onto a gold type standard.

There were more but you get the point. Looking at the talking heads in the news in the last 24 hours plus other statements made by Warren Buffet (Dollar on Verge of Losing ‘Reserve’ Status) & Alan Greenspan (Greenspan: Gold is a Universal Means of Payment) in the last month you can hear the bagpipes playing Amazing Grace in the mist. The funeral procession is well on its way for the Dollar, all that is left is to pry the it from the Fed’s cold dead hand.

We still believe in this country, in the power of American innovation that keeps us as a beacon to the world of what happens when a society is given the freedoms to accomplish anything.  From this will come a solution, yet don’t be caught off guard during the inevitable transition. Bolster your position with physical holdings of rare coins and precious metals  in your tangible asset portfolio(TAP). Yes, like clockwork, a conservative 10% to aggressive 20% investment of your total net worth in a TAP will provide as all other assets including the US Dollar fail.


Silver Eagles: Long Demand, Short Supply

March 30, 2011

William H. & Nelson B. Hunt AKA The Hunt Brothers testifying before Congress.

Not since the Hunt Brothers attempted monopoly of silver in the 1980’s has silver seen gains of this nature. This leads every conversation we have at Coin Trader Inc. to at least a cursory look at silver acquisition.  The coin inevitably brought up, the U.S. Silver Eagle (1 oz).  It is the coin that brought the U.S. Mint back into the bullion business in 1986.

Even at a current spot price of $37.35 an ounce, silver is only a fraction of the cost of gold. This makes it more affordable to the investor looking to get there feet wet in the bullion markets. It also is the choice of the disgruntled masses – Daniel Brebner of Deutsche Bank told the Financial Times, silver investors dont like where their country is going… particularly the U.S. but elsewhere as well. He went on further, They are looking at other political alternatives, but they’re also looking at diversifying away from conventional assets they’ve held in the past.

The U.S. Mint has sold 12.4 million oz of silver in the first quarter of the year, setting new records. This is roughly 6% of all global production of silver in the same period. The Canadian Mint has a similar problem that has led to shortages of the popular Silver Maple Leaf . David Madge, the head of bullion sales at the Canadian Mint, told the FT, the sales of  silver maple leaf coins remain robust with demand still exceeding our supply.

All of this has made the average wait for 1 oz silver coins from the various mints approximately 3 weeks, at time it is longer. The experts are calling for $50 silver by the end of the year. This will continue to drive the market and keep the supplies short. We recommend silver as part of a balanced portfolio but when ordering just remember there will be a delay. This shortage is for the long term and doesn’t look to be easing anytime soon.

See more – Financial Times: Americans feather nests with silver Eagles

Central Bank of China: Buy Gold

March 29, 2011

Li Yining, a senior economist at Peking University, member of Chinese People's Political Consultative Committee

1.5 Billion Chinese are encouraged by the Peoples Bank Of China (PBOC) to buy gold as a hedge against failing global currencies.  Li Yining, a senior economist at Peking University and member of the Chinese People’s Political Consultative Committee advised: China should use the precious metal to hedge against risks of foreign currency devaluations.

This is a call to every citizen to cover their financial house with gold. In the last 2 months, the PBOC has added an additional 10% to China’s Gold Reserves. Li stated in Xinhua the official news agency, China should increase its gold reserves appropriately, and China must take every chance to buy, especially when gold prices fall. When Li speaks he has the ear of some very influential politicians such as Chinese Vice Premier Li Keqiang, who is seen as Premier Wen Jiabao’s successor in 2013.

As the Chinese people go, one can only imagine the pressure that will place on the demand for gold thus, driving the prices forward.  With China looming as the next #1 economy in the world it is only a matter of time before gold permanently shifts upward. Gold is predicted by many experts to top $1,800 to $2,000 by the end of 2011 this makes gold a bargain at today’s current of $1,420.

Read more – Reuters: China adviser says Beijing should buy more gold

Unstable Markets Lead Three Hedge-Funds to Return Investments

March 28, 2011

Carl Icahn, Chris Shumway, & Stanley Druckenmiller

If you wonder how stable the global financial markets are you have to look no further than 3 of the best hedge-fund managers on Wall StreetCarl Icahn, Chris Shumway, & Stanley Druckenmiller are all bailing out of the hedge-fund business.  Each one in the last quarter gave back all outside investors holdings, the latter two have left the fund managing business entirely. What does this say for these managers? More importantly, what is it saying about the current markets?

Each one of these guys are some of the best at what they do: make huge sums of cash for those who have huge sums of cash. All three site fatigue & the unstable markets as the reason for divesting from outside investments. Apparently, the pressure is getting to them and they only want the responsibility of there own personal interests. This on the surface is very understandable, but more to the point, maybe discretion is the better part of hedge-fund management. Better to chicken out now than let the market cook their collective goose?

The take-home for you, Joe Investor, buyer beware! Since, some of the brightest & best at the Wall Street game are bailing out then you should also consider your current position in the market.  Should the market take another swan dive or a double dip much in the way it did in the 1930’s, the best place you can hedge against the losses would be in the ownership of physical gold & silver.  We recommend a conservative 10% to an aggressive 20% of your total net worth invested. These figures should cover any losses incurred just as it has over the last two downturns.

The Canaries of Wall Street are dropping like flies, take their que,  strengthen your position with the financial insurance that is your very own tangible asset portfolio.

Friday Fun: 24-Karat Gold Vending Machine

March 25, 2011

Gold is showing up everywhere, even in vending machines? Yes right next to the gum and Red Bull machines are the bling bling gold vending machines. These are not the old fashion put in a quarter and get your gold-like Dick Tracey Decoder-ring. But pull out your American Express Platinum and get those 24K cuff links you needed for your next black tie event. To see more unusual vending machines check out the collection of 12 here – CNBC: 12 Alternative, Unusual Vending Machines

Fear & Dollar Woes Drive Up Gold

March 25, 2011

Bill O'Neill, LOGIC Advisors managing partner on CNBC

There is not one single factor that keeps pushing gold upward. It isn’t global unrest in Libya, Egypt, Yemen or the disasters in Japan or the declining US Dollar or emerging markets acquisition of gold. While no single one of these sustain the current bull run in gold & silver all together make a very convincing indications for a long-term investment in precious metals.

Yesterday, Bill O’Neill, LOGIC Advisors managing partner told CNBC he thought there was room to run, the use of the term safe haven at these prices is a little scary, I think the gold market is going to go higher. O’Neill went on further to add, There is a flight to gold as the ultimate currency. He doesn’t attribute this to a bubble but to the normal market cycle.

Gold & Silver both have pressures that are driving them forward in price. Should this continue to cycle as it has during the last decade. We will see  the markets moving higher in the following couple months with a summer plateau, then another run higher in the fall through the end of the year. Everyone, including Goldman Sachs is calling for $1,800 to $2,000 an ounce gold & near $50 an ounce for silver.

Now is the time to get into the market and cover some of the decline in the dollar that is predicted over the remainder for the year. Also to continue acquisitions for your tangible asset portfolio, today’s levels will be looked back on with regret much like $800 gold is today. See the entire interview: CNBC – Metals: Room to Run?

Gold, Silver Higher on Global Unrest

March 24, 2011

Robert Lenzner of Forbes StreetTalk

Not often do we  reprint an entire article but in this instance Robert Lenzner writer of Forbes StreetTalk says it all.  The one thing we found most enlightening is his reference to the Financial Times article about Middle Eastern central banks loading up on gold. It just seems everyone is looking to the safe-haven of gold.  Now for your reading pleasure Robert Lenzner

Gold, Silver Prices Break Out As Political Unrest Spreads

Mar. 23 2011 – 7:27 pm | 4,283 views | 0 recommendations

Gold bullion closed at $1438 after hitting $1442, and will rise as  investors try to protect themselves  in  a world gone mad with chaos and blood. Silver actually hit a new 35  year peak  at $37.19, and  getting closer to the $40-$50  goal we set last fall.

Gold is no longer  just a  hedge against QE2  and  inflation– or a  hedge against deflation. Or a hedge against a declining dollar. Today, gold  has become an expression of the instability spreading from Tunisia to Egypt to Libya  to Syria, to Yemen, to Saudi Arabia, to Iran, to Bahrain– and those  street  dissensions to come, conceivably in Kuwait, UAE, and elsewhere. Oil supplies  are threatened. Buy gold and silver.

You don’t believe? Look at a chart of gold against silver. They are  moving in  absolute tandem now.  Any Sheikh trying to preserve  his fortune must own gold and silver.

In the US the price  of GLD, the largest gold ETF, hit a peak of $140 and looks set to breakthrough that mark tomorrow or the  next day. Let’s see if net selling turns  into net  buying. Are you listening Soros and Paulson, and their camp followers?

Then, there’s the WikiPedia Impact on gold and silver. The FT reported a few days ago, via  cables  released by  Wikipedia,  that  more central banks are plowing into gold, playing catch up with China, Russia  and India.

Listen up!. Iran,says the Bank of England via the FT, is making “a significant move… to purchase gold. Likewise, the Qatar  Investment Authority, no slouches, and Jordan’s central bank are  putting   reserves into gold. I must call my friend at  the Bank of Israel to find out what he’s doing. I’m sure I won’t get anywhere.

Imagine; gold and silver at new peak prices. While oil is only at $106– high for sure, and going higher in fits and starts, and copper has eased recently  as the Chinese reduced their purchases. A  shocking development. Goldman Sachs is still bullish.