Beware of Bank Safe Deposit Boxes

December 6, 2012

Many hard asset investors store their holdings in bank safe deposit boxes, thinking that this is the most secure, private place to store rare coins and precious metals.

The video report below from ABC News should make you think twice about that mode of storage.

Coin Trader can advise you on the best ways to securely store your holdings…


Europe, Drought, Poverty, Recession All Weigh on Wall Street

July 23, 2012

The US stock market fell sharply today, mostly because of renewed worries coming out of Europe.

It now looks as if the $100 billion bank bailout package the European Union granted to Spain isn’t going to be enough and the fear is that a much larger, broader bailout of the country’s financial system will be required. Spain is not Greece. Spain has a much larger economy and a much larger banking system. Scraping together the money to fix Spain’s debt woes is a lot easier said than done. In fact, no one is certain that a bailout can or should be accomplished at all.

http://www.cnbc.com/id/48279904

Speaking of Greece, the old problem that was supposed to have been fixed is still very much of a problem. The bailout program that the European Union put together for Greece worked so well that now their Prime Minister is saying their economy is in a “Great Depression:”

http://www.telegraph.co.uk/finance/financialcrisis/9418656/Debt-crisis-Greek-economy-is-in-a-Great-Depression-says-Samaras.html

For now, the Dollar has been the beneficiary of the European trouble, but there are other indications that the dollar’s strength can’t last:

For example, the drought that we have reported on here twice before is getting worse, which means higher commodity prices ahead, pushing inflation fears higher, even as the economy stagnates:

http://www.nytimes.com/2012/07/20/science/earth/severe-drought-expected-to-worsen-across-the-nation.html?_r=3

And despite all the government spending over the past few years, all designed to stimulate the economy, the poverty rate in America is soaring, reaching levels not seen since LBJ originally launched the so-called “war on poverty:”

http://news.yahoo.com/us-poverty-track-rise-highest-since-1960s-112946547–finance.html?_esi=1

Meanwhile, disappointing earnings are pointing to a fast-aproaching recession in the US to go along with those higher food prices. STAGFLATION anyone?

http://www.cnbc.com/id/48259674

Experts expect that recession any time now. Nouriel Roubini says the US economy is going from bad to worse:

http://www.cnbc.com/id/48281577

Anyone who expects good things from the US dollar and stock market in these conditions is whistling past the graveyard. Diversification is the best defense and hard assets provide the best form of diversification.

 


THE STATE OF THE ECONOMY AND HARD ASSETS

May 29, 2012

Investment markets are ultimately driven by the direction and condition of the economy.

The problem for investors is that it is not always so straightforward what the current condition of the economy is, much less the all-important future direction of the economy.

Right now many investors believe that the US economy is improving and they have taken this to mean that they should not buy hard assets, such as rare coins and precious metals.

Investors who follow this philosophy are making two mistakes:

  1.  The economy is still very weak and storm clouds are gathering on the horizon.
  2. Hard assets have a role to play in a properly diversified investment portfolio in all economic environments.

A Great Deal of Uncertainty 

At the present time, the US economy is actually dominated by an overwhelming climate of uncertainty. In some areas the economy is improving. In other areas it is not. In still some other areas, what looks like improvement isn’t actual improvement after all.

An area of improvement that can definitely be pointed to is energy prices. Despite most forecasts, oil and gas prices have declined, perhaps saving the economy from the onset of stagflation—a combination of inflation and a stagnant economy.  The problem, of course, is that we’ve just entered the summer driving season, so the jury is still out on this one.

The economy is clearly not improving in the real estate sector as an example. The US real estate market is in an outright depression and most historians maintain that there has never been a robust economic recovery without a recovery in real estate. That isn’t happening right now and it doesn’t appear to be in the cards any time soon.

Some pundits are looking at the unemployment figures and proclaiming that the US economy is improving. But only a superficial analysis of the statistics leads to that conclusion. While the unemployment rate has declined slowly over the past year, it is still high and, most importantly, the overall employment situation is still very poor because many people have simply given up on finding a new job and have exited the workforce. This artificially lowers the unemployment rate but it is not a sign of an improving economy—just the opposite in fact.

What all this adds up to is a great deal of uncertainty. The future direction of the economy remains a mystery at this point. Diversification is more important than ever in such uncertain conditions because different types of investments react differently to different economic situations. Without proper diversification, an investor can get caught in a trap if the economy moves in an unexpected direction.

Hard assets, such as rare coins and precious metals, are especially useful in this regard since they have historically not had a close correlation with financial assets. This makes them the perfect holding to provide balance to a portfolio of stocks, bonds and cash.

Just as hard assets are key to the effective diversification of an overall investment portfolio, it is just as vital that investors exercise proper diversification within their hard asset holdings. This is because different hard assets (the various precious metals and different sectors of the rare coin market) provide different sets of benefits in different stages of the economic cycle.

Some hard assets provide security during recession and even depression. Others excel during periods of high inflation. Still others perform best during periods of economic growth and prosperity.

It is imperative you accumulate a diversified portfolio of hard assets that will serve you well in all phases of the economy, during good times and bad.


China Acquires 436 Tonnes of Gold in Eight Months

May 23, 2012

China has now imported 436 tonnes of gold through Hong Kong over the past 8 months, compared with only 57 tonnes over the same 8 month-period a year earlier.

We recently saw a video last month that discussed China’s belief in a version of Manifest Destiny by taking their self-proclaimed rightful place as the #1 economic titan in the world.  It also made an interesting point about China using the West’s economic policies & regulatory loop-holes to strengthen their economic position globally.

This should strike fear in every investor knowing that the Chinese can so easily manipulate and influence our markets. Even when they acquire large quantities of gold, as mentioned in the article below, it is to benefit their long term goals  of global financial domination.

While you may not be able to stop our own governments from hurtling us head-long off the oncoming economic cliff;  you sure can build your personal Tangible Asset Portfolio to provide a safety-net for you and your family. Read on here:

Daily Reckoning: China Buys Gold…No Matter Who’s Selling

By Eric Fry

05/04/12 Laguna Beach, California– Someone is selling in size…Someone is buying in size. That’s what makes markets, as the saying goes. But that’s also what makes market manipulations, according to the bloggers at Zero Hedge.

The seller in this case is very large and very sloppy, perhaps intentionally so. The buyer is also very large, but very patient and methodical. Trapped between these two powerful opposing market participants we find a “range-bound” gold market. Let’s take a closer peek at the curious goings-on…

Last Monday, a large early-morning sell order in the gold market whacked the price of the precious metal by about $15 in a matter of seconds.

“The CME Group Inc.’s Comex division recorded an unusually large transaction of 7,500 gold futures during one minute of trading at 8:31 a.m.,” The Wall Street Journal reported. “The sale took out blocks of bids as large as 84 contracts in one fell swoop and cut prices down to $1,648.80 a troy ounce [from $1,663.00]. The overall transaction was worth more than $1.24 billion.

“Gold traders buzzed with speculation that the transaction was an input error — a so-called ‘fat finger’ trade,” the Journal continued. “‘Or a Gold Finger as it might be known in the bullion market,’ traders at Citi joked in a note to clients.

“Still, not everyone agreed Monday’s slip in gold was caused by a keystroke error,” said the Journal. “Chuck Retzky, director of futures sales for Mizuho Securities USA, said that silver prices suffered a similar leg down at the same time as gold, tumbling 35 cents to $30.805 a troy ounce, but other markets like Treasurys, currencies and stocks were unperturbed. ‘To do it both in gold and silver tells me that it wasn’t a trade done in error,’ Retzky said.”

A second trader chimed in, “No one who has the account size and the money to trade thousands of gold contracts would do it in one transaction, that’s just stupid.”

Or maybe this “stupidity” was intentional, as the folks at ZeroHedge suspect. Again yesterday, a large 3,000-plus lot gold sell order hit the Comex overnight trading system around 1:30 AM,Chicagotime — causing the gold price to quickly fall more than $5. “Volume that size is unusual for that time of the day on the COMEX,” ZeroHedge remarks.

A few hours later, shortly after the Comex opened the gold pits for the regular daytime trading, a couple of very large sell orders knocked $10 off the gold price in a matter of minutes.

These large, sloppy sell orders are no accident, ZeroHedge insists. They are simply some of the most flagrant examples of what could be market manipulation by Western central banks. ZeroHedge does not point fingers at any particular “fat finger,” but it does wonder aloud if the Bank for International Settlements (BIS) may be involved.

“[A few weeks ago],” says ZeroHedge, “somewhat tongue-in-cheekly, we presented the ‘people bringing you currency manipulation on a daily basis,’ or in other words, the BIS execution team for Europe’s central banks, which is most directly engaged in FX and precious metals ‘interventions’ when needed.

“The execution chain we presented was headed by one Richard Austin Jones, head of central bank services at BIS, Basel, yet more importantly the actual trader at the bottom of the totem pole was a Mikaël Charozé, whose various tasks included the ‘management of the liquidity for big amounts’ primarily interventions and portfolio diversification, as well as ‘holding and managing proprietary positions on all currencies including gold.’

“We posted this observation on April 5,” reports ZeroHedge. “Funny then that just 10 days later, one would never know that Mikaël no longer counts ‘holding and managing proprietary positions on all currencies including gold’ among his duties as well as task of ‘management of liquidity for big amounts including interventions.’ [I.e. the BIS Website removed all of this language from Mikaël’s job description]. In fact his entire profile, since our little humorous exposés, appears to have been rather completely altered. Inquiring minds would love to know: why?”

Why, indeed?

Many gold-market participants have long-suspected that Western central banks (and other agencies of currency debasement) conspire to suppress the gold price. According to this conspiracy theory, the central banks periodically pound on the gold price in order to prop up the value of the paper currencies they print.

But despite the anecdotal evidence supporting the conspiracy theory, no one has ever caught one of the conspirators in the act. Like Sasquatch, the conspirators leave lots of great, big footprints, but no one ever manages to trap them in their caves.

So maybe there are no conspirators, just lots of really stupid and sloppy gold sellers.

Meanwhile, the buy side of the gold market is much less mysterious.

“Earlier this month it was revealed that Hong Kong gold imports into China totaled nearly 40 tonnes in the month of February, representing a 13-fold increase over the same month last year.” Sprott Asset Management observes in its April letter. “China has now imported 436 tonnes of gold through Hong Kong over the past 8 months, compared with only 57 tonnes over the same 8 month-period a year earlier (July 2010-February 2011).”

In other words, on the other side of every sloppy gold sale by a BIS trader (or whomever) you are likely to find an eager Chinese buyer. The recent surge in Chinese buying represents a whopping 25% increase in total global investment demand for gold.

“There isn’t a physical market on earth that can withstand that type of demand increase without higher prices over the long run,” Sprott declares, “and the gold market is no different. There are no sellers of physical gold that we know of who can satiate that scale of new demand, and global gold mine supply has been virtually flat for over the last 10 years…Where is the gold going to come from? We ask because we don’t actually know.”

So there you have it…The invisible “fat fingers” are selling gold. The very visible Chinese are buying it. Place your bets!

Eric Fry
for The Daily Reckoning


2012: Buy Gold on the Dip

March 23, 2012

Gold is retracting, giving back much of its gains for the year to date. We are seeing gold at mid-January levels and it is finding resistance in any moves over $1675.  The projection for 2012 ,an election year, are for mostly good news and economic sunshine. Jim Rogers, Chairman of Rogers Holdings,  commented while on CNBC’s The Kudlow ReportThis is 2012. There’s an election in november. There’s an election in france. There are 40 elections this year. The germans are having an election a year from now. You will see a lot of good news and a lot of money being spent. A lot of money being printed. Yes, this year’s fine. Worry about 2013. Be panicked about 2014, but this year, a lot of good news is coming out.

Jim Rogers isn’t alone he is join by Marc Faber , of the Gloom, Boom & Doom Report, who told CNBC, If you don’t own any gold, I would start buying some right away, keeping in mind that it could go down. He was later quoted in ETF Daily news: The possibility of the gold price going down doesn’t disturb me, says Faber.  Every bull market  has corrections. Adding that investors who own no gold today should immediately  begin to incrementally allocate no more than a total of 25 percent of their  portfolio holdings in gold.

We have commented on Fed Chair Ben Bernanke’s change of tone on QE3 & the economy after Rep. Ron Paul blasted him on the floor of Congress about the real value of silver & gold. This year is  should be viewed for investors as the summer before the long hard winter of recession. Now is the time to acquire precious metals & rare coins to build up your Tangible Asset Portfolio.


Ignore the Talking Heads Acquire Gold Now!

March 16, 2012

On a daily basis, we follow the nuances of the Precious Metal & Rare Coin markets. Experts everywhere talk about the upside & downside of these portions of the market. We pass much of this information on to our readers in an effort to educate and aid in your decision of when to acquire or potentially sell. Of late, the mantra given is Buy on the Dip & Gold is still a fundamentally sound investment.

I read an article recently that asserted listening to daily news can impair your judgement about the right investments. In other words, you get too much insight and you cant see the investment for the trees. They suggested to read on the subject from the macro not the micro. The set long term goals and stick to them.

This is why we often bring up an investment goal of a conservative 10% to aggressive 20%of your net worth invested in a diversified precious metals & rare coins portfolio. We call this a Tangible Asset Portfolio (TAP) it is a long-term plan with a definable goal. While we will continue to watch the news and disseminate the information to you we will never lose track of the long term goal. Own gold as a diversification  to your overall investment and keep your TAP just as diversified to preserve your hard earned wealth.


The Bernanke Effect…

March 9, 2012

The month of March pounded Gold over $100 to $1674 an oz. to date. Many have given technical reasons for this drop from profit taking to lessening global risk with the resolution of the EU Greek Dept crisis. What most have missed is one of the biggest stories of Leap Day and how it pertains to golds current retraction. In what most took as election year grandstanding, perennial Presidential candidate Ron Paul took Fed Chair Ben Bernanke to task over the devaluation of the Dollar & real inflation. (see video here)

Ron Paul has been on the record for over two decades attempting to return the Dollar to a Gold or Silver standard. He is also a huge proponent of owning physical Gold as a portion of your investment portfolio. These are all things that fly in the face of Bernanke’s support of the fiat system of currency we are currently under. To say these guys are at opposite ends of the discussion is putting it mildly.

Bernanke, in what most missed as a shot across the bow to Ron Paul’s Leap Day ambush, failed to make any mention, hint or allusion to a future QE3 during a speech on Wednesday this week. Gold took another beating as many investors believe that the Fed is holding the economy on the right track. So, they sold major positions in Gold. Silver is mirroring Gold over the last week, yet it still remains firmly entrenched in the low 30’s.

The take away from this is very simple. All metals are down yet the real risk has not left the building. While Bernanke & Paul knife fight around the room, take advantage of the lower prices by adding to your Tangible Asset Portfolio. A conservative 10% to aggressive 20% of your net worth is our recommended goal for your overall investments.