Hurricane Sandy Intermission Review

October 29, 2012

The markets closed early today due to Hurricane Sandy and trading in gold was subdued due to so many New York traders and investment houses hunkering down for the storm.

So, rather than review today’s inconsequential market results, we decided to look in our archives for articles that we might have overlooked that are particularly relevant to hard asset investors.

We think we found two from just under two weeks ago that everyone should stop and take a closer look at.

First, recently, Pimco, the parent company of the largest bond fund in the world, warned that a further downgrade of America‘s sovereign credit rating is in the cards. They think it’s inevitable and will probably happen just after the first of the year…

http://www.bloomberg.com/news/2012-10-17/u-s-to-get-downgraded-amid-fiscal-theater-pimco-says.html

Second, Mark Hulbert, esteemed editor of the Hulbert Financial Digest, one of the oldest and most respected investment newsletters out there, has pointed out that extensive academic research indicates that a 1987-like stock market crash is “inevitable.”

http://www.marketwatch.com/story/another-stock-crash-like-1987s-is-inevitable-2012-10-17?dist=afterbell

Both of these articles are relevant for investors because they should both serve as warnings that paper assets that might seem secure today, may not actually be so secure tomorrow. If US Treasuries are no longer rock solid and the stock market crashes, gold investments will likely be the most secure assets that an investor can own.

 

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Investors Beware: Counterfeit Gold Bars Surface in New York

September 19, 2012

Hard asset investors must beware: counterfeit gold bars have surfaced in New York. Fox News has the story linked below…

…but investors need to know that the best way to avoid the risk of counterfeiting in hard asset investing is to buy gold in the form of PCGS– and NGC-certified gold coins. These two respected grading services guarantee the authenticity of the coins that they certify and encapsulate in sonically sealed “slabs,” thus removing the risk of counterfeiting for individual investors…

Fool’s gold: Counterfeit bars turn up in New York

A jeweler in Manhattan’s Diamond District learned the hard way that all that glitters is not gold.

Ibrahim Fadl, a chemical engineer who owns a business near 47th Street and Fifth Avenue, bought four 10-ounce gold bars and decided to check them out further since he heard counterfeits were making the rounds, MyFoxNY.com reports.

Fadl, who paid $100,000 for the merchandise, drilled into several of the bars and found gray tungsten, which has nearly the same density as gold, making it difficult to detect. The same thing reportedly happened in Great Britain earlier this year, and finance blog ZeroHedge.com reported that in 2010 German refiner W.C. Heraeus claimed to have received a 500-gram bar from an unnamed bank that proved to be filled with tungsten.

The scheme purportedly involves a genuine gold bar that is purchased with serial numbers and authentic documents and is then hollowed out to be replaced with tungsten. The bar is then closed up to finalize the sophisticated operation, the website reports.

Manfra, Tordell & Brookes, the Swiss manufacturer of the gold bars, warned customers to only buy from reputable dealers. Raymond Nessim, the company’s CEO, said he has reported the incident to the FBI and the Secret Service.

Secret Service officials, meanwhile, told FoxNews.com an investigation is ongoing, declining further comment.

Fadl, who could not be reached for comment, told NY1.com that the shell of the gold was sold to him by a customer at his gold refinery business and peeled off like foil on a candy bar.

“It’s got to be somebody really, really professional,” Fadl told the website. “When I analyzed them, it showed they were tungsten.”

Fadl said a colleague tipped him off to the scam, prompting him to further inspect the gold bars.

“Sick to my stomach, but thank God we didn’t sell this to somebody,” he said when asked how he felt. “People are selling their homes to buy gold, it’s a big issue.”

http://www.foxnews.com/us/2012/09/19/new-york-jeweler-duped-into-buying-100g-worth-fake-gold-bars/?test=latestnews