Gold is an incredibly fascinating subject. Not only has this shiny, yellow & soft metal been used since at least 4000 BC. but, gold has been used as currency, jewelry, is a sought-after investment option & is widely used in the production of electronic devices. Did you know, for example, that most of the earth’s gold (approximately 1.6 quadrillion tons) lies at its core as the precious metals’ high density caused it to sink there in the planet’s youth? Bet you didn’t.

Learn more facts about gold in this education infographic:

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<a href="http://www.sbcgold.com/blog/gold-is-from-space/"><img title="Gold Is From Space" src="http://www.sbcgold.com/wp-content/uploads/2013/04/sbc-gold-facts-infographic.jpg" alt="Gold Facts Infographic" width="560" height="2337" /></a>[Gold Is From Space: An Infographic by: <a href="http://www.sbcgold.com/" target="_blank">Scottsdale Bullion and Coin</a>]

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Similarly, many people emailed me when Eurozone member Cyprus proposed a quite sizable tax on bank deposits, which led to another proposal regarding partial confiscation of private property. Moreover, news broke that central banks across the world bought more than $3 billion in gold in 2013.

Nuclear Missiles

Although it is not very likely that North Korea would actually act upon their recent nuclear threats, we should nevertheless remain vigilant. North Korea’s new inexperienced young leader Kim Jong-Un is attempting to prove to the North Korean people that he strong leader; thus, we have to take into account that this inexperienced leader might in fact follow up on his threats. Considering this volatile political situation, the price for gold should have spiked, but it did not.

Cyprus

Cyprus had to eventually abandon its plan to impose taxes on bank deposits as this proposal was widely opposed. Again, the Cypriot government did not just seek to impose a tax on interests, but on all deposits. This would have led to the confiscation of private property without any compensation. Yet, Cyprus managed to impose strict capital control regulations. Originally, people were able withdraw a maximum of 300 euros per day from the bank and they could not take more than 1000 euros out of the country. Furthermore, overseas credit card transactions were not allowed to exceed 5000 euros per month.

Even though Cyprus’ capital control regulations have been eased, they still remain onerous. Cypriots with large deposits are likely to lose a lot of money if the value of Euro drops and they are unable to get a hold of their financial assets. One would think that under these circumstances, people would want to protect their money by investing in gold, but they did not.

Central Banks

As mentioned above, central banks world wide bought $3 billion worth of gold in just the first two months of 2013, (according to UBS data): South Korea bought 20 metric tons, Russia purchased 19.2 metric tons, Kazakhstan accumulated 6.6 metric tons, Indonesia invested in 1.9 metric tons, Bosnia bought 1 metric ton, and Azerbaijan purchased 2 metric tons. Such a massive run on gold by numerous central banks should have caused its price to rise to $1900 but it did not.

So What Has Happened To Gold?

It is actually not that confusing if you understand complex computer algorithms. However, since most of us do not, let me explain. We have been on a down sloping trend line since October 2012. This is the reason why I have urged my clients to look into other areas of the precious metal market. Basically, the trend line told the algorithms to sell. Yet, since an algorithm cannot take into account current events like central banks’ sudden accumulation of gold, Cyprus’ capital control policies or North Korea’s nuclear threats, it just sells when it hits a certain number, as the algorithm is programmed to do.

In addition, the people who panicked were the ones who invested in gold for the wrong reasons. I like to call these types of investors “trend feeders.” The feeders do not really understand what they are doing, but since everybody else is doing it, they do it, too. These buyers get disappointed because they do not understand that gold is a long-term investment and they typically seek to obtain a quick turnaround. These buyers sold their gold after a weak bounce in February, which then led to the large sell-off we just witnessed.

What To Do Now

Long story short, you need to decide if you are a trader or a long-term investor. If you are a long-term investor, it is time to buy and hold. If you are a trader you will see it is time to bargain hunt. We saw the bounce up off the magic $1,320 number, which is what I personally was looking for.

Most of you know that I am not a fan of bullion for a variety of reasons. Thus, I was not surprised when I made my purchase. As the gold price fell dramatically over the last trading days, it has become apparent that the fluctuating premiums of investment grade gold can alleviate the blow when the spot markets turn sharply. As I have repeatedly stated in the past, investment grade gold not only allows you to profit from changes in the spot price, but also benefit from fluctuating premiums. This has been proven to be true over the last few days. As gold plummeted from $1,565 on April 3rd, 2013 to $1,386 ($179) April 15^th, 2013, the price of generic $20’s only fell by $55 (for MS61 $20 Saint Gaudens) to $105 (for MS63 $20 Liberties). This is mainly due to large public demand and limited availability as the spot price tumbled. The public is still buying despite the recent decline in precious metal prices. However, it is unlikely that this new premium will hold forever. Yet, fluctuating premiums in fact have the tendency to rise in times of anxious trading while also spiking demand; thus providing some protection and comfort.

I told many of you that the value of investment grade coins fluctuates gradually, not drastically like the value of bullion.

Look at the charts and you can see what I am talking about.

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Published by: Mike Rowlands

Buffet recently complained about the “disappointing performance” of American companies like Johnson & Johnson, Procter & Gamble, and Kraft Foods. His holding company Berkshire Hathaway sold approximately 19 million shares of Johnson & Johnson and reduces his overall stake in “consumer product stocks” by 21%. Berkshire Hathaway also sold all its shares of computer parts supplier Intel. In addition, Paulson’s hedge fund Paulson & Co. sold off 14 million shares of JPMorgan Chase and dumped its entire stake in discount retailer Family Dollar and consumer-goods manufacturer Sara Lee. Ultimately, Soros sold almost all of his bank stocks, including JPMorgan Chase, Citigroup, and Goldman Sachs. In total, Soros dumped more than a million shares.

The fact that billionaires like Buffet, Paulson, and Soros are losing their faith in large American consumer-oriented corporations is particularly disconcerting considering that 70% of the U.S. economy depends on consumer spending. Billionaire investors are usually “in the know” and can often predict imminent market developments before anyone else. It is very likely that these professional investors are aware of specific research indicating massive market correction in the near future. In fact, some esteemed economists even anticipate a daunting 90% drop in the stock market.

One of them is Robert Wiedemer, author of New York Times bestseller Aftershock. He and a team of economists already predicted the 2008 fallout in 2006. Their research, published in the book America’s Bubble Economy, foreboded the collapse of the U.S. housing market, equity markets, and consumer spending. Wiedemer’s research garnered a lot of attention from economics journalists and investment strategists to business magnates and individual investors. Since his predictions have been incredibly accurate in the past, Wiedemer’s latest book Aftershock, in which he details all the trigger points of a major impending catastrophe, certainly demands attention.

In a recent interview, Wiedemer explained why a 90% drop is a virtual certainty. First, he laid out how the Federal Reserve prints massive amounts of money out of thin air in order to stimulate the economy. However, he pointed out that “these funds haven’t made it into the markets and the economy yet. But it is a mathematical certainty that once the dam breaks, and this money passes through the reserves and hits the markets, inflation will surge.” He further explained that “once you hit 10% inflation, 10-year Treasury bonds lose about half their value. And by 20%, any value is all but gone. Interest rates will increase dramatically at this point, and that will cause real estate values to collapse. And the stock market will collapse as a consequence of these other problems.”

According to Wiedemer, billionaires like Buffett, Paulson, and Soros could be dumping U.S. stocks because companies will be spending more money on interest than business expansion costs. He stated that “that means lower profit margins, lower margins, lower dividends, and less hiring. Plus, more layoffs.” No investors, especially professional billionaire investors, want to own stocks with falling profit margins and shrinking dividends. Thus, investors like Buffett & Co. might be dumping their stocks because they want to cash out early and leave Main Street investors holding the bag. This would mean that they would see their investment and retirement accounts decimated for the second time in five years.

Investing in Gold and Silver

Wiedemer and the three billionaires mentioned above may be investing massively in precious metals which are hitting record levels: the value of gold has increased over 600% in the last decade and the price of silver is up 950% from 2004 to 2011. Soros recently expanded his gold holdings to over 130 million and Paulson has over 44% of his billion-dollar fund tied to gold. Buffett famously purchased 130 million ounces of silver several years ago, giving him ownership of 37% of the total silver in the world at the time (however, he also famously missed out on gold & has sold his silver holdings). But, recent rumblings have it that Warren Buffett is re-entering the silver market under the cover of the solar energy.

Investors who owned gold and silver during the 2008 crisis were not only protected, but made huge profits. As long as the Federal Reserve continues to print money at this rate, there are strong indications that investors anticipate big gains from precious metals while anticipating immense losses from stocks.

Published by: Mike Rowlands

Source: MoneyNews.com

The Legal Tender bill specifies that legal tender in Arizona consists of all of the following:

1. Legal Tender authorized by Congress.
2. Specie (containing gold or silver) coin issued at any time by the U.S. Government.
3. Any other specie that a court of competent jurisdiction rules by a final, unappealable order to be within the scope of state authority to make legal tender.

If SB 1439 passes in the State House and is signed by Governor Jan Brewer, gold ands silver would become legal tender in Arizona as soon as 2014. That would mean that precious metals would be treated like Federal Reserve notes for taxation and regulation purposes. In other words, if the legislation were approved, trading Federal Reserve notes for gold or silver money would no longer be taxed. Yet, unlike fiat money, nobody would be forced to accept gold or silver currency.

In 2011, Utah became the first U.S. State to recognize U.S. Mint gold and silver coins as legal tender by passing the Utah Sound Money Act. In this case, no capital gains or other state taxes are levied when the coins are exchanged. However, federal taxes still apply. Moreover, gold and silver coins are still only worth their face value despite record gold and silver prices.

The tumultuous global economy of recent years has caused lawmakers in Minnesota, North Carolina, Idaho, South Carolina, Colorado, Indiana, South Dakota and Virginia to debate similar legislation. When the Federal Reserve increased the amount of currency in circulation to combat the debt crisis in the U.S., the value of the dollar decreased. Proponents of gold and silver as legal tender argue that paper money is too vulnerable to government manipulations and that precious-metal-backed money is more resistant to inflation.

Published by: Steve Hunt

Source: Mineweb

This year, we chose to experience the show from the other side of the table, forgoing a booth of our own for the first time in years. Our co-founder, Mike Rowlands, spent a lot of time talking with coin dealers from around the country, discussing industry trends and challenges in today’s evolving market.

While most conventions have their busiest and best days on Saturday, the Long Beach Expo was bustling on Thursday and in full swing on Friday. Although the show features collectible stamps and sports memorabilia, the main dealer’s floor consisted of about 80% coin and precious metal vendors. Magic Johnson and Jerry West were scheduled to make an appearance on Saturday, so coin lovers elected to beat the crowds and come out in full force to buy and sell before the celebrity rush.

SBC started our Thursday at the Professional Coin Grading Service, or PCGS, booth. PCGS.com is a renowned grader of rare coins, so we were excited to talk to them. PCGS founder David Hall took a special interest in our “better dated” Silver Morgan dollar coins, and he spent some quality time discussing them with Mike. However, we worked as hard we played; SBC associate Chris Dickens submitted a recently liquidated set of Morgan and Peace dollars to be graded. Once that was done, we explored the rest of the floor to see what it had to offer.

Iridescent Coin Toning

1992 $1 Silver Eagle Coin Toning

One of the major trends we found this year at the Expo was that iridescence, or iridescent toning, was very popular. Iridescence refers to the multi-colored, rainbow-like toning on a coin’s surface, especially silver coins. While most people are familiar with coins in their natural, or virgin, state, knowledge of these iridescent colors and the methods through which coins are changed can be very useful to the collector. An iridescent coin’s value is based primarily on the appeal of its coloration. While appeal is subjective and may vary from person to person, there is no denying the demand for these coins, and the premiums they fetch.

When first minted, all silver coins have bright, white colored surfaces. Over time, however, when left to their own devices, the chemicals in silver can turn a once-silver coin brown or even black. The interesting exception to this rule is that uncirculated, or proof silver, can often “corrode” the coin’s color in a very different way. In uncirculated silver coins, we often see beautiful, multi-colored hues after just a few years. Blues, purples, greens, or a combination of the three are not uncommon. The brilliance of these hues and the combination of colors often dramatically increases a coin’s value. While most new collectors prefer their coins to look exactly like the red book, veteran collectors often prefer attractively toned coins. Therefore, iridescent coins fetch a nice premium at shows like the Expo and in coin shops nationwide.

If you’re interested in learning more about coin toning or how you can get your hands on some iridescent coins, give us a call toll-free: 1 (888) 812-9892.

Other Commodities

To understand the value of precious metals, let’s first look at other commodities. Most commodities have an obvious intrinsic value. Lumber can be used to build houses and furniture, grain can be used as food, and oil is turned into energy for a variety of industrial purposes. Spectators are quite able to see the intrinsic value in these things. No reasoned individual would claim that oil is simply a shiny goo, valuable only because people “have faith” in it. It is valuable because it can be turned into gasoline and, when combined with an automobile, is able to convey you and all your stuff across vast distances.

Likewise, it is not from mere faith that grain derives its value, nor from trust and international contract that lumber commands a price on the market. Value in these commodities is clear and demonstrable, and it summons no great mental effort to comprehend.

But where is the intrinsic value of gold? Or silver? One can’t build houses, nor eat, nor drive a car with these commodities – their value must come from elsewhere.

Gold

To be sure, gold is shiny and has long been used in the crafting of jewelry and ornamentation. It has always been desired for these purposes. However, few wars have been fought over pearls, which also make lovely jewelry. No, it is neither the glimmering earrings nor necklaces that comprise the majority of gold’s intrinsic value. It is something else.

Silver

As to silver, we know it as a wonderful conductor of electricity. As such, the metal has intrinsic value in the production of circuits and electronics. Yet, this benefit was entirely irrelevant for most of man’s history, and still silver has always been precious. Like gold, the intrinsic value of silver must come from something other than these obvious societal uses.

Where Precious Metals Get Their Value

Their value comes from nothing less than their efficacy as a medium of exchange – as a form of money. It may sound weird at first, or perhaps tautological, to claim that gold is valuable because it can be used as value, but this is precisely the point. Precious metals, through their very nature, are simply commodities that are best suited to be used as money. A brief examination readily testifies the point.

Ponder, for a minute, what possible product on Earth could be used as money? Technically, anything could be used as money. We could all trade with cattle, or with sand, or with venti mocha lattés. But, what is it about these things that make them impractical as money? Cattle die, for starters, which is not ideal for savings. Sand is too plentiful… try to buy an ice cream cone with sand. You will need much of it. Venti mocha lattes are the most valuable per ounce, but they get cold, and will certainly expire with time. Continue this thought experiment with other items – you will come to realize that most things, while very useful for certain purposes, are lousy as money.

Eventually, you will stumble upon gold, and you will realize that it works beautifully as money. It is durable (it never rots or rusts), it is divisible and combinable (unlike diamonds), it is homogeneous (every ounce is the same as every other – unlike cigarettes, seashells, and birthday cakes), and it is scarce (unlike sand or grain). Silver mirrors these attributes, though it seems to be less scarce and thus less valuable per ounce.

It should then become apparent that gold has intrinsic value because of its natural properties and the circumstantial geological composition of the Earth. Perhaps on another planet, if gold extended forth from every hillside, it wouldn’t be practical to use it as money, as truckloads would be required for the smallest of purchases. But we’re not on another planet, and thus gold and other precious metals have proven themselves, over thousands of years, as the most effective type of money. This is where their intrinsic value comes from.

How, then, do we consider these metals against fiat paper currencies (such as US Dollars), which have been the modus operandi since the gold standard was fully abandoned in the 1970′s? Well, there’s really only one important difference. Dollars can be, and are continually, printed at whim by governments that need to buy the votes of the public. Gold and silver do not suffer the same embarrassment.

So the next time you hear a commentator state that gold has no intrinsic value, remember what is being overlooked – its ultimate value as money itself.

Published by: Steve Hunt

Sales on silver coins are up so far in the month of January. The volume this month alone has already reached 5.13 million ounces and is expected to grow according to Kitco News.

The U.S. Mint temporarily suspended sales for the 2013 American Eagle Silver coins until later this month because they had sold out says Kitco News. However, as of right now, Kitco views the notable sales from November as “the fear trade” at play because of the election and thinks the increase in sales of the American Eagles coins as more a functions of seasonality but, they do stress the importance of keeping an eye on U.S. coins sales in the coming months to see if the high volume continues.

With the reports of elevated American Eagle Coin sales, the demand we are seeing at Scottsdale Bullion and Coin and then to mix the uncertainty of what may happen with the debt ceiling debates, we are expecting continued demand for these coins.

Lock in Your Order of the 2013 American Eagle Silver Coins Now and Get Early Delivery. Call: 1 (888) 812-9892

Published by: Mike Rowlands

Source:
kitco.com/reports/kitcoNewsMarketNuggets20130118.html

The hearing, which took place at the Labor Department, featured a parade of left-wing groups that argued for more government regulation of the private pension system and the elimination of 401k plans and IRAs, warned Crone.

An AFL-CIO representative agitated for more regulations to oversee private retirement accounts. The big labor agent also suggested that private 401k accounts be replaced by annuities run and sponsored by the federal government.

The intent of the Labor Department meeting was to explore why Americans were not saving more for retirement. Crone said, however, that the real purpose of this meeting was to explore ways for the government to take over private pension accounts.

Rebecca Davis, a representative of the progressive Pension Rights Center, complained that IRA and 401k plans were unfair to poor people. She laid down a list of demands to the Obama administration, including the establishment of a government-run program administered by the federal Pension Benefit Guarantee Corporation. Davis also stated that private annuities “are problematic.”

These reforms would completely destroy private retirement accounts in the United States, Crone warned. The federal government would require all Americans to purchase government-backed annuities rather than save and invest in private plans that suit their individual needs, Crones said. Then the government would take these investments in federal annuities and redistribute them through a government retirement system.

J. Mark Iwry, deputy treasury secretary who presided over the meeting, is a harsh critic of private pension plans, calling them schemes that favor the rich. The president has appointed Iwry as the lead man to take over private pension plans.

A bill is already waiting in the U.S. Congress that would require businesses to enroll employees in a scheme that would take part of their paycheck and pay it into a government IRA. This would effectively open the door for government to confiscate all retirement accounts, said Crone.

“This effort ultimately is designed to grab the retirement nest eggs of America’s senior citizens,” said Crones. “This new government annuity scheme, even if it is at first optional, will turn into a giant effort to redistribute the wealth of America’s older citizens.” Crones also warned that he expects the president to go after Social Security and turn it into a welfare scheme.

Crones said that NSC is planning a grassroots effort to stop this government grab of private equity accounts. This endeavor will be launched with the seating of the new Congress in 2013.

So many of us today look around and wonder how to explain not only the mess that we’re in, but also the reason why, given the results we’ve seen over the last four years, our government continues to push us down the same disastrous path.

Because what happens when big government and fringe interest groups take over? America fails.

As federal regulations continue to cripple our nation’s growth by restricting small and large business growth alike, irresponsible fiscal policies are leading us further into debt, keeping the unemployment rate higher than ever (the numbers have not dropped below 8% since February, 2009!), and adding to our existing $1.4 trillion dollar deficit at an alarming rate.

What’s frightening to ponder is that America will continue to fail as long as the current administration promotes the same disastrous, unsustainable policies of the last four years. Unfortunately, given the outcome of the 2012 elections, it looks like we’re in for another four years down the same path ultimately leading to economic collapse.

In the context of this grim scenario, everyone is watching for clues as to how much worse things will get. While the economic crisis in Europe not only remains unresolved but continues to worsen, and considering both the political and economic challenges around the world (particularly in a very unstable Middle East at the moment), can anything be done to protect our investments and achieve some financial security for the future?

This video portrays how large a part China plays in the current operation of GM and the confused relationship between the American company and the communist country. From establishing joint partnerships to sporting the Cadillac logo at a communist film festival, the video explores some of the questionable ways GM has become intertwined with China since the government bailout.