I did a calculation based on rate of rise ( rather than total % rise ) , and found out that the 1929 market blowoff mania still exceeds anything so far in the current markets. I dont think the market mania has topped yet. But there are a number of factors coalescing that will make 1999-2000 bearish for the markets. Of course we will still have to beware the market suction effect on precious metals equities next year too. All depends on the pending La Nina, and how long it takes to affect US weather. SEAsia may get this cooling before we do, IMHO. We may also have less precipitation.
Keep ( most of your ) powder dry for now. I am not so sure about a cold winter this year -- given the baking in this part of the country. Went to 105def F today. Never been this hot since I moved to the midwest.
If you do make the Journey to Carmel, travel in the spring or fall. Summer in those environs is a dark and dreary time with the sun mostly obscured by a wide blanket of fog. Works real good for romance though. If you want quiet walks along quaint streets as hushed fingers of fog slip over the hills and up the street to coil around you ankles, fine dining with a very small town feel, and artwork from around the world, go in the summer.
If you want to see anything beyond a distance of fifty feet, go there in the spring or fall.
You will then be rewarded with moss hanging from the branches of windswept Monterey Cyprus poking out here and there from a sugar white sand beach displaying one of the most spectacular meetings of water and rock to be viewed anywhere in the world.
And since Carmel and Dirty Harry have both been mentioned in separate posts this evening, a trip to Carmel is not complete without a leisurely toddy or cappuccino at The Hogs Breath, Clint Eastwoods small bar and restaurant. A tiny inside bar on one side and a smallish dining room on the other side flank an open courtyard with a squillion stars overhead to keep you company. The tables are made of driftwood and overhead heaters insure that, absent rain, the courtyard is one of the most comfortable and agreeable places you might ever visit.
Indeedy
Are you all using a different text editor?
Well, with fixed exchange rates there is one thing you can do if you are a member of the Euro -- buy and sell gold to maintain a constant exchange rate relative to the other Euro members. The weaker currencies may be forced to sell gold to prop up their currencies. Interesting problem if they have already sold their gold. And -- the ones that do not need to protect their currency -- such as Germany -- will not need to sell.
Interesting dilemma created by the EURO launching -- a defacto gold standard?
Comments, anyone? Looks like trouble ahead if the Euro exchange rates are to stay fixed. I'm willing to bet that the hedge funds are lurking, just waiting for another stumble like what happened in 1993, and England had to bail out of the European Union. If the issue of differential inflation rates, money supply growth differences are not resolved soon, the new Euro crisis could very well be a big one compared to 1993. Gold and the US dollar will skyrocket. Except this time the rest of the world is in no state to have the US dollar rise any more.
Interesting times we live in.
The point is, studies show ( as they say on the TV commercials ) that when the unitiated get excited about investing in exotic vehicles they don't understand that are basically highly leveraged gambling games, look out below. Further common knowledge is that the small unsophisticated investor almost always buys at the top and sells at the bottom -- i.e., the little man is always wrong.
This is also the same guy that bought a pair of emus 5 years ago for $35,000 so he could get 30 eggs a year at $5000 per chick, and have someone else look after them for him -- not a bad deal. Some of you will know that scheme didn't work..They are all over the Texas highways at night now from bird farmers who have turned them loose so they wouldn't have to feed them. Emus -- stocks -- emus -- stocks---hard to tell the difference right now.
p.s. How do I dollar cost average if I'm buying Mounties or the like? It seems that their price doesn't fluctuate with the spot price of Gold. Also, can anyone advise as to who would be the best person/company to deal with if I want to buy using the dollar cost averaging method?
Thanks a bunch
If I understand correctly, exchange rates are already fixed, or will be very soon ( 1/1/99? ) . If so, some other currency must be traded such as the US dollar or gold so that parity can be maintained. Gold would be the logical choice -- but not necessariliy to a 'fiat' banker type. If exchange parity is to be maintained with transfer of US dollars back and forth, that will maintain the demand for US dollars as the reserve currency. Issueance of EUROs as the exchange reserve currency seems like a bad idea to me -- could complicate parity evaluations considerably if the EURO began to inflate as well -- the Germans would become quite upset to see their currency effectively watered down.
Of course, using the US dollar as the world's reserve currency is what we need to slowly move away from, if we ever expect to resolve our debt problems. Otherwise the US dollar eventually follows the historical path of the British pound sterling -- not a pleasant thought.
My assessment of the EURO is that it is swamped in legaleze -- either intentionally so that multiple options are available, so simply because it was form by a committee. Your posts eloquently show this. Either way, I am not optimistic about the likelihood of the EURO replacing the US dollar anytime soon.
My guess is that the fog will not clear until a major gold-backed currency is launched -- probably from SEAsia. Hong Kong perhaps? The BIS connection? Why would the BIS set up an office in Hong Kong if it thought the answer to the world's currency problems was the EURO?
I just had a wild thought. If gold was to be a major reserve currency for the EURO, European central bank sale of gold from one bank to another would be very effective at keeping the gold bulls at bay. All they have to do is sell gold from one CB to another, and how they report the sales will determine the bearish or bullish effect on the gold market. Even better if they officially claim gold is a minor reserve currency, even if it is not. If this scenario is accurate, gold will not go up until the CB's want it to, barring war or financial crisis. David Copperfield could not do it any better than this.
Physical precious metals are not a short term investment, as there is considerable overhead. You must hold onto it for years if you expect to get a significant gain. Short term buying and selling ( churning ) only lines the pockets of the broker, who must make a profit of some kind.
Ciao
The following refence article will give you some idea of the dealings of the U.S. Treasury with respect to gold confiscation and the status of gold coins, at least up to the time of 1970.
As far as gold coins which are likely to remain insulated from any new confiscation program, pre-1933 coins are pretty safe, from any country. I'll let others attack the question of what you should buy.
*************************************************************************************
The following is a quotation from
"How to Invest in Gold Coins" Donald J. Hoppe, 1970 - Chapter II
THE PRIVATE CITIZEN AND GOLD TODAY
Despite the patently obvious evidence of recent years that Gresham's Law is still irresistibly in operation, the student of monetary history and crowd psychology may yet have some reservations about gold investing. Before deciding on gold coins as a safe and profitable investment, with the obvious advantages already mentioned, one may properly question the extent to which man's historic faith in the reliability of gold as a standard of value has been or will be affected by the thirty-four-year campaign of the Keynesian economists to escape from the restrictions and disciplines of gold-based money. ( The question is especially pertinent because of the defection of so many so-called conservative economists and bankers to the viewpoints of the New Economics. )
After all, we in what the French like to call the "Anglo-Saxon camp" have been told for a considerable time now, through our press and by the pronouncements of even some of our highest Treasury and banking officials, that gold, like the Deity in the eyes of some modern theologians, is dead; that the use of gold for monetary purposes or as a store of value is, in that already well worn clich, a "barbarous relic." Furthermore, it is said that the sooner we are able to abandon it completely, the better it will be for us.
But perhaps the demise of gold as the center of the monetary universe has been reported, as was the death of Mark Twain, somewhat prematurely. Although the obituaries continue to be published, the world remains unconvinced. If gold is indeed dead, it has proven to be a rather lively ghost. The author's clipping files concerning monetary subjects indicate that more press copy on the subject of gold has been published during the last two years that at any time since the crisis years of 1933-34. Countless reports on the future of gold and the attendant opportunities for speculation it offers have also been prepared by private financial advisers and services ( and sold at high prices ) since the dying relic, the "echo of the past" has suddenly become a full-blown crisis. Some went so far as to declare that gold was America's number-one problem. But there is still little public agreement on whether the ancient idol will be finally and forever toppled from his throne or restored once more to past glory.
In the author's opinion, the decisive vote was give in 1967 and 1968, when repeated waves of gold speculation swept the gold markets of the world, shaking its very monetary foundations, breaking up the London gold pool and its fixed $35 per ounce gold price and forcing the devaluation of the British pound sterling. The most revealing part of these episodes was that they imposed an ignominious retreat on the neo-Keynesian money managers of the West. In being forced into a tightfisted defense of their stockpiles of monetary gold, the position of the money managers would have been ludicrous but for the tragic effects of the inflation that had already eroded the wealth and vitality of countless peoples.
Ironically, it was these practitioners of the New Economics who had insisted all along that gold was only a superstition, a vestige of a barbarous past, and that we would have been better off to dump it all into the sea. But now that it has apparently been found necessary, for the moment at least, for the United States and its partners in financial experiment to defend at all costs ( that is, with whatever further sacrifices may be required of their citizens ) what is left of their monetary gold stocks, it may be suggested ( with tongue in cheek ) that we dump our money managers into the sea instead.
However, it is obvious that the present show of defending gold by Britain and the United States, through various austerity programs, exchange controls, high taxes, etc., is a tactical expedient only. The ultimate goal remains the implementation of some new international paper-money scheme, an eventual total devaluation of the dollar, and the complete demonetization of gold. Therefore, stability in the price of gold and an end to the long-term inflation that has accompanied the ascendancy of the New Economics are nowhere in sight. Additional waves of gold speculation, gold-buying panics and recurrent gold crises are not only probable but inevitable.
What part the citizen of the United States and his British cousin have played in these events has been somewhat restricted, legally at least, by the actions of their respective governments. They have been prohibited by law and regulation from direct participation in the purchase, sale or ownership of gold in bullion or monetary form.
In most other civilized lands ( and some that are not so civilized ) the ownership of bar gold and gold in any other form is not only permitted but, as in the case of France and Switzerland, often tacitly encouraged. These enlightened countries believe that gold in the hands of private citizens is an aid to internal economic stability and complements rather that competes with the official reserves of their central banks. By allowing the free use of gold as a store of value, the other Western countries have eased somewhat the burden of inflation upon their citizens. Unfortunately, the insidious disease of inflation is, as a matter of record, chronic in every country that practices neo-Keynesian economics. But by permitting the private possession of gold in any form, France and Switzerland at least recognize that the least sophisticated and affluent of their citizens should have the right to defend themselves.
The only other major nation, besides the U.S. and Britain, that prohibits free commerce in gold by its inhabitants is the Soviet Union. Private holdings or transactions in the yellow metal are considered there to be "economic crimes' - most serious offenses in a Marxist state. Those engaged in them are subject to the firing squad. ( Yet is has been reliably reported that a flourishing black market in gold continues to exist in Russia and the other Marxist states ) Curiously enough, the writer finds that the parallel presented by the United States and the Soviet Union, regarding the private holding of gold as an infringement on a state monopoly and therefore a crime, is neither unbelievable nor incongruous. Perhaps the "big brother" philosophy of economics is rather easily recognized whatever its stage of development.
Worldwide, the record of the neo-Keynesian money mangers in the area of maintaining the purchasing power of their fiat currencies has been deplorable. But perhaps I am too harsh on the proponents of the New Economics; after all, monetary delinquency antedates Keynes by a considerable period; it is of course as old as money itself. The coin clippers and debasers caused as much ruin and suffering in ancient times as the paper-money inflationists have in the twentieth century.
But holding aside for a time further comments on the great questions concerning future trends of inflation and the coming rise in the price of gold, let us proceed directly to the problems and opportunities confronting people generally and citizens of the United States and Britain in particular who might wish to speculate on these possibilities, or who might want to invest in a gold-related activity as a hedge. Since possession of monetary gold ( bullion ) by citizens of the U.S. and Britain is unlawful, there remain only two ( legal ) avenues of gold investment open to them: the purchase of shares in gold-mining companies, and the collection of gold coins.
The gold coin was once a very vital part, at times the lifeblood, of the economic body. Today is not so. The lifeblood of the New Economics is credit. The coin of gold, the ancient king of money, was forced to abdicate in disgrace during the depths of the Great Depression and it has been banished from the realm ever since. But the gold coin still has a meaning, and sometimes a very profitable one, for those who have the eyes to see it.
The provisions of the Gold Reserve Act of 1934 and the Executive Orders and banking laws of 1933, which originally demonetized and confiscated all outstanding gold coin in the United States, prohibited the individual possession of gold bullion ( or any other recognizable use of gold as a store of value ) . However, they made no prohibitions regarding the ownership of gold-mining stocks, and they also permitted the retention of gold coins of "recognizable numismatic value." Failure of the original legislation to define adequately what constituted recognizable numismatic value caused considerable confusion for some years, but in general, the parts of the gold regulations concerning numismatics were not rigidly enforced - at least not to the point of harassing collectors of gold coins.
It is now obvious that considerable quantities of U.S. gold coin were never surrendered at the time of the original order. Some coin was withheld because it was in the possession of foreign citizens, banks, or governments, and some because its owners chose to defy their government because of what they considered to be an arbitrary and unjust confiscation. Considerable quantities of American gold coin also found residence in Canada. At any rate, choice uncirculated U.S. and foreign gold coins were generally available through coin dealers in the United States after 1934 and they sold at prices that from today's vantage point were fantastically cheap.
Unusually strong demand for the more common gold coins, strictly as a speculation on a possible rise in the price of gold or as a hedge against inflation, occurred from time to time, notably in 1946, 1957, and 1961, but in general, the market for the so-called common type of gold coins remained unexciting - until 1967. In the truly numismatic area, however, astute and knowledgeable collectors gradually reaped a tremendous reward for their patience. During the postwar years, gold coins of unusual scarcity or rare numismatic value enjoyed a spectacular and continuous rise in price.
In the forties and fifties, the U.S. Treasury held most of the world's gold bullion, and consequently, the attitude of the government toward gold-coin collectors was one of indifference, even though the legality of possessing so-called common-date coins was somewhat questionable, at least until 1954. Prior to that year, the Treasury held the opinion that it alone had the right to determine whether or not any gold coin was of numismatic value. Determinations were to be made on the merits of each individual coin presented to the Treasury for ruling.
The pre-1954 criterion for judging a coin minted before 1933 was whether or not the coin in question had possessed a recognized numismatic value on or before April 5, 1933. Gold coins minted after 1933 were to be judged on the basis of the number issued, the purpose for which they were issued, their condition, mint mark, historical significance and other numismatic factors. However, there appeared to be no great rush of collectors to the Treasury Building to have their coins checked.
It must be admitted, however, that the Treasury Department of that era did not rigidly or aggressively enforce a narrow and legalistic interpretation of the "numismatic value" provision of the Gold Reserve Act. Had it done so, American numismatics would have suffered severe and irreparable damage; many fine gold coins which are now the prized possessions of American collectors would have been lost forever. "Numismatic value" is a term of varied and at times subtle meaning. Many regular-issue coins gradually become scarce or even rare, through natural attrition, while they are still technically part of the circulating medium, and these scarcity situations are invariably recognized at first only by the most astute and sophisticated collectors. By the time the numismatic value of such coins becomes common knowledge, it is usually well past the point where that value or the potential for numismatic value was actually acquired.
There is also the case of the unusually well struck or prooflike coin which was selected from a regular issue; certainly this type of coin has exceptional numismatic value even though the issue it was taken from was not particularly scarce. And how does one objectively judge the roll of uncirculated coins put away by the foresighted for the benefit of future generations of numismatists? And specimen coins retained because of their artistic merit or historical associations? Surely the final U.S. gold-coin series designed by Augustus St. Gaudens, on of America's most noted sculptors, would fall into this latter class. To have ruthlessly insisted on the surrender of all gold coins extant on or before April 5, 1933, that were still technically part of the circulating medium, and/or not obviously or generally recognized to be of unusual historic numismatic value, would have been catastrophic indeed, as far as numismatics is concerned.
But the Treasury officials of that day chose to be tolerant, if not amiable, and, except for prevent the importation of large numbers of post-1933 foreign gold coins, did little to disturb numismatic gold activity. Apparently, numismatists, collectors, and even hoarders were too few in number at that time to cause alarm on the Potomac. Whatever the reason, we can feel thankful that the Treasury authorities of the first quarter-century following the demise of gold coinage in the U.S. did not flail about with the typical bureaucratic myopia that has characterized their successors. In any case, the "common" U.S. gold coins ( which, as we know now, are anything but common ) and most pre-1933 foreign gold coins were allowed to be traded and collected more or less openly during the years prior to 1954.
In 1954, the Treasury Department recognized at last that the time had come to legitimize the numismatic gold market. Consequently, an amendment was made to the Gold regulations, to the effect that all gold coins minted prior to 1933 would subsequently be presumed to be rare and of recognized special value to collectors, without the necessity of further specific determinations by the Treasury. Coins minted after 1933 were still subject to specific Treasury Department rulings, which were to be base on the advice of the Curator of Numismatics of the United States National Museum. All U.S. gold coins and the vast majority of foreign gold coins were thus freed from the overhanging threat of confiscation, and a new era for American numismatics appeared to begin.
It might have been reasonable to expect after 1954 that further relaxation of the Treasury's Gold Regulations, particularly as they applied to numismatics, would be a natural development in time. But the subsequent course of American economic history ruled otherwise. By 1960, the underlying inflationary instability of the Western world had reached the point where the once seemingly unlimited gold reserves at Fort Knox had noticeably begun to shrink.
This unfortunate ( and, in my opinion, wholly avoidable ) turn of events precluded any possibility of further liberalization of the gold rules, numismatic or other. Instead, in 1961, the Kennedy Administration saw the necessity of establishing within the Treasury Department the Office of Domestic Gold and Silver Operations ( ODGSO ) , in order to institute a more rigorous control over the import and export of gold and silver, the licensing of jewelers, goldsmiths and industrial users of gold, and import and sale of gold coins.
The most positive accomplishment of the new ODGSO was to reaffirm, as its own policy, the 1954 amendments to the Gold Regulations, which ruled that all gold coins minted prior to 1934 are rare and consequently of recognized numismatic value. For gold coins minted after 1933, the office required a separate ruling in each case and the issuance of a special permit for the importation of possession of each post-1933 coin approved. ( Once an initial ruling on a particular coin was made, however, no further permits or applications were necessary to purchase or hold other coins of the same identity within the United States, although a license to import any post-1933 gold coin is still required, whether it has been previously approved or not. )
By some obscure and tenuous logic ODGSO also required ( until 1969 ) a permit to import pre-1934 gold coins, even though the purchase or possession ( or both ) of such coins was unrestricted within the United States. I might add that the majority of applicants desiring to import pre-1933 gold coins were invariably refused.
The author once applied for a permit to import some pre-1933 Mexican gold coins offered by a Canadian dealer. The license was refused, even though the coins under consideration were the rarest of their series and selling for more than twice their intrinsic value, on the grounds that they were "not of exceptional numismatic value within the meaning of the Treasury Department Gold Regulations." In reply, I could only point out, politely ( and in vain ) , that the Treasury Department Gold regulations, which ODGSO was supposed to be administering, stated without qualification that all gold coins made prior to 1934 were to be considered of "recognized special value to collectors." The spectacle of federal regulatory agencies regulating themselves in a circle is at times wondrous to behold.
Fortunately, the 1954 amendments are now a well-established precedent, and they provided at least a basic protection for the numismatic gold collector. Furthermore, although it has required a change of administrations, ODGSO has finally come to recognize that some of its interpretations of the gold rules have been, in the words of its new director, "of dubious merit."
On April 22, 1969, the Gold Regulations of the U.S. Treasury Department were amended to correct the obvious and unreasonable inconsistency introduced by Executive Order 11037, issued July 20, 1962, which required, among other things, a permit from ODGSO for the importation of pre-1934 gold coins. The new director of ODGSO, Mr. Thomas Wolfe, appointed by the Nixon Administration, admitted candidly that "it really didn't make a lot of sense" for ODGSO to prohibit or confiscate a pre-1934 gold coin coming from abroad, when the collector could walk across the street and buy the same coin in the U.S. without restriction.
Therefore, the provisions requiring a license to import pre-1934 gold coins were eliminated. Collectors and dealers in the U.S. are now free to import such coins, provided they are genuine, subject only to the usual customs regulations and import duties. Counterfeits or restrikes, however, are subject to confiscation, regardless of a pre-1934 date. The Gold Regulations were further amended to require import licenses only for gold coins struck from 1934 through 1959. The granting of such licenses is to be subject to the usual criterion of judgement. No gold coins struck after 1959 will be admitted, except for those issues already granted exemption by ODGSO prior to April 30, 1969. ( A list of the exempt post-1959 gold coins will be found on page 286. )
The 1969 modifications of the Gold Regulations bring a welcome breath of fresh air into the bureaucratic smog that has shrouded the rulings and statements of the Treasury and ODGSO since 1961. However, one can only regret the arbitrary cut-off date of 1959, which automatically excludes such highly desirable numismatic treasures as the Canadian $20 centennial gold coin of 1967, and most of the post-1960 commemorative gold coins of Israel.
Fortunately, past history has demonstrated that common sense eventually triumphs, even in the Treasury; we can therefore continue to hope that the absolute 1960 cut-off ruling will also be re-considered one day.
By contrast, however, British gold collectors were apparently dealt a severe blow when in 1966 the Bank of England issued regulations requiring the registration of all coin collectors and limiting collectors to no more than four gold coins minted after 1837. But fortunately, as was the case with the original numismatic provisions of our own Gold Reserve Act of 1934, these rules were softened considerably in their administration. Although not specifically stated in the regulations, it has been made known that "collectors may possess two gold coins or sets of any one type or series, that is, two 1887 five-pound pieces, two 1902 two-pound pieces, two 1937 proof sets, etc. - only holders of large quantities of common-date sovereigns will be required to surrender them.
The citizen of the United States, if interested in acquiring a speculative or investment position in gold, is then limited to gold-mining stocks or gold coins. The citizen of Great Britain has the same options except that he is much more limited in the are of coins. The natives of Canada, France, Switzerland, Germany, South Africa, and innumerable other areas of the world, presumably not as far along on the path of enlightenment as we, are free to do as they please regarding gold.
There has been some talk that once gold was successfully demonetized by the U.S., the free holding of gold by its citizens would be permitted. If this is ever tried, it will be as a last desperate bluff to prove that the dollar is better than gold. But like our former policies of trying to hold down the international price of gold by selling it freely through the London "gold pool" and trying to hold down the price of silver through massive Treasury sales, it will be just another phenomenal failure. By its demented economic and fiscal policies of the last three decades, the U.S. government has forfeited all confidence in its ability to maintain the value of its currency. If U.S. citizens were now granted the right to cash in some of their paper dollars for gold, what is left of our national gold reserve would disappear in a month.
In Russia and the Marxist countries of Eastern Europe, there are of source no gold-mining stocks. If it were not for the Communist ideology, however, no doubt there would be; the Soviet Union is thought to be the third largest producer of gold in the world ( after South Africa and Canada ) , although the actual production figures are a closely guarded state secret. It is also reported that the Russians pay production cost equivalent to $100 an ounce for their gold. Despite Lenin's boast that gold would one day pave the public rest rooms in the worker's paradise, the Russians seem to have found other uses for it - like buying vitally needed equipment and raw materials in Europe, Africa, and Asia.
But as we have said, private trafficking in gold bullion in the Soviet Union is considered ( as in the United States ) a most serious crime. The state mints occasionally issue gold commemorative coins and medals, and sometimes restrikes of older gold coins. We can assume they are sold on a strict on-to-a-customer basis at home, although some of these restrikes have been widely exported to the West ( and smuggled into the United States ) for profitable sale. However, whether a tovarich can acquire a collection of gold coins without arousing the suspicion that he is surreptitiously planning an "economic crime" I do not know, but I imagine the mental hazards are discouraging.
The general worldwide availability and popularity of gold coins as an investment and speculative medium, and the rather intense activity of recent months call for diligent, thorough and hopefully objective investigations in the merits, hazards, techniques and problems involved in the purchase and collection of gold coins. That is the main purpose of this volume. It is hoped that it will also serve an auxiliary purpose by revealing something of the extent of monetary deterioration in the West and by showing the absolute necessity, as well as the advantages, of finding alternative stores of value to rapidly depreciating paper currency.
First: recognize that holding a heavy golden disc in your hand that has some time honored warranty of intrinsic value is a religious experience in itself, which seems to be important to you. Recognize also that except for a few lost jewelry pieces, no gold ever goes back into the ground. It is always either newly mined or refined from scrap in some form. In that one ounce chunk you may be holding someone's old wedding ring, sweepings off the jeweler's bench, a couple of grandma's crowns, the class ring given in love and hocked in hatred, a souvenir charm or two from some past trip, or some dust that a panner found in a stream during the 19th century. It could also be the result of a central bank unloading its specie on the open market in favor of paper promises.
So, the very fact that gold is gold -- beautiful in color, heavy and substantial, scarce, valuable, mystical, historical, and has symbolized future security in love and war for centuries-- makes it desirable to own.. Yes, you have gold fever, and I do too. But...let's keep our heads about us.
So here's what you do. If you live in a city large enough to have a coin show, go. Take $1000 with you in cash....Buy one each of the following coins in one ounce denominations: a Krugerrand, a Maple Leaf, and an American Eagle. Shop a couple of tables for the best price and don't ask for a receipt. If anyone wants to give you one, tell them you are Oliver North. You have now started a collection -- what's more boring than a hundred of the same old coin. We will get to a hundred, but not all a once. Take them home -- lift them, hold the greasy things in your hand, imagine who owned them before you, why did they sell them? Compare the designs and wonder why one is more lovely to your eye than the other.
Next month, of course depending on your budget, buy one or maybe two more -- but different. Look for a Panda, a Philharmonic, a Nugget, a Britannia, or other similar. Add it to your collection. When you have accumulated the Nationalistic one ouncers, look at the beautiful coins of Mexico and the United States. Add a US 20, a Mexican 50, etc....
You are going to be a coin collector of gold coins of the world without worrying about peaks and valleys and whether you can scalp a market dip for a couple of bucks. If you don't have access to a coin show within a reasonable distance, order them by mail from reputable dealers with close spreads. Buy a Coin World -- there are lots of highly competitive ads from very reliable businesses. If you can't find a show or a Coin World, I will send you a couple of issues free and pay the postage to get them to you.
Here's the bottom line: Have a plan, diversify your holdings so you can enjoy your purchases, learn and study, do it only on non-essential money without borrowing to get wealthy quick, and have fun with the thrill of the hunt. You will accumulate wealth and an interesting estate to pass along if you wish, or you can choose to sell if a strong market comes your way. In any event, relax and put yourself in a gold position where you can sleep well at night.
Now, take the change from your original $1000 buy, go to the hardware store and get the biggest ball peen hammer you can carry. Whenever you feel the urge to get greedy and jump in all at once or stray from your plan in any way, hit yourself in the head with that hammer just as a reminder not to. Good luck and I sincerely mean it!
I have just received notice that our phone provider, which has lowered basic rates by a hair, is requesting rate increases of 150 to 400% for every little service, from checking if a line is really busy to connecting you to your party. Nickel and diming customers to death. A real hyperinflation, that. Expect volatility, the calm is over. If, as I suspect, we are well into the collapse of a secular great wave of inflation, all hell will continue to break out.
Time to reconsider Robert Prechtor, who saw it coming, James Dale Davidson, who gave lots of warning, and David Hackett Fischer, who explained what was going on. It has been a slow process, but anyone who follows global events can no longer doubt that the long-term secular wave of price inflation has broken. This is NOT an elliot wave. It is visible on the surface, just for looking at prices. It may well have broken a decade ago. It is a 50 - 100 year process before the next phase.
Our thanks to Tolerant1 and Donald. Who saw it coming and never failed to tell it as they saw it.
All of you who said "Gold did not do so bad today, considering xyz ..." - how much money you have in gold ( and gold related ) investment versus watching it from the sidelines.
All of you who said "gold is the long term investment", can you explain when this became "the thing" instead of "gold is the hedge for bad times?"
I think that we are sending mixed messages and it would be nice to know "what is the position of people who make a specific statement"
For some of old posters it's clear ( at least to Kitco members who are around for a while and know the poster's position ) , however some statements come out of the blue, and it makes me wonder how much of it is backed up by the real investment, the real understanding, or just wishful thinking of investor loosing his money and trying to justify "holding on loosing investment"
JMCM - "Just Me - a Curious Mind" ;- )
http://search.washingtonpost.com/wp-srv/WAPO/19980709/V000184-070998-idx.html
I think all would agree that precious metals were great investments after the great depression began.
But my warning is in regard to what happened before the markets crashed. The point is this: We know little of precious metals cyclical price trends in deflationary times, and a great deal about precious metals cyclical price trends in inflationary times. Thus we must steel ourselves not to make analogies from the precious metals price patterns we have from inflationary times, and assume they apply to deflationary times. Perhaps they still apply, perhaps they do not. Perhaps only certain periods in modern gold price patterns apply to deflationary times.
The only fairly solid, modern information we have about gold prices in these rolling deflationary times is from countries that have just had currency crises, such as Indonesia.
To instill some caution in our fellow perpetually bullish gold bugs, just think about the price of oil, which peaked at $25/barrel at the end of 1997, and is now plummeting on monthly charts, now at $13/barrel or less. This drop is far in excess of the recent rise in the price of the US dollar. This is deflationary.
My point is simply to keep most of your powder dry, as the price of gold is not likely to rise significantly for some time, unless we have a world crisis of some kind, such as a war that impedes the flow of oil, or a financial crisis where gold is not sold at fire sale prices.
Gold equity prices only rise due to increased profit margins, either from an ( inflationary ) increase in the price of gold, or from a ( deflationary ) decrease in the cost of producing it. But, while there is relatively little delay between the rising price of gold and worsening inflation, there is more delay between the rising price of gold and worsening deflation. Commodity prices tend to collapse in the latter situation, and so do equity prices. Gold may actually be sold during this deflationary period by individuals who need it for food and shelter. But, after the immediate deflationary crisis is over, the price of gold will begin to rise -- and rise. And those who have been patient will benefit.
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No umbrage here. I have never been shy about bandwidth. I have been toying with the idea of posting some of Kitcos Best, One Year Later as a kind of retrospective comparison with our views and beliefs today. Maybe the best 5 or 6 posts from the same day exactly one year ago.
I sorted the archives by file size and was surprised to find which were the busiest days on Kitco this last year. I was all over the busiest day, but nowhere in sight on the close runner up. I wonder if there is a correlation in the amount of traffic on Kitco and the POG? There goes the demon chartist in me, got to quantify it all.
I would be interested in hearing from the rest out there if this sounds like a good idea.
There would only be two rules:
1: No negative posts. None, zero, null, zip, nada. Only posts that reflect the new spirit of Kitco would be reposted. To accomplish this, I must be allowed to edit a post that has some bile but much else of worth. Any editing would be clearly defined by the ubiquitous ".." before, after, or in the middle of a post to denote editing breaks.
2: I would only repost my own posts. And then only those that turned out to be right. I will be allowed to edit out any mistakes I have made and appear always correct and wise and sage.
( This second point, preposterous as it is and clearly unacceptable to all but the most bored of souls is offered as a negotiating point. It is a rider attached that will be grandly sacrificed in the furtherance of negotiation and cooperation. Used car salesmen sum up this theory by the crude but accurate, "Go in high, and watch em buy". Never cared for the ditties myself, sounds too much like Jessie Jackson or very bad Al Gore rap. )
So the idea is proffered:
A friendly snapshot of yesteryear on occasion?
Or Naught?
Yes?