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Fake Money Threatens our National Security, again!

BUYING GOLD/SILVER, GOLD & REAL ESTATE, GOLD AND MONEY, SELLING GOLD/SILVER, STOCKS AND GOLD/SILVER   No comments yet

Does the name Sam Upham ring a historical bell? Mr. Upham imprinted his name into history books in the most unusual fashion. In fact, Mr. Upham learned, well before Mr. Bernanke I should add, that the power to print is more profitable than the effort to work. Maybe this is why our gentleman of the hour printed nearly 15 million counterfeit Confederate dollars during this country’s Civil War over 150 years ago. Some respected historians believe our Civil War’s outcome was offhandedly determined by one “Yankee scoundrel” with the power to print money.

History is a road map seldom followed. So many readers are asking what it will take for physical PM (precious metal) to rise without questioning what happens when fake money rules the world. Like a wave building, the ill effects of fiat printing will soon position those holding sound money into a posture of wealth accumulation. Our country’s history is the only proof needed.

I would like to expand our history lesson for a paragraph, or two, before comparing a circa 1862 American currency to today’s precious metal alternative. The Confederate South created a fiat currency to afford a war. This new fiat currency, commonly called Confederate dollars, held no gold restraint because of a 100% reliance (sound familiar?) on those with the power to print.

Over creation, or over printing Confederate dollars led to rapid inflation as confidence in the money dropped all while volumes of Confederate dollars increased. It is worth mentioning that the cost of a man’s suit ran just under $3000 Confederate dollars as inflation gripped……. and then crushed this fiat money of the South.

For the record, the aforementioned Mr. Upham didn’t work for the Confederate Treasury. In fact, Mr. Upham was nothing more than a money bootlegger who realized the potential of combining cheap paper with barrels of ink. His ability to create fake money accelerated the Confederate currency into an inflationary spiral that led to the end of the Civil War!!!

I’m not a conspiracy theorist but it’s worth mentioning Mr. Upham was never caught, even with a $10k bounty on his head, and rumored to be protected by our country’s secret service till his death, hmm.

NATIONAL SECURITY:

Not a day passes without the mention of our country’s national security. The War on Terror rages long after September 2001 and the argument of a safer world is debatable. Less debatable are the costs of wars under the pretense of national security. To put it bluntly, we continue to borrow/print money in order to fight rotating wars.

The parallels between an extinct Confederate currency and today’s US dollar have reached an undeniable state of similarity.  The very act of overproducing our currency is now a compromise to our national security. This realization grows more haunting when we factor growing Middle Eastern tension and other threats of war.

Only a thin line separates the power to print, and then wage war, with the vulnerability of over creating a fiat currency that intensifies the threat to our national security. The Federal Reserve Bank promotes control but their actions say otherwise.

I’m not sure who tomorrow’s history will blame for the demise of today’s reserve currency. Will we print our dollar to death in order to sustain our consumer-based economy or will we destroy our currency in the name of national security while fighting never-ending wars?

Regardless why, physical silver and gold will protect the wealth of the few willing to accept today’s historical monetary lesson.

QUESTION:  DC, are we talking about someday trading pricey PMs back into a fiat currency (US Dollars)? Not sure I’m comfortable exchanging sound money for paper promises.

TPS Reply: Thanks for the comment and question; not a week passes without someone asking the same “what to do when it’s time to move on” question. You are correct, there will come a time to leverage wealth stored in silver/gold for another asset. We often envision this step, or process, transitioning through dollars first but this most likely will not be the case.

Complications arise the minute we convert an asset back into dollars. This complication could be a tax consequence (red flags or capital gains), wealth exposure, even security issues. The word that comes to mind is discretion. Discretion is a key component to owning, storing, and someday trading precious metal.

It’s worth mentioning that the same forces soon to propel PM higher will also have an adverse effect on other assets now over leveraged; real estate, stocks, and many businesses are a perfect example. When a business or property becomes overly leveraged it becomes vulnerable to a decline in revenue. The burden of leverage remains the same even if profits decline. This is the number one reason small businesses fail when a consumer-based economy cuts back on spending.

The potential to buy (trade) severely discounted property, stock, and businesses for precious metal will increase over this decade and probably the next, too. Those storing wealth in silver and gold will eventually realize the financial benefit of trading PM for another distressed asset. This trade bypasses the need to liquidate PMs into dollars, if structured properly.

This site will discuss many other options to trade, or sell, physical silver and gold in the near future. Thanks for the question.

QUESTION:  How does someone new to PMs know the best time to buy? I hear experts mention a “bottom” but how is the bottom recognizable?

TPS Reply:  Great question, thanks. The PM bottom is not recognizable…….. anyone claiming to know differently is nothing more than a paid PM spokesman. Too many forces now control day to day PM fluctuations, unfortunately. This means we must keep our eye on the long-term goal of wealth preservation by creating our own personal gold standard.

If you’re new to PM, and unprotected, please consider buying ASAP. No one knows when some event will push our economy to the brink…… just like the days in September 2008. The world’s banking institutions are now risky investment houses and highly leveraged. Sure central banks have rolled billions in dollars of liquidity into some banks but this cushion is pale compared to the exposure of most financial institutions.

My opinion is regardless the price paid PMs are worth it, especially when we consider the potential to preserve wealth ever so discretely. No need complicating this gift by guessing an actual PM bottom that will someday soon seem irrelevant.

Contrarily, I often recommend those PM protected to exercise patience when adding to their growing stack. The trend of late is declining. This means, in all probability, the same dollars will buy more metal in the very near future but only recommended for those already PM protected. Thanks for the question, and reading TPS.

 

DC Carlton is founder of The Prospector Site and author of the Amazon Kindle #1 Bestsellers Why Silver and Gold Will Go Higher and Storing Silver & Gold. If you’re looking for trustworthy PM assistance feel free to contact DC regarding his personalized consulting service. TPS doesn’t sell silver or gold; we represent you, the buyer, looking for affordable precious metal from honest trustworthy sources. Feel free to register here for his free online newsletter that provides precious metal insight rarely mentioned from mainstream media sources.

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IS SILVER WORTH IT?

BUYING GOLD/SILVER, GOLD & REAL ESTATE, GOLD & SILVER, SECURING GOLD & SILVER, STOCKS AND GOLD/SILVER   No comments yet

The truth is only the precious metal faithful are still buying silver or gold……. at least here in the US. Those who aren’t continue to irresponsibly invest, directionally speaking, thanks to the greatest wealth intervention in history. Far too many weigh PM (precious metal) up against other investments without considering the monetary difference, challenge, and purpose. Today’s DOW explosion is the purest example of such intervention. If we are to compare the two assets, DOW vs. PM, intervention gives the DOW a half track head start over precious metal all while spectators ask, “what’s up with precious metal and why is it pacing so far back?”

I see just two types of investors these days. The first type chooses to remain clueless as long as “experts” drum a rising DJIA and housing market. This type cares not to question “why” and too busy living life to question manipulation, intervention, record borrowing, or anything else for that matter. The second type is as concerning because these folks perfectly understand why the DOW and housing are rising but don’t care as long as they’re getting theirs.

The tiny sliver (sliver not silver) nestled between the two types aforementioned is you, the PM holder. You discretely stack discounted metal realizing the law of economics will soon and suddenly forever change this generation’s view of investing. I congratulate you for your tenacity.

It’s hard to get up each morning and then tell ourselves to stick to the plan. Metal experts sound like a broken record each time they predict a PM breakout that never seems to happen. Are these experts wrong? Is it possible the days of rising silver or gold are over? We both know the answer is “no way”.

Once wealthy countries like the US can no longer afford our current fiscal path. Our job market will no longer support the costs of everything from education to mortgages, pensions to property taxes. This tension causes a fiscal conflict that adversely affects nearly all aspects of our lives. This tension is also the reason politicians and governments have stepped beyond our constitutional rights of privacy and capital control.  Neither form of overreach will change anytime soon.

The word selfish surfaces in my mind this morning as I try to explain today’s complexity while living in a 21st century world. Investors succumb to selfishness as they watch a debt derived DOW add inflationary dollars to a bottom line. Politicians practice selfishness as they print dollars in order to maintain another round of power therefor appeasing a growing class of dependency.

Someone recently asked, “Where does it all end?” This is a good question but one far beyond my pay scale, sorry. My guess, it ends right where it all started some time ago. Was it that long ago when folks relied on each other and not a gov’t program? Was it that long ago families, churches, and other private organizations took care of those in temporary need? Was it that long ago we traded effort (cash) for healthcare, cars, houses, meals, etc. - not debt?

Could the end actually be a beginning? Is it possible the end is nothing more than a recurrence built from sound money and limited government? Can monetary intervention last forever without true growth within the economy? Maybe I’ll keep stacking silver and gold just in the off chance I’m right!!

I heard several great questions this week but two in particular really caught my ear and eye. I’m guessing if someone is willing to ask then others are quietly doing the same. As always, thanks for sharing your time with TPS.

QUESTION:  I’m new to precious metal and have a simple question, thanks. What will keep silver from someday dropping to a point of no value? It appears headed in that direction now.

TPS Reply:  Boy, no kidding. What a great question so thanks for sharing. Although highly unlikely, silver could decline to a point well below today’s offering. Such a scenario is, in my opinion, a short-term possibility when we consider today’s economic climate of accumulative fiat debasement and devaluation. The fiat currency experiment is building toward a climatic end that won’t bode well for most investors.

The majority of those considering silver, maybe you too, are judging the worthiness of physical metal on past performance. In other words, we buy or don’t according to today’s price far over the overall economic picture. Falling silver prices must mean silver is no longer a worthy investment, right?

Here is my recommendation to you and all those considering physical silver. Ask yourself if you truly internally believe economic recovery is real. Is the DOW rising because corporations are profitable or is the DOW rising because everyone is blindly jumping in? Is US housing in recovery or too-cheap-to-be-true mortgages spurring the next real estate bubble?

And the most important question to ask; what would the economic picture look like if not for the trillions of FED/US Treasury created dollars supporting everything from food stamps, healthcare, housing, military, banks, DJIA, pensions, Social Security, foreign banking, foreign government, etc? Because if you believe an economy 100% dependent on printed money is sustainable, please don’t buy physical silver.

Regardless, thanks for the question and following TPS.

QUESTION:  Although your book (Storing Silver & Gold) is interesting – I have a better plan. I’ve owned, and personally store, gold jewelry and bullion at home without a floor, wall, or standup style safe. It makes more sense to keep something of value in places a thief would never consider. To me, a safe communicates storage of wealth but something hidden says the opposite. Am I off base with my storage plan?

TPS Reply: No, not necessarily. A storage plan is extremely personal for obvious reasons. I wrote Storing Silver & Gold to make one huge significant point for those practicing the independent voyage into PM. Each person storing wealth within PMs must spread the risk among two to three storage options and methods. Simultaneously, it is recommend to keep at least 1/3 of your physical metal within arm’s reach or with someone trusted and close by.

TPS has other readers who also store bullion and jewelry in fake drawers, cabinets, tubes, walls, rooms, toilets, fireplaces, firewalls, etc. My opinion is if hiding PM outside a safe is what makes you most comfortable – then so be it, but. I encourage all readers to consider the possibility of fire damage along with the risk of theft. Gold will melt, as most know, and such a risk is as real as the odds of your home or office burning down (by the way, the PM insurance often mentioned at TPS will not cover PM improperly stored outside a safe, to my knowledge).

For what it’s worth, here is what my book research proved. The right safe, as part of a complete storage plan, sends a signal to a would-be thief that this family is prepared and protected from such an intrusion. Maybe the best plan for you is a combination of my recommendations and your existing plan? Thanks for the comment, reading my book, and question too.

 

DC Carlton is founder of The Prospector Site and author of the Amazon Kindle #1 Bestsellers Why Silver and Gold Will Go Higher and Storing Silver & Gold. If you’re looking for trustworthy PM assistance feel free to contact DC regarding his personalized consulting service. TPS doesn’t sell silver or gold; we represent you, the buyer, looking for affordable precious metal from honest trustworthy sources. Feel free to register here for his free online newsletter that provides precious metal insight rarely mentioned from mainstream media sources.

 

 

 

 

 

 

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WHY I RECOMMEND BOTH SILVER & CASH

BUYING GOLD/SILVER, GOLD & REAL ESTATE, GOLD & SILVER, GOLD AND MONEY, GOLD OR SILVER BUBBLE   No comments yet

In all likelihood your home or apartment has an inconspicuous looking device attached to the ceiling, probably more than one. This device has saved untold lives and is a priceless addition to your family; by law each new home or new renovation must include this device. By now you realize the item I’m describing today is a smoke detector.  The primary goal of a smoke detector is not to detect smoke; it is to sound alarm of eminent danger. Unfortunately, few can hear the harmonic sound of an economy in correction, even less realize where there’s smoke there’s usually fire.

Not a day passes without a reader emailing, or calling, TPS to ask what PM I’m buying. The answer is “silver” and the reason is nothing more than the primal desire to survive and preserve. Why so few Americans fail to react to this internal beacon is beyond me. I’m so very glad you’re excluded from this clueless trend sweeping our nation but what if I said physical silver alone is not enough?

Bells and whistles are blaring all around us even as your read these words. Few hear the ringing because most folks view danger based on the reaction of others. It is a proven fact that if enough folks take flight others will follow without knowing why. Unfortunately, the opposite is true too. On a 1-10 scale, I would gauge the flight to precious metals slightly above 1, as of April 2013.

This lack of urgency spawns inaction by business owners, college students, wage earners and retirees. All the above are on the cusps of no longer controlling their monetary future because they fail to recognize how quickly technology can separate our wealth from our control; the video below is but one real-time example.

Economists often compare the Great Depression with today even though this is impossible. The Great Depression was a slow burn that consumed untold wealth over several years. The US economy was primarily “local” in nature unlike today’s global age we’re living. At such time, silver, gold, and the US dollar were all real money.

A monetary life in 2013 is much different. Almost instantly our financial world can be contained by a banking lockout, this usually happens on a Friday afternoon. The video above accurately describes the challenges of every individual who still trusts, therefor stores, personal wealth within a banking system. The powers in control realize the best way to control your wealth…..not to mention preserve their power, is to quickly lock the exits before you can transfer personal capital (savings).

NOTE:  Cyprus bank depositors are allowed to withdraw no more than a few hundred euros per day; this came after an eight day bank holiday.

The political machine realizes the best way to keep the village distracted is to pipe in the soothing sounds of recovery, stability, and economic opportunity. It matters little if true, it only matters that you believe it because if you don’t the powers in control will enforce control. Reminds this writer of an abusive spouse who punishes but only because the victim deserves it.

I’ll say it loud and clear, I’m not a good victim. Since you’re reading today I’m guessing neither are you. The thought of an overreaching bureaucracy divvying out my wealth byway of an ATM ration doesn’t resonate well. I refuse to allow a bank to control how much I spend, where I spend, and on what I spend. This reason alone is why I recommend storing cash as well as physical PM.

Precious metals are in my opinion the best long-term store of wealth. The problem is the only way PM can convert to cash is by selling. We don’t want to sell our silver, or gold; this is why it’s important to understand a world accustom to trading in dollars, a.k.a. cash, will confuse real money with physical dollars, especially in times of banking volatility or unsuspected bank holidays. A Cyprus glimpse proves my point better than I can.

This is why cold hard cash is king, short-term speaking, as shown at the 3:00 minute segment in the above video. A loss of faith within the banking industry will lead to a run on cash.

The play of the day is twofold. I strongly encourage each reader to consider physical silver, while still available, along with a couple thousand dollars in cash and, as always, 1/3 STORED WITHIN ARM’S REACH. If you’re finding this confusing please email or call TPS for assistance in formulating a personal plan that best fits your need.

QUESTION:  I made my first gold purchase a few months ago and ever since it has done nothing but decline. I realize this is all part of the risk but it is a little discouraging. Any words of encouragement?

TPS Reply:  Thanks for reading TPS and taking the time to send over your question. It is always somewhat disheartening when metal prices decline like they have over the last few weeks. For what it’s worth……I too bought physical gold only to watch it decline 23%. The only difference is this was back in 2008 when I paid somewhere around $980 per gold ounce. I recall feeling a little foolish with my “investment” but today my only regret is that I didn’t buy more at the time.

The key word just mentioned is time. We can’t ignore the great economic or monetary challenges of our day. A rising, and soon to bubble over, DJIA is not a sign of an improving economy, neither is a low interest rate infused housing market. Both the DOW and housing are responding to the benefits of currency creation, the cash must go somewhere, right?

Since you’re taking the time to read unbiased PM sources then you must also realize precious metal is a long-term play. Don’t confuse month to month PM movements with validation. Safe havens and real assets are still the best options for realistically minded individuals; regardless how they measure up in dollars (by the way, gold is rising in other currencies. This is why it’s impossible to validate PM gauged in just one currency OR over one moment in time).

I’m not a good gambler; this is why I continue to invest my dollars into PM while watching other investment foolishness from the sidelines. Your decision to buy gold cannot be validated by a rise no more than vilified by a decline soon after (purchasing). My advice is to keep an eye on the long-term goal of wealth preservation realizing what is “real” is real and what is “not” isn’t.

If the price of gold drops to $1300 an ounce tomorrow, so be it. If it jumps to $2200 next week, so be it too. The dollar (number) next to gold means nothing since all markets are affected, either positively or negatively, by forces well beyond our control. Historically speaking, such market interventions rarely last longer than a season. This is why I view my PM as a long-term safe haven.

COMMENT:  Couldn’t agree more with your book’s chapter on real estate. Thanks for keeping it real in an age of confusion.

TPS Reply:  Thank you for taking the time to self-educate. It really comes down to knowledge, doesn’t it? Too many are rushing back to real estate with an improper mindset. Housing is a place to raise families and extinguish birthday candles. It’s always great when it appreciates but the primary goal of home ownership is not an avenue of saving or wealth building.

Here is the question each potential home buyer must ask PRIOR to inking an offer. How much of the home’s value derives from nothing more than the ability to borrow currency at a low rate of interest. This portion, or percentage, of the home’s value is susceptible to market volatility beyond the realm of short-term fluctuations.

It is only because of those who benefit from lending, building, or selling real estate that so many have a false belief in real estate as a good investment. The cheap money used to buy today’s real estate is nothing more than a byproduct of a government in perpetual money creation mode. Cheap interest rates only punish the savers of the world and blur true housing values.

My opinion is we’ll see a day when 20 ounces of gold will buy more homes than not.

QUESTION:  What is causing gold and silver to drop so suddenly today?

TPS Reply:  Great question. The only words I can think of to describe such PM brutality are manipulation, intervention, greed, fear, and corruption. It is impossible to believe a free unrestricted market is the cause of our recent PM correction.  The games happening within the PM market are nothing short of criminal and here’s why.

Gold or silver are nowhere near bubble territory, the charts below clearly show how quickly an asset, like housing, will climb just before correcting or bursting. It is understood that when a particular asset raises too quickly that eventually it will become prone to correct.

Now, let’s look at the bigger picture here since it’s becoming extremely obvious that PMs are under full assault. With the threat of war (both militarily and monetarily), economic uncertainty, and perpetual currency printing, precious metals priced in dollars should be steadily climbing. But this is not the case.

What is not declining is the demand for physical metal. This demand is quickly depleting metal inventories as buyers like you, I hope, take advantage of cheap silver or gold. Such a demand will continue to disconnect physical metal prices from paper price manipulation. At such a time no one selling physical PM will give an ounce of attention to the paper PM market.

Speaking of a gold bubble, it could help to show what a true asset bubble bursting looks like. Below is a chart showing how quickly housing values rose just before the housing bubble burst back in 2005-06. Then compare the next chart showing the Dot-com build and bust back in 2000-01.

 

And now, does the last six months in gold look anything close to a bubble?

 

Below is one last chart I want to add just before posting. It shows the virtual currency Bitcoin just days before it recently corrected. If gold were as vertical as this last chart then “yes” I would have to say PMs have reached a dangerous level in need of correction, but not the case.

 

BERNANKE WATCH:

FED chief Bernanke is the most powerful man on earth. Unfortunately, his ability to accurately gauge how money printing and market manipulations lead to asset bubble’s bursting should be of great concern. Dr. Paul Craig Roberts offered a commonsense approach to why precious metals are under FED assault.

“The exchange value of the dollar is threatened, and if that collapses the FED loses control over interest rates. Then the bond market blows up, the stock market blows up, and the banks that are too big to fail, fail. So it’s an act of desperation because they’ve got to establish in people’s minds that the dollar is the only safe place, it is the only safe haven, not gold, not silver, and not other currencies.” -Dr. Paul Craig Roberts.

 

DC Carlton is the founder of The Prospector Site and author of Why Silver and Gold Will Go Higher. If you’re looking for trustworthy PM assistance feel free to contact DC regarding his personalized consulting service. TPS doesn’t sell silver or gold; we represent you, the buyer, looking for affordable precious metal from honest trustworthy sources. Feel free to register here for his free online newsletter that provides precious metal insight rarely mentioned from mainstream media sources.

 

 

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CONQUERING THE “FEAR FACTOR” WITH SILVER

BUYING GOLD/SILVER, GOLD & REAL ESTATE, GOLD & SILVER, GOLD AND MONEY, SOCIAL UNREST, Uncategorized   No comments yet

If you find yourself anxiously searching for answers in a time of great complexity then today’s post is for you. I see two trends that lead me to believe many folks are reacting to an emotion that has consumed the soul of man for thousands of years. Yesterday’s news was no surprise, not to me at least. It seems gun sales are up nearly 20% this Black Friday over last. Why, because people are afraid? Maybe this is why gold and silver sales are up comparably, too. So, before you buy another ounce, or AK-47, please read the following closely.

“He who fears something gives it power over him.  Author: Moorish proverb

You are wise to investigate why silver and gold are so necessary in such an age like the one we live today. But your decision…or motivation must go beyond a fearful reaction to preserve and protect what you’ve worked hard for. I realize this is something easier said than done.

An opportunity to own silver and (or) gold must be part of an overall commitment to develop a life of independence.  For me this decision is one I made over a decade ago as I realized something wasn’t right with the way we send currency (you may call it money) to Wall Street and then pray someone we don’t know takes proper care of it.

The thought of endless currency creation didn’t make sense either. How is it that I work so hard – for something like dollars – when others can create more on a whim…..accountable to no one and then give this newly created cash to only a chosen few?

Like you, I receive many PM newsletters but lately nearly everything written is based on a fearful projection of our future. Tales of currency collapse, social unrest, war, riots and other terrible forms of crisis. Maybe it’s time we break down our worst fears and then compile a “what if” plan not calculated from fear but God given common sense.

Do you realize all the terrible fears described above already take place as you read this post? The USD has lost 95% since it unhinged from gold; I would have to describe this as a “currency collapse”.  Social unrest fills our inner city streets as millions live a gang related life few of us can imagine (over 7 million people are on probation, parole, jail or prison in the US). Spend an hour in the city of Compton and you will have no doubt “social unrest” is prevalent today. Wars are rampant, in fact our youth have yet to live a day when our country wasn’t at war. It seems each evening we hear of yet another riot as Europeans realize bigger government is not the answer.

Wealth stored in silver or gold is about creating opportunities, like the opportunity to establish your own monetary policy. The opportunity to serve others, worship, store supplies, afford a weapon of protection and most importantly, the opportunity to pick your family up and move them elsewhere. These opportunities I’m describing today have nothing to do with fear. Sure fear may spark the motivation necessary to re-direct but fear shouldn’t lead.

I recall an email we received here at TPS not long ago. This reader was very concerned that the banking system is close to collapse and ultimately destroy the wealth of millions. Folks, I have news for all who will listen. The banking system, as we know it, only stands because of the trillions of dollars “borrowed” from the Federal Reserve Bank. This fiat system based on fractional reserve currency creation is a short-term experiment soon to show it uselessness.

Eventually inflation will erode the wealth of those unprotected. Some of this wealth will disappear and some will transfer to the few who hold silver, gold, and other “real assets”. You may ask why our elected leaders fail to warn of such a destruction of wealth but the truth is Congressman Ron Paul has done so for years.

Our banking system will someday “correct” itself or risk becoming obsolete. This is why a savings in “real money” is so necessary. Please allow your common sense to override your perception of reality; fear has nothing to do with such prudence.

Most of you know I authored a book called “Why Silver & Gold Will Go Higher”. One of the reasons both metals will elevated is, unfortunately, because of fear as millions realize what you already know. Please don’t include yourself on the fear list. Seek out unbiased precious metal sources to educate and then let wisdom supersede fear.

QUESTION:  If you had to choose just one would it be to buy silver or gold? Love the site, thanks.

TPS Reply: Thanks for the question, and reading TPS. Right now I would have to pick silver over gold, no doubt about it and here is why. So many folks around the globe are realizing the banking system is rigged and their wealth is in jeopardy. They are, or soon will be, desperately searching for a safe haven and many can’t afford gold. But they can afford physical silver and will buy boatloads of it while they still can. I completely expect to see silver inventories depleted as the masses attempt to protect wealth and then store it outside of the banking system.

Personally, I would buy $100 an ounce silver today, if necessary. I would rather risk paying too much for silver than watch my wealth disappear on Wall Street or disappear through inflation. Remember, most of the world is free to own a very limited supply of physical silver. Silver is unlike gold, once silver is used as a commodity it rarely returns to a physical form. I recommend taking a hard look at silver bullion, rounds or bars soon.

QUESTION:  Thank you for providing useful PM info for those of use new to silver and gold investing. My question today pertains to our wealth in real estate, particularly our home we live in. You mentioned the danger of wealth disappearing in our homes as values decline but lately we have seen the opposite. Our community has experienced an increase in sales that resulted in an increase in home values. Do you feel this trend will continue? We are seriously considering selling our home and renting but hesitant to sale while values are trending upward. Thanks.

TPS Reply: Great question so thanks for asking. I agree with your assessment that values in residential property are increasing after losing around 40% from peak bubble. You are wise to question the return of equity so congrats. We must ask why housing has turned around to answer if this trend will continue. The fact is most of today’s buyers are investors looking to take advantage of perceived bargains and low interest rates. These historically low rates are compliments of a federal government willing to backstop a housing market (low rates also allow our government to borrow trillions at historically low rates).

Our government will do everything possible to support real estate values because every new mortgage is the creation of currency the Feds don’t have to print. Our economy depends on consumption and new mortgages are great for a debt-based economy. Now, it’s my turn to ask you a few questions. What do you think will happen when the only lender in the land (US Government) realizes it cannot backstop mortgages forever? Do you realize no other banking institution can or will take the risk that our government provides today? Do you realize taxpayers are on the hook for every foreclosed property the gov’t insures?

This is why I view today’s real estate market as the housing meltdown 2.0 considering this is not a real market built on unassisted economic forces. Having said that, no two markets are alike and your home could sustain or grow in value. It is possible this administration will beg, borrow and steal to support housing for the next four years, who knows.

For the record, I still own my home because it is part of an overall plan of self reliance and my cost of ownership is far less than my local rates to rent. Hope this helps because I realize you are facing a very tough decision.

 

 

DC Carlton is the founder of The Prospector Site and author of Why Silver and Gold Will Go Higher. Feel free to register here for his free online newsletter that provides precious metal insight rarely mentioned from mainstream media sources.

 

 

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YOUR FIRST SILVER PURCHASE

BUYING GOLD/SILVER, GOLD & REAL ESTATE   1 comment

I can honestly….and humbly say I’ve made mistakes during the buying process. I made mistakes early from a lack of knowledge and planning. Many of you are new to precious metals and I commend you for making one of the wisest monetary decisions you will ever make. We are living history as we watch central banks worldwide devalue their respected currencies to a place of worthlessness.  You can do little to change such foolish behavior, but you can take the proactive nature of owning silver and gold, here is how.

Trading currency for real money is not complicated. The process, if calculated, should take less than 10 minutes and with little or no anxiety. Making your first silver, or gold, purchase need not be complex, confusing or stressful. Today I will provide two little nuggets that will make even the most inexperienced metal buyer sound proficient the first time buying PM.

We must remember that each party – buyer and seller – has a goal. Your goal is to trade dollars (or whatever your currency is) for real money all while not being ripped off. The seller’s goal is to sell the most profitable metal that benefits their bottom line the most, very simple.

This next sentence or two is very important so please read them carefully. We are not coin collectors. We care nothing about a coin’s rarity, proof, history, shine, glow, etc. Our goal is to buy silver, or gold, cheaply as possible and as close to “spot price” as possible.

This is where most “newbies” fall off. The tendency is for new precious metal buyers to find themselves easily swayed especially when they say, to the PM seller, the worst words possible;  “I am new to silver and gold” or “what metal do you recommend”. Nothing, and I mean nothing, has the potential to sabotage your gallant effort like the sentence above.

Let’s backup here a second. Isn’t it your cash we are talking about spending? Isn’t this your future, your family’s financial stake and your hard-earned effort that brings you to this point? Why would we scatter your tokens, aka dollars, across a stranger’s counter all while hoping they honor your best interest? No way, we cannot entrust something so important to a commissioned salesperson, sorry.

I realize many good, and reputable, PM brokers work within our industry today but is it worth chancing? By the way, feel free to email TPS for a short list of PM sellers I’m 100% confident will look after your best interest.

WHAT TO SAY:

Regardless if buying from a coin shop or over the phone, you must decide what you’re buying and how much BEFORE INITIATING CONTACT. I recommend new bullion coins, rounds or junk silver since they offer the lowest “premium” over current spot price. First, ask the person selling PM for the current spot price. Next, ask the sales representative which silver, or gold, they offer closest to “spot” and I’ll bet the answer will be one of the three aforementioned.

I want to encourage you to try this at your local coin shop, soon. Start small maybe with an ounce or two of silver, this will allow you to become comfortable with purchasing PMs while not spending a boatload of cash. Remember, inventories fluctuate each day and so does the precious metal market. You can save money buying in person especially with small orders (no shipping costs) but larger orders make online purchasing the most cost effective.

For the record, I buy PM both online and in person. I love the interaction and feel the necessity of supporting my local coin shops since they are more than willing to quickly trade metal back to cash if necessary.

SEND OVER YOUR PM QUESTIONS OR COMMENTS ANYTIME. WE WOULD LOVE TO HEAR WHAT YOU’RE BUYING AND HOW…. SO CONTACT ME RIGHT HERE.

QUESTION:  I want to first say “thanks” for what you do at the TPS. I’ve been buying silver bullion for over a year and from a online bullion broker you recommended (Miles Franklin), each order arrived on time and as promised. My question relates to the equity we have in our home and buying more PM. Even with the housing correction we still have over $100,000 equity and owe slightly over $100k. Your chapter on real estate (Why Silver & Gold Will Go Higher) makes me believe the remaining equity in our home will decline further. If so, do you recommend capturing remaining equity, via a refinance, then use the proceeds to buy more PM?  We don’t really want to sell our home but hate the idea of losing more wealth. Thanks in advance for your reply.


TPS Reply:  Thank you for reading my site, and book.  Your question is one each person holding wealth in real estate must ask since I’m convinced residential real estate will further decline. Your wisdom led you to buy silver and your prudence tells you to buy more. The question is should you borrow from your home’s equity (or sale) in order to add to your PM arsenal? No one can answer this question better than you but let me offer what I would do under such a scenario. I would only refi (in order to buy more PM) if my new fixed rate payment remained the same. Can you execute a “cash out” refi without raising your payment? Can you easily afford the new payment even if your household income declines (household incomes are declining and this trend is likely to continue).

I’m always hesitant to leverage something as volatile as silver but I completely agree that declining equity is exactly the same as wealth loss. Most folks fail to correlate the two and this is why 40% of the wealth in the US disappeared over the last few years. With that said, I recommend you… and all other readers, to do whatever is necessary to amass as much PM as possible, but wisely. It does no good to turn around and sell 20 ounces of silver bullion each month just to cover a mortgage payment.

 

 

 

 

 

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WHY WE LIE ABOUT “RECOVERY”

GOLD & REAL ESTATE, GOLD & SILVER, GOLD AND MONEY   No comments yet

Writing for The Prospector Site is a continued commitment in hopes of convincing as many folks as possible why silver and gold are so necessary. Unfortunately, the odds are not in your favor of finding accurate information and this is why so many will lose a majority of their wealth over the next few years. Does this last sentence sound like an overreaction? Before you answer think about this, it is estimated 40% of all US wealth disappeared over the last three years.  Yet most folks go out to dinner, take vacations, even invest just like they did when 40% more wealthy. We live life as “normal” for one reason; we live life as normal because we foolish lie to ourselves about recovery!

 

TPS doesn’t sell silver or gold, most readers know why. My goal is to provide an accurate analysis of today’s economy and then beat the silver and gold drum as loud as possible.  I’ll be honest; few heed PM’s warning because few question the illusion of recovery. To accept PM as worthy one must simultaneously deny the false flag of economic recovery. Please don’t confuse my revelation as doom & gloom or apocalyptic since neither accurately describe my view point.

Denial is a rampant plague that will soon devour our way of life. Denial is what allows intelligent minded people to accept trillion dollar debt ceilings. Denial is why we believe economic stimulus somehow will improve our personal situation all while big banks grow bigger, not to mention more profitable. Denial is a belief in a reserve currency (USD) on the verge of worthlessness and historical defeat. Denial is the only reason we still hold wealth in dollars while we watch central banks print unconscionable amounts of worthless dollars knowing this debt can never be repaid.

Denial is why we steal from our children’s future unwilling to alter our lifestyle 100% dependent on debt.

We believe in recovery, real or not, because this allows us to ignore the need for change. Most folks today are uncomfortable with real money like silver/gold yet willing to risk it all for a promise or currency creatable by the push of a button. I used to view our generation as economic ignorant but I’m slowly changing my mind to believe ignorance has little to do with denial.

I believe most of us don’t want to know the truth. We don’t want to face the fact our houses, cars, boats, travel trailers, pensions, retirement accounts, etc all depend on new debt for value. If you believe then you continue to borrow cash to buy such overpriced assets as above. When you question the so called truth then you don’t buy as many and the results expose the Ponzi debt scheme now plaguing our very existence.

We lie about recovery to live one more month of a lifestyle that will soon make everyone on earth ask, “What was I thinking.”

Folks, this has nothing to do with if silver and gold will go up, only a fool questions long-term value of precious metals. Both metals in physical form will climb as long as denial fuels a belief that yesterday’s normal is tomorrow’s future.

QUESTIONS & COMMENTS:

Question: I just finished reading the book Aftershock (Next Global Meltdown) and it’s slightly disturbing. I recall you mentioned working with one of the book’s authors so thought maybe you can help with a real estate to gold question. The book warns of lost real estate wealth and recommends trading RE for precious metals. This seems drastic so I guess my question is what do you think?

Answer: I want to first say thanks for the question and reading TPS. Aftershock is a real eye opener and I’m guessing this NY Times bestseller has reached close to a million copies sold by now. Cindy Spitzer and I discussed her take on real estate liquidation before I finished Why Silver & Gold Will Go Higher.  Cindy said all three of the book’s authors still own their homes (none have sold), she also insinuated all three authors hold plenty of gold too.

I can’t speak for Cindy, or the other authors, but feel we are in the same camp regarding real estate and gold.  I feel real estate equity will continue to decline as credit tightens and this is truly unfortunate for those using their home as a savings account. This loss has less impact for us who also owning silver, gold, or other hard assets.

So to answer your question, if you have wealth safely stored outside your home then selling your home to buy precious metal is less necessary.  If your home is underwater then selling your home doesn’t help either. I guess it boils down to each reader’s personal situation and how realistically they view this life changing economic correction.

Oh, one other thing. Cindy (Aftershock author) did recommend selling all vacation and second home property not turning income. Don’t worry, vacation homes will find themselves greatly discounted in the near future if you decide to someday trade a few ounces of gold back to RE. Thanks again for the question.

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“ALL IN” WITH PHYSICAL SILVER & GOLD

BUYING GOLD/SILVER, GOLD & REAL ESTATE, GOLD & SILVER   No comments yet

The question of “how much” becomes more relevant with each passing week of economic turmoil. If you too are considering going “all in” I have a few suggestions before making such a brave move. I compare this decision to wearing a life vest around on a cruise ship while other voyageurs ignore an ominous skyline (most folks continue to underestimate today’s economic challenges). Owning gold is wise, it’s always wise in my opinion, but owning PM (precious metal) is different from owning ONLY precious metals. A 100% position in gold or silver may not be necessary but could be prudent at least for those with a little insight. As always, the decision is yours and yours only.


Question: Do you think it would be a risk to be all in with physical PM’s? Certainly is a huge risk to be with stocks which most are and think nothing of it. if you truly believe in wealth preservation it shouldn’t be. They say you shouldn’t have all of your eggs in one basket, but if you have your self sustainability and no debt covered what else is there? I’m pretty sure I know the answer but would like your input. thanks!

TPS Reply: Thanks for the questions and I like how you phrase the first question around “risk” over reward. It really does come down to “risk” over reward at least in my opinion. Each day new readers find this site which leads me to believe new folks are just now finding relevance in precious metals. You, on the other hand, ask if enough evidence supports a PM “all in” position.

Most of you know by now that all investing, or saving, carries risk and PMs are no exception. The question that must be answered; where is your savings less at risk considering today’s economic turmoil?

Is the goal to get rich or not grow poor?

Most buying silver and gold do so as a hedge in case traditional investments fail. As more traditional investments fail more run to the safety of silver and gold. Will this drive prices higher? Of course, how can it not?

The result, or answer, you are in search of comes down to one thing but this one thing must be viewed from a proper perspective. The question is not about gold’s risk (if you feel it is then you’re missing the point). The question is what happens when every currency on the planet continues to borrow in order to cover a lifestyle that should have never existed? Will creating new debt (more debt) fix decades of borrowing problems? Each of must understand that those in control of your currency are all in too. But their all in doesn’t have your best interest in mind and we know this as true by who receives another taxpayer bailout over and over again.

Someday soon the world’s wealth will connect the dots how printing currency only weakens the wealth of those invested in currency based assets. This realization comes sooner for some but later for most. We are soon to enter a monetary renaissance and this awakening will drive trillions in wealth in search of something real and unprintable. The few all in with silver and gold will reap the most reward, at least in my opinion.

Here is what I suggest for the average reader trying to find a handle on today’s PM situation. Watch, be aware, and invest accordingly. We know that gold values rise along with debt creation. Creating debt is only obtainable by creating more currency (Greece’s third bailout is a perfect example). Gold will continue to rise as long as central banks continue to print more cash. This is why the gold I bought in 2008 is now worth double in dollars and more in true value. This is also why the gold we buy tomorrow will double yet again (my opinion). My suggestion, keep buying gold and silver until this madness stops.

NEWSWORTHY:

USA WATCHDOG: “Financial crisis detonates before election….”

Forget about the outcome of the Greek elections.  The only thing that matters, according to Karl Denninger of Market-ticker.org, is math.   Denninger thinks, “The powers that be are lying about the solvency of institutions and this is doomed to fail.”

He still thinks the financial crisis “detonates before the election,” and “layoff numbers start going back up.” If the U.S. isn’t careful, we could be looking at a sudden 50% to 75% cut in the federal budget.  Greg Hunter goes one on one with Karl Denninger.

Watch it right here.

NEWSWORTHY:

MSN MONEY: We’re Defaulting-But Don’t You Dare

Thomas Marano, chief executive officer of Residential Capital, wrote me a letter.

“Dear Homeowner,” it begins. (That’s me, homeowner.)

As you may have read or heard, Residential Capital LLC recently announced that it and its subsidiaries, including GMAC Mortgage, are restructuring under Chapter 11 . . . The restructuring . . . does not change your obligations as a mortgage borrower . . . You must continue to make your scheduled mortgage payments on time and in full.

I can only guess why he sent me this letter. Maybe he’s afraid I’m going to do what he’s doing.

Of course, as Marano wrote to me, I’d have to write to my tenant, so that he didn’t get the wrong idea:

Dear Renter: I am restructuring my GMAC mortgage. My unusual financial shell game does not change your obligations as a tenant. You must continue to make your rent payments on time and in full. Yes, I know. GMAC is not making its payments. And I am not making my payments. So you must be asking why you should be making your payments? Well, to borrow a line from an Ally commercial, “It’s just the right thing to do.”

Hey, even kids know a bad example when they see one. Why don’t banks?

Read it all right here.

TPS adds, this article is yet another example of how banking defaults will eventually lead to a record number of tenants and mortgage holders refusing to pay monthly obligations (as the bestselling book Aftershock warned). What will such a time do to already depressed housing values? This is why we recommend to carefully consider moving some home equity into PMs while this door is still open.

THANK YOU TO THE NEW READERS, AND NOT SO NEW ONES, FOLLOWING TPS. WE WANT TO SHARE WHAT’S ON YOUR PM MIND SO SEND OVER YOUR QUESTIONS AND COMMENTS HERE. ALSO, SIGN UP FOR OR ONLINE NEWSLETTER .

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THE FOOD STAMP GENERATION

BUYING GOLD/SILVER, GOLD & REAL ESTATE, GOLD & SILVER, GOLD AND MONEY   No comments yet

Will you agree that no one plans on living a life in poverty? The masses do not see the correlation between declining personal wealth and food stamp dependency. Not even national news that recently exposed a 40% decline in net worth snaps our middle-income class into realizing how close most are to depending on food stamp allowances. It’s no wonder physical silver and gold are so far off the radar considering such an accumulation of failure. Most of us stand and watch asset wealth drift away unwilling to see the sand eroding under our very feet.


I want to breakdown the progression to food stamps just in case some readers haven’t figured it out.

  • Declining real estate equity gradually siphons wealth away from the unsuspecting. Declining equity makes up most of the 40% net worth decline here in the U.S. (since 2007). The great housing bubble made it possible for those accustom to living paycheck to check to live beyond their means. Years of using a home as a store of wealth is proving costly to savers especially when we accept that housing hasn’t reached bottom. What does this mean for those with remaining equity? It means most of us are about to become poorer.
  • Declining wages arrive just as the price of necessities rise leaving millions in the middle class one step closer to poverty. Some argue wages have not declined but fail to mention how employees are paying a bigger share of insurance and pension obligations. This is no different from a reduction in wages since the bottom line is lower at month’s end. The only alternative is to feed your family less or rely on food stamps. A decline in true purchasing power of the USD only confuses those who trust currency as money. The confusing part comes when the numbers on our currency stay the same even though the buying power mysteriously declines. Welcome to the wonderful world of hidden taxation, inflation.
  • Declining savings.The trade-off for a credit addiction is a decline in savings. Last decade’s rise in credit exposes just how bad Americans are at saving for rainy days. This is sad when we consider most missed an opportunity to grow wealth and take advantage of cheap silver and gold. Not to justify a failure to save but the truth is savers are punished because of artificially low rates of return. Why save if the reward is less than inflation, why not borrow ourselves into an unsustainable lifestyle?
  • Nothing to sale, no savings, and soon no available credit parlay our world’s middle class one rung closer to poverty. This is why houses are so cheap in cities like Vegas and Scottsdale. High inventory drives prices down especially when coupled with declining capital (credit). This is why we suggest waiting to buy a car, truck, motor home, vacation home, condo, business, airplane, and dream vacation. Sellers sell cheap when liquidation is the only option to pay the water bill or keep lights on. As you can see below, Food Stamps are no longer for the stereotypical poor.

CNN MONEY: Living on food stamps in Middle-class suburbia.

Morris County is known for its wealth and million-dollar homes. Median household income there is over $91,000. Yet, the number of people receiving food stamps in the area has nearly tripled in the past five years.

Phyllis Tonnesen is on the front lines of the epidemic. She works for the Department of Human Services Office of Temporary Assistance. In her 27 years at the agency, she says this is the worst she’s ever seen it.

The food stamp caseload has increased 240% since the beginning of the recession.

“These people thought they had the American Dream,” Tonnesen said. “They had decent jobs, a home, a new car every five years, took the kids to the shore for vacation. Suddenly here they are applying for food stamps.”

The Smiths are one of those families. That’s not their real name. They want to keep their identity secret so their three kids won’t be teased at school.

Four years ago, Mr. Smith lost his six-figure job of twenty years at a telecom company and ended up selling shoes for $10 an hour.

Read the rest here.

Questions & Comments:

Comment: First and only rule to making money (…..not waiting forever for a buyer for an overpriced coin) with coins.. BUY FOR THE METAL VALUE ONLY. Obviously, there will be a premium for the gold or silver in a coin form but the closer you can pay to spot, the better. The only thing rarer than a rare, expensive coin is a BUYER for one. Don’t buy numismatic coins to make money. Buy them for their metal content. It will not only hedge against inflation, right now, your wealth will grow.

TPS Reply: Well said and thanks for commenting. It really is all about metal content considering rarity is of little value to those trying to protect, or grow, wealth. Unfortunately, most shops selling rare coins work diligently to convince PM (precious metal) “Newbies” otherwise. It really is all about the premium for those on the selling side and rare coins offer great premiums over new bullion. Right now we have choices: bullion or rare coins. But these days are numbered since one day soon the few holding bullion will not sell (who will consider selling when the world realizes fiat currency has a baseless value?) leaving PM latecomers with nothing but higher premium rare coins.

Question: Okay, I’m a little confused. At least a dozen times  you refer to today’s economic meltdown as a “correction” (in Why Silver & Gold Will Go Higher).  To me this seems like an underestimation at least compared to other silver and gold newsletters & sites. If the economy continues its course, I doubt record levels of unemployment, foreclosures, bank runs, and social unrest will seem merely like a correction. Care to expand a little here?

TPS Reply: Great question and thanks for asking it. As mentioned in the book, I refuse to call the age we live anything other than a correction since historically this accurately describes our time. Real money will correct the sins of an abused fiat system every time (not my opinion but history’s). Will this correction devastate masses? Yes, it certainly will but monetary corrections always blindside those unprepared, all while the few invested in silver & gold watch wealth grow. This is why it is so important to trade currency for real money like silver and gold. It is only a correction for those unprepared, this is why I refuse to sensationalize our economic plight into anything other than what it is. Thanks for asking.

IF YOU HAVE A QUESTION OR COMMENT WHY NOT SHARE IT RIGHT HERE?. ALSO, FEEL FREE TO REGISTER FOR OUR ONLINE NEWSLETTER TOO.

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IS IT TIME TO TRADE GOLD FOR REAL ESTATE?

BUYING GOLD/SILVER, GOLD & REAL ESTATE, SELLING GOLD/SILVER   No comments yet

A Prospector reader recently asked if now is the right time to trade gold for a home or income producing property. What I find ironic is that some, maybe most, cash used to buy silver or gold came from real estate income of some kind. This only proves my point how assets cycle and those most prudent leap from an asset peaking to one ready to incline. I will say this from the start, regardless if you trade some or all metal for housing the bull run for gold is anything but over.


Depending on where you live the price of residential and commercial property is in all probability looking affordable. Just like we ask if gold will go higher, we must ask if real estate will further decline before deciding if now is a good trade from gold. Some of you are influenced by cheap mortgage rates and this is completely understandable.

The question worthy of asking, are cheap mortgage rates reason enough to buy an asset still declining in value? Is cash flow alone reason to jump from an asset poised to rise into an asset destined to decline? Some of you view real estate as a bargain but this is only when compared to an artificial high water mark that should have never existed.

Overall, real estate has a way to go before reaching bottom, the problem is sometimes the bottom is valueless!

Let’s throw out some numbers just to keep things interesting. What if today you buy a nice rental unit paying $120k that nets $800 per month (8% +-). The currency to buy the unit comes from selling 70 bullion ounces of gold (not factoring capital gains just to keep it simple). The result of such an investment will net an annual income of around $10k depending on vacancies, etc.

The result is 70 ounces of gold gone and an income producing property fully owned, easy enough.  The value of the home is now in the hands of a tenant, let me explain. Income producing property finds value according to net income over say replacement value or comps. Some will argue this but they are wrong since we have now entered an era where real estate value is always in question. Each bank owned property further devalues the surrounding homes in the same area (distressed or not).

Okay, let’s agree the value of your new rental hinges on the new tenant who recently lost their home to short-sale or foreclosure. The only reason a hot rental market exists is because of a historic failure in home ownership.

At this point you traded hidden wealth (no wealth is more hidden than physical PM) for exposed wealth, all for passive income not possible with silver or gold. Shouldn’t we at least discuss the dangers of exposing wealth in an age of fix-all taxation and regulation? Overreaching government doesn’t die easily and your 3/2 property sits ripe for bureaucratic picking.  Please expect boatloads of fees, taxes and regulations to find landlord coffers someday soon.

I’m not saying fees and taxes won’t find silver and gold but remember increasing wealth from PMs are typically more “hidden” compared to an asset with a roof line. Also, international storage makes this asset less likely to find domestic taxation near the level of domestic real estate.

Regardless, let’s move on with your income producing unit providing $800 per month income. We all agree the value of your new asset hinges on income ability over standalone value (like typical owner occupied units).  This means two things can increase your rental’s value. The first is a rise in rent and second a rise in property values. Let’s look at a rise in rents first.

Jobs are the determining factor of realized rental income. If you own income property in a strong job market then the result is higher rent, the opposite is true as well. The trend here in the US is a declining job market with reduced incomes for those still working.

More than 50% of all college graduates under the age of 25 unemployed or underemployed. Shadowstats claims actual overall unemployment is over 20%.

It is safe to say you will not raise rates anytime soon, at least not enough to keep up with real inflation.

This means lucky landlords will find tenants with steady jobs but content to keep units occupied and less concerned with raising rates. Now, here is the problem for those not three steps ahead of my slow typing skills. A flat rate of passive income means trouble when groceries, heating fuel, electricity, and other necessities all rise with inflation.

Not one realistic person on this earth will argue against inflation rising. This means your 8% return lessons each year in real terms. My guess is $800 in today’s terms will buy less than $400 someday soon. This also means the newly inflated cost to own your property rises too (maintenance, property taxes, etc.)

The second option to improve “worth” of our new rental unit involves making improvements to the unit; this requires more currency and effort from a landlord. We should argue that a new wave of easy credit could also increase the rental unit’s value.  But how many of you feel the age of easy credit is coming back anytime soon? It’s safe to say your new rental unit will not find increased value derived from a rise in property appreciation anytime soon.

Well, where does this leave us? It leaves us with an asset far more likely to provide declining income (in real terms) and far less overall standing value. Does this mean we traded gold for something paying less than expected in cash flow and worth far less than perceived? Yes!

REAL ESTATE QUESTIONS:

Question: What if we take gold out of the equation? What if we trade dollars in savings for income producing property?

TPS Reply: Great question. Trading dollars for income property makes more sense than trading gold. Dollars are (and will continue) in decline so moving dollars to a real asset makes sense. This doesn’t change that most property is declining and trending to continue. My recommendation is to find a knowledgeable Realtor in your area who understands the importance of buying distressed property deeply discounted.

(NOTE: Part of the services offered at TPS include phone consultations offering PM owners the peace of mind coming from an informed perspective. You can find more information here if interested.)

Question: Do you see any value in trading gold for real estate?

TPS Reply: Yes, but only if an opportunity surfaces allowing a gold holder to buy a greatly discounted home and then turning the home for a quick profit. This type of “bouncing” can provide quick income but does carry obvious risk. It may be suited for those of us sitting on old gold or using no more than 1/3 of our gold investment.

I’m not convinced now is the best time to trade gold (even $300 gold) for rental income producing property, at least in most cases.

Question: Do you see any justifiable reason to exchange gold for income producing property?

TPS Reply: I recall a reader last year very caught up in when to sell or how to know what to buy (after gold/silver) and if I remember correctly this reader appeared elderly, at least by my perception. Anyway, my advice then, and now, is why I suggested we must also remember to live life. This means serving others, this means making the trip to see family living states away, this means fulfilling a calling regardless of today’s economic challenges.

It is important to remember the goal here is not to crawl in a hole and hide. Sometimes economic volatility paralyzes us from living life, if this “living” requires spending some gold/silver then why not?

SEND OVER YOUR COMMENTS AND QUESTIONS HERE. ALSO, DON’T MISS A POST FROM TPS BY REGISTERING FOR OUR ONLINE NEWSLETTER.

News Worthy:

EXAMINER.com — Market Rumor: Pimco and JPMorgan halt Vacations to Prepare for Economic Crash

On June 1, market rumors were coming out of a hedge fund luncheon stating that Pimco, JP Morgan, and other financial companies were cancelling summer vacations for employees so they could prepare for a major ‘Lehman type’ economic crash projected for the coming months.  These rumors came on a day when the markets nearly came to capitulation, with the DOW falling more than 274 points, and gold soaring over $63 as traders across the board fled stocks and moved into safer investments. Read it here.

News Worthy:

REUTERS: Gold Rally Triggers Scrap Sales in India

Gloomy equity markets and high interest rates have forced investors in India to cash out of gold, said Prithviraj Kothari, president of the Bombay Bullion Association.

“There is no money available and people are selling their old gold,” Kothari said, adding that India could see scrap sales rise to 400 tonnes this year, more than triple last year’s 130 tonnes.

“I last sold gold about a year ago and I am back again as prices are high,” said a woman selling 100 grams of 20-year-old jewellery worth 300,000 rupees to a scrap dealer in Mumbai’s famed Zaveri Bazaar, who declined to be named. Read more here.

News Worthy:

THE SOVEREIGN INVESTOR:  How to Get Ready for the Next Leg of the Gold Rally

The long-term bull market in gold is now 11 years old – and, in spite of recent market stagnation, the latest phase of the rally appears to have just started. My advice is simple: Prepare yourself. It still has a long way to go.

In the wake of very disappointing news on the U.S. labor market, the gold price today soared above $1,600 an ounce.

The long-term bull-run in this yellow precious metal has been slow and steady. After Gordon Brown finished selling 60% of the U.K.’s gold reserves in 2002 at an average price of $275 an ounce, the market has never looked back. Read more here.

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GOLD, SILVER & Facebook

GOLD & REAL ESTATE, GOLD & SILVER, GOLD AND MONEY, GOLD OR SILVER BUBBLE, GOLD/SILVER COINS, STOCKS AND GOLD/SILVER   No comments yet

Two weeks ago the buzz on Wall Street was Facebook’s IPO (initial public offering). As I write, Facebook stock is down nearly 23% from the original offering leaving many investors questioning such a sure thing. This leads me to ask how comfortable you are with your investment portfolio? From your emails, most are still on board with silver, gold too, but will we feel the same if gold drops below $1400? My bet is $1400 gold would make for nervous investors even though true metal owners know the best days for PM (precious metals) are still to come.


It is easy for me say the recent drop in gold is nothing to worry over since I bought most of my physical gold years ago, some of you cannot say the same. I won’t attempt to justify why gold is down lately since the answer is trivial compared to what motivates gold over long term.

Some of you are thinking of jumping from gold all while I’m timing when to add more. The only difference between “us” is perspective. You perceive gold as risky and I perceive gold as the only protection against fiat supported governments unwilling to go down without a fight. I perceive the crises of 2008 as a monetary siren and you perceive the economy as in recovery.

The type of investor willing to buy Facebook stock is the same one willing to accept forty years of a fiat based economy as sustainable, it is not. Facebook stock is declining because more folks around the world are beginning to dispute today’s fiat Ponzi scheme.

A few weeks ago, most investors perceived Facebook a wiser investment than physical gold/silver? We must realize the one thing Facebook and today’s gold/silver prices have in common is volatility. Putting a value on Facebook is nearly impossible just like putting a value on silver and gold is too (for two completely opposite reasons). With that said, here are the differences between PM and Facebook.

  • Facebook is socially popular, gold is not.
  • Facebook is a very young company, gold is the oldest form of money.
  • Facebook is moving toward global status, gold is a global currency.
  • Facebook’s future value is in question, gold’s future value is in demand.
  • Facebook unites the internet world, gold unites the wealth of the world.

It is no secret that I feel social sites, like Facebook & Twitter, will play a major role in PM prices extending beyond what most view as expectant or realistic. Nothing will transport the news of another bank holiday, Lehman collapse, or government bankruptcy like social networks can.

To be fair let’s talk about the long-term projections of a giant like Facebook. After all, Facebook stock should offer promise since this is a young company founded by some of the sharpest minds in our tech world, right? Maybe not. Will economic instability help influence Facebook stock upward? Will social unrest, the S & P in retreat, worldwide housing declines, or market volatility in general help elevate Facebook stock over long term?

No, aforementioned forces will not help Facebook’s stock value. Just because Facebook itself will find popularity around the world doesn’t necessarily justify it as a worthy investment, at least not as priced.

To find comfort in silver and gold requires a realization more than anything else. This realization must include the need for nontraditional monetary decisions during nontraditional times.

This “realization” must include a basic understanding how not one fiat currency has experienced long-term success, not one! On the other hand, gold has never experienced monetary failure. Now, with that said, who wants to buy some Facebook?

News Worthy:

REUTERS:  Biggest Greek Bank Warns of Dire Euro Exit Fallout

If Greece left the euro, living standards would plummet, incomes would be slashed by more than half, and inflation and unemployment would skyrocket, the National Bank of Greece warned on Tuesday.

The bank said per capita income would collapse by at least 55 percent, the new national currency would depreciate by 65 percent against the euro and a recession, now in its fifth year, would deepen by 22 percent. Read more here. TPS (The Prospector Site) adds, what is not reported is how US political forces are now pressuring European countries to PRINT stability into Europe’s economy.  This should be painfully obvious that those elected are willing to destroy currencies before facing political defeat.

News Worthy:

Congressman Ron Paul: Capital Controls Have No Place in a Free Society

The characteristic mark of a tyrannical regime is that it eventually finds it necessary to erect walls to keep people from leaving.  This is why we should be troubled by the “Ex-PATRIOT Act,” an egregiously offensive bill recently introduced in the Senate.  Following a long line of recent legislation and regulations attempting to expropriate more and more wealth from hard-working Americans, this new bill spits in the face of overburdened taxpayers and tramples on the Constitution.

If they wish to escape the Federal Reserve’s inflation by emigrating to lower-cost countries so their dollars will go farther, as many Baby Boomers are starting to do, the federal government will penalize them, and continue to penalize them for the rest of their lives as long as they hold any money in the United States.

No wonder increasing numbers of Americans feel this government is engaged in outright warfare against its own citizens. Every day the noose grows tighter, yet anyone who sees the writing on the wall and seeks to leave must pay exorbitant taxes just for the privilege of leaving, and increasingly the possibility looms of never fully breaking away from the government’s tentacles no matter where they go. Read more here. TPS adds, several international sites are now committed to provide accurate information to those interested in international dual citizenship or relocation. I’ll be the first to admit that this is not for everyone, but. Remember, life can change on a dime so don’t rule anything completely out. Check out International Man for more information.

News Worthy:

Financial Sense:  So You Think You Own Gold?

One of the most common reasons investors cite for buying gold or silver bullion is that they are losing confidence in fiat (paper) money systems and the over-indebted governments behind them. Many investors prefer to own “physical” gold rather than “paper gold”, meaning they want to own the real thing as opposed to a paper promise – a contractual commitment to deliver gold at a later date, or in other cases a contractual commitment to pay the equivalent of a future gold price to the investor.

But there is an alarming deficit of understanding among investors relative to how the precious metals markets actually function. In fact, I would go so far as to opine that most investors who believe they own gold really don’t! Read more here. TPS adds, Mike Maloney says it best, “If you can’t hold it then you don’t own it!!”

QUESTIONS & COMMENTS:

Question: This whole precious metal thing is confusing considering each so-called expert has a different opinion than the last. How do I know what is safe haven silver or gold? Two, who is trustworthy within the PM community? I don’t want to buy only to lose money like many others have over the last few months.  Please help since I’m not having much luck !

TPS Reply: Wow, you are loaded for bear but thanks for the questions. Let me start by taking some pressure off, ready? Don’t buy silver or gold, at least not yet, since first comes education (PM understanding) long before the steps in question.Don’t worry about prices going up since the risk of buying “wrong metal” far outweighs the risk of prices zooming.

Part of becoming comfortable with gold involves a basic knowledge of a fiat based economy now driven from consumerism. This understanding provides a solid foundation built from confidence that sustains a physical metal holder during times like today (this is why I pay no attention to media misinformation, dips or bubble talk).

Next, realize you’re not a coin collector and have no interest in rare coins. The goal is to trade currency for real money AS CHEAPLY AS POSSIBLE!! This is why we encourage readers to buy bullion coins, rounds, bars, or junk.

Now, as far as the who to trust question. TPS often interviews small family operated bullion dealers who have strong long-lasting reputations. Dig into our achieves to find one you are most comfortable with or visit a local coin shop asking to see their lowest premium silver or gold. Leave if they attempt to redirect you toward rare metal.

You mentioned a fear of losing money but this is far from the case. We can’t compare PM with typical investments of the past, i.e., real estate, stocks, etc. Precious metals are money. A wealth transport of sorts happens the minute you convert currency (what you called money is actually a currency) into PM.

Like all transportation the path to protection and prosperity is not a straight-line destination. Hills, valleys, dips, rises, are all part of this journey. No educated PM owner will sell physical silver or gold during a paper dip like the one we see today.  Thanks for reading The Prospector Site.

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