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THE TRUTH ON GOLD

GOLD AND MONEY   No comments yet

One advantage of founding The Prospector Site is feeling free to pass along unbiased facts on gold and silver.  Companies selling or buying gold may create a level of doubt even if information is 100% factual. Many beginners, experts, and everything in between are trying to wrap their minds around the benefits of gold/silver ownership.  The rest of this post will be nothing but answering the nagging question ” is gold or silver a good place for your money in 2011?”

This morning I watched two metal analysts argue both pro and con on this very question.  Both represented their side well but both missed the main point to owning precious metals.  The “con” argued that gold represented nothing but a mass of metal that pays no dividend with no way to prove it isn’t now over inflated.  I say all this is true.  The “pro” argued gold is a safe haven and a great storage for wealth.  I say all this is true.  So with both sides providing truths on gold who the heck is right?

WHAT IS GOLD? The analysts were correct in saying gold is a mass of metal.  What they didn’t understand gold is the most corrosive resistant, long-lasting, and one of the most rare metals on earth.  This is why chosen over wood or rocks several thousand years ago as people started to form some type of currency for trade.  The traders that did well then needed some way to store wealth so gold made sense for storage.  Gold was, and still is, transferable everywhere on earth.  Many people don’t realize an ounce of gold in United States brings the same value in all countries elsewhere.  This is unlike currencies that trade up or down from each other.

I can’t pull a piece of gold out and duplicate it when no one is looking.  I can’t take a hunk of iron to my local jewelry store and switch it for gold when no one is looking.  Gold is nearly impossible to counterfeit by way of its molecular structure.  The only thing that can replicate gold is the same amount of gold!  We can’t say the same for dollars, or euros, or yuan, or yen.

MISSING THE POINT: Not one person on this earth can honestly tell you what gold will be worth next week.  Many experts expect gold to rise or hold its value but if they had to bet the farm on it most wouldn’t.  I have said several times we are in uncharted waters including all economies around the world.  What used to be safe and secure investing avenues now seem not so sure.  The new age of electronic transfer and information exchanges, at the speed of light, has changed the world forever.

But everything we spend money on has to have a “bench mark” behind it.  A deed of land has to have a bench mark or survey to verify place according to a stationary mark or standard.  An earthquake registers only by a Richter scale that measures movement according to a level of calm or standard.  Everything of value has to be based off something relevant first.  An item or asset can increase or decrease freely but must first be based from a value bench mark.  The only true standard for money is gold.  Unfortunately, US dollars are no longer tied to gold like they used to be.  Things started going up in cost the minute we broke from a gold standard.

We often use something great as a bench mark.  I wrote a post the other day comparing something great to Michael Jordan.  Jordan has become the standard of what greatness compares to.  The problem is not even Micheal’s standard is “true” enough to replace gold as the test or standard of value.  Gold is what the value of all things made, manufactured, bought, and sold come from.  With out this standard prices of things can float along with value being gauged only by market value.  This is exactly what the dollars in your pocket have become.  A baseless, limitless, and now paperless form of money that has no limits.  If a country or government wants more money they simply push a computer button and another zero appears on some balance sheet.  Based on nothing and valued from nothing.

GOLD AS MONEY: To answer if gold is overpriced is difficult.  The US dollar, and other printed papers of currency, have drifted so far from a gold standard it is hard to say what part of gold’s value comes from real gold compared to speculation.  We have become so saturated with worthless dollars we have lost perspective of value.  If you doubt this take a minute and call grandma asking her what things used to cost.  Prices of “things” would still be close to the same as granny’s day if a gold standard would have been left in place.  Gold is not only the best standard it is the only real money (silver too).

What is for sure is the dollars in your wallet are not buying nearly what they used to, but gold still is.  My thinking is this.  I look at gold, and silver, like an insurance against a declining dollar and everything bad that can come from it.  If my gold dumped tomorrow then the economy is surely back on track and the value of my dollars increasing.  I win either way.  I’ll stick to this mass of yellow metal that pays no dividend and that others see as useless.

QUESTION:  You often say gold is the only real money.  What do you mean by real money?

ANSWER:  Thanks for the question.  Real money, gold/silver, can not counterfeit, devalue, or print into worthlessness like the IOU’s we carry in our wallet better known as dollars.  The progression from gold to dollars was innocent enough since carrying around folded paper is much easier than heavy metal.  This worked out fine when local banks could only release paper in exchange for gold.  A percentage of gold had to be “on hand” for every dollar released into circulation.  The idea went south as leaders (aka politicians) decided more cash was needed for pet projects and wars so this system of backing dollars with gold got scrapped.  This was one of the first forms of debt.  Today debt is as common as paper dollars.  All because we broke away from a gold standard allowing limitless money to enter the economy.

TIP OF THE DAY:  Don’t take any wooden nickels.

FAIR PRICES OF PHYSICAL GOLD & SILVER (10:45 am MST)

  • ONE OUNCE SILVER BULLION:                   $42.26

  • ONE OUNCE SILVER ROUNDS:                     $39.92

  • ONE OUNCE GOLD BULLION:                       $1509

  • ONE OUNCE GOLD BARS:                              $1474

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WHAT YOU SHOULD KNOW ABOUT SILVER

GOLD & SILVER   No comments yet

Most would say an investment that realized 75% gains last year should be the last place a new investor plant money.  I would agree to stay clear of silver, without hesitation, if it not for uncharted economical waters.  Personally I would invest in silver if it was $10 an ounce or $60 per ounce.  It’s not that I feel lucky or like donating it just comes down to who will be the last asset standing.  If you are in search of a way to protect your money I feel your pain.  Let me break down what you must know about white metal we commonly call silver.

The reason I’m so cautious about influencing new investors on metals is because I want the decision to be yours by way of knowledge and not advice.  The fact is we could wake up tomorrow morning and silver be down 25% on some wild card not considered.  Its possible but not likely.  What is more probable is that continued spending of printed money will push your dollar’s value down.  What is more likely is prices of everyday necessities will go up because of devalued dollars.  What is more likely is fear and mistrust will lead massive amounts of money into precious metals like gold and silver.

SILVER COMPARED TO GOLD: Silver is true money by proof of its reference in the Bible.  But how does it weigh up against the other real money so commonly called gold?  Historically silver runs 14:1 compared to gold with gold being the most valuable.  Recent values have seen this ratio move from 60:1 to currently running around 38:1.  If you are wondering what these silly ratios represent the answer is more money is going to silver than gold.  Does this alone mean silver is a better investment than gold?  Not by a long shot does more money being spent on silver mean it is stronger than gold.

EVERYONE IS A PLAYER: I recall a flustered auctioneer lowering the opening bid low so “everyone could play.”  I guess it can be said silver is priced to where everyone can play so this affordability seems, well, affordable enough for new investors.  Some buyers are motivated by fear, some by greed, and some because they have no idea where to park money so silver it is.  What ever the motivation, it is driving silver too highs not seen it years.  On a personal note, I don’t look to what an investment has done but what drives an investment and how much room for growth.  My opinion is silver has plenty of vertical left in it.

WHAT’S SO BAD ABOUT DEMAND: Silver and gold have one thing in common and it is a limited supply.  Unlike other assets that can be produced or built to meet demand, metals can’t.  It takes a lot of time, money, and work to extract enough silver to make an ounce.  Couple shortages with high demand and you have the perfect storm for price increases.  This demand only drives the silver market beyond the value of silver itself.  What I mean is physical silver has two value parts to it with one being the silver content itself and the other being the demand and speculation part.  Not to mention a small part for mining, minting, and selling physical silver.

QUESTION:  Is silver a better investment than gold in your opinion?

ANSWER:  Silver is like the new baby and gold is like the three-year old having to adjust with a new kid in the house.  To say one is better is hard.  I do like the fact silver is more affordable and has the potential for increased demand.  Sorry, not a defining answer.

TIP OF THE DAY:  If silver looks like a wise choice to you watch for the next dip if time allows.  Silver has been on a good run since late January and is due for a pull back.

FAIR PRICES IN PHYSICAL GOLD & SILVER (11:15 am MST)

  • ONE OUNCE SILVER BULLION:                                  $42.08

  • ONE OUNCE SILVER ROUNDS:                                    $39.74

  • ONE OUNCE GOLD BULLION:                                      $1496

  • ONE OUNCE GOLD BARS:                                              $1460

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WILL THE STOCK MARKET MAKE GOLD HOLDERS RICH?

STOCKS AND GOLD/SILVER   No comments yet

It amazes me that most Americans religiously deduct 5%, 10% even 20% of their hard-earned paycheck  then invest it into a relatively unknown source called 401k. Ask most people what a mortgage-backed security is and they would have no idea.  Yet these same folks blindly send dollars, paycheck after paycheck, hoping the money doesn’t find its way into corrupt hands.  But how long can this wish full thinking last before America says enough is enough?  I say not much longer and the result for gold/silver holders could be the biggest gold spike in history.

Thanks for reading The Prospector Site.  You maybe asking what the stock market has to do with metal and my answer may surprise you.  The fact is so many arrows point to rising prices in precious metals its hard to count all the indicators.  One big indicator is the stock market and today’s post will show exactly how its decline could mean gains for gold and silver.  Let me ask you if this makes sense.  Goldman Sachs peddled mortgage-backed securities as safe investments for clients during working hours and then personally bet against them in the after hours.  Dozens, no hundreds, of stories like this unfold yet investors continue to stick with the program that worked so well for dear old dad.

ADDICTION: By definition the word addiction means “the state of being enslaved to a habit or practice…”.  So many corporations publicly traded are becoming addicts and the stock holders to these very same corporations can’t see it.  The habit or practice is all about dependency on government programs and bailouts.  Big corporations simply lining up out front of the next stimulus plan not to attempt profit but simply be the first in line for money.  If alternative energy is the latest beneficiary of federal money then these corporations are ready to do business.

I have to admit corporations are becoming good at the game but what will happen to stock values when the money dries up.  This form of artificial economic stimulation can not last forever so where will that leave stock values when it’s over.  These same corporations at one time created, developed, and marketed real goods now simply wait for the milk to drip from the breasts of tax payers.  This will end soon and badly for the addicted.

Americans get fighting mad over entitlement programs for the poor but say little as big corporations receive political favors and then profit billions.  The corruption, greed, and mistrust is all founded on middle class wage earners being kept in a state of denial.  Wall Street feels, “why keep it simple when it can be complicated” and us worker bees fall for it time and time again.  All while the average Joe cleans up champagne corks and confetti from the Wall Street parties.

TRUST: Or lack of it is starting to wear on many folks.  Most people by nature are good and don’t imagine scams, Ponzi schemes, or lies being what some on Wall Street are feeding them.  We like to think the stock market that holds our retirements, mutual funds, equities, and bonds are honest and trustworthy corporations.  Many are but as we are seeing as of late many aren’t so how do we know the difference.  I say combinations of lack of trust, declining stock values ( caused from declining tax payer bailouts), and greed will chase away many conservative investors.   This correction could come quick as fear grips investors looking for safe havens and honesty.

ALL ABOARD THE GOLD TRAIN: The American people are kind and forgiving but when they have had it one better watch out.  More and more folks are seeing difficult times ahead and these same people are looking closer at their investments.  The same folks are less worried about big gains and more concerned about protecting what they have.  Many, maybe most, will turn to solid safe havens of gold and silver.  This fresh herd of investors will rapidly drive demand for an already limited sources of metal.  This upward pressure will create new highs in both gold and silver all while early investors reap the rewards of insight.  I have no doubt that fortunes will be made when the stock market loses face with mainstream investors.

QUESTION:  I’m confused what to do with my money.  I don’t understand stocks, bonds, or gold for that matter.  Many woman like me are simply trying what is best but have no idea what to do.  Please comment?

ANSWER:  You have already done the hard part by “questioning” what down deep you know is not right.  My advice is trust the number one person that will look after you and this person is the one in the mirror.  Educate yourself on solid, low risk, self managed investments that will keep your wealth.  The days of simply handing off your money and hoping it is still there when old are over.

TIP OF THE DAY:  Self sufficiency is the best protection from greed and corruption. Don’t take my word, or anyone else, but research what is best for you and your family.  Safe investing is not that complex but many experts like to present it as complicated.

FAIR PRICES OF PHYSICAL METAL (9:15 am MST)

  • ONE OUNCE SILVER BULLION:                                  $41.75

  • ONE OUNCE SILVER ROUNDS:                                    $39.41

  • ONE OUNCE GOLD BULLION:                                      $1495

  • ONE OUNCE GOLD BARS:                                              $1460

The prices listed above are current as of post time but change by the minute.  This is only meant to be a base price for your reference.  If your gold/silver source is out of line with these prices please find a new metal source.

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WHAT HAPPENED TO GOLD IN 1980?

Uncategorized   No comments yet

Every gold, or silver investor too, should understand what happened to gold in 1980.  To grasp why gold melted down will create a safe guard of self-reliance that nothing can take away.  So many new prospectors of gold ask if gold is in a bubble and after researching the 80′s I can see why.  What happened to gold (it dropped by over half in only a few short months) should send a chill down every investor.  The question is will it happen again?  I think it will “bust” and here is why.

Thanks for reading our site and congrats on considering gold.  We don’t offer financial advice but we are very bullish on precious metals.  As I looked back at the years leading up to 1980 I noticed several consistencies with current times.  Like now, the word inflation was used often and for good reason.  During the late 70′s, many countries were seeing double-digit inflation and to say consumers were concerned is an understated.  This inflation, coupled with high oil costs and unrest in the Middle East, drove metals to spike like never seen before.

GOLD SPIKE: I remember, guessing in 79, my dad sitting at our dinner table stuffing scrap gold into this little yellow envelope.    Dad was tapping into the gold spike by selling off some of mom’s broken jewelery. We had a great time on the beach that year all because dad knew there was profit to made with such a bull run.

If we look back at charts of golds movements, early 1980, it looks more like The Andes Mountain Range than anything else.  I’m not a big chart guy but this is worth researching as you have time.  When I say it looks like a mountain peak that is exactly what gold did.  As fast as it spiked it “unspiked” as it came back down to its true market value.  The problem is gold buyers that bought near the spike probably hate gold to this day and for good reason.

TRUE VALUE: To truly understand why gold spiked we must first realize that gold has two driving forces behind its value.  The first, and most significant, is the value of the metal itself.  The second is tough to nail down but it is the supply/demand side of gold as it relates to speculation. Speculation portions of any investment are hard to put into percentages but cause average consumers fits.  When the speculation side gets heavy it causes a false shock value to thrust gold ( or any investment, commodity, or asset) into an unsustainable level or price.

THE HERD STAMPEDES: The late 70′s exploited gold into a speculation point not even Rod Stewart could describe.  Newspapers, news channels, news breaks, constantly announced the new record high of metal with each spike creating another gold expert.  The herd took notice, they always do, and mobs of modern-day prospectors traded dollars for metal.  Not even long lines outside coin shops discouraged the greedy all while true metal investors lined up outside the back door.  These seasoned investors, like wolves in Yellowstone Park, patiently waited for the feast that comes soon after the herd reaches the cliff.  They didn’t have to wait long, they seldom do.

Many of these seasoned investors ( had bought gold for less than $100 bucks per ounce) sold near the top of the spike, $800 plus, only to re-enter the now crashed gold market in the high $300′s.  Can you imagine the value in gold these same investors are sitting on now?  They are reading this post from a yacht floating in tropical waters I’m betting.

REAL TIME: The last few years has seen a gradual climb in precious metals related to the decline of currency values.  Simply put, your dollars buy less (this becomes clear by prices rising) but gold “floats” along with these increases.  Unlike spikes in real estate, precious metals have NOT increased because of low-interest rates coupled with easy credit.   This does bring up a good time to ask when or how will we see a bubble in gold like real estate just experienced?

Just like in 1980 the herd’s dust will give proof, along with big spikes, that gold is speculated into a non-sustaining level.  When everyone starts talking about this new way to make millions with precious metals my advice is to quietly take your place in line behind the back door.  Like the seasoned gold investors of yesterday, we will write about your wisdom, and your tropical tan.  Congrats in advance.

QUESTION:  As I look back at gold prices I can’t help but think I’m coming into gold late.  Are you still buying and why?

ANSWER:  One thing you must realize is that I will never recommend something that I’m not vested in myself.  Yes I do continue to buy metal but have changed to a buyer of silver over gold (will pick this up in a future post) but it’s not because I’m afraid of gold.  It just seems there is more money to be made in silver at this point. I understand the concern of coming in late specially compared to the prices of yesterday.  I’m bullish on precious metals and see no bubble in my opinion.

TIP OF THE DAY:  Do research on your own of the gold bust in 1980 but from a perspective of what current events pushed gold to this extraordinary levels.  This will help you to recognize when the next bubble forms.

Each day, the market is open, we track prices of physical gold and silver.  These prices change constantly so stay current before you buy. If you are paying over these prices please look for a new source to buy metal.

FAIR PRICES OF GOLD & SILVER (9:30 am MST)

  • ONE OUNCE SILVER BULLION:                                     $41.52

  • ONE OUNCE SILVER ROUNDS:                                       $39.18

  • ONE OUNCE GOLD BULLION:                                         $1490

  • ONE OUNCE GOLD BAR:                                                   $1455


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BURN THE SHIPS

GOLD & SILVER   No comments yet

History tells a life lesson for all when a Spanish conquistador named Cortez set sail for Mexico.  The goal was to take a much smaller force and over throw an Empire of wealth that had ruled for six centuries.  As Cortez, and his men, landed ashore the order was given to burn the ships that had just provided safe passage.  Failure would not be an option and travel home would be in the ships of a conquered Empire.  Considering the state of our economy we could use this style of leadership.  In fact, burning the ships is the only way to bring stability to a failing system and here is why.

Thanks for reading The Prospector Site. If you are wondering what the heck ships have to do with investing in gold let me explain.  Daily we give proof of how and why investing in precious metals is wise.  Instead of simply advising to buy gold or silver we look into how current events shape the trend of metal.  It is not that we have an insight into what metals will do in the near future but more of an understanding of what makes them valuable when other investments, assets, are in decline.

THE GOLD LEADER: Gold is the Michael Jordan of all investments.  It is the “go to guy” when times are uncertain and the anchor of wealth many are turning too.  But the sad thing is gold and silver should be a “non issue” and nothing more than a currency standard.  The reason we need gold today is because of a lack of leadership, responsibility, and accountability.  By leaving these qualities at the door we have let debt rule our complete way of life.

We must understand that all city, state, and federal decisions will eventually turn to borrowing if debt is an option.  Its only after borrowing is off the table when real problem solving will take place.  This became clear to me one day when my wife, a nurse of nearly twenty years, explained how a trauma protocol works.  The first level of protocol is to stop the bleeding of the injured.  Nothing is more important than to find the origin of bleeding and control it. Pint after pint of fresh blood can enter the body but will only buy so much time before a fix is life or death.

Our economy is no different then a bleeding patient.  The problem has become a way of life by continually injecting pint after pint of printed money into a bleeding system.  Plenty of lip service is heard daily from those that lead but stopping the bleeding is less important than self-preservation.  It really boils down to leadership.  Your gold and silver will continue to rise until the bleeding gets under control.

LEADERSHIP AT HOME: Living off borrowed money has become a way of life for everyday Americans too.  It seems the mainstream has followed suit by packing on debt that can no longer be supported.  This spending has created a consumer based economy that no longer can feed the giant.  The ill effects of debt are affecting everything from banking to real estate, government deficits to unemployment,  and education to food prices.  You may not have control of city, state, and federal spending but you certainly control personal spending.

If the spending ships aren’t burned immediately, both personally and public, the dollars we use will become more and more worthless.  This devastation, especially to those on fixed incomes, will be like nothing ever seen within the United States.  When politicians claim to represent the poor, yet devalue the dollar into a new low of poverty, it surely doesn’t seem they have the poor at heart.

QUESTION:  Should I pay off my debt before investing in gold/silver?

ANSWER:  I will assume we are talking about credit card debt or another consumer debt.  The interest and fees of credit cards has changed and now can easily run at or above the profits of gold and silver.  I like the idea of payoff, or down, debt before buying metal for one main reason.  Once the debt is gone its gone as long you are disciplined enough to control it.  This discipline is tough for many folks because spending has become a way of life.  Maybe its time to break the spending trend to set a good example to a younger generation that is surely going to see some tough times ahead of them.

TIP OF THE DAY:  It’s tempting to borrow money to buy gold/silver but I don’t recommend this.  Precious metals are a great store of wealth but don’t cash flow (no dividend income).  Leveraging to buy gold/silver is for the experienced, or adventuring, investors only.

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IS A BIG DIP COMING SOON?

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

One thing I can tell you after several years of metal investing is the higher gold & silver go the bigger the dips.  But should this scare investors away from buying in times like now?  If you are seriously considering buying gold or silver, or both, don’t miss this post because we are going to break down the ups and downs of physical metal investing.

WHAT MAKES GOLD/SILVER TICK: To comfortably invest in precious metal requires a slight understanding to what motivates movements in metal.  Gold, such as, has seen something like ten plus years of gains but is this rally done?  Silver is at record highs so why month over month does it keeps going up?  Why do both metals move up one day only to fall off the next?

New investors are constantly boarding the gold train and maybe you are one of them.  If so, congrats on being one out of a hundred that realize the best method of wealth storage is in precious metals.  Let me also say thanks for reading The Prospector Site and let us know what you think.  Many metal investors bought when prices were much lower than they are now.  Some of these same investors set a ceiling or trigger to sell realizing cash profits.  When enough of these sellers hit the market simultaneously it drops the price of metal.  New folks see this drop and like pelicans to anchovies dive into the market better known as a “dip”.

This cycle of selling and then buying repeats itself over and over but each time the number of buyers increases ever so slightly.  This makes for a higher gold/silver price at the end of each cycle.  As metal prices increase the dips or cycles become deeper and possibly longer.  But are we due for a deep dip in metal?

THE BIG DIP: I have no way of knowing for sure but my gut says a big dip is coming and here is why.  My thought is plenty of new buyers are moving to gold but really don’t trust the metal yet.  I guess you can say they are nervous investors.  Nervous investors have a way of keeping a finger close to the sell button and every 3% or better dip sends them into a panic.  If they truly understood what drives metal they would relax and take peace in the most solid investment since man kind.  But this is easy for me to say because I have faith in metal.

I think silver shows the highest chance of showing us it’s back side between the two metals.  Silver has not only investor appeal but its one heck of an industrial metal as well.  Several things could knock silver back, only for temporary, like maybe consumers buying less phones, electronics, and automotive products.  But who knows, this world is very big even in the age of instant communication.   Should you sell silver if it dumps say 15% next week?  I won’t because I believe silver is the most affordable metal and potentially the biggest number of buyers.  I guess you can say it is priced to where everyone can afford to invest.

PANIC SELL OFF!! I think a panic sell off is possible for gold or maybe silver.  I believe there is a better chance of gold/silver being the beneficiary of a major stock sell off compared to the reverse.  My reasoning is that many corporations are becoming addicted to bailout money and we all know this spending will not last forever.  One of the many things I like about metals is that they are big boy investments that stand on their own merit.  When was the last time you heard of a bailout, tax deferment or credit, government take-over,  or cash for clunkers program for gold?  Gold continues to be the dirty little secret that insiders and economist ignore.  Unfortunately for these folks, gold and silver will soon see their deserving spot light.

QUESTION:  I want to buy silver on the next big dip but I’m growing anxious to do so.  Should I wait or buy now?

ANSWER:  This is the million dollar question and to be honest I constantly ask myself the same question.  I’m leaning toward waiting for the dip.  Many new investors feel pressured to buy once they make up their mind gold/silver is right for them.  Some of these same investors buy slightly higher than true market from lack of patience.  Dips are important but they are only a light shove of momentum into a long life of metal investing.

TIP OF THE DAY:  Take a close look at silver rounds if your only concerned with buying a storage of silver.  Unlike silver coins, these rounds are simply masses of silver but easy to buy and sell.  Rounds will have less buying fees associated with them which means you can buy for less.

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WHERE IS THE REAL ESTATE BOTTOM?

GOLD & REAL ESTATE   No comments yet

Not a day goes by without desperate folks asking where the bottom is to this declining real estate market.  It may surprise some but the numbers show that retirees have large amounts of  net worth in real estate. This same equity was part of the retirement plan.  But what happens when equity dries up and retirement plans decline at the same rate as housing?  All markets, not just real estate, decline when there are more sellers than buyers.  This certainly describes current housing trends but is the bottom just around the corner?

I know of no other industry that affects more people than the real estate industry.  From mortgage lenders, title companies, builders, subcontractors, lumber yards, supply houses, Realtors, architects, and developers just to name a few.  To answer if we have reached the housing bottom we must ask if the same toxins that brought it down still exists.  You maybe asking how a real estate melt down affects gold and silver so let me explain.  As investment money flees the once profitable housing market it searches for a safe haven to weather the economic storm.  Gold and silver is the perfect safe haven for this new money.

REAL ESTATE ROAD BLOCKS: As we look back on the monster housing market we now see easy credit drove housing prices well beyond what any typical job market could support.  Lenders once required only a mirror fog test now need spotless credit and substantial down payments.  Low down or no down loan options are gone and will not be back anytime soon.  These hybrid loans are as dead as flipping houses for profit and equity lines.

Even lenders that do find qualified buyers must now find a property appraisal that puts loan-to-value ratios in check.  Many folks that are angry at banks don’t realize their hands are tied by low appraisals.  Low appraisals are the result of discounted sales via REO’s, short sales, and foreclosures factored into comparable sales data.  There is zero chance new construction can compete with discounted distress sales that often sell 30% or more below replacement cost.  This inventory only creates a race to the bottom from those that absolutely must sell.

As if the above was bad enough we must factor in increased inventory coupled with fewer buyers.  This housing  market of yesterday went from multiple offers and families camping out to blocks of houses “under water”.   To say it is a buyers market is a titanic understatement.  But not all states or markets are feeling the level of pain states like California, Nevada, Arizona, and Florida are.  It seems states that have been able to suppress job loses are seeing the lowest declines in real estate.

RAISING FEES & REGULATIONS: I have always felt there should be a simple test for parenting and public office.  To increase building costs through green regulations, fees, taxes, etc makes no sense when a market is on its knees.  Yet many states that are feeling the housing decline pain the most are the ones passing new regulations.  This may sound obvious but tax and fee revenue from building and job creation is what pays the salaries of public employees.  To tighten the noose on the golden goose is like shooting oneself in the foot.

ARE WE AT BOTTOM? If you are a patiently waiting home buyer I want to ask you a few questions.  Is your area (market) seeing an increase in unemployment?  Is your area seeing an increase in inventory of houses on the market?  Is your area seeing a month over month decline in housing values?  If you answered “yes” to two of these questions I doubt if you have seen the bottom of your housing market.

THE WRAP: Please don’t misread this post because I’m a huge advocate of real estate investing and ownership.  The one good bi product of this real estate shake out is professionals left standing are really good at what they do.  If you are considering buying real estate contact a veteran Realtor that truly understands your local market before committing to buy.  A true professional in residential or commercial real estate will save you thousands on both buying and selling.  Someday down the road gold & silver will have run their course and I guarantee you I will be looking for property to invest.

QUESTION:  Will we ever see a time when homes are purchased with gold or silver?

ANSWER:  I sure hope so.  As dollars decline more real estate sellers will look for alternative methods of payment.  As metals go up and real estate comes down it creates a perfect opportunity to trade a store of wealth (precious metal) for an income producing asset (real estate).

TIP OF THE DAY:  Look beyond the assumption that precious metals will go up and more into how other investment types are failing.  This along with sociopolitical and geopolitical events all affect metal values.

SIDE NOTE:  I noticed this morning on the Fox Business Channel they now are showing silver prices on the bottom screen ticker.  This type of attention is what makes the herd lift their head and take notice.  No worries because it will take much more to start the herd into a full stampede.

Each daily post we show current market prices of physical gold and silver for your reference.  If you find your metal source out of line with these numbers please find a new source.  Keep in mind that metal prices change constantly.

FAIR PRICING OF GOLD & SILVER (9:30 am MST)

  • SILVER BULLION ONE OUNCE:                                    $42.17

  • SILVER ROUNDS ONE OUNCE:                                      $39.83

  • GOLD BULLION ONE OUNCE:                                        $1507

  • GOLD ROUNDS ONE OUNCE:                                          $1471

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THREE REASONS YOU SHOULD BUY SOON

BUYING GOLD/SILVER, GOLD & SILVER   No comments yet

Growing up my parents would take me to a little beach town, Cayucos, California, to watch Fourth of July fireworks off the pier.  Some of my earliest memories are of loud explosions of color and noise as our country celebrated its independence.  I recall, even at a young age, watching the firework show build knowing something big was about to happen before the evening was over.  Watching government leaders battling back the flames of crisis with borrowed dollars reminds me of the something big is about to happen days of my youth.  My question for you is will precious metals be part of your safe guard and if so what are you waiting for?

REASON #1: Inflation is like the frog in warm water analogy.  If you are on the wrong side of inflation it can be devastating to your financial future to say the least.  Paying more for everyday necessities not only drains the personal coffers it destroys the middle class and down.  If we look at riots in Egypt, Ireland, Spain, Libya, etc we can see the results of unaffordable food combined with high unemployment.  Cheap dollars spread by way of government bailouts drive up prices of commodities across the world.  You cannot control, other than vote, drunken politicians spending tax payer money but you can control your financial future.  Removing personal debt and buying precious metals is a great place to start.  Let’s get you onto the receiving side of inflation.

REASON #2: You don’t have to be a precious metal expert to know metal is going up.  Even though only 3% or less of the world’s wealth is stored in metal the number is rapidly increasing.  Silver tapped out around $37.50  per ounce yesterday but was only $12 just two years ago.  Even at today’s price silver is cheap when you factor this real money’s buying power.  Gold realized appreciation of around 27% last year and has seen gains over the last ten years as well.  The crazy part is the growth, in price, of gold and silver is accountable to the decline of dollars.  It simply takes more dollars to buy what they used to all while gold floats along relatively steady with real costs.  Gold/silver keeps pace with this inflation in a time that dollars are in question.

REASON #3: Most commodities (assets) increase or decrease production as demand requests but gold and silver are different.  No matter how many buyers want yellow metal only so much exists to be mined.  We recently found out that investment silver demand is so great that 100% of domestic silver is used just to mint coins.  This leaves nothing for industrial uses of silver (silver is a great conductor).  Inflation drives up metal but supply and demand does too.  What do you think will happen to the price of metal as inflation, debt crisis, employment crisis, housing crisis, and bankruptcy crisis continue to rise?  The safety boat made of metal only has so many seats so grab yours while you still can.

TIP OF THE DAY:  The buying process goes something like this.  Educate, research, and then buy.  No need to over complicate the obvious.

QUESTION:  I want to buy gold but one ounce purchases are too much for budget.  What about buying 1/2 ounce gold coins or smaller?

ANSWER:  You are wise to consider gold purchasing regardless of the amount.  One good thing about gold is it can be bought in small amounts ( commonly as low as 1/10 ounce).  Keep in mind the smaller the gold coin the higher the “buy fee” over spot.  Buy at the rate you feel comfortable with regardless.

We have added “FAIR PRICING OF GOLD & SILVER” as a reference for your purchases.  Please keep in mind that prices change by the minute.

FAIR PRICING OF GOLD & SILVER (9:30 am MST)

  • PHYSICAL SILVER ONE OUNCE BULLION:                                    $42.68

  • PHYSICAL SILVER ONE OUNCE ROUNDS:                                  $40.34

  • PHYSICAL GOLD ONE OUNCE BULLION:                                    $1520

  • PHYSICAL GOLD ONE OUNCE BAR:                                               $1484

NOTE:  If your gold/silver source is not competitive with the above pricing please find another source.

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ARE PROOF COINS WORTH IT?

BUYING GOLD/SILVER, GOLD & SILVER, GOLD/SILVER COINS   2 comments

Spend anytime at all around gold/silver coins and the word proof comes up.  A “proof” graded coin is the best of any uncirculated lot of minted precious metal coins. The question is does a proof coin justify the added stress to your pocket-book?  I guess to answer this question you need to ask yourself if you want to invest in coins or precious metal?  We have certainly seen proof coins in gold and silver appreciate but are they worth the extra cost.

Most gold, and many silver, coins minted by the US Mint (or any other mint) will be uncirculated but not all uncirculated coins are proof worthy.  It would be an unwise person that would attempt to spend a gold coin stamped with a $50 dollar denomination  when the coins gold value is worth many times face value.  But even uncirculated coins are not perfect and many have small dings or marks from packing and transporting.  This distressing doesn’t affect the value of the coin since the coin’s value is in the silver/gold within it.

PROOF COINS:  Proof coins are minted by using a different die system when stamped.  The stamping process is double as typical uncirculated coins with the result leaving a proof coin clean and contoured.  The polish of a proof coin will look mirror like leaving no doubt these coins are as perfect as a piece of pressed metal can be. These proof coins are then certified/graded as the best of all uncirculated coins.  The price over uncirculated coins is what the market demands for proof coins.  Many times the mint will stamp a limited number of proof coins and this only drives up the value.

TRUE WORTH: Answering the question if a proof coin is worth the extra money can be difficult to answer.  Obviously if you are a new precious metal investor my advice would be to consider uncirculated(you are paying for the metal in the coin) over proof coins.  If you are an established metal investor then there is something to be said for a coin that is the best possible, limited in number, and made from gold or silver.

Precious metal like gold, and silver, have a limited supply available for mints to press into coins.  Even though the gold/silver market is ignored by most investors many new ones are coming into metals daily.  I completely expect someday soon the proverbial herd will discover gold’s true value and this will only dry up reserves of new coins.  As inventories diminish, all gold/silver coins will see huge market gains as desperate investors buy anything made of precious metals.

THE HERD ARRIVES: There is no question panicked investors will buy and push the proof coin market to new levels.  Just because an investor panics doesn’t mean he isn’t wealthy and the wealthy are used to being different then the herd.  These well to-dos will find attraction in proof coins that hold great gold and silver value.  I believe holding a percentage in proof coins will be of great value in the not so distant future.

QUESTION:  What do you think of buying coins from sites like Ebay?

ANSWER:  I like auction sites (from a buying aspect) as a source to add new coins to the arsenal.  Sites like Ebay identify sellers by rating past performance and service.  One thing to be aware of is many sellers charge slightly over market to off-set selling costs.  The best part of EBay is most coins are in stock and ready to ship (many times shipping included).

TIP OF THE DAY:  If you like the idea of buying proofs be sure to verify the certification of each proof coin.  Certification has come along way over the last ten years or so but do you own research.  Its your money being spent so trust but verify.

For your reference we have added “Fair Pricing of Gold & Silver”.  This should give you a general market price of gold & silver.  If you are being asked to pay much more please research alternative buying options.


FAIR PRICING OF GOLD & SILVER (11 am MST)

  • SILVER BULLION ONE OUNCE:                                $41.80

  • SILVER ROUNDS ONE OUNCE:                                  $39.46

  • GOLD BULLION ONE OUNCE:                                    $1512.45

  • GOLD BAR ONE OUNCE:                                              $1476.72

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SHOULD YOU WORRY ABOUT PRICE DROPS?

BUYING GOLD/SILVER, GOLD & SILVER   No comments yet

Take a room full of new investors, even some veteran investors, and ask them their number one fear and it will be the fear of metal prices declining.  Most gold/silver buyers are banking on metal values increasing but what if I told you if doesn’t matter as much as you might think.  Don’t get me wrong, I do expect metal to increase but there will be those that buy, at no fault of their own, only to see a huge or long dip soon after.  I say,”no big deal,” and here is why.

If you are new to The Prospector Site let me say thanks for reading.  The fact you are a reader means you are taking control of your financial life so congrats.  Precious metals are the real deal and soon the mainstream will see what you already know.  But for the new readers, like yourself, I want to disclose I used to worry about my metal investing going down in value.  I have been fortunate in my ten years of investing in metal to see a 20% average annual dollar gain in my investment but that doesn’t mean I, or you, will continue to see this size of gain.

WORRY: It is easy to worry in times like we are currently living.  But before you become too concerned about your metal going down in price let me point out a fact or two.  Other assets are going down yet some devaluations are hard to see.  It’s no secret our dollars we use everyday are declining by proof that we pay more for almost all products.  Real estate is another asset that is declining and will continue until job growth improves.  The stock market is declining when you deduct borrowed government money from it (like buying from your kids lemonade stand with borrowed money from your neighbor).

Would you believe it is possible for your gold/silver to actually decline yet still increase in purchasing power?  This is hard for those that relate all values to dollars but precious metal doesn’t have to move up in dollars to keep buying power.  My hopes are that someday you will price assets in gold/silver and not dollars.  It will give a new perspective on what things cost and how, or if, they go up.

THE GOLD SHOCKER: This might surprise you but the price of your monthly groceries hasn’t gone up over the last twenty years.  They certainly have in dollars but not in gold which is real money. I would guess the average household paid around $200 per month in 1990 for groceries which equaled 1/2 ounce of gold.  Today we could easily pay $600 per month for the same groceries which equals less than 1/2 ounce of gold.  So it is safe to say groceries are less today than in 1990 when we use real money (gold).  Even if gold had dropped 15% over today’s price we would still be paying the exact amount for groceries as 1990.

BOTTOM LINE: There is no need to worry about declines in gold and silver because this asset type will always float with true/real costs of all other items.  This may seem odd at first since you are comfortable valuing all things in dollars but soon it will become natural.  Please consider gold/silver as a source of preserving true wealth.

TIP OF THE DAY:  Begin tracking typical items like milk, fuel, propane, electricity, etc to watch how they compare to gold but go up in dollars.  It won’t take long before you are a true believer in gold too.

QUESTION:  I have read several posts that talk how prices in gold stay true but prices in dollars are going up.  The problem is I don’t have gold or silver to buy things I need so why does it matter to me?

ANSWER:  You bring up a great point so let me try to explain how metal can benefit you.  You are 100% correct that everyday items will not accept gold/silver for services or products but these days are quickly changing.  Soon trading metal for goods will be as common as using dollars now.  The point I want you to understand is you should consider trading as many dollars as possible to precious metals so future price increases don’t affect your family.

QUESTION #2:  What types of gold do you recommend for a new investor?

ANSWER:  Sorry but we don’t give pin point investment advice.  We do supply unbiased information of how gold and silver can protect and preserve your wealth.  I do recommend researching sites like ours that will aid with a self-reliant investment plan with the #1 goal being about you and your family.


Today we will kick off a new addition to our daily post called “FAIR PRICING OF GOLD & SILVER”.  Please feel free to use this as a current market source and hedge against paying above market for current gold & silver.  Keep in mind that market price can change quickly and these prices are current as of post time.

FAIR PRICING OF GOLD & SILVER (3:30 pm MST)

  • CURRENT SILVER BULLION:  One ounce silver bullion $40.98

  • CURRENT SILVER ROUNDS:    One ounce silver round $38.64

  • CURRENT GOLD BULLION:      One ounce gold bullion:  $1500.78

  • CURRENT GOLD ROUNDS:        One ounce round:  $1465.25

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