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Archive for August, 2011

DROWNING IN DOLLARS

GOLD & SILVER, GOLD AND MONEY   No comments yet

Some of you may remember a game show where contestants could win an opportunity of snatching as much cash as possible inside a see through box.  The lucky winner would stand in this vertical box while forced air circulated thousands of dollars into the air.  What if I told you the same influx of money is circulating all around you but unfortunately the only winners are big banks, Wall Street,  and the chosen few? Today we try to find fresh air all while most drown in dollars.



2007/8 will go down in history as the era cracks in the economic glass appeared to all.  As credit froze and folks began to panic governments around the world decided to inject billions soon trillions of fresh revenue into the monetary system. This statement means little to most folks out working hard trying to make a living.  The problem is most of this new money didn’t make it into the hands of middle America in fact most money went no further than Wall Street fat cats and banks.  The plan was to trickle credit (money) through banking institutions and into the hands of small business and employees.  The money stopped well before Main Street, USA.

Some have asked a reasonable question asking why didn’t America’s central bank simply give each person a set amount of money?  Why didn’t those handing money out to banks require 90% or so of the money be directly deposited into taxpayer bank accounts?  Wouldn’t forty or fifty grand in your account help stimulate your local economy?  The answer is only for a short time unless the money is invested into real assets like gold or silver.  As soon as it’s gone and no new money follows the blast of stimulus grinds to a halt like a new Hemi without gas.  Is it possible the Treasury never intended for stimulus money to go any further than Wall Street and banks?

But there is a long-lasting effect of massive stimulus and you see it each time you grocery shop or read the latest unemployment numbers. The same money you are working so hard for is turning into a wave of toxin causing commodities to increase and your assets to decline.  Small businesses constrict (downsize) trying to meet expenses with less income resulting in more unemployment.  Families stretch budgets trying to meet expenses with fewer dollars and less buying power.  The drowning process for middle America is slow and painful at least for those not aware of rising water flush with dollars.  If your solution to rising costs is earning more money good luck because your earning potential cannot keep up with Mr. Bernanke’s printing staff.

I received an email last week from a friendly reader telling me my solution for everything is buying gold or silver.  I had to chuckle because my solution to this economic challenge is to trade dollars into assets least likely manipulated.  Dollars certainly are not on my list at this time.  Gold is now a currency.  You need no more proof than the demand gold is realizing from governments and central banks worldwide.  For us to argue if gold is a good investment that will go up is redundant at best. Please take a hard look at gold and silver while the option exists for your family.

Thanks for reading The Prospector Site and feel free to sign up for our online newsletter here.

NEWS WORTHY:

One of the given explanations, made clear in Bernanke’s speech, is that US inflation is now rising. So-called “core inflation” hit a 19-month high of 1.8pc in July. That’s admittedly tricky for the Fed, seeing as one of the official justifications for previous doses of QE, is that the US Fed (and the Bank of England) have released virtual money in order to “fight deflation”.

In addition, QE is part of a deliberate but still largely unspoken ploy to gradually weaken the dollar (and pound), so debasing the enormous debts of the US (and UK) governments. “Fighting deflation” has, for the most part, been an intellectual conceit – a deception now made more difficult by the latest inflation numbers. Having said that, if the US authorities had really wanted more QE, they wouldn’t have let a few awkward inflation statistics stop them.  THE TELEGRAPH. Read more here.

NEWS WORTHY:

“Young Americans are looking for economic opportunity and they know the solution rests with job creators in small business and companies – not government,” said Paul T. Conway, president of Generation Opportunity. “As they continue to work to make ends meet and weigh the costs of delayed dreams, young adults are sending a message to the President and Congress – stop your spending and get out of the way of those who actually know how to create jobs in America.”

* Only 31% approve of President Obama’s handling of youth unemployment.

* 76% would like to see U.S. federal government spending decreased.

* 69% prefer reducing U.S. federal spending over raising taxes on individuals in order to balance the Federal budget.

* 59% believe the U.S. economy grows best when individuals are allowed to create

businesses without government interference.

* 53% indicate if U.S. taxes on business profits were reduced, companies would be more

likely to hire.  PR WEB.  Read more here.

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YOUR CHILDREN AND THEIR FINANCIAL FUTURE

GOLD & SILVER, GOLD AND MONEY   No comments yet

We would do anything for our kids wouldn’t we?  The time, energy, and knowledge we invest in our children is the truest testament of who we are as human beings.  What if I told you many of us are making a serious teaching mistake with our kids?  It has nothing to do with nutrition, nothing to do with faith, and nothing to do with social interaction.  To put it frankly we are failing our kids on how to develop financial stability, financial independence, and financial freedom.  Today we make a change by taking control of your child’s  financial future.


ENSLAVE OUR CHILDREN:

None of us can stand the thought of children enslaved to debt, greed, or corruption but over the last 40 years we have done just that.  Our children have watched parents slap on debt handcuffs, voluntarily I might add, as we saddle ourselves with car payments, credit card debt, house payments, etc.  Bigger, nicer, faster, younger has caused mom to go back to work and dad to take 20mg of acid inhibitors daily.  Living just beyond our means requires most to finance part, if not all, of the American Dream.

Our economy is now dependent on you teaching your kids how to borrow money and then spend it. If you don’t our economy slams shut like a screen door in tornado alley.  College loans the size of mortgages greet new grads instead of job prospects.  We gladly swallow what advertisers peddle without questioning why we really need what ever it is they are selling.  Do I really need a week in the Caribbean?  Do I really need more hair?  Do I really need a bigger house or season tickets?  Am I letting other parents down if my kid doesn’t take part in 9 months of club sports?  We slap on debt handcuffs because we think we deserve it and our children actually pay the price.

TO HECK WITH SAVING:

The few not indebted and able to save have no idea their savings is in danger of theft. Traditional methods to “save” no longer work.  Recently we posted how a twenty-dollar bill and twenty-dollar gold coin once shared the same value.  Today the gold piece will buy 95 times more than the same twenty-dollar bill.  To save in anything dollar related is risky.  To teach your children to save in anything dollar related is destructive.  The US Dollar, most currencies in fact, is now in full print mode trying to prop up too big to fails and other dying industries.  If you want to invest in something that irresponsible leaders can create at a moments notice feel free but understand your children will pay for it.

Gold and silver are real money and quickly becoming a world currency.  Why do you think central banks worldwide are trading currencies for gold? Precious metal can’t be printed, reproduced, or replicated.  Teach your children the difference between real money and monopoly money as soon as possible.  Since you’re reading this site you must realize something is not right with traditional methods of saving.  Good job.  No longer is equity ( our homes) a safe form of saving, no longer are most stocks a safe form of saving, no longer is the dollar a safe form of saving.  Please do the research for yourself soon.

BOTTOM LINE:

I’m sorry to be so brazen but all this needs to be said and we all need to hear it.  For the first time our children are not expected to live a life as promising as parents.  In reality, we shouldn’t have lived as good of life as we have and it’s only because of debt we did.  I don’t want your children or mine to experience third world life and I’m sure neither do you but this is the direction we are heading.  Is it possible prominent cities right here in the US are becoming mega cities like Rio de Janeiro with no middle class.?  Next to tall new buildings full of wealthy people sits shantytowns full of families living in conditions unthinkable.  While reserve wine satisfies the wealthy sewer water flows by the poor child’s front door.  This is not what I want our children to ever experience.

QUESTION:  My financial adviser tells me gold has been a terrible investment over the years and advises me not to put my money in precious metal.  You and others make sense but I’m not sure what to do?

ANSWER: He probably has good intentions and may be misinformed.  First, gold really isn’t an investment as much as a currency.  A currency the world is turning to instead of dollars, yen, yuan, and euro, etc.  Think of gold like an insurance policy against inflation and uncertainty because a lot of both are floating around the world as you read this.  The decision is yours and yours only so if gold makes sense then go buy some. There is freedom in learning to think for yourself and living with the consequences.  For what it’s worth I have my savings in gold and silver. Thanks for the question.

NEWS WORTHY:

As precious-metals enthusiasm rises, investment regulators have noticed a proliferation of blogs, websites, YouTube videos and Tweets focused on buying gold. And while many pitches are legitimate, FINRA, or the Financial Industry Regulatory Authority, is worried about scams.

“Con artists are using the run-up in the price of gold as a hook to part investors from their money,” said Gerri Walsh, FINRA’s vice president for investor education, in a statement. “Investors should think twice before investing in any gold investment promising exponential returns or any company that claims it is a buyout target for other mining companies.”  ARIZONA BUSINESS AND NEWS.  Read more here.

NEWS WORTHY:


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THE GREATEST WEALTH TRANSFER IN HISTORY

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

TRANSFER:  To pass from one place, person, or thing to another. Many of you have worked twenty, thirty, even forty years following once good financial advice only to soon realize your wealth is in jeopardy of transfer.  Not a good thought.  I guess wealth transfer is not so bad if you’re on the receiving side but unfortunately few are currently on this side.  Congrats to you for taking the time to self educate ultimately finding yourself in the wealth minority.  Good job.  Today we take a close look at the greatest wealth transfer in modern time, right before our eyes.


I’ll be honest in saying I love gold and silver but will someday have no problem selling both.  Many of our readers have no idea how metal can trap wealth but do understand what they’re doing now is not working.  Let’s clear the air why traditional wealth preservation is not working and how you can be on the wealthy side of this transfer.  I’m a simple guy so lets keep it easy to follow.

THE OLD WAY NOT WORKING:

Traditionally those with wealth accumulated it by owning real estate, businesses, stocks, savings, or inheritance.  For years this allowed many to enjoy the finer things in life especially as we aged and worked less.  Like so many things what once worked no longer work now.  Each day more wealth disappears from our real estate holdings, not transferred but lost.  It only existed on paper but none the less it was wealth.  Years of easy credit expanded the real estate balloon and new expectations should be years, maybe decades according to experts, of major real estate decline.  This wealth is not coming back anytime soon.

Owning a business has been known to provide cash flow and build wealth but few are profitable today. I personally built a business from $2500 growing it to a value over seven figures up until 2005.  Today it might be worth $100k if the right buyer felt like donating time and money to a dying industry.  I’m not the only business owner showing a million or two less net worth than just a few years ago.  What about stock wealth?  The DOW is a far cry from 14,000 but the DOW only represents 30 corporations right?  The fact is stock markets worldwide have declined if compared to real money like gold and further decline should be expected.

THE NEW WEALTH:

So a million lost here and a million there starts to add up to a lot of money especially for those dreaming about tropical days and margarita nights. To this point we have talked more about lost wealth than transferred wealth but make no mistake the transfer is taking place.  The impact of lost wealth hasn’t hit most of us because most of us still live off passive income, retirement income, or salaries like we always have.  The problem is this income is fixed or declining but the cost of living is growing making it harder to live off what we once did.  Something will need to replace incomes needed for groceries, utilities, etc and the money will come from liquidating investment assets.

Let me ask you.  Do you think those with wealth will sit and watch assets dwindle away all while gold and silver climb to historic highs? The remaining wealth will push and shove its way into precious metal stocks, metal ETFs, and physical gold/silver.  Factor in a limited existence of precious metal and I will guarantee many more wishing to own than actually owning.  The wealth transfer from assets like stocks, dollars, yen, yuan, euro, real estate, etc has already begun and will only intensify as currencies, credit, and deficits go from bad to worse.  What side of the wealth transfer are you on?

TIP:  Your transfer of wealth can start with as little as $45 by purchasing physical silver bullion and rounds.  The Prospector Site hears over again how can a person get started in a metal market like today?  My answer is one ounce at a time over and over again.  Good luck and thanks for reading our site.

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WHAT KIND OF GOLD NUT ARE YOU?

BUY AMERICAN, BUYING GOLD/SILVER, GOLD & SILVER, GOLD AND MONEY, GOLD OR SILVER BUBBLE   No comments yet

Let’s face the facts.  Since you are reading The Prospector Site you obviously are one of two types of crazy.  No I’m not putting anyone down just calling it like I see it.  Economic conditions like this bring out the nut-jobs making it easy to see why the mainstream gives little credence in assets like gold, silver, guns, or other self-reliant  preservation type stuff.  But does owning gold or preparing for tough times really classify a person as a nut?  Today we ask just what kind of crazy are you?


Type 1:

This type is growing in record numbers of folks like you no longer buying into the notion unlimited money printing leads to economic prosperity. This type no longer believes more government means more prosperity and is willing to stand up for organizations like the Tea Party.  This type cares little if Democrat or Republican but is all about a constitutional motivated form of government willing to live off moderate to low tax revenues.  I guess I fall into this type and I’m hoping most our readers do as well.  

Gold fits in nicely with this type because they no longer trust a currency based on nothing and more worthless each day. This person understands a limited government creates a strong society and economic prosperity without mandates like personal health care.  Redistribution of wealth is not part of this types lifestyle but helping those truly in need certainly is.  If you listen to political leaders, the left, and mainstream media you are some kind of crazy if you fall into this type.

Type 2:

This type believes our current economic decline could lead to Mad Max type social unrest, major wars, and a complete currency breakdown. They buy gold and silver not only to preserve wealth but as a tool for barter after a dollar collapse.  Water filters, kerosene, night vision all play a part in this type of gold owner.  Credibility, once rare, is growing with this type but the fact is most folks still haven’t excepted the size of our economic quagmire.  Some folks within this type, wrong or not, sell doom & gloom yet find some way to prosper from it.

Here is my take on type 2.  I have no idea what the future holds but I do believe countries like ours are built on solid principles and most are not afraid of hard work and risk.  We certainly have drifted from what built our great country but if economic shakeout is what it takes to get back to small government and self-reliance then so be it.  I do agree that this type sets a good example of preparedness for disasters of all kinds.  The one common thread both types have is the importance of owning real money like gold and silver.

We have a lot today so I want to keep moving but let me know what type of gold nut you are.  Feel free to leave comments here.


BUY AMERICAN UPDATE:

If you have followed our site then you know we are all about buying local and buying American. Recent news of a mega country music star putting his effort into buying American is exactly what our country needs to bring jobs back home.  Toby Keith has asked his merchandising manager to make and sell everything related to Toby Keith to be made right here in the USA.  Other country acts are getting on board and I can’t say enough about the commitment Mr. Keith is making.  CHECK OUT TOBY KEITH’S MADE IN AMERICAN SITE HERE.

READER’S QUESTION:

Your post Ways to Profit From the Next Depression makes life sound no fun at all.  Can you expand on the timing?

ANSWER:

Thanks for reading our site and thanks for commenting on Ways to Profit From the Next Depression. Let be clear on at least one thing.  No one knows what our economic future will bring, certainly not myself, but there is little doubt depression is the direction of most economies around the world.  Unlike the last depression our world is connected like never before.  No longer are currencies pegged to gold so budget shortfalls are “fixed” by printing more money.  The problem is nearly all currencies are racking up huge deficits simultaneously.

Profiting from a depression is more about making lemonade from rotten lemons.  I would much rather see an overall healthy economy and quality of life over my gold or silver profiting.  The fact remains until those in power make real change self-reliant people will need gold, prudence, faith, and ways to profit from the upcoming depression.  Thanks again for the question.

BIG GOLD CORRECTION:

I haven’t turned on the news this morning but I’ll bet the media will talk about how overvalued gold is and ask “experts” about a possible bubble. If you are relatively new to gold, or silver, please stay strong to your commitment to own metal.  Like we have posted many times huge swings are to be expected as gold climbs.  Take advantage of these dips if more gold and silver are part of your financial plan.  The next wave of bad economic news will bring gold back to necessity level therefore driving the price up even more.  Very easy to predict.

NEWS WORTHY:

“We all knew it was coming, it was really a matter of when,” said Phil Streible, senior market strategist at MFGlobal. “In 10 days prices went from $1,700 to $1,900.”

“We haven’t had a correction, other than brief correction, since the $1,500s,” he said. “I don’t see it going down there, but we needed a good correction.”

Either way, the analysts said this break in gold won’t have the same severity that the price break in silver experienced this spring when it fell 30%. “This market is very different from silver. Gold is trading as a currency, whether you believe it is money or not…. The reasons that have caused people to put capital into gold have not been solved,” Lesh said.  KITCO NEWS.  Read more right here.


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THE DANGEROUS SIDE OF GOLD

BUYING GOLD/SILVER, GOLD & SILVER, GOLD AND MONEY, SECURING GOLD & SILVER, SELLING GOLD/SILVER, SOCIAL UNREST   No comments yet

The Los Angeles Times recently ran an article I found fascinating yet concerning. Below is how the article begins.

That stunning rise in the price of gold is having a ripple effect: A rash of jewelry store robberies, street muggings and home burglaries. Now, merchants are stepping up security and police are warning everyone against flaunting their blingLos Angeles Times



The first fascinating aspect of this article is that run-of-the-mill thugs see enough value in gold willing to risk arrest. Less than 3% of folks worldwide see gold as a necessity but thieves do?  The concerning part of the article relates to the warning law officials give to citizens of not flaunting their bling.  I do understand  importance of prudence but this shows all the ill effects of an entitlement nature state like California.

My concern goes deeper than thugs snatching gold chains from folks heading home from work. Our concern at The Prospector Site is a trend like this worsening along with our economy.  Don’t you feel at this point thugs are stealing gold because of quick cash turn around but what happens as entitlements continue decline and unemployment doesn’t improve?  The survival nature of many is not to develop a skill or find a way to improve a bad situation.  The nature of the type of person willing to snatch a gold chain is to take what they can from good folks like you and not get caught.

Criminals are also targeting cash-rich gold buyers, setting up appointments to sell gold but then robbing buyers at gunpoint when they arrive, police said. LOS ANGELES TIMES

Some point gold owners will find themselves gold sellers.  The nature of an investor is to squeeze every ounce of profit from money invested and this I understand well. My concern is, just like stated above, sellers will be targeted by criminals willing to separate gold owners from their hard-earned stash of gold.  Metal brokers generally will buy back metal at spot or 1% over tempting some sellers to resort to selling privately.  This could work out well or it could end up like the story in the LA Times.

Please don’t misread me on this because I’m not saying gold is too risky to wear or to hold. I do recommend taking a realistic approach to both as your gold value grows.  Gold is going mainstream but unfortunately gold’s popularity does not always seek attention of those with your best interest in mind.  Law enforcement agencies across the US are stretched thin from budget restraints.  Most agencies do a great job with what they have but most will tell you more officers are needed immediately.

The above article proves what we have said for so long.  Gold, and silver, are money and each should be viewed as currency over “bling”.  Thanks for reading The Prospector Site and feel free to sign up for our online newsletter here.

NEWS WORTHY:

“It’s pretty simple. It’s black and white. I don’t have a job, I had to work, and I rob to survive,” he said, adding “desperation is a great motivator.”

The criminal complaint released on Tuesday noted that Urquijo told arresting officers he had been laid off from work, was unable to find a job, and robbed the Phoenix area banks to survive.  REUTERS.  Read it here.

NEWS WORTHY:

“People need money right now, and the price of gold is high,” he said. “There’s no business. There’s no jobs. Gas is expensive. Food is expensive. Clothing is expensive.”  LA TIMES.  Read it here.

NEWS WORTHY:

Don’t let yourself be confused in the slightest about what’s going on, and pay no attention to the punditry. The analysis they do is garden variety at best, and they have it dead wrong… just as they almost always do.

That’s much as is the case today. Until there has been a fundamental shift in U.S. fiscal and monetary policy, I would like to strongly suggest you trust your own instincts about the relative value of holding gold versus dollars – or any of the fiat currencies, for that matter – and set your sails accordingly.  CASEY RESEARCH.  READ IT HERE.

PROSPECTOR:  By the way the above article by CASEY RESEARCH was not about today’s gold dip but one earlier this year when gold went from $1420 to $1359.  Same problems exist but now growing more complex by the day.  Gold will run until fiscal responsibility prevails.


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RIP NEW HOME CONSTRUCTION

GOLD & REAL ESTATE, GOLD & SILVER, GOLD AND MONEY   1 comment

New readers could mistake articles like this as irrelevant to gold and silver but this is the furthest from the truth.  So many economic indicators point to importance of metal ownership and residential real estate is certainly a key indicator.  As trillions in real estate wealth disappears savers turn to real money like metal.  I will be the first to admit the gravity of our economic condition in the US is understated but, in reality, there are trillions in dollars of wealth sitting on asset sidelines willing to push precious metal prices higher. Today we mourn a big part of the American dream, new home construction.


I had only two stops during my trip to town last Friday.  One stop was at my local coin shop and the second to a local lumberyard. The number of customers, respectively, in both sums up my point better than I can.  My lumberyard sat empty of customers but full of flatbed delivery trucks ready for even the smallest of deliveries.  The counter help tried to act busy but after a few minutes of visiting I realized busy is no longer the norm.  The store manager informed me a stabilizing in the stock market is what it will take to get buyers buying again.  I think the problems go much deeper than a volatile stock market.  Millions in inventory, building costs, manpower, and equipment welcomed the only customer on a Friday morning, me.

My visit to the local coin shop looked entirely different from the lumberyard.  The shop itself is less than 1400 sq. ft. and only person works there most of the time.  I made the fourth customer when I walked in and patiently watched to see what my local market was trading.  As I waited I couldn’t help but think how the store I left (lumberyard) had so much invested with so few customers and this store thrived with an inventory of less than $100k or so.  My Friday trip to town left little doubt where the money flow is flowing at least for this fly over community.

CEO’s from large corporate home builders argue temporary declines in new home construction ( some regions are seeing a 70% decline in new home permits) are only temporary.  They anxiously assure stock holders single family homes are severely under inventoried but this is not true. The fact is most homes built over the last twenty years are underutilized by proof of families not long ago raising children, more children in fact, in homes half the size of new homes today.  More new homes is not the trend now and won’t be for some time as credit tightens, more do with less, and inflation steals wealth from the mouths of families worldwide.

But something always replaces a dying market and new construction is no different. Many have asked what is a good business considering our current economic decline.  If you are one of the millions looking for ways to make a living in the construction industry please read closely.  The trend replacing new construction is space utilization and energy efficiency.  Think more folks in the same footprint of an existing residence.  College kids come back home waiting for job prospects to improve.  Loved ones looking for shelter as banks realize sitting on shadow inventory only leads to a bigger loss.  Contractors offering affordable ways to convert wasted space into functional living areas will prosper more than new home builders waiting for a return not coming soon.

Yes so many indicators point to gold and silver as our economy built on credit and consumption replaces itself with self-reliance and small government.  Thanks for reading The Prospector Site and feel free to sign up for our free online newsletter here.

NEWS WORTHY:

There is a strong indication that home builders have almost ceased activity in several states as demand for newly built homes has dwindled. The slowdown in new home permits is particularly stark when compared to the total number of existing homes in each state. 24/7 Wall St. examined the number of building permits to find the states where no one wants to buy a new home. 24/7 WALL STREET NEWS.  Read it here.

NEWS WORTHY:

“Gold has become the portfolio antidote for the global financial crisis,” James McDonald, chief investment strategist at Northern Trust Corp., the Chicago-based custody bank and money manager, said in an interview.

The metal is up more than 32 percent in 2011, which would be its 11th straight year of gains, while the S&P 500 Index (SPX), a benchmark of the biggest U.S. stocks, has lost 9.5 percent including dividends. Investors have accelerated the retreat from equities on concerns that European countries will struggle to repay their debts and that the U.S. economy is weakening under the strain of unemployment above 9 percent, falling home values and a decline in consumer confidence.  BLOOMBERG.  Read it here.

NEWS WORTHY:

“That ratio may repeat under the present scenario, indicating gold could hit about $4,000 over the next few years,” Wang said.

Central banks from South Korea, Mexico and Russia to Thailand have been adding gold to their reserves in a sign of waning faith in the West’s benchmark bonds and currencies like the dollar and the euro.  REUTERS.  Read it here.

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IS WAITING COSTING YOU MONEY?

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

This morning I read an article of a young couple that waited, and watched, gold until recently deciding precious metal is a safe harbor for hard-earned cash.  No doubt their waiting cost a few dollars in earnings but the important aspect is they are on the gold train. As evident by gold’s skyrocketing prices, masses of new buyers have come to the same conclusion but as a whole few find protection within the confines of gold or silver.  Gold’s historic climb means nothing if the yellow metal isn’t part of your prosperity plan.  My question for you is what are you waiting for?


Let me fill new readers in on a secret about gold buying. The cost of waiting to buy gold is clear as gold rises and quick calculations can show lost profit.  But the real loss is not what gold could have earned but the loss from where your money’s parked while you decided to or not buy gold.  If your money has been in B of A stock you now have 47% less money to worry about.  If your money was in residential real estate you now have over 50% less to invest in gold ( obviously depends on your region).  Waiting is costly coming into gold, or silver, and coming out of what ever asset you once believed in.

This may sound odd but if you take your stash of cash today and buy gold, especially silver, you are still in on the ground floor in my opinion. Several reasons prove my opinion and the obvious one of late is how our world intertwines financially and economically as well.  Like a domino, as Europe realizes the significance of deficit and banking crisis the effects are felt in the US.  As United States implode the dollar the effects are felt in China, Japan, across Europe, etc.  A unilateral monetary collapse is something new and the world doesn’t know what to do with a large-scale currency fire.  Before investors could simply make lateral money moves into other currencies, stocks, whatever but this is not the case today.

Gold is quickly becoming one of only a few safe spots and governments are realizing this in synchronized fashion. My surprise is not gold creeping toward $2000 but the nonchalant way private buyers work their way into the gold market.  You don’t need me to remind readers a finite amount of gold and silver exists so when the music stops plenty will find themselves looking for a place to park cash.  My goal is for you to not be one of the many still standing. Thanks for reading The Prospector Site.

Feel free to sign up for our weekly online newsletter here.


NEWS WORTHY:

“One would be led to believe they obviously knew who they were targeting,” said Kammert.

He was then hit from behind by another vehicle while a second car boxed him in. That’s when five to six masked suspects jumped out of the vehicle, smashed the back window and made off with a backpack with over $2 million worth of diamonds inside.  NBC LA.  Read it here.

PROSPECTOR:  This article is a prime example how discretion is as important as ever.  Feel free to change the word diamond to gold.

NEWS WORTHY:

At one point gold topped $1,880 an ounce on its fifth straight day of increases. The price has risen about 30 percent this year and demand is expected to remain strong.

When there is uncertainty about the economy, investors often buy gold because of its reputation as a more stable asset. Central banks around the world have been net purchasers of the precious metal as they try to diversify reserves.  YAHOO NEWS.  Read it here.

NEWS WORTHY:

“The way I look at it,” Faber said, “I am ultra-bearish about everything geopolitically. In an environment of money printing, we have to ask ourselves, how do we protect our wealth? … Where do we allocate the money?

Good question, but in fact a fairly straightforward one if, like Faber, you believe that Federal Reserve policy is stoking speculation over savings and debasing the U.S. dollar, hyperinflation is a real possibility, the stock market’s recovery since 2009 has favored the rich and powerful, cash is trash, and gold and land in the countryside are the only true safe havens.  MARKET WATCH.  Read it here.

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GOLD NEWS AUGUST 2011

GOLD & SILVER   No comments yet

Sometimes writers get in the way of news so today I’m letting the gold market speak for itself.  Feel free to rummage through articles that catch your eye understanding some of this is purely mainstream media’s interpretation of what is happeningThe world is witnessing economic balance as too much debt and government interference shake up economies around the world.  Interesting times for gold and silver holders.  Frightening times for those holding dollars.

Thanks for reading The Prospector Site and feel free to sign up for our online newsletter here.


NEWS WORTHY:

HUFFINGTON POST:  Gold Prices Rise: Welcome To The New American Gold Rush

“Gold is the reciprocal of the world’s faith in the world’s central banks,” Grant says, and right now, “the world is in a pickle.”

Gold prices will probably keep rising until the U.S. and Europe get their finances in order, he says – and Grant doesn’t expect that to happen soon. He predicts inflation, low for the moment, will soar, further eroding the value of the dollar and leaving only gold as a good investment.

If Peter Hug is right, this frenzy for gold is likely to continue. The director of the precious metals division for Montreal-based Kitco, one of the largest dealers of precious metals, says gold is no longer “just for the crazy people” – Henny Pennys expecting the sky to fall.  Read it here.

NEWS WORTHY:

MARKET WATCH:  ‘R’ is for recession, not recovery

SEATTLE (MarketWatch) — Call it a cyclical slowdown, a correction, a bear market if you will, but the fact is that the trend of the economy, wages, prices and share values are all pointing south. Until the Fed tries to save the day by announcing a third round of quantitative easing — and possibly not even then — figure it’s 10 minutes ’til sunset for the bulls.

Earlier this month, all the blame for sinking stock prices was focused on partisan bickering between the White House and Congress in Washington over the debt ceiling. Then blame shifted to Standard & Poor’s and their cuckoo-bird downgrade of U.S. long-term debt. Next, blame was shifted to high-frequency traders who are accused of providing the microphone and a loudspeaker whenever someone prominent decides to cry “fire!” on a crowded exchange.  Read it here.

NEWS WORTHY:

BLOOMBERG:  Gold Surges to Record as Mount Concern About Growth Spurs Sale of Equities

Gold surged to records in New York and London as mounting concern about debt crises and slower economic growth spurred investors to sell equities and seek the perceived safety of bullion and Treasuries.

Stock markets fell 2 percent or more across most major European markets and futures on the Standard & Poor’s 500 Index suggested the gauge would open down by about the same amount after Federal Reserve officials said the central bank should refrain from protecting equity investors. Morgan Stanley cut its forecast for global growth this year. Gold holdings in exchange- traded products backed by the metal gained the most in a week.  Read it here.

NEWS WORTHY:

MINEWEB:  Gold still good, but silver better! – Sprott selling his gold to buy silver.

Until Wednesday, though, Mr. Sprott was still committed to gold, as its price rose to new highs. … On Wednesday, Mr. Sprott said his comment about silver does not mean he is abandoning gold altogether. “Anything I said about it being the resource of the last decade was not to suggest that it wasn’t going to do well this decade,” he said. “It’s just I think silver will do better.”  Read it here.

NEWS WORTHY:

MINEWEB:  Gold miner minting its own gold and silver coins – looking to pay dividends in kind!

In reporting strong second quarter figures which have seen new production, revenue and dividend payout records, the company’s board has announced that it has approved the company minting approximately US$1 million worth of its own one ounce gold and silver coins.  Read it here.

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GOLD IS NOT TOO EXPENSIVE!!

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

Bar none the biggest reason folks give for not buying gold is it’s now too expensive.  The runner-up is it might fall in price shortly after buying but if we take a close look neither are very likely reasons to not own gold.  I will agree gold is much more expensive than just a year or three ago but few are holding breath waiting for prices of old to return anytime soon.  If you are one of many believing gold is too expensive please read closely as we break down two simple factors proving this untrue.


Individuals who believe gold is too expensive must also believe gold will not increase over current value. As a lifelong businessman I have learned to not judge an investment on cost but on income or appreciation potential.  We must make an argument that gold increases in dollar cost because dollars are not as valuable as in the past.  It is very important to realize gold is somewhat stationary but our dollar’s buying power is declining at an alarming rate.  But most of you have heard all this before, right.

What you haven’t heard is if gold is too expensive then you must also believe government debt and borrowing  will stop soon. The same folks must also believe worldwide deficits will cease and governments are determined to live off what income comes in.  They also must believe entitlement commitments will decline and those dependent on government income will find a new way to survive.  Fiscal sanity prevailed, borrowing is a thing of the past, and deficits will shrink faster than $2 tee shirts made in Honduras.

But history shows something can reverse the gold engine and us old guys watched it happen back in 1980. As inflation threatened to turn the US into another third world country leaders decided to raise interest rates.  As fast as interest rates climbed gold plummeted and the result reversed the inflation trend.  So why is it governments aren’t raising rates today like back in 1980?  The reason is our entire economy is dependent on cheap money.

Our economy is dependent on consumers like you to spend new money.  Manufacturing and production is now outsourced to countries with cheap labor and all that remains are government jobs and consumers spending.  Consumer debt, your spending, is dependent on low interest or cheap money to keep you spending.  If rates rise you stop spending and so does your neighbor.  This turns the economy in the direction of deep depression, devalues real estate even more, and sends stocks downward. I see no scenario where leaders choose this option anytime soon so artificially low rates and more printed money should be the norm.  All while gold, and silver, grow in dollars and buying power.

READER’S QUESTION:

I enjoy reading TPS but it angers me you call our economy an economic depression when my mother lived through the Great Depression.  Today is nothing like the days of the Great Depression.  Can you stop comparing the two?


ANSWER: Sorry but no.  The fact remains the difference now compared to the Great Depression is trillions in unfunded entitlements and debt.  If governments around the world stopped borrowing the curtain of depression would drop exposing exactly how bad things are.  Sorry but I must state fact even if it’s not what you want to hear but thanks for reading regardless.

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DON'T FORGET SILVER

GOLD & SILVER, GOLD AND MONEY, GOLD/SILVER COINS   1 comment

As the media climbs over itself to repeat another gold story silver patiently lies in wait.  The point is physical silver is still an option at $44 per ounce with physical gold cost over $1850.  The question, is a ratio of 42 to 1 reason enough to buy silver? If so what is the best silver to buy in today’s precious metal mania? Should volatility of silver override the unsustainable value of currencies worldwide, especially the US Dollar?  Is silver secretly lying in gold’s shadows waiting for the perfect time to spring?  I think so and here is why you shouldn’t forget silver.


As far as I know I’m not related to Nostradamus but I’m going to do something I rarely do.  Today I’m making a prediction, a silver prediction, and for all the gold bugs please read closely. I believe silver will climb and I feel only one thing is holding it back.  The good news is this one thing holding silver back is providing a window of opportunity for those with open eyes.  For the record I’m still buying silver and have no intention of quitting anytime soon.  Here is my Nostradamus moment for what it’s worth.

Silver is realizing a fraction of gold’s gain for one big reason. Folks are afraid to buy silver because they believe it could rise only to fall like earlier this year.  Physical silver spiked over $50 just before it lost 1/3 of its value.  This correction put fear in new silver buyers but those skeptical miss the point of silver’s potential.  The same forces elevating real money like gold will elevate real money like silver.  Yes I realize governments and central banks are pushing gold to its well deserved price but the fact remains many wanting precious metal can’t afford gold.  Folks like us will find gold’s price, eventually, out of reach leaving only silver as the last option.

The good news is silver is real money too. The same economic problems still exist and as long as governments attempt to solve debt problems with more borrowing precious metal will climb, yes that means silver as well.  If you have yet to utilize the protective forces of silver the temporary suppression in silver works in your favor.  If this wouldn’t have happened you would be paying well over $50 for silver today.  I’m surprised physical silver doesn’t cost new buyers $57 an ounce right now.  Please remember this.  Someday soon the question won’t be how much you paid but how much you own.  Price isn’t an issue if precious metals continue the path of a new worldwide currency.

BEST SILVER TO BUY NOW!!

Although The Prospector Site doesn’t offer pinpoint investment advice we are bullish on silver as much as gold. The trend is to buy silver bullion, bars, and rounds as close to spot price as possible.  Rare coins are great for experienced metal holders but for those simply wanting protection silver as pictured above will work.  I recommend spending a little time on Gold Shark guaranteeing the most bang for your buck.

Thanks for reading The Prospector Site and feel free to sign up for our weekly online newsletter here.


READER’S QUESTION: If precious metal is real money as you say why is it stores don’t allow it as trade?

ANSWER: Great question and the simple answer is they do.  Most businesses will gladly accept gold or silver coins known as legal tender.  The reason they aren’t used is the dollar value minted on the coin is substantially less than the coins metal value.  A $20 gold piece, one ounce of gold, is now worth over $1850 so to trade it at face value of twenty bucks is unrealistic.  This tells us how much our dollars have declined in buying power by the way. So if your asking why stores don’t accept pieces of gold and silver, at market value, as trade the reason is simple.  Precious metal prices constantly change as metal is bought and sold worldwide.

I have no doubt as world currencies decline natural market forces will demand gold and silver exchange for assets, services, and goods.  In our electronic age it’s hard to say how this will work but by pure demand it will happen.

NEWS WORTHY:

“We had reversed the recession, avoided a depression, gotten the economy moving again,” Obama told a crowd in Decorah, Iowa. “But over the last six months we’ve had a run of bad luck.” Obama listed three events overseas — the Arab Spring uprisings, the tsunami in Japan, and the European debt crises — which set the economy back.  THE EXAMINER.  Read it here.

NEWS WORTHY:

Below is a video of Micheal Maloney filmed shortly after this year’s silver correction.  Watch over Mike’s shoulder as his staff fields phone calls of nervous investors willing to sell silver for far less than paid.  As you will see silver, like gold, rarely moves up without pullback and all metal owners must realize this.  The fundamentals pushing metal to historic highs are in place for long-term wealth gain for those prudent enough to own metal.


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