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Archive for June, 2012

MODERN DAY GOLD PROSPECTING

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

With many new readers joining TPS over the last few months I feel led to explain what the heck we do here. Our goals are simple as we continue to prove silver and gold as not only worthy but necessary. One reader recently asked why I named us The Prospector Site and truthfully this is a good question. TPS name perfectly describes our journey to prosperity and preservation while shuffling through sensationalism, facts and fiction. I founded this site around 18 months ago in hopes of making sense of something so worthy of explanation. I realized many years ago gold and silver confuses most new to metal, it did me, since most try to compare PM to other assets. This confusion compounds from misinformation, this is why our goal is to provide facts justifying PM and then let you decide its worthiness. Regardless, I am so very glad you’re joining us today.



To those new to silver and gold I encourage you to invest $5 in my book Why Silver & Gold Will Go Higher. I recommend this book not because it’s my work but because it’s one of the few PM books written by someone not selling silver or gold. The book outlines many relevant reasons why PM will rise without sensationalizing today’s economic correction. I don’t want you to buy one ounce of silver or gold until fully understanding why both are so very necessary to protect your family’s future.

Modern day prospecting no longer requires a gold pan or pick. Sure it’s possible a guy can still find a few nuggets hidden below crystal clear Sierra waters, but not likely. Your prospecting efforts are best spent doing exactly what you’re doing today. Prospecting in 2012 and beyond is less about price paid compared to ounces owned. This doesn’t mean we should pay a dime more than necessary but it should focus each owner on the long-term goal over price per ounce.

Modern day prospectors are not traders like the days of old. Think about this if you will. Old world prospecting required much effort to find gold with a goal to TRADE it for cash. Wow have things changed since no one in right mind trades gold for cash, not today at least, not unless under economic duress. Why you ask? The answer is the cornerstone to understanding PM’s usefulness so please read carefully.

Wealth held in currency based assets is declining at an alarming rate. Because of this we must find a new storage to save the little remaining wealth we still have. Trillions in wealth has disappeared over the last few years and trillions more soon will. Trading dollars, euros, yuan, etc into silver or gold provides a reprieve while foolish monetary controllers try to print the world back to prosperity. THIS WILL NOT WORK, NEVER HAS!!

The economic unraveling we describe today requires modern day prospectors to find (purchase) PM and then tuck it away. This is what I mean by hidden wealth or storing wealth outside traditional investment avenues.  No other form of wealth is as discretely hidden from overreaching governments and taxation as gold. No other storage of wealth benefits from such a time of economic volatility either.

Questions & Comments:

Question: I have a simple question and will keep it short. How do I know how much physical silver is enough? I asked my bullion dealer and she said to diversify with proofs, rare coins, and other metal contradictory to your opinion. I’m confused!!

TPS Answer: Congrats on making the decision of a lifetime by owning physical PM. It’s not long before nearly all my clients or readers ask this question and to be honest there’s not a rule of thumb. Each new day justifies not only owning silver and gold but justifies owning more PM. No one can tell you how much and if you give it thought the decision should be yours alone. I encourage you to do exactly what you’re doing today by furthering your PM education. You’ll know when it’s time to buy more, trust me.

Now, let’s discuss the advice coming from our bullion salesperson. Is their goal the same as yours? Hardly, their goal is to sale the most profitable PM for them, not you. This is why I advise all buyers decide exactly what they’re looking for, how much, and how much to pay before contacting a seller. I’m not against asking your seller questions but against relying on a salesperson to offer the best PM advice FOR YOU. This not only stacks silver and gold in your favor but eliminates PM confusion. Awesome, keep up the good work, you’re doing great.

Question: With all the talk of PM suppression I’m not sure what to think. If metals are suppressed isn’t it wise to wait before buying therefore paying less for physical? I’m buying bars of silver and each time paying less than the time before. Your thoughts?

TPS Answer: Thank you for the question, and using my PM consulting service. I completely agree too much is written today about PM suppression. Of course PMs are suppressed, name one asset not suppressed or supported. My opinion is suppressed or not physical silver and gold are necessary to grow and protect wealth. Who cares if you buy silver for less tomorrow than today if the goal is to trade dollars to PM?

I realize PM experts try to justify PM’s stagnate growth of late but all I see is added confusion. No one can stop the rise of physical PM we will experience over the next few years and because of this I still recommend buying silver without looking back. Your plan is wise so pay little attention to the manipulation or suppression talk dominating the PM world. Thanks for the great question.

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RETIREMENT MYTH

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

Do you recall the good old days when a guy could find a job, work it for say thirty/forty years and then enjoy another twenty or so years living leisurely off a full pension, including health care coverage? Boy, what a difference a few years make since the best most folks can hope for now is a job working until their dying breath. Realism is liberating, this is why each reader must accept that all benefits, over a paycheck, are soon to become obsolete. This fact is yet another reason to divert today’s retirement funds into real money like silver and gold.


Let’s break this down in real fashion and then tie PM (precious metal) into this illusion of retirement. Somewhere down the line we convinced ourselves retirement wealth will take care of us during our golden years. The truth is many public pensions (private too) are severely underfunded and will not be around when age takes away the option to work. This news is hard for many to believe and possibly why so few have control of their wealth.

Right now the world is divided on how to fix monetary problems. One side looks for a government sponsored return to “normal” (even if it means mortgaging our children’s future) and the other side prepares for a correction your grandchild’s grandchildren will read about. My question is why are the two sides so far apart when the facts are as obvious as the nose on our faces?

Let’s look at where we are now to see where we’re headed. Those working want whatever is necessary to make good on past pension promises. Those looking for work want whatever is necessary to find a job.

How can we honestly expect a leisurely retirement when somewhere between 20% and 40% of the world is desperately looking for a job?

Part of my job includes consulting with small business owners and individuals to find a way to protect wealth in an age of denial and confusion. The first few minutes of each consultation includes erasing a lifelong belief in the USD (traditional investing)…… and then explaining the power of silver and gold. Most who call realize something is wrong in our monetary world but have yet to calculate exactly how this impacts them.

Why are we so confused and divided you ask? Maybe Yahoo’s home page can help answer this question better than I (As I write this Yahoo breaks new ground by sharing “Woman’s biggest Bikini-buying mistakes”), unbelievable!

Loads of misinformation keeps us from facing a harsh reality that no longer includes luxuries like retirement. The few willing to accept this as fact, and act accordingly, will greatly benefit from cheap silver and gold. Remember, no one new to PM cares what metals HAVE DONE, only what they will do.

Do we agree the job market from here forward is about to become more competitive? If so, then doesn’t it make sense new hires will take what they can get even to the point of forfeiting everything over a livable wage? Private employers always take a savings when possible, this I can guarantee you. Anyway, how much leverage will an applicant have when hundreds of others are competing for the same job? Someone will work for less and fewer benefits.

Volatility will sweep away retirement benefits for most, if not all, and the ones holding physical PM will find themselves very thankful they did so. My point today, don’t bank on a promised pension or retirement.

QUESTIONS & COMMENTS:

Question: I don’t get it…

If gold tends to rise due to monetary easing (stimulus) why did the extending of the operation twist, that is another form of stimulus ( http://in.reuters.com/article/2012/06/20/usa-fed-operation-twist-idINDEE85J0CP20120620 )

caused investors to devalue PM’s?

Why did i read today that operation twist if good for the stock market but bad for gold? Where is the sense in this if a QE3 would be good for both?

And while we are on it, what do you think of this guy forecasting that the value for gold will test $1373 an ounce by the end of this coming July ?

Share your thoughts about this.
Thanks

TPS Answer:  Love to and thanks for the questions. To begin with, the USD is benefiting from a panic sell-off in Europe as more lose faith in the euro’s future (what’s good for the dollar can mean short-term volatility for PM). Combine this with investors selling everything not nailed down to cover losses and it’s easy to see why gold and silver are off the radar (nearly all commodities are down). A run to dollars has a short shelf life and it won’t be long before the same concerns in Europe arrive here in America.

Will temporary faith in the USD take gold below $1400? Who knows, but who cares since nothing in the making will fix decades of continuous borrowing ultimately destroying the dollar as we know it. Gold will rise if for no other reason than keep par with massive currency printing.  My advice is to stick to the plan, still.

Question: This could sound crazy but my plan is to sell a few gold ounces then stock up on ammo and food storage. Talk of bank runs and bank holidays lead me to believe grocery shelves could empty overnight. Sound crazy?

TPS Answer: Crazy you ask? NO it doesn’t sound crazy, sounds wise to me. If your only option is to sell a few gold ounces then do it. All readers should have a supply of life’s necessities on hand regardless since no one knows what the future has to offer (remember Katrina?).

I’m all about self-reliance especially in this age and recommend each reader do the same. All the gold in the world does little good if you can’t protect it. I encourage you to put PMs on hold until 100% comfortable with everything your family needs in case of emergency. Great question and thanks for reading TPS.


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“ALL IN” WITH PHYSICAL SILVER & GOLD

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

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


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

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

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

Is the goal to get rich or not grow poor?

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

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

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

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

NEWSWORTHY:

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

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

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

Watch it right here.

NEWSWORTHY:

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

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

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

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

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

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

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

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

Read it all right here.

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

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

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THE FOOD STAMP GENERATION

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

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


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

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

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

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

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

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

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

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

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

Read the rest here.

Questions & Comments:

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

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

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

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

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

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WHEN BANKS REFUSE TO HAND OVER MONEY

BUYING GOLD/SILVER, GOLD & SILVER, SECURING GOLD & SILVER, SELLING GOLD/SILVER   No comments yet

My first thought is of the old Chinese proverb that says, “Dig the well before you are thirsty.” I’m not sure why bullion lines aren’t wrapped around city blocks but this stampede free situation has me nothing short of concerned. For some odd reason most of us can’t recognize today’s abstract outline of tomorrow’s future. In fact, we can look no further than Spanish banks as a prime example of our near future. A future of limited wealth extraction, a future of wealth separation and a future of grave concern for those not holding real money (silver & gold).

Monetary power is achievable two ways. The first way is to limit access to wealth (exactly what we will describe today). The second is to grow wealth beyond typical limitations (taxation & regulation) ever so discretely. It could be too late for some of our European readers to heed such good advice. Below is why.


The Telegraph: Spanish Debt Crisis, “Fear of a Bank Freeze is Palpable”

Should you want to see the real effects of the Spanish debt crisis, the Pluton Bar in Sant Pol de Mar, Catalonia, is a good place to start. Over morning coffees, customers discuss sovereign defaults, credit spreads and a possible euro exit.

There is certainly plenty to talk about – and complain about too. Local property taxes are set to rise by 15pc, on top of recent state income and capital gains tax increases. The national tax increase is supposed to be temporary, but no one believes rates will come down any time soon.

Banks also come in for a lot of stick. A local restaurant owner complained that her savings bank manager refused to let her take €30,000 out of her account. The money was needed to get the restaurant ready for the summer rush. New small print lets the bank block withdrawals, even on instant-access accounts. It took two weeks for the bank to relent. Apparently, it could block savings for two years if it wanted.

Changes to lletra petita (small print) are rife and rarely in customers’ favour. Banks and mutual lenders changed their terms and conditions when a new law to limit super dipòsits (high-interest accounts) came into force last year. Before the law took effect, big banks could afford to offer high rates. Weaker rivals saw money walk out of the door. The new small print might save them from a bank run, but fear of a corralito – a bank freeze – is palpable…………..

Recently bailed-out Bankia tried to lure young customers to its Youth Account and offered those who saved €300 a Spiderman beach towel and the chance to enter a draw for a free trip to New York. The bank quickly withdrew the offer following criticism.

The best financial advice comes from Alicia, a friend who works for fundspeople.com, a Madrid-based investment fund news service. “The more you save, the more you can lose. So don’t save,” she says.

If only the good people of Sant Pol de Mar had listened. Montse, another friend, lost €50,000 after her bank sold her a bond issued by Kaupthing, the now defunct Icelandic bank.

She had originally asked for a low-risk savings account. The bank dismissed her mis-selling claim and left her to fend for herself on the long list of Kaupthing creditors.

Read the entire article here.

TPS adds, …..we cannot overlook relevancy of government and banking overreach, it truly is nothing short of separation of wealth.  I mentioned in Why Silver & Gold Will Go Higher that wealth separation is something each of us, regardless where you live, should expect over this decade.

Few things will drive silver and gold prices higher as a separation of wealth.

The majority view this as unlikely but isn’t it true nearly 60% of America’s wealth (GNP) is now held in only 6 Wall Street banks?  This means banks now have the power to ration your deposits, whether you agree or not doesn’t change this fact. The banking article above describes new regulations that allow  European banking institutions to block savings for two years if it wanted and block withdrawals of instant-access accounts.

The goal here folks is about control. The idea is to limit withdrawals therefore limiting the risk of bank runs on insolvent banking institutions. This could cause some to worry considering your bank  is as solvent as the government bailing it out. I recommend separating some personal wealth outside today’s banking system while this is still an option.

Yes, this means trading currency (paper wealth) for silver or gold (real money).


Comments & Questions:

Comment: A friend recommended TPS and I love it, haven’t missed a post since finding your site. Very refreshing precious metal information in an age of commercialization. Thanks.

TPS Reply: Thank you and welcome aboard (don’t forget to sign up for our online newsletter too).  Many new readers find us each week and it’s always great to hear what you’re thinking. The plan is to expose how current world events drive silver and gold values higher. Remember, it’s all about value over dollars. As always, feel free to send over questions anytime and thanks for the email.

Question: If the banking system is on its last leg how will storing gold in Bullion Vault help? My account requires money earned from selling gold to wire directly back to the original account when I opened my BullionVault account. It appears to be a catch 22 in my opinion.

TPS Reply: Great question and thanks for asking it. Yes, you are correct, international storage facilities like BullionVault send proceeds from a precious metal transaction to the original bank account you chose when setting up an account. This could complicate things especially when banks begin to “ration” currency by limiting withdrawals. This rationing will happen and it will catch most depositors by surprise.

You always have an option to take physical delivery of your silver or gold. BullionVault charges an extra fee for taking physical delivery but this option will bypass the banking system. Once the metal is in hand it can trickle into currency, at your option, with help from a local coin shop or pawn shop. Believe me, they will be glad to see you walk in with a stack of PM. Thanks for the question.

PS…I still view international storage as wise and recommend all PM holders use multiple storage options.


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WHAT’S BETTER THAN GOLD?

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

Silver has the most devoted precious metal advocates asking themselves if Wall Street’s manipulation is worth the trouble. Does it come down to a slight risk of temporary decline over  chance of long-term gain? Is it possible other metals, besides silver, have a real chance to outperform gold?  Some experts believe so but as with all things written here on TPS (The Prospector Site) the last decision is yours. Today we take a closer look at outlaw metals with huge earning potential.

THE SOVEREIGN SOCIETY:  Metals More Precious & Profitable than Gold

Gold may be a national treasure — and I am reminded of that whenever
I think of the time I arranged for the return of Kuwait’s gold from Iraq
after the first Gulf War — but gold is not the rarest, or necessarily the
most profitable, metal.

There are two particular metals, whose rare brilliance surpasses even the
luster of gold.

I’m talking about the real royalty of rare metals —the king and queen
of rare metals, platinum and palladium — and something interesting is
about to happen with them.

The most important aspect to consider is scarcity. Platinum is 15 times
rarer than gold. All of the platinum ever mined in the history of the
world would fit in a room that measures 25 cubic feet.
Palladium is even rarer.

Read the entire article here.

TPS adds…..many of our readers have shown concern about future gold/silver confiscation similar to 1933 & 1934. If concerned, platinum or palladium could be worth making a precious metal diversification. No one knows how far overreaching governments will go as this decades big squeeze tightens.

Like silver, I expect short-term volatility to include platinum and palladium if world economies shrink to the point of buying less of the products that use these alternative metals. My long-term tendency is to believe all three metals (silver, platinum and palladium) will draft gold upward as more view each metal from a monetary viewpoint.

PRWEB: Silver Better Investment than Gold

Danny Esposito, contributor to Penny Stock Detectives, argues silver has been used as money throughout history, making its association with money equal to gold’s. He believes investors who argue that silver is not a monetary precious metal because it has more industrial uses than gold are wrong. Instead, Esposito suggests, silver’s exciting new industrial uses make it a more attractive investment.

In the article, “Silver as Precious as Gold,” Esposito notes, “Silver has the highest electrical conductivity of any element known to man and the highest thermal conductivity of any metal.”

Silver bullion’s ability to kill bacteria without harming the human body has made it invaluable in many medical applications. Everything from wound dressings to gowns to catheters to medical equipment is manufactured with silver bullion.

Research and development continues to find new uses for the precious metal. It is estimated that three-quarters of the silver bullion mined each year is already earmarked for industrial uses. This leaves less and less silver bullion for investment purposes, Esposito explains.

“China is the largest producer and exporter of silver bullion. However, over the last few years, it has cut its exports. Clearly, China has been using the precious metal for industrial uses,” says Esposito, “but it wouldn’t surprise me in the least if, besides hoarding gold as a reserve currency, China is also holding silver to diversify its reserve currencies away from paper money.”

Read the entire article here.

TPS adds….silver’s uses continue to amaze our industrial world and I can’t help but wonder how long it is before silver’s monetary fans (investors) battle it out with corporations around the world who use silver. Our technology and medical industries are extremely competitive as more rely on silver’s conductivity to channel advancement to the next level. Interesting times for silver to say the least.

Questions & Comments:

Question: I just finished reading your new book and have to admit the section on silver took me by surprise. I take it you agree with multiple levels of precious metal diversification but not 100% sold on silver? If not silver then more gold? I still have one foot in but leaning toward silver since it appears discounted, especially compared to this time last year. Thanks and I’ll watch for your answer over the next post or two.

TPS Reply: Thanks for reading my book, and the questions. Just to clear the air I too own silver (20%) but have no problem with folks waiting before buying more. Having said that, there’s risk in buying now just like risk in waiting. If you recall, I also wrote how social networking will someday soon drive precious metals price up 5% to 10% instantly as panic and fear strike (warranted or not). A limited supply of physical gold and silver is the best anyone can hope for. Don’t let this limited inventory leave you outside looking in.

Here is what I suggest, follow your gut but keep a close eye on market volatility. Waiting is for those already protected but looking to add more. I’m all about dips but see little benefit of guessing what a volatile market will do over the short term. Thanks for the question.

Question: I’m looking for silver bullion….. and gold…….. Can you send over your current prices?

Answer: Sorry, TPS doesn’t sell physical silver or gold, only information.

TO READ MORE POSTS LIKE THIS THEN REGISTER HERE FOR THE PROSPECTOR SITE ONLINE NEWSLETTER. SEND COMMENTS AND QUESTIONS HERE.

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POLITICIANS SOON TO MAKE GOLD HOLDERS VERY RICH

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

Elected officials around the world are in the process of making me very wealthy. Each precious metal fan should view this as the reward for staying true to the one true safe haven.  I’ll be honest here, I don’t give a rat’s behind about politics since regardless what’s said, actions rarely favor the few pulling the wagon. My only interest is how political miscues affect those trying to raise families and live productive lives. Regardless, if you’re one of a hundred sitting on physical metal than prepare to soon enter the highest tax bracket.

Some of us did not buy silver or gold to become wealthy, I didn’t. Sure having real money is nice but at day’s end the papers are full of unhappy wealthy. The primary benefit of owning real wealth (silver or gold) is the insulation value it provides while knuckleheads decide how much debt shackles your child’s future.

Today’s candidates drum a recovering economy but fail to mention our economy is  dependent on near zero interest rates and never-ending borrowing. I find it funny that super committees pass off trying to reduce the deficit still growing, how is this possible? Don’t we need to stop the bleeding before all else. The truth is we cannot stop deficit bleeding. If we could we would!

I find it odd that some in society view food, power, water storage and self-reliance as overreacting when history clearly justifies such prudence considering the length of our USD fiat reign. Our age of “assuming” life as normal is turning dangerous in my opinion.

Political leaders are making two gigantic mistakes as you read this post (both will eventually push metal prices higher than most view as possible).

Mistake #1:

It is rumored 83% of the US Senate & House of Representatives are male, I seriously doubt this is true. Please don’t mistake this as a sexist statement because my only point is to question the anatomical strength of today’s male politician. The first mistake soon to drive your net worth skyward is an unwillingness to admit the USD can no longer sustain the world’s lifestyle (make no mistake, the USD is the cure and disease).

This requires all sharing public office, at all levels we should add, to honestly explain why we can no longer borrow $.40 of every dollar spent. Yes, this will cause chaos and discontent, how can it not? But will hyper inflating our dollar not lead to a life like camping?

Do you feel the average politician underestimates the character of hard-working folks around the world, I do? An explanation of “why” we are where we are and “how” shared pain will allow future generations more opportunity is something most reasonable folks will grasp. The ones only concerned with themselves will fall lockstep, eventually, since they are destined to a life of dependency regardless.

Think about this if you will. The upcoming “pain” worsens with decades of deficit spending allowing most to live an unrealistic lifestyle.  This deficit spending allows wars to rage, bubbles to expand and pop, and a USD dominance built from debt and inflation. Not to mention the few who grow richer at the expense of so many others.

Mistake #2:

Part of living a life of political integrity requires ones in control to separate from those most motivated by wealth. This is proving difficult, maybe impossible, since Wall Street now singularly drives political leaders around the world. It could appear your best interest is in mind but comparably speaking you and I are small players when compared to the handful controlling wealth.

This failure to separate is what leads us to a common four words we all know too well, Too Big To Fail. Does is make sense that a banking entity can be too big to fail? How is possible we are willing to bankrupt America to save a handful of institutions TBTF? This defeats the purpose, right? TBTF is nothing more than an excuse for political favors in exchange for one more term.

Yes I realize your retirement (not mine) entrusted to the TBTFs and politicians use this as excuse to continue the bailout party. But each of us must carefully review our options here since the alternative to fiscal responsibility is eventual inflation that gobbles a typical pension allowance with only a handful of groceries.  This “alternative” is now a $16 trillion deficit on cue to reach $21 trillion in an evolutionary blink. My point, everyone will eventually share the pain of today’s individual and political sins!

What about gold & silver owners?

My book editor didn’t like my Introduction to Why Silver & Gold Will Go Higher and I’m forever grateful she encouraged me to rewrite. To be honest I changed the intro to one of opportunity over despair. My heart is torn as a gold holder since I realize my individual monetary protection is not worth the overall pain of a collapsed dollar. This monetary understanding allows us a peek into the future.

The monetary sins coming from D.C. and Wall Street are far-reaching and will cause generational pain, this I’m sure of. Since you are fortunate to still have a choice I strongly advise each reader to take a proactive approach to self-reliance and then make a political stand at a local level. You will be surprised how many feel exactly like us.

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IS IT TIME TO TRADE GOLD FOR REAL ESTATE?

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

REAL ESTATE QUESTIONS:

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

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

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

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

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

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

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

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

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

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

News Worthy:

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

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

News Worthy:

REUTERS: Gold Rally Triggers Scrap Sales in India

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

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

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

News Worthy:

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

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

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

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

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WHEN GOLD JUMPS 5% PER DAY

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

Last Friday was nothing short of the purest example of a typical day for future gold. When fear and uncertainty grip millions, maybe I should say billions, the results are a monetary flight to all things real.  We are living history and the world is soon to realize paper assets cannot compare to the real protection within silver and gold. How many days like last Friday will it take before the masses line up to pay 2 or 3 times today’s physical gold offering? Let last Friday go down as a sign of the times.

I wasn’t alive during the Great Depression to witness shuttered banks wipe out the wealth of good honest folks. I wasn’t around to watch folks in Germany push carts of currency necessary to buy hyper-inflated groceries during the days in Weimar Germany. But I will be around to witness the greatest wealth transfer in the history of mankind, this is all but certain.

It takes a loss of faith to push something like PM (precious metals) to the point of last Friday. I want you to think back making a mental list of who and how many predicated such a gold advancement like one witnessed last Friday. My list is empty. My point is we have entered a period of perpetual volatility on a massive level and anyone willing to make short-term predictions are unwise or arrogant.


The average person doesn’t realize how quickly wealth can transfer in our age of instant money movement.  Are we on the verge of such a wealth transfer into silver and gold, I think so? The great rush into 10-year treasuries paying under 1.5% could be such a sign of the times described today. Eventually, the result is a flight to PM but no one said the flight is direct.

The few still hanging onto recovery also anxiously wait for the next bailout. Who honestly believes a life of endless bailouts can continue?

Last Friday’s amazing, soon to be typical, gain attributes to a worse than expected jobs report and continued trouble in Europe. Yes, this news lit the fuse but the winds fanning the flames comes from a giant media base willing to sensationalize anything from collapse to celebrity addiction.

This is why I believe gold’s next bull run is an accumulation of multiple factors sensationalized into the greatest flight to safety in our lifetime. Think of it like a person shouting “fire” in a smoky room not to save others but to create a profitable scene of chaos. Nevertheless, the results are the same.

Like most weekends, this one was no different when an individual asked the one question I hear so often, “Why is gold the best choice right now?” See the question below. I’m willing to bet this same individual didn’t have gold on the radar until recently.

Can you imagine a week of multiple days of 5% or better gold gains and how the media will sensationalize gold as the hurry-and-jump-on-metal? You can bet that we’ll be right here to sort it out by making factual silver and gold observations.

QUESTIONS & COMMENTS:

Question: What makes precious metals the best choice considering the volatility around the world? Second question, silver or gold? (verbal question during consultation)

Answer: Thanks for the questions. Just to make sure we’re all on the same page here let me start by saying we are talking physical metal. Also, we recommend low premium bullion, rounds, bars, and junk over rare or numismatic coins.

As said in Why Silver & Gold Will Go Higher, precious metals are the safest store of wealth today. We have to realize the ill economic effects we’re feeling now started many years ago (actually decades ago). Up until recently we papered over the problems with borrowed money but this appears to no longer work.  A life of credit allowed a lifestyle that should have never existed in the first place.  A consumer based economy driven from credit allowed us to invest in assets that appeared solid or trustworthy but are not.

More of us realize with each passing day that traditional investment or savings sources are in huge trouble, this realization drives more in search of solid trustworthy assets. Nothing has a history like silver and gold, nothing ever will. Think of it like the perfect storm driving masses to the one cove of shelter but on a global scale.

As per your second question, I see little chance silver will not benefit from gold’s draft and I personally own both (80%/20% gold over silver). But I do recommend using silver as a segue into PM since it’s easy and cheap to buy. Hope this helps.

Question: I love reading TPS and enjoy your realistic view of precious metals (I bought gold many years ago). I’m thinking about taking advantage of cheap mortgages and discounted real estate by exchanging some metal for income property. I recall something you wrote last year mentioning this is wise under certain situations, this leads me to ask two questions. Should I offer gold as part of a down payment or completely “cash out” the properties?

Answer: Thanks for the nice words and reading TPS. I hear your questions and I’m making the same decisions myself. Like you, many of us bought gold for hundreds of dollars and now tempted to buy discounted real estate. I will devote an entire post to real estate this Wednesday and I have no doubt your questions and more answered. Thanks for asking and be sure to catch us on Wednesday.

News Worthy:

CBS DENVER: Embalmer Pleads Guilty to Stealing Gold Teeth from Dead

LONGMONT, Colo. (CBS4)- A man who was working as an embalmer says he stole from the dead in order to support his family. Adrian Kline, 43, of Brighton, pleaded guilty Thursday to removing gold crowns from the teeth of dead people and then selling them.

Kline received a deferred sentence, probation and community service after pleading guilty to two counts of providing false information. Police believe Kline may have recovered or extracted hundreds of teeth from the deceased or the deceased’s remains.

After a body is cremated, any metal — including dental work — is usually removed from the remains to be recycled. Kline claims he only took the gold crowns that were going to be thrown away at the funeral homes, but one funeral home manager in Brighton said Kline was fired after jewelry belonging to a deceased man went missing. Creepy, but readable right here.

News Worthy:

KSEE 24 NEWS: Increase in Thieves Snatching Gold Necklaces of Necks

Gold theft is on the rise in Fresno. Fresno Police Sgt. Mark Hudson explained, “They’re coming up behind the victim or somewhere beside them, running by, snatching the chains right off of their necks and then taking off that way.”

One of the most recent thefts happened at the Git N Go Market on Tulare and Peach. Gerald Kane was arrested after he was caught on surveillance video snatching the cashier’s necklace. This past month alone, there have been ten of these types of thefts in Southeast Fresno. Most of the victims have been women. Police suspect the increase in this crime is due to the increase in the price of gold. Read it here.

TPS adds, we expect to see more of this type of crime as metal prices rise and the economy continues to correct. The problem complicates when we reason states like California no longer have the revenue to incarcerate at the level necessary to clean trash like this off the street.

News Worthy:

AMMOLAND: Firearms Industry Numbers Reflect Record Pace of Gun Sales

NEWTOWN, Conn --(Ammoland.com)- Following the eleventh straight month-over-month increase in consumer firearms purchases, firearms and ammunition manufactures are reporting strong sales even with the down economy.

RUGER SALES UP 10.5 PERCENT IN FIRST QUARTER

Sturm, Ruger & Co. (NYSE:RGR) reported that first quarter sales increased 10.5 percent compared to the same period last year. Read more here.

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TIME TO BUY SILVER & GOLD? One expert recommends patience!

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

Okay, I admit it, I find myself asking if now is the best time to add more physical metal to my 10-year-old stash.  Also, I admit paying little attention to what motivates silver and gold, short-term speaking, since most short-term influences are beyond me. We both know Europe is in the death throes of financial hardship as good currency chases after bad. We both know the smallest spark could send PM (precious metals) skyward with little warning. Yes, we both know a limited supply of physical metal could disappear overnight too.

But today’s investment writer makes a good point to wait and I won’t argue with the valid points he makes.  I’m very appreciative that Precious Metals Digest founder Jim McCraigh is willing to share his opinion on why now might not be the best time to buy physical metal.


Jim McCraigh Q & A

Question: Jim, tell us a little about the motivation behind Precious Metals Digest and where you see the site going from here?

Jim M. –I have been interested in investing since first going to work for a commercial bank in 1971, especially in the real estate and precious metals markets. Precious Metals Digest was created to sift through the avalanche of articles, videos and blogs on PMs…some of which is very good and some of which are not so good… and present the best to readers in an engaging and informative fashion. The site will eventually feature more vetted guest writers to offer a diverse set of viewpoints. I’m personally not a gold bug… per se, but I am an investor who wants to make money by either buying or selling different PMs. We will also cover some of the miners, along with platinum, palladium and rhodium going forward.

The mission of the site is to serve investors by helping them navigate the world of PMs. We’ll do this by sharing with readers the things that I would want to know myself as a PM investor. The site is designed to be an alternative to mass media noise and present the facts so that the reader can decide for themselves. We won’t be a news site as such since there are already some good ones out there. However, we will include focus on global and US macro-economic issues and other markets (equities, bonds and currencies) to the extent they affect PM prices.

Question:  I take it from reading your posts over the last month that you would advise those on the PM sidelines to patiently wait to see how this dip shakes out, is this correct and why or why not?

Jim M. — I ‘m glad you asked that question. There is likely some more volatility ahead for at least the early to mid summer period. I’m still preaching patience for both buyers and sellers here, but we might better substitute the phrase “disciplined approach” for patience here. For sellers, that means not trading out of positions in an emotional or fear-based way, but hanging tough until we begin to see the hint of a decent volume-based uptrend again. The only exception to this might be if someone has carefully considered trailing stops in place that are crossed and they sell as part of their overall trading discipline. What I want my readers to understand is the back story for precious metals is still intact… politicians globally will choose to react to deflationary pressures and sovereign debt issues by massive money printing measures.

Buyers should realize that gold is in a secular bull market, and that some attractive entry points may present themselves this summer because of anticipated volatility. As things continue to deteriorate in Europe, we could see more short-term strength in the dollar that puts pressure on prices…. But on the horizon for late summer are some potential market movers like a QE3 that could spike PM prices upward. Gold’s moves will be big in the coming months and years. There is no need to try to time the market here. Sometimes investors feel that they have to DO something. Being patient (and disciplined) IS doing something!

Question:  I’ve noticed at TPS my readers lose interest during times of PM dips. In your opinion, are we as investors too concerned with short-term PM fluctuations?

Jim M. –Unless an investor is a day trader (I wouldn’t recommend it unless you are a true expert) short-term price movements should mean very little to most folks. What’s important is the longer term trend line measured in weeks, months and years… not daily or weekly closes. Reacting to short-term price moves is like driving while only looking at the road a few feet ahead of the car. Sooner or later you’ll rear-end a slow-moving truck ahead that represents the trend line and there will be some serious financial damage.

It is interesting you mentioned that there is often an apparent loss of interest during dips. The smartest investors will strategically buy those dips (read opportunities) in a disciplined way while the herd will wait too long and pay too much. If we pay too much, we will rarely make any money or even worse lose big chunks of principle. For me, investing in PMs (or equities or bonds) is a year-round endeavor, not a one month on and two months off kind of thing. If an investor is not willing to be active, they should engage a licensed professional financial advisor to help manage their money.

Question:  Can you share with our readers what other assets (investments other than gold/silver) you see as solid considering today’s economic volatility?

Jim M: –What I can tell you is that I own some agricultural commodities right now… As the world prospers, the first thing people want with their new-found money is more and better food. This will cause some demand based price inflation. So I would want to own some of those here and ride them up over the long term.

I am long GLD, SLV, PHYS, NEM and RJA

Thanks Jim and we look forward to following you at Precious Metals Digest.


News Worthy:

Slate: The Coming Global Recession

America is still recovering from the Great Recession and Europe is melting down, yet from a global perspective, the economy has never been as healthy or prosperous. The world economy enjoyed amazing growth from 2002-08, took a small dip in 2009, and then went back to growing. Sadly the good news seems to be coming to an end in Brazil, China, and India, and that’s horrible news for us.

More alarmingly, both China and India are running into trouble. Catch-up growth, in which a poor country improves its public policy, begins importing foreign production techniques, and gets rapidly richer is a time-honored Asian tradition. We saw it in Japan, then South Korea, then Taiwan and other Asian “tiger” economies in the 1980s and ’90s. China and India are so large that their catch-up growth was able to raise the entire worldwide rate of economic growth. That’s why the world economy kept growing through the 2008-09 financial calamities. Read it here.

TPS adds, what this article lacks to mention is even emerging countries were beneficiaries of the U.S. bubble economy.  In other words, the world recession was postponed by a consumer based economy dependent on debt and deficit spending. Credit tightened and now recession becomes more obvious. Sounds like a good time to be vested in gold.

News Worthy:

The Gold Report: Will Gold & Silver Fall All the Way With the Euro?

What we’ve seen lately is gold and silver prices moving with (and often faster, both ways) than the euro, but the link remain solid. With concern for the future gold and silver prices in mind, it’s time to examine this relationship to see where it’s taking these precious metals. With the Eurozone crisis moving to potential ‘runs’ on Greek and Spanish banks, the future of the euro is now on the line. A look at a precipitous fall in the euro and the potential for gold and silver to follow is warranted. Investors should be prepared for very volatile and surprising gold and silver price moves. Read it here.

News Worthy:

The Gold Standard Now:  2012 –Good Money & Jobs vs. Easy Money & Stagnation

The 2012 presidential election is shaping up to include an argument over opportunity versus equality.  The American economy has been stagnant for a decade.  Income for working men has been stagnant (or even contracting) for 40 years.  Why?

40 years ago is when America started abdicating its classical high-growth monetary policy, the gold standard.  We abandoned good money to chase after a chimerical improvement of easy money — ostensibly to promote job growth.  But as 40 years of wage stagnation has shown, easy money has failed. Read it here.

TPS adds, since releasing Why Silver & Gold Will Go Higher,I often hear questions that lead me to believe many who own PM don’t truly understand why they are so necessary. The last forty fiat years are proving to be more disastrous than most realize but this oddly works in favor of real money holders (yes, even with today’s meaningless dips). Please take time to gain a basic monetary understanding before trading currency for silver or gold.

Comments & Questions:

Question: I just started reading TPS and new to silver and gold investing. Any pointers for someone new?

TPS Reply: Very cool and welcome aboard. You are taking the necessary steps to first educate and then decide if silver and gold makes sense to you. Your question is a common email we receive several times a week, here is my advice. Read everything related to physical gold. Don’t rush into buying either metal. Do begin a plan how to relocate wealth from declining paper assets and into real assets like silver and gold.

Be sure to read First Steps to Buying Gold & Silver posted last Fall on TPS.

Comment: In my opinion, the derivatives market collapse could make the housing and stock market collapses look incidental!

TPS Reply: Yep, I 100% agree and will also bet less than 10% (invested) have a clue the risk of derivatives. Some experts estimate the derivative total exceeds an astonishing $700 trillion, can you imagine.  The run to real money, like PM, comes when the average working guy realizes his retirement is layered in piles of paper promises, like derivatives. I will roll the PM dice any day over piles of paper. Thanks for the comment.

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