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Archive for August, 2012

#1 REASON SILVER & GOLD WILL GO HIGHER

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

We receive some great precious metal questions at TPS so I want to take a sentence or two to say “thanks” for all those reading and especially those commenting or asking questions.  Silver and gold continue to confuse most folks and my goal is to provide a forum that helps simplify, yet justify, PM (precious metal) worthiness. I’ll be the first to admit it’s hard to pick just one influence soon to push metal prices beyond most expectations but one reader this week asked me to do just this.

QUESTION:  I read the book (WHY SILVER & GOLD WILL GO HIGHER) and must admit you sold me on the value of owning precious metals. I’m buying silver and my goal is to add gold soon after paying off a few grand in debt all while hoping metal prices don’t surge in the meantime. You make it sound simple (in the book) but my friends look at me like I’m crazy when I recommend trading dollars for silver or gold. What will it take for the world to wake up?

ANSWER:  Awesome – and congrats for making such a wise decision to own physical silver and gold, thanks for reading my book too.  Your question is one I hear often but it’s hard to pick just one influence soon to send metal prices higher. Like an all night poker game the situation changes as we progress. I good example is last weeks news of worldwide gold miners claiming $3000 gold is what it will take to make mining efforts worthwhile, WOW. This is just one wild card example, I could list dozens beyond those mentioned in the book.

If I must pick one major influence it would have to be FEAR. Most metal owners up until now bought silver and gold hoping for profit. New buyers will seek out silver and gold to quench economic fear and uncertainty all while trying to protect what little wealth remains. This fear is building as you read this and why so many hang their hats on this next election. The truth is President Obama could tax 100% of our wealth away and not dent our growing deficit. A president hopeful, like Mr. Romney, could cut programs & taxes yet still not gain control of a growing deficit.

The last four years has resulted in a futile attempt to restart a bubble economy by throwing trillions of borrowed dollars down the drain. Soon the masses will wake up to the fact that printing trillions of dollars only pads the pocket books of a few while lessening the buying power of most. The effects of such spending (debt) are extremely damaging for those holding wealth in soft assets but few holding dollars truly understand why.

The dollar is part of an “all in” poker game and the losers will pay by losing generational wealth. This fear I’m describing today is a result of a loss of faith. Faith lost in a failed monetary system that refuses to maintain fiscal responsibility. Faith lost in cheesy politicians who put personal interest over those who elected them, but ultimately, faith lost in a fiat currency 99% of us call “money”.

I hope all readers hold wealth in silver or gold well before this fear driven run spurs precious metals beyond what most can afford. Thanks for the great question.

PLEASE FEEL FREE TO SEND OVER YOUR QUESTIONS OR COMMENTS RIGHT HERE.

 

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IS OWNING GOLD WORTH IT?

BUYING GOLD/SILVER, GOLD & SILVER   No comments yet

I recently received an interesting question or three from a very worried reader leading me to ask all readers if owning gold in 2012 is really worth the trouble. Most of us understand the natural progression to protect begins monetarily but at least one reader questions gold’s worthiness during what history will write as the economic correction of the century. I believe gold is relevant but, more importantly, what do you think? Here is the question with all its raw honesty.

Question:  Okay, I bought gold bullion many years ago preparing myself financially and emotionally for a day I see as imminent. By doing so I made great sacrifices at my family’s expense that includes living on a narrow budget, taking few vacations and lots of worry. At times my family viewed my decision (to own gold) as overreacting but has slowly come around to the same conclusions that led me to precious metals. The problem is lately I’ve doubted my decision to own gold and here is why.

I see the entire world facing long odds of economic recovery in my lifetime. I see severe social unrest and I see more totalitarian governmental control that only compounds problems by stealing more wealth from those making deep personal sacrifices. To be honest….what good is a boatload of precious metal if a government steals it through taxation someday? I question the benefit of owning silver, gold, or any other storage of wealth in such an age.

TPS Answer: First let me say I do appreciate your honesty and candor. This site receives many gold related questions but few as honest as the ones you’re asking. Most folks are miles away from your prudence and just now looking for ways to preserve what wealth is left in 2012. You on the other hand have accomplished what few will ever realize but still question such prudence, I understand. To be honest, I too have asked myself similar questions and this is why I would rather live in a world with $500 an ounce gold than $10k (quality of life is more important than individual gain).

You are realizing growing gold values come with a price far beyond growing wealth. The downside to expensive gold (gold appreciation is on its second decade) is the pain and suffering as those unprepared realize dollar dominated wealth is an illusion all while gold grows out of reach. “Yes” overreaching governments will take wealth unprotected and exposed. “Yes” social and civil unrest worldwide is happening and will probably expand as the economy corrects.

But all these things you mention will happen if you own gold or not. Those holding wealth have choices other don’t and this means more options for someone like you and your family. The option to relocate, the option to serve others, the option of better health care and the option of growing wealth. But another option is rarely mentioned and one I want to make most clear. A great option of wealth is the ability to protect it, let me explain.

I’ve owned small private businesses my entire adult life and can honestly say nothing can protect wealth more than a compatible team of professionals committed to protecting what you have worked hard for. This is why big corporations pay little in taxes while the middleclass continues to see inflation tax away any real chance of a prosperous future. Your storage of gold – hopefully silver too – provides the ability to pay those with the professional capacity to protect wealth, even from an overreaching government. Now is a good time to take your wealth to the next level, the protection level of metal ownership.

In the meantime, try to enjoy what you’ve been blessed with and appreciate what most can only dream of owning. Thanks for the questions and honesty.

Question:  Do you feel comfortable putting a number to year end gold prices? I’m sitting on the sidelines waiting to buy more gold while hoping gold dips at year end exactly as last year.

TPS Answer:  Great question and thanks for asking. I’m assuming you’re asking in terms of dollars? If so, any year end gold prediction would only be a guess. Gold could drop over short term but no one with a simple understanding of economic sins believes gold will do anything but substantially rise over the longer term (rising deficits equal dollar devaluation which in return equals rising gold prices). I don’t have a problem with waiting since you sound as if you already own gold and looking to add more. If I’m misreading, and you don’t own gold, then don’t wait since marginal gold inventories could leave new buyers outside looking in.

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HOW THIS ELECTION AFFECTS YOUR GOLD!!!

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

Thanks for joining us here at TPS and congrats for taking time to see if owning precious metal is a wise choice for you. I view silver & gold as wise to own but ultimately it is you that must find comfort in trading cash for history’s oldest true source of money. The reason I mention “comfort” is because this is what it takes to not lose faith in something highly volatile and definitely necessary. Gold was considered volatile when I first bought it over ten years ago at less than $400 per ounce. Maybe this is why a close friend said I was crazy to take tens of thousands of dollars and trade it for something so risky. 

Few realize how politics play into the price we pay for precious metals OR how political miscues will drive both metals (silver & gold) higher. My emails stacked earlier this week when US presidential hopeful Mitt Romney picked Paul Ryan to share his November ticket. I guess optimistic senders found encouragement in the above ticket but failed to realize how insignificant government officials are in the cure to a failing economy.

Please don’t misinterpret this last paragraph to mean voting is insignificant, it is not. But the facts show your local election has a greater impact on you personally than the presidential election of 2012. Why you ask.

Because the direction in motion is long determined and regardless who leads this great country the plan must be to borrow, spend and divert attention away from constituents.

Most of you read a post like this for one reason. You’re looking for legitimate reasons to prove gold & silver will grow in value or price. You really don’t care what PM (precious metals) have done but only what they will do in the future, I understand. But even the most diligent reader sometimes misses the signs signaling gold and silver upward. Please let me explain.

Right now political decisions affect nearly all aspects of your life. Their decisions for war send our youth to fight. Their decisions to raise taxes take more of your hard earned paycheck. Their decision to use eminent domain can take ground your grandfather worked seven days a week to amass. Everything from speed limits to chlorinated water rests in the hands of a growing entity called government that has grown too large to support.

I personally like a young man like Paul Ryan and view his plan for fiscal restraint as a step in the right direction. But even his plan, as I see it, doesn’t address ever increasing deficits in this decade, or the next, or the next. We can’t wait 30 years to deal with the one burden that saddles us all, sorry.

What young politicians, like Ryan, are realizing is a truckload of sandbags will not hold back rising tides of debt. The ill effects of debt know drag all economies downward and 90% of those making decision recommend adding more debt to solve old debt problems. So, where does this leave you and your growing stack of silver & gold? Let me explain.

Everything supported by government will decline or suffer as tax revenues and borrowing lessen (yes, borrowing is not bottomless and will decline or cease). This means wealth invested in industries or corporations depending on government revenue will dramatically decline. This decline will create panic selling and then panic buying of real assets like silver and gold, nothing new here, just history repeating itself.

Those buying silver and gold now are far ahead of the curve. Owing PM today is no different than investing in industries of the future. Some readers ask what such a day will look like but actually some cities already offer a glimpse of tomorrow. Take Oakland for example. Oakland can’t pay its police force so law enforcement has declined around 30%. Crime hasn’t declined so the market still exists for protection of life and property. This is why private companies now service the businesses and fine folks living in the city of Oakland.

Even taxing 100% of wealth cannot forever support the level of spending most municipalities or states now need to operate.

Here is yet another example of too much government spending what we don’t have. The Department of Agriculture just announced it will buy $170 million of pork, lamb, chicken and catfish to help support farmers suffering from the drought. Now, let me ask you a question. Does it sound prudent to spend $170 million when we’re borrowing over $.40 of each dollar spent? Does this sound like a political favor in order to shore up more voters?

I spent the last couple of days fishing and enjoying my state’s population of deer and elk with the owner of a large West coast farming business. He described this year as one of millions in profits but also mentioned years in the past far less than profitable. He then mentioned something each of us must grasp and keep in mind each time we hear of another politically motivated bailout. He mentioned that in good years or bad, he understands and accepts the risk of farming. When governments (politicians) take or borrow money, in your name, and then dish it out they are creating a dependency regardless if it’s handed to a multimillionaire or the unemployed.

Your decision to own gold is a preparation for tomorrow. Owning real wealth (not dependent on taxpayer support) allows us to prepare for a future when a government can no longer support all those it promised. The value of silver and gold doesn’t hinge on stimulus or government support. This is 100% why I have readers who divested from traditional retirement accounts and into gold. Assets supported by government will decline and assets “real” will hold or grow true value, regardless who wins the next election or the one after.

QUESTIONS & COMMENTS:

Question: I couldn’t disagree more with your opening chapter in Why Silver & Gold Will Go Higher. You downplay the importance of elected leaders when you know good and well our liberal ideology is what brings down this country.  Why not say it like it is? The rest of the book is right on but the chapter on politics is way off!!

TPS Reply: Thanks for your comment and question. Yep, I realize you and many others feel this way but I’m sticking with my first chapter and here is why. Conservative minded folks blame overgrown social programs and the liberal minded for too much debt and destruction of our economy. Liberal minded folks blame our failing economy on war capitalists and greedy Wall Street executives.

The fact is both sides are correct but this doesn’t change my opinion in the least regarding politics and gold. My belief is both sides of the political aisle will support more spending, regardless why, and this will drive gold prices higher by driving our economy deeper toward the abyss. We can argue all day who is to blame but the newly elected folks repeat the same monetary mistakes and until we the people roll heads this will not change. Until then, my friend, stay focused on things of value and less focused on one disagreeable chapter.

 

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THREE PREDICTIONS SOON TO SEND GOLD HIGHER

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

I’m not sure if they still do but at one time most popular state fairs had a guy who would guess passerby’s weight. This expert of girth would randomly pick individuals walking by usually guessing a person’s weight within pounds. Wouldn’t it be nice if our economy had the same sort of fellow to help us choose our financial path and make accurate financial decisions? From business owners to individuals the world starves for accurate economic predictions to help protect and build wealth over such turbulent times. This is why today I want to point out three upcoming issues soon to send gold higher.

CONFLICT:

From simple road rage to city council conflicts the world is as tense as ever I’ve seen in my lifetime. Conflict affects all of us in so many ways and few realize this conflict will accelerate precious metal value as financial conflict expands across our globe. Everyone has an opinion how money must be spent and all agree there is no where enough to go all around. This is why cities bankrupt, countries send their young off to war and once happy couples allow slimy lawyers to divide assets and children’s time.

My wife and I made a commitment to not allow monetary conflict divide a family that means everything to both of us.

Refusing to allow burdensome debt in our lives is one of the ways we choose to promote harmony at home, owning real money like silver and gold is another example. This unity allows for a solid foundation while the rest of society stumbles through a maze of economic correction while conflict rages on nearly every front.

Gerald Celente is a trends forecaster who is and has made extremely accurate predictions over the last 30 years. His latest Trends General explains why the world is on the verge of the first great war of this century. It’s fascinating to read how Mr. Celente chronologically lists how recession, trade wars, currency wars and debt eventually lead to world wars. Our news today of upcoming conflict only validates another one of Celente’s accuracies.

Conflict drives precious metals with uncertainty and debt. History proves most wars find funding by creating more currency even when this monetary creation devalues the worth of those holding such currency. This devaluation is why it takes more cash to buy the same amount of groceries at your local market. This creation of war money also drives the value of your stack of silver and gold.

AWAKENING:

I recall an early morning when my two boys each had several buddies spend the night one weekend. I awoke early stepping over lifeless sleeping bags and empty bags of microwave popcorn knowing the morning’s quiet would soon shatter with awakening. The world around us is soon to awaken as well. This realization of all is not good will lead some to do what we will describe in the next prediction because they’ve not prepared for the inevitable economic correction.

But for now most silently rest still believing lifelong politicians can fix the unfulfillable. They still trust enthusiastic leaders full of promise and hope not realizing the insurmountable levels of world debt will eventually lead most to a lifestyle depending on rations of food stamps, housing allowances and low budget health care.

The word “austerity” equals awakening in my mind. Most won’t connect austerity as an admission of a failed society and fiat economy because most citizens are just trying to protect what they’ve worked for, or not worked for. The price of silver and gold will awaken before most Americans (the world as well) leaving ones needing protection the most outside looking in. But some can afford precious metal, regardless the cost, and are soon willing to pay whatever the few holding physical metal demand. How can such an awakening not drive precious metal prices?

PANIC:

I’m hesitant to use the word panic in an age that sensationalizes even the most trivial events. Many events can spark panic and I won’t pretend to understand what motivates some to run and others to calmly react. But the panic I’m describing today is not only spurred by an empty bank account or the loss of a retirement/pension promise. The one soon to send gold unimaginable is a panic stemming from a loss of trust and faith in a economy doomed by greed, debt and dishonesty.

The monetary panic of this decade will energize itself when world financial markets no longer find bailout money to support a false value. This will lead to an exodus eventually leading remaining wealth looking for anything offering monetary flotation and true value.

Folks this writer has no other insight than history. What we are soon to experience is a scenario that has played itself out many times before. Governments grow too large and make too many promises along the way. Real money shrinks and artificial wealth (currency) expands to a point beyond expandable. The problem this time is the currency expansion spreading toxin around the world stems from the USD. If your wealth is in dollars I urge to you do a quick study of monetary mistakes and then focus on how well silver and gold protect in such a time.

Don’t let panic drive your future. Take time to understand precious metal first and then make a commitment to store your wealth in the one asset history has proven necessary and worthy.

NOTE: For more information on silver and gold please read Why Silver & Gold Will Go Higher. I wrote this book for those searching for a simple explanation of why both metals will continue to grow in price and value.

COMMENTS & QUESTIONS:

Question:  Being an expert on keeping your precious medals safe – what is your opinion on the Free Lakota Bank?  I know it is smart to not have your stash all in one location, and I was therefore contemplating sending 1/3 to 1/2 of my stash to them and even being able to make interest of 7.25% (in silver) on  my investment.  They are fairly new, founded in 2008, and I have no idea how secure their facilities are (or in fact if it is a scam altogether) but wondered about your opinion on them in theory and practice.  This could also help get my currency (fiat money) out of regular banks as this is an interest paying account if you are willing to tie up a portion of your silver for 1 to 3 years.  Thanks for your remarks.

Answer: Great question and thanks for asking it. You are wise to bank outside traditional avenues of saving since the banking system as we know it is in great turmoil (fiat currency).  Free Lakota Bank is part of the Lakota Indian Nation and claims to be the only non-reserve, non-fractional banking institution that operates like any other bank. I personally love the concept and believe banks like Free Lakota are the future of banking (fractional reserve banking is the #1 source of debt creation – not good).

Here is how silver depositing works. A 12 month silver contract pays 3.25% (according to website). A 24 month silver contract pays 5.25% and, as you correctly mentioned, a 36 month contract pays an amazing 7.25% IN SILVER. These accounts are not dollar based, this means all interest is paid incrementally in real silver.

This is what the industry refers to as commodity banking. Free Lakota Bank is in their forth year of operation and I personally know very little about this institution, but intrigued.  If you, I would start out skinny and increase my deposits as worthy. My plan is to try them out with a small deposit and see how it works; I’ll pass along information as it becomes available. Thanks again for the question and if other readers have info on Lakota Bank please pass it along.

 

 

 

 

 

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WHEN OWNING PRECIOUS METAL IS NOT ENOUGH

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

Sometimes just owning silver and gold is not enough, it wasn’t for me. The goal of precious metal ownership is to create an independent life no longer relying on agencies and assets that will continue to decline as our economy weakens. Most have not connected the level of societal unrest or personal wealth loss and still truly believe one more trillion dollars borrowed will fix decades of monetary mistakes. These same folks simply fail to recognize what their local community will become as budgets decline to the point unrecognizable. At such a time owning precious metal is not enough.

I want to be perfectly clear at this point, there is no perfect place of monetary utopia.  Even the Manhattan billionaire is affected by potholes and unanswered 911 calls.  This article is not describing escape since escaping is impossible but “better” is attainable.

Your definition of “better” is different than mine. For me, better was wide open spaces in a friendly flyover town where folks still look after each other.

My better is a place where city and state budgets look for ways to decrease spending not tax payers more when times get tight. These types of places are growing extinct but my bet is you’ve probably noticed this.

In Why Silver & Gold Will Go Higher, I discuss the benefits of hiding wealth in precious metals and provided more than enough facts why both metals will make holders very happy over the long term. What the book doesn’t discuss – as much – is the trade off for prosperity. All things sending your stacks of silver and gold higher also lead to a severe decline in quality of life that few metal holders want to think about.

A decision to buy precious metal is a big decision but nothing compared to saying goodbye to family and friends while over packing a U-Haul. I won’t pretend to know what is right for your family but will provide a few trends to look for that may help open denying eyes.  I’m guessing many of my readers today are seriously considering “getting out of Dodge” so I thought maybe we should list a few trends that could help with such a big decision.

TREND #1: MAJOR DECLINE IN HOME VALUES: Declining home values are far worse for communities than most imagine. Most city and school budgets rely on property taxes to fund safety services and local programs. When values decline budgets shrink. When budgets shrink then services are cut. This eventually leads to a breakdown in infrastructure on nearly all levels. This means your city services can no longer support local citizens and this always ends with you paying more taxes or living with such a decline.

Most of you are familiar with the growing number of cities declaring bankruptcy but most fail to realize this also increases the number of individual bankruptcies too. This chain reaction – if you will – severely weakens a local quality of life not to mention the drag on personal wealth. My question for you is how much wealth do you have stored in your home’s equity? How fast is it declining?

TREND #2: UNEMPLOYMENT:  The year 2012 introduced a new term called “Silent Depression”.  By definition, a silent depression describes bad economic times hidden by massive government support. Picture soup lines of the 1930s replaced with EBT cards, food stamps, long-term unemployment benefits, ever increasing numbers on disability, etc. This support becomes normal when job opportunities decrease or pay less than the local standard of living. There is a difference between a temporary safety net and long-term dependency (only one is sustainable).

The problem arises when we consider the wealth of most countries cannot support the rising numbers using such services, this is why most countries have growing deficits. The facts show cities in a silent depression are experiencing an increase in robberies, rapes and murders. Can you imagine the extended level of such crime when services are reduced or benefits lag behind inflated food and housing costs? Can you imagine the level of hatred as those who truly feel entitled decide to blame those with remaining wealth?

TREND #3: DECLINING INCOME: Some of you cannot imagine saying goodbye to family and friends, I understand. But the fact remains you live where you live because of opportunity, even if you’ve already relocated. Opportunity to grow a business or advance a career keeps us in a place slowly deteriorating. For some, it really comes down to income and a lifestyle but the truth is today both are in serious jeopardy of decline. My advice is to watch both closely realizing something must “trigger” a God given instinct to protect family and remaining wealth. I personally left a tax heavy state (simultaneously killing business with more useless regulation) when my income no longer justified the hassles of such a lifestyle. I wish I had made the move a decade before to be honest.

Several decades ago Americans fell into a trap when someone convinced us “more” is the secret to happiness. This lead to “more” spending, more personal and public debt, more acid inhibitors, more family fights over money, and especially more compromise in order to live someplace in obvious decline. If one thing good comes out of today’s economic correction let it be a return to common decency and a simple family oriented way of life. This lifestyle I’m describing does not take a boatload of money but a savings in silver or gold will help.

Let my last note be this. Who knows what your wake up call will be or if you will hear one. I personally would rather own less metal and a better quality of life than the other way around. The choices are yours but you can rest assured we will continue to justify precious metal ownership as events unfold, regardless where you live.

QUESTIONS & COMMENTS:

QUESTION:  In 2011 I bought 200 ounces of silver for the first time thinking silver was a wise move but now not so sure. I do not doubt my decision to buy silver but question my timing more than anything. How does a small silver investor know when is the best time to add more considering how silver continues to drop in price?

 TPS Reply:  Nothing casts doubt like PM prices dropping especially for those new to silver and gold. Thanks for the great question and let’s see if we can help ease a few concerns and then answer your question. First, yes silver has significantly dropped and this leads many new to PM to doubt such a wise decision. This doubt has a short shelf life since “real money” will soon surface as one of only a few true safe havens of wealth storage. The true question is what will silver do in the future, right?

You already know the same monetary mistakes still take place in fact, most currencies have only increased the mistake that will drive your silver skyward, debt. Nothing will stifle economic growth like the burden of debt. This is why the job market lags, this is why housing can’t rebound, and this is why cities across America, heck the world, are starving for revenue while college students riot in the streets. All these things cause remaining wealth to flee for safety. Nothing has the historical track record of silver and gold, nothing ever will.

To answer your question, my advice is buy each month with little attention on price realizing it will average over the long term. I too bought silver only to watch it fall. I also bought gold less than $400 an ounce. My point is we are soon to enter a time when price paid is far less important than ounces owned.

 

 

 

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