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Offline g

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Re: Gold & Silver News: Americans Pile into Silver, Gold Coins
« Reply #390 on: April 06, 2013, 06:16:13 AM »

The Christian Science Monitor - CSMonitor.com
Americans pile into silver, gold coins

Sales of silver and gold coins have surged this year. With silver and gold prices near two-year lows, is it time to buy?


 By Margaret Price, / Correspondent / April 6, 2013 at 8:00 am EDT
New York

As the banking crisis struck in 2007-08, investor Will Mitchell sprang into action: After boning up on precious metals, he started buying fairly sizable amounts of silver bullion bars. Eventually, he switched to silver and gold bullion coins, which he considers easier to trade than bars.

The happy result: Even though precious metals prices have been falling lately, "my holdings of them are up [in value] about 100 percent since early 2008," says Mr. Mitchell, the owner of Startupbros.com in Tampa, Fla., a resource for entrepreneurs seeking to create an online business. "You can't ask for more than that."

Interest in these glittery investments – which soared five years ago – has been especially hot this year. In January, the US Mint sold 7.5 million American Eagle silver bullion coins to dealers – a monthly high, and not far from the 9.9 million silver American Eagles it sold in all of 2007. Demand was so strong that the Mint temporarily ran out of supplies and had to suspend sales for roughly 10 days. In addition, sales of American Eagle gold bullion coins hit highs not seen since June 2010.

Although sales of the one-ounce coins fell to more normal levels in February and March, the US Mint is still on track to sell a record number of silver American Eagles in 2013. Sales of gold American Eagles are also back to the high levels of 2011.

"We've been seeing a massive increase in interest in precious metals," says Terry Hanlon, president of Dillon Gage Metals, in Dallas, whose firm is one of the authorized purchasers of the federal government's bullion. (Except for a few special coins designed for collectors, the US Mint only sells to dealers, not individuals.)

Gold and silver, he says, are "an offset to other investments and are an insurance policy against falling currency values."

Investors worried about inflation can diversify into precious metals several ways. They can buy stocks of companies that mine gold, silver, or platinum. They can purchase precious metals mutual funds or exchange-traded funds. But to some investors, problems that surfaced during the recent recession, such as the collapse of the mortgage-backed securities market, prompted them to seek safety in tangible, versus "paper," assets. Experts say that's been one factor boosting interest in owning physical gold and silver bullion.

Gold and silver bullion come in two main forms: bars and minted coins. "It's better to have the coins," says Edmund Moy, former director of the Mint and now chief strategist at Morgan Gold, a precious metals dealer in Irvine, Calif., specializing in services for Individual Retirement Accounts. For one thing, "the US Mint guarantees the purity of the coins' content," he points out. Because gold and silver bars "are made by outside companies, the purity of their metal content possibly could be subject to fraud."

In 2011, Utah passed a law allowing gold and silver bullion coins issued by the US Mint to be used as legal tender. People place their gold and silver bullion coins in the Utah Gold & Silver Depository and receive a card that acts similar to a debit card which they can use to make purchases of up to 80 percent of the coins' current value. A dozen other states have been considering similar legislation.

http://rss.csmonitor.com/~r/feeds/csm/~3/mKjauNhhipo/Americans-pile-into-silver-gold-coins    :icon_study: :icon_study:

                                           
0406 goldcoins full 380
0406 goldcoins full 380

Offline jdwheeler42

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Re: Gold & Silver News
« Reply #391 on: April 06, 2013, 09:02:54 AM »
RE, you got the general idea and the particulars right, but I think you are missing half the mechanism.

Gold is not an investment.  It is either speculation or insurance.  It definitely is subject to perceived value.  However, while people are very familiar with "buying on margin" from the past few asset bubbles, people don't understand the flip side: the "naked short".   This is where you sell an asset you don't have.  Needless to say, this is very risky, as there is no limit to how much you might end up paying.  You need really, really, really good credit to do this -- or be able to print your own money.  That is how you can manipulate gold to the down side.

But if you do own gold, you might not want to sell it.  You can still earn money from it by leasing it.  You give someone your gold with a promise to get it back and a certain payment while they hold it.  You technically still own the gold even though you don't physically possess it.

In both cases, the problem similar to a "margin call" is "taking delivery".  If people start demanding the physical gold, like the Bundesbank recently did, then you have a problem, because you don't actually have it on hand.  This means you have to buy it at whatever price you can get it.  This makes for very rapid price rises.

All that said, as I said before, gold is not an investment, it is insurance or speculation.  In either case I wouldn't put money into gold that you would need in any less than a generation.  And before that, I would try to find things that have a better potential for a return, like, say, a Foxstead  :icon_mrgreen:
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Offline DoomerSupport

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Re: Gold & Silver News
« Reply #392 on: April 07, 2013, 10:45:19 AM »
Don't forget the difference between specie value and the material base value.

Got money AND debt?  Buy gold eagles with a face value of $ 50.00 and you protect around  $ 1,500 per coin. Then file Chapter 7 bankruptcy protection.  You're allowed up to $ 20k (I think it's still the same) of cash or assets, only above that threshold can the Trustee touch it.

So 100 oz of gold in american eagles (maples or Panda's won't work) is only $ 5,000 "cash on hand" reported to the trustee in the BK filing, even though six month after the BK is accepted by the court (earlier and it's exposed to the Trustee) and that $ 5,000 face vale can be sold for $ 150,000. 

All legal and above board. You're declaring the face value, which is all that's required.  Try claiming that the FRN's in your wallet are only worth the linen they are printed on and you'll see why it's set up this way - and why the SCOTUS refuses to touch specie cases (since Thompson v. Butler).

This is not theoretical, I've helped people do this and their bankruptcy attorney had no issue with it. We put a family though chapter seven bankruptcy protection (all unsecured debt discharged) while that family had an income of over a quarter of a million a year. 



off-topic - We've paid the attorney fees and filing fees for a couple of people who could not afford to get out of debt in the last few years. I hate the banks enough that I'll advocate the charity (of which I'm a trustee) pay the $ 1,800 fees to cost the banksters $ 100,000 or more ins written off debt.  The trust only serves people within a certain distance of the Lodge which administers it, or there would have been a lot more.  I love using the system against itself.


Offline g

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Re: Gold & Silver News: Gold Price Reaches an All Time High in Yen
« Reply #393 on: April 08, 2013, 05:26:36 AM »
Another major fiat currency bows to it's lord and master.


                                                 
Gold in Yen
Gold in Yen
               click to enlarge

                                               
                                                 
1922 Gold Certificate Gold Coin Note
1922 Gold Certificate Gold Coin Note
   click high res enlarge

                                                   

Offline Surly1

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Re: Gold & Silver News: Gold Price Reaches an All Time High in Yen
« Reply #394 on: April 08, 2013, 08:18:08 AM »
       
1922 Gold Certificate Gold Coin Note
1922 Gold Certificate Gold Coin Note
   click high res enlarge                                       

Never saw one of these in my life. Thanks, GO.

Amazing.
“The old world is dying, and the New World struggles to be born: now is the time of monsters.”

Offline g

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Re: Gold & Silver News: Currency Wars Now Entering Their End Game
« Reply #395 on: April 12, 2013, 04:16:43 AM »

Currency Wars Now Entering Their End Game
By FS Staff
Created 11 Apr 2013

Grant Williams, author of the widely read newsletter Things That Make You Go Hmmm [1], discusses with Financial Sense Newshour [2]the next logical step in the ongoing currency wars, the difficulties facing Japan with import prices, and, lastly, a few thoughts on gold repatriation by central banks. Here, we present a partial transcript of the interview.

The Bank Credit Analyst just reported that the Bank of Japan will expand its balance sheet by 40% to 220 trillion by the end of 2013 and the Fed will also be expanding its balance sheet by 35% this year. What are your thoughts on this?

“Japan has fired the bazooka, they’ve decided to go all in put all their chips on the table after two decades of very poor economic performance…we’ve entered the realms of complete and utter monetary debauchery in Japan now, they are absolutely desperate to weaken their currency and they figure they can do this, generate inflation, and then unwind it painlessly if they do get there. Kyle Bass has spoken about this phenomenon at lengthover a number of years now and we really do seem to be moving towards this end-game where we’re in a currency war—there’s no two ways about it—and Japan has decided to arbitrarily try and weaken their currency. Now, they’re getting away with it; the Yen’s weakened against the dollar by some 27% in the last few months but, at some point, we’re going to start to see some retaliation. The Koreans particularly need to do that. Japan and Korea compete directly in two very key industries; both of which are automobiles and consumer electronics. If you look at the divergence of the Nikkei and the Kospi in Korea you’ll see that as Japan has weakened its currency and [the Nikkei] strengthened, Korea has gone exactly the other way and it’s too big a deal for this to happen in a vacuum. So, right now, Japan is getting away with this but I suspect in fairly short order once the initial impetus of this trade runs out we’re going to see some salvos fired back by the Koreans and the Chinese—things could get ugly quite quickly I think.”

Japan imports a lot of things—everything from energy to raw materials to food—so how can you continue to import all these items when your currency is being rapidly depreciated?

“Well, you can’t. That’s the problem. And, also, don’t forget that this is a country that got the bulk of its power from nuclear energy and they shut down their reactors after Fukushima. So, the oil import bill last year was $100 billion/day and obviously that’s gone up 30% in Yen [/b
]terms. But, again, we had one of the cabinet members come out yesterday and say that the government was going to mitigate the effects of inflation for small to medium sized businesses—well, they can’t do it. I’m pretty sure we’re going to see these nuclear reactors turned on as fast as they possibly can because they need to bring some of these costs down for a country that has no energy apart from nuclear.”

Recently, you gave a presentation in Hong Kong [3] where you discuss the process of central banks leasing out their gold while other countries demand theirs back. What do you see taking place?

“Chavez demanding his gold back was the beginning of the end of this little scheme. I don’t know how long it takes to play out but if we assume they [central banks] all lease their gold out to some extent, they all know that the gold is not necessarily all there so it really becomes a game of chicken and with Chavez kind of blinking first...we see a few fringe countries like Azerbaijan, Ecuador, and some of these really small gold holders that started quietly repatriating their own gold. But, as you say, when the Bundesbank announced that they were going to do it, that’s 300 odd tons that they want to bring back from the U.S. That’s a meaningful amount of gold. And once you start getting those big holders pulling their gold back, it really does become, in the case of central bankers, why on earth would you take the risk that you’re the guy who asks for his gold back and it’s not there? And it becomes a huge huge problem..."

"On the face of it, the status quo looks okay and in an environment where there are so many reasons for the gold price to go higher—you know, with this infinite QE on the part of Japan and further QE on the part of the UK and the US, and we’ve got currency camps in Switzerland, we’ve seen the events in Cyprus with deposits actually confiscated—every single one of these is unequivocally positive for the gold price and yet the gold price is kind of stagnating and languishing, but at some point reality is going to assert itself. I don’t know what the event is going to be. We’ve seen plenty of potential catalysts kind of come and go, but at some point that is going to change. As long as this continues, and when it does or if we get a real rush to perfect assets and repatriating gold, the gold price is going to go through the roof.”

http://feedproxy.google.com/~r/fso/~3/59d_r1lzFis/grant-williams-currency-wars-end-game  :icon_study: :icon_study:

Offline g

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Re: Gold & Silver News Gold & Silver Being Pummeled This Morning
« Reply #396 on: April 12, 2013, 05:26:44 AM »
Gold down 35, Silver down .90 as I write. Unusual moves for such a short period. Something going on.  :dontknow:

Offline Petty Tyrant

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Re: Gold & Silver News Gold & Silver Being Pummeled This Morning
« Reply #397 on: April 12, 2013, 05:36:32 AM »
Gold down 35, Silver down .90 as I write. Unusual moves for such a short period. Something going on.  :dontknow:

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Offline WHD

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Re: Gold & Silver News Gold & Silver Being Pummeled This Morning
« Reply #398 on: April 12, 2013, 06:22:39 AM »
Gold down 35, Silver down .90 as I write. Unusual moves for such a short period. Something going on.  :dontknow:

So by any reasonable measure, precious metals should be climbing, fast. What is the mechanism that allows them to depress the price, seemingly artificially?  :icon_scratch:

Offline g

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Re: Gold & Silver News Gold & Silver Being Pummeled This Morning
« Reply #399 on: April 12, 2013, 06:25:14 AM »
Gold down 35, Silver down .90 as I write. Unusual moves for such a short period. Something going on.  :dontknow:

So by any reasonable measure, precious metals should be climbing, fast. What is the mechanism that allows them to depress the price, seemingly artificially?  :icon_scratch:

Futures markets, bankster controlled, and the MSM rumor mill.  Cyprus has to dump all it's gold is the latest story.

Offline WHD

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Re: Gold & Silver News Gold & Silver Being Pummeled This Morning
« Reply #400 on: April 12, 2013, 06:29:58 AM »
Gold down 35, Silver down .90 as I write. Unusual moves for such a short period. Something going on.  :dontknow:

So by any reasonable measure, precious metals should be climbing, fast. What is the mechanism that allows them to depress the price, seemingly artificially?  :icon_scratch:

Futures markets, bankster controlled, and the MSM rumor mill.  Cyprus has to dump all it's gold is the latest story.

Cyprus has to dump all it's gold? Is that a euphemism for thievery of the highest order?

So how does toying with the futures markets depress gold? Big money players all dive into speculative commodity futures that make the future appear bully?

Offline Eddie

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Re: Gold & Silver News
« Reply #401 on: April 12, 2013, 06:58:26 AM »
The mechanism is basically this:

1.  Large investment banks, acting with the consent of government at the highest levels, start selling into the paper market at ridiculously low prices....this immediately triggers stop loss mechanisms previously set by large traders, which causes a cascading market drop.

2. The markets are leveraged maybe 100 to 1. Most players never take delivery of physical metal they are supposedly buying, because they can cash out into fiat instantly..so it's a traders market.

3. Big banks, with basically bottomless pockets can drive the market down 1 or 2 percent (or more, sometimes) in a matter of minutes. Because they are causing this drop and know when it's going to stop (theoretically), they can then buy at the depressed level and ride the elevator back up.

4. Using huge leverage like that to move the markets is extremely risky, but the banks get away with it because they are backed up by their government and the Fed, and because their HFT algorithms, which are fraudulent, are winked at by the regulatory agencies, which are under corporate capture.

5. So they make money when the market goes up or down, riding the elevator, getting on and off ahead of the crowd.

Paul Mylchreest is the guy to read if you really want to get what's happening.

http://www.zerohedge.com/news/paul-mylchreest-presents-various-visual-case-studies-gold-price-manipulation
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Offline monsta666

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Re: Gold & Silver News
« Reply #402 on: April 12, 2013, 07:37:53 AM »
All valid points Eddie but I would argue that the banks do not have complete control over prices of various commodities. While I can understand they can manipulate the price of say gold to go up or down as desired, the price manipulation can only stay within a certain range. The issue I see with most derivatives is every trade will have a winner or loser. If the banks consistently win through shorts, futures, forwards etc. then the counter-party - in this case the gold bug - will have to eat the losses. Eventually if the gold bugs kept losing money then the only players in the table would be the banks so the game would sort of stop. This zero-sum type game means that the system cannot be too volatile.

The reason I do raise this issue is because quite often people make the opposite argument and claim that banks have kept oil prices artificially high at $90 a barrel by trading manipulation and if they stopped trading maliciously in paper oil the price would drop to its historical norm of $20-40. I don't believe this is possible because the banks, while powerful, do not have the means to drive prices so far from their true fundamental market value. Saying that, I will agree with you that since the banks hold most of the chips, and have the backing of the government who will supply them with extra chips if need be, they hold the strong cards in this casino. Unless the gold bugs have nerves or steel or are excellent poker players and can anticipate the banks move well they are likely to get burned. 

Offline Eddie

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Re: Gold & Silver News
« Reply #403 on: April 12, 2013, 07:53:53 AM »
No, I don't think they have complete control. It has gotten away from them and will again. But they have killed silver longs for the past two years. I am among the dead.
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Offline g

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There were many casualties following Friday's 4% gold rout, but none were hurt more than one-time hedge fund idol John Paulson, who according to estimates, lost more than $300 million of his own money in one day.

Per Bloomberg: "Paulson has roughly $9.5 billion invested across his hedge funds, of which about 85 percent is invested in gold share classes. Gold dropped 4.1 percent today, shaving about $328 million from his net worth on this bet alone." This is merely the latest insult to what has otherwise been a 3 year-long injury for Paulson and his few remaining investors, whose very inappropriately named Advantage Plus is among the bottom 10 hedge funds for the third year in a row. Yet despite being a one-hit wonder thanks to one lucrative idea (long ABX CDS) generated by one of his former employees (Pelegrini), Paulson still has been lucky enough to somehow amass a $10 billion personal fortune which can have a $300 million downswing in one day, even if it is in an asset class which eventually will go only one way - up. Unless, of course, like so many other fly by night billionaires, Paulson too hasn't somehow managed to lever up all his equity into numerous other downstream ventures, and where a $300 million blow up leads to margin calls and other terminal liquidity outcomes.

More:

    “The recent decline in gold prices has not changed our long-term thesis,” John Reade, a partner and gold strategist at Paulson & Co., said in an e-mailed statement. “We started investing in gold at $900 in April 2009 and while it’s down from its peak to $1500, it’s up considerably from our cost.”

     

    Paulson investors can choose between dollar-and gold- denominated versions for most of the firm’s funds. In addition losses from bullion’s decline, investors in Paulson & Co. funds, including the firm’s founder, lost about $62 million today on their gold-stock investments, based on holdings as of Dec. 31, 2012. New York-based Paulson & Co.’s biggest wagers in miners include a 7.35 percent stake in AngloGold Ashanti Ltd.

     

    Paulson’s Reade said gold will continue to appreciate in the long run because governments are pumping money into the economy at a rate not seen before.

     

    “Federal governments have been printing money at an unprecedented rate,” said Reade. “We expect the strengthening of the economy and stock market to cause money supply to rise more than real growth and eventually lead to inflation. It is this expectation of paper currency debasement which makes gold an attractive long-term investment for us.”

That said, one doesn't have to be a bull in gold and gold equities to position appropriately for the eventual inflationary outcome, whose arrival is only a matter of time now that not one but two central banks are injecting $80+ billion in fresh liquidity into the global markets every month.

Recall that gold bull Hugh Hendry said in October that while he is long gold, he is short gold equities, a trade which has generated substantial alpha, courtesy of the 40% plunge in GDX and associated gold miners (a pair trade we have supported incidentally), and one which may well continue generating additional returns should Japanese financial institutions be forced to continue selling off the yellow metal on margin concerns, due to the record surge in JGB volatility as we explained yesterday.

As for gold as an inflation hedge, here Paulson is certainly correct. The only question is when will the price suppression scheme of gold as an alternative currency finally end. Since various official organizations (such as the Troika) are currently doing all they can to buy the sovereign gold of insolvent nations at firesale prices, it is likely that the period of artificially suppressed prices may continue.

Which, incidentally, for all those who lament the recent price drop in gold, is a good thing: for those who see gold as an alternative currency to fiat, all the recent sell off (as well as alleged or real downward price manipulation) does is provide a lower cost basis for accumulating hard monetary assets. Which is something to be welcomed and not mourned, especially if one plans on holding on to said gold (or silver) as a currency, instead of merely converting it back into fiat at a higher price point, and thus as an asset (something all those who bought BitCoin at $260 and sold at $50 appear to have completely forgotten).

http://www.zerohedge.com/news/2013-04-13/john-paulson-loses-over-300-million-fridays-gold-tumble  :icon_study:

 

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