Wikileaks - does it affect you?

In November 2008 I predicted that we would see greater transparency in our governments, banks, corporations and that information and secrets that had been withheld would be revealed. And just two years later, that prediction has come true. Just look at Wikileaks that has come along and threatened the security of many countries as they reveal information about businesses and governments around the world. And they have only just got started…

This weekend, Amazon Europe went down for over half and hour. Amazon said that it was a hardware issue, but was it really? After all, Amazon was among the first US firms to pull the plug on WikiLeaks since it began publishing thousands of US diplomatic cables, withdrawing hosting services last week after being questioned by the US Senate Homeland Security Committee.

Julian Assange has just been released on bail of £240,000 and he stated that he plans to continue with WikiLeaks and with releasing sensitive information. Many countries want to see him killed as they see him as such a threat. Right now there are over 3000 hackers from around the world who have joined his cause. Probably more are signing up all the time. They have pledged to ruin Mastercard, Visa, Paypal, Amazon and any company that has rejected hosting their services. They are gathering momentum and this is just the beginning. What’s interesting is that they are so concerned with transparency and yet they are called the Anonymous Group and they themselves hide behind screen names. They are not transparent themselves.

The latest news is that one of Assange’s top men has split with him and started his own organisation called OpenLeaks. This organisation is going to feed bits of information to the media in dribs and drabs and then let the media do what they want with it. This then gets them off the hook and takes them away from the direct line of fire. We don’t know the power of these groups, but one sure thing is that they are just starting up. There is certainly much more to come.

We’ve had the riots in Greece, Ireland and the latest in the UK. The spontaneous attack on the Prince Charles and Camilla shows the degree of rage of the people against the ruling classes. The banks have had billions of dollars of bailout funds, yet they continue to post huge profits and give their management enormous bonuses, while the people are left with austerity measures, losing their homes, their money, their jobs…..is it any wonder that they are resorting to rioting at the injustice of it all? We are going to see many more revolts and uprisings round the globe.

Although you are seeing in play out in government, you will also see it play out in your personal life. What should you watch out for?

Be careful about what you share and with whom – whether it’s information, material goods, contact, anything. Be aware of what you post on social networking sites – that’s where transparency and security are really at risk. Don’t tell everyone that you are going away on such and such a day – chances are you will have a robbery when you get back.

If you do internet banking – check it out. Is it really safe? Not only your money, but how about your identity?

We are all vulnerable in one way or another.

Be careful of your privacy
Be aware of your security
Be observant
Don’t move too quickly as to what is being said to you
Guard what you say and to whom

All your private details should be kept secret. Anything that you have always felt very secure about will feel as if the rug is being pulled out from under you. Stay vigilant and don’t take anything for granted.

Gold to $2000 and silver to $50 Soon!!

The Federal Reserve is now onto QE2 and printing more and more money. There are consequences to each and every action and surely this will result in inflation down the line. Inflation has been described as a “painless” method through which a country devalues its currency. It’s like turning on the car in your garage and letting the carbon monoxide slowly put you to sleep. In most western countries the public is being dumbed down by the government run public schools. They count on the fact that 9 out of 10 people don’t understand what inflation means. It is an insidious way of robbing people of their hard-earned money and transferring it to the very rich people.

This is going to mean less money for pensioners and people who are conservatively saving their money, and more profit opportunities for the financial industry. As the saying goes: “the rich get richer and the poor get poorer” and that is certainly what we are seeing around the world.

As the work dries up, people can no longer find permanent employment, they need to rely on temporary work, maybe having two or three part time jobs, or contract work just to make ends meet. It can be harrowing for families who are just trying to survive in the current economic climate. But what they don’t realise is that the powers that be are making the situation even worse through their actions.

In the US, for example, they allowed the FASB to turn a blind eye to the actual values of the banks’ assets and let them value their assets at ridiculous prices that would never fetch those amounts if they were actually to sell them. And secondly the government stood behind Fannie Mae and Freddie Mac and this as resulted in over $1.5 trillion in debt obligations of these insolvent companies.

The situation is getting worse not better.

If you haven’t already done so, consider getting yourself some gold and silver bullion. Whilst the prices may look high, in the months and years today’s prices will look extremely inexpensive. So while you are still able to buy precious metals and have them in your possession, go ahead and do it. Don’t be kicking yourself saying that you wish you would have bought some sooner.

In my opinion as I said several years ago, we will see gold at $2000 an ounce and silver at $50 an ounce in the not too distant future.

Financial Predictions 2010-2011

Many of you will remember the financial predictions I made a couple of years ago. My first prediction was for gold to be going to $1500 – when it was just under $800 in October 2008. When it got to $1000 an ounce everyone said it would not be sustainable and it would surely drop. Then when it got above $1100 an ounce, everyone said that was impossible – and then it hit $1200 an ounce – and today it’s at $1345 an ounce on October 7th 2010 – just two years later!!

One of the theories about gold is that it holds its value over time. Indeed it is said that in King Nebuchadnezzar’s time an ounce of gold was worth 350 loaves of bread and depending on the unit of measurement that was used at that time, and the unit of measurement that we use today, that same ounce of gold might still be worth 350 loaves of bread. If we use the current price of gold against the current price of a loaf of bread – so for example an ounce of gold at the time of this writing is $1345 an ounce and the price of bread is about $3.85 a loaf, thus showing that the purchasing power of gold has not diminished since biblical times.

I predict that gold will go to $1650 within the next few months and within 2011 don’t be shocked when it goes to $2000. That’s my prediction for gold in the next 15 months.

Do you remember when I predicted that silver would go up tremendously in value when at the time it was only $12.00 an ounce. Today it is almost double that amount – only 2 years later at nearly $23.00 an ounce. I am predicting that within the next 14 months it will go to at least $37.50 - $45.50 an ounce.

Silver is used in so many different applications: the technology industry, computers, medical advancement and equipment and its uses continue to grow so the price of silver is likely to increase.

People will try to get you to invest in gold and silver funds or mining stocks. DON’T DO IT! Make sure you are in possession of your gold and silver coins. I am predicting that most of those mines will eventually play out and you will be left with paper that’s not worth anything at all.

I’m going to make another prediction – as many of you know, I used to own a very successful property investment business. When everyone said that the real estate market in the UK was going to collapse, I had faith it would not and during those years I was right and the real estate market did not collapse and my properties increased a great deal in value. The properties that my clients bought increased substantially in value.

So I am making another prediction: As we have already seen, real estate has taken a tremendous nosedive – and if you are thinking of investing in the deflated property market and getting a wonderful bargain now – my prediction is that within the next 15 to 24 months the market will topple another 10-20% below what it is now.

As I have told my clients, don’t buy that house you have got your eye on as an investment or you will lose money. Only buy that particular property if you intend to live in it. Then if the market drops, you won’t be relying on it for investment returns and you will be able to ride out the dips.

Diamonds will always be a good investment. Precious metals will go up and down but essentially they will still be a good investment. During the time that they go down in price, if you can afford to hold onto them, do so – because my prediction is that they will always retain their value just not necessarily at the time that you think that they should.

Anything that has to do with survival will be a good investment. Anything that has to do with health care will be a good investment. Anything that has to do with sustainable energy will be a good investment. If I had room on my back lawn I would put up a windmill to generate electricity. Anything that has to do with solar energy will be a good investment.

And just like playing poker – you have to know when to hold em and when to fold em!

In speaking of survival – don’t forget to buy my book on Surviving the Global Financial Crisis – you can get it as a download or you can buy it from http://www.amazon.com or on my website http://financemoneybusiness.com. It’s a small book chockfull of big ideas on how to survive and thrive in the upcoming changes.

Gold going higher and higher!! Don't miss the boat!

Gold going higher and higher – don’t miss the boat!!

Today gold is at USD$1340 an ounce and rising…….silver is at USD$22.80 and rising…..of course nothing goes up in a straight line and there may be dips and bumps along the way, however, you can be sure that gold will go over $1500 an ounce very soon. For those of you who are unaware of this one of the triggers for precious metals going higher in the not too distant future is the revelation that mortgage fraud is huge in the US and it is just being unraveled. It turns out that many banks do not have the proper title to the homes on which they are foreclosing and therefore they lack the legal right to foreclose. In a nutshell, the subprime lenders, trusts and banks did not keep good records and in two states there are now civil class action suits against them. This latest public information is yet another reason for the gold bull run we will see in the coming months.

Hold on tight, put your seatbelts on and get ready for the turbo charge!!

http://www.financemoneybusiness.com

Gold reaches new highs

The price of gold went over USD$1284 this week and this trend it set to continue. What are the reasons for this? It’s very likely that during the rest of 2010 we will see a worsening of the crisis. Billions upon billions of dollars have been swallowed up by the banks, billions and billions of dollars have been pumped into the economy to no avail. Unemployment hasn’t stopped growing, the US housing market remains depressed at historically low levels and one in five Americans is out of work. In the press this week there were reports that one in seven Americans is on the poverty line. This does not bode well. I think we are building up to a very dangerous time in the world economic and financial system.

Two years ago and repeatedly since then I have recommended that you put a good portion of your fiat money into gold and silver bullion and those that have heeded this advice have done very well so far. However, for those of you who think that gold is already much too high, think again. Yes, of course, like any precious metal it is volatile and it could go down to the $1100’s again, but it will surely rise again like the phoenix out of the ashes. So for those of you who are still on the fence, try to make a decision quickly as gold will go to $1500 and beyond within the next 6-9 months.

Could Gold Get Confiscated Again?

Another invasive law has passed in the US which states that any payments to a vendor of more than USD$600 will have to be reported to the IRS. I am anticipating that more and more material about this law will start appearing on the internet and in the press. This law will affect virtually everyone in the US who has business to business dealings. It could well lay the groundwork for a VAT tax similar to that in the UK and Europe or GST in NZ. This law could reignite fears that the US government could confiscate gold. This would make the government aware of its citizens gold transactions and make it more prone to confiscation.

Traditionally, precious metals dealing have provided a last haven of non-reportable financial transactions. With this current legislation, the status of gold and silver as an anonymous purchase is breached.

What can you do about it if you are a US citizen and you still want to buy gold and silver?

1. Use dips in the gold price to top off your portfolio before the 2012 proposed implementation date of this law
2. Document your purchases so that, should you ever be dragged in to explain the source of funds you used to buy your gold in a subsequent sale, once the regulation is in place, you are ready with the answer
3. Consider opening a safety deposit box at a reputable Canadian bank, then make occasional gold buying/storage trips up north or if you have relatives or friends in other countries, consider having them buy and store your gold for you.

My advice is that no matter where you live, you need to be aware of new legislation that could affect the safety of your ownership of precious metals. As our monetary system worsens, governments will be looking for all kinds of sneaky ways in which they can rob us of our wealth.

If you would like a personal consultation about how to protect your wealth during these uncertain times, please don't hesitate to get in touch: www.financemoneybusiness.com

Gold at new all time highs - where to from here?

In Dubai, a hotel has installed a vending machine for their clients to buy gold instantly. Prices are electronically displayed and change as the price of gold fluctuates during trading hours. Many European cities have made it more accessible for the average citizen to purchase gold. However, has gold become mainstream yet? Not really. Most people don’t know how to buy gold, what to buy, where to get it from, what the premiums are, who should store it…..instead they put their money into banks, stock markets, pension funds, mutual funds….indeed all “paper” assets. These paper assets eventually, in this environment of spiralling debt, may well become worthless. Gold has been a store of value for thousands of years. The Central Banks are buying up gold. For those of you who have not yet bought some gold, consider have a portion of your wealth in gold bullion just in case the whole system goes belly up.

Clients are asking me whether maybe its time to sell because gold has reached such a high level. My view is that with the uncertainties in Europe, from Greece, to Portugal, Spain and Ireland, the bankruptcy of at least 30 states in the US, the plummeting of the British currency and the ballooning of debts worldwide, we are far from complete with the current economic crisis. Some experts are predicting a huge drop in the price of gold – and indeed, I think we will see tremendous volatility in the months to come. However, for each fall, we will see even greater rises. Even at $1229 at the time of writing this blog, to some this seems very high. But it is likely we will look back on this figure and see it as a cheap entry into a metal that will continue to skyrocket.

If you don’t have to sell your gold, don’t. Stay the course. It will go to $1500 and beyond. This is just the beginning.

Dow over 11000 – is this a bubble or will it crash??

This is the question on the minds of many of my clients and students. There is no doubt that few thought that stock markets around the world would make such strong rallies. And these rallies are far from over. Vast amounts of money have been pumped into the system and I would expect the rallies to continue for several more months. The question is, when do you get out? There will be those who are experienced speculators and they will know when to take their money out. However, those who have been lured back into the stock markets due to low interest rates on savings worldwide, may find they are in for a huge shock. At some point, the markets will go down considerably, and those who have put their faith into a financial advisor, unit trust, mutual fund….may find that they are caught short and that they lose most of their capital. This is my greatest concern in the months to come. Those with experience and those who watch the markets avidly and research their results carefully, will probably do very well out of the extreme volatility to come. Those who rely on others for their information, who give over responsibility for their hard-earned savings to institutions would do well to consider having at least a portion of their wealth in physical gold and silver.

There is no currency that I can identify in monetary history that has been able to put up with the abuse the USD has had without a major currency crisis happening, a major devaluation. I expect this to happen within the next couple of years.

Just over a year ago, my target for gold was USD$2000 per ounce, now it is over $3000 per ounce. Even now, people are not waking up to the possibility of high inflation eroding their savings and assets.

Silver is more rare than gold and is so cheap at the moment – just $17.67 at the time of writing. Bearing in mind that silver went up to $50 an ounce in the 1980’s, surely it will go well above that in these turbulent times.

So please, if you have not already done so, get a small amount of gold and silver to protect yourself for the future upheavals in our global financial systems.

The Greek Financial Crisis - What's Happening Around the World?

The Greek Financial Crisis – Which Country Is Next?

It seems to be only a matter of time before all the currencies of the world become worthless. As they say, history repeats itself, and paper currencies have never survived in the past, so what makes you think they will survive today?
In the midst of global upheaval, massive and growing indebtedness, low interest rates and more speculative bubbles on the way, the vulnerability of fiat money grows by the day. And the average person still seems to be unaware of the possible consequences of this.

As governments keep on bailing out the banks, as countries and states have to be bailed out, where will it all end? Whoever thought that governments would support the idea that banks are “too big to fail?” I can understand that in connection with the utilitarian purposes of banks which is to provide a service to people so that they can exchange goods and services more easily. It’s a bit like the utility companies so they say, where we need to have electricity and gas, so the government steps in and bails them out if they get into trouble.

However, what about the speculative ventures of these huge financial institutions? Should taxpayers really have to come in and bail out these so-called financial wizards who have continued to risk their investor’s money in huge speculative deals that have gone bad? This cannot be right, but again, the average person doesn’t have a deep understanding of what is going on and in some ways although we haven’t got a physical war in most western countries, there is a war going on against us which is about robbing us blind through inflation, which reduces our purchasing power, through luring us into more debt through low interest rates, through tempting people who rely on interest on their savings into more speculative investments…it goes on and on and whilst the sheeple are still asleep and listening to mainstream media to idiotic statements like “the jobless recovery” and believing that we are coming out of a recession, nothing much will change and millions of people will lose huge amounts of their wealth overnight.

It’s happening folks. I was a bit too young to see what went on in my own family. My father took out an insurance policy in the 1950’s which would pay out $2000 25 years later. This was enough money to buy a house outright. He paid in faithfully year after year, but he wasn’t savvy enough to see that there was high inflation on the horizon, and he continued to pay into his policy. When it came to maturity, that $2000 wouldn’t even give him a 10% down payment on a property. All his wealth had been eroded. He never really recovered.

And we have a similar situation today. We are on the verge of economic breakdown, the powers that be are frantically trying to hold everything together, but sooner or later, as we all know, there are consequences for our actions.

This is going to get much much worse. Try to prepare for it.
I have written a book “handbook for surviving the global financial crisis” – just a pocketbook sized publication to give you tips so you can not only survive but thrive in the coming changes.

Remember, get out of debt, don’t do anything speculative unless you really know what you are doing, get some physical gold and silver if you haven’t already done so, and store some supplies of food and water in case of an emergency.

It’s advisable to take action sooner rather than later – once a panic starts it will be much more difficult to get supplies. Prepare for the worst and hope for the best.

Understanding your finances

So much is written about our money, our economy, markets, productivity, wages, salaries, bankers, bonuses, riches and poverty – how do we wade through this quagmire of data to find the nuggets of information that can transform and help us in our everyday lives?
Who is right? Is anyone right?
In the midst of online arguments between such “greats” as Robert Kiyosaki of “Rich Dad, Poor Dad” and Suze Orman, a financial coach and author – criticizing one another’s approaches to money and finance; in the midst of countries like Iceland, Ireland and Greece being bankrupt to whole states in the US such as California and Michigan being on the verge of bankruptcy – what can you as the average person do?

Here are some simple rules of thumb which can help guide you through:

1. Don’t believe all you see and hear in the media. Most everyone has an agenda and you must analyse carefully the information they are giving. For example, recently, George Soros publicly announced that gold was in a bubble and was likely to fall in price soon. The minute he did this, the price of gold did fall and he was reported to have purchased a huge amount of gold at the cheaper price.
2. With any books you read, remember that no one person has all the answers, and what they are writing about – whilst it may appeal to the majority – may not be applicable or relevant to your personal situation.
3. Most of us don’t like change, but in the current economic climate, we need to be ready to turn on a dime. Governments around the world are bringing in new laws every week, laws are changing on taxes, employment…you need to stay abreast of these changes in order to be one step ahead of possible disaster.
4. Be conservative. Make sure you have planned for the worst. Ensure you have at least six months living expenses in cash, six months food and water stored up and some physical gold and silver. Pay off all your debts and only if you have some money left over after all this preparation, should you consider investing in more risky ventures such as stock markets or property. I have so many clients who want to be full time traders on the stock market. They seem to see it as a quick way to get rich. I see too many people losing more than they can afford and they unnecessarily put their families and homes in jeopardy. Best to play it safe. Life moves in cycles – as long as you are in tune with the cycle, then you can benefit from the changes. If you go against that trend, then you may end up in severe financial difficulties.

Economic Recovery or Economic Collapse?

The media would have us believe that we are just about to come out of recession and very soon we will be on the road to recovery. Yet, I speak to more and more people who are feeling very uneasy about the situation in their respective countries. From the US, to Europe, to Hong Kong, to China, India and Japan, to Russia, Australia and New Zealand, people all over the world are feeling the pinch and cannot bring themselves to trust their politicians and their bankers.

So what is the situation? Of course, there are extremes of opinion on both sides. From Gerald Celente who spoke of the Panic of 2008, the Collapse of 2009 and the Total Breakdown of 2010 to governments around the world who are talking up the economy and the end of the housing collapse and the bright future ahead of us. While at the same time, these governments are cutting costs as never before, we have states like California, Michigan and others that are bankrupt and having to issue IOU’s to their employees; in the UK the cost-cutting measures to public services are the most drastic for decades. The US promised to kerb their deficits, yet within a few months the deficit has gone from 9 trillion dollars to over 13 trillion.

So isn’t the writing on the wall? Shouldn’t we be taking notice and starting to prepare for a possible total breakdown of world economy and trade?

In my opinion, there is much worse to come and it is best to be prepared physically, emotionally and mentally. Even if things turn out to be much better than I outline here, then your preparations will not have been in vain – you will just have a store of goods that you can use at your leisure and you will probably have bought them at greatly reduced prices.

Here are my top tips:
- get yourself out of paper currencies. That means if you have all your money in a bank, make sure that you put some of it into gold and silver. That doesn’t mean paper gold and silver as in stocks and shares – it means the actual coins and bars.
- start storing up paper goods, toiletries, canned foods, dehydrated foods, water
- make sure you have at least one other form of heating and lighting that doesn’t depend on electricity
- get a wind-up radio. With the increased threats of tsunamis, earthquakes and tornadoes it is wise to have a radio that you can take with you so that if you have to evacuate your home, you can keep up to date with current events
- connect with people in your community and start to grow your own food and become as self-sufficient as you possibly can

Hold onto your hats because the economy is likely to tumble severely towards the fall of 2010. We haven’t seen the half of it yet. I wish you and your loved ones the best of luck. Take care.

Silver - how and when to buy it? Will it go up in value?

Look in your change purse, do you see any gold coins? Chances are, the answer is no. Now look in your change purse and see if there are any silver coins. Chances are, you have lots of them. And that may be the difference between why gold looks more valuable than silver. Of course there are deeper issues why gold is more valuable than silver, but just on the surface, how frequently do we run across gold coins as opposed to how frequently we run across silver coins, silver looks almost inconsequential. But are we giving silver enough credit for being a valuable element? In our everyday life do we think about the innumerable uses for silver? When we look at the electronics in our homes, do we ever stop to think that silver is used in our laptops, our pc’s our cellphones, our stereo equipment, our medical devices, our mirrors, our silverware, our cameras and photographic equipment, for solar energy, water purification… chances are we don’t give this a thought. For utilitarian purposes, silver should be far more valuable than gold. The reality, however, is just the opposite. Historically, silver has been one twelfth the value of gold. In China, during the Ming Dynasty, silver rose to a quarter of the value of gold, and during Egyptian times, gold and silver were of equal value. In January 1979, gold was at $210.00 an ounce, while silver was at $5.90 an ounce. This meant that gold was 35 times the value of silver i.e. it took 35 silver coins to buy one gold coin.
In January 1980 both gold and silver peaked. Gold went to $850.00 an ounce while silver rose to over $50.00 an ounce. So by the beginning of 1980, it only took 17 ounces of silver to buy one ounce of gold.
Today, however, in February 2010, gold is at $1089 an ounce while silver is just over $15.00 an ounce – so it takes over 70 silver coins to buy just one ounce of gold.

Most silver supplies do not come from silver mining operations. Silver is generally a by-product of mining for gold, lead, zinc and copper. Silver producers actually only produce about 25% of the total silver production, so if you could freeze the demand for silver where it is today, and the silver producers were able to double their production capacity, it would take at least fifteen or twenty years to get the silver stocks back to the levels they were at in 1990.

When you look in your change purse and you see a lot of silver coins, you say to yourself, there’s a tremendous amount of silver in the world. And that’s why silver is so cheap. However, the reverse is true. It’s almost like an optical illusion where we think silver is so plentiful, but the reality is that silver is very scarce. In the United States until 1964, quarters and dimes were made of 90% silver. Starting with 1964, those same silver coins are now being made of copper, zinc and tin.

As of this writing, silver is being very seriously undervalued and the small investor can get in very very cheaply between and $15 and $19 an ounce before commission. But don’t expect silver to stay at these low prices. Due to the scarcity of this metal, it will probably soar in value in the not too distant future. And the investor can use it either as a hedge against the failing economy or to get a remarkable return on his investment.

So in what quantities should you buy your silver? The small investor would do better buying the one ounce silver coins rather than the 10 ounce or 100 ounce silver bars. If paper money becomes worthless and banks fail, the small investor has more of a chance of purchasing household necessities with one ounce silver coins than with 10 ounce or 100 ounce bars of silver.

The thing to watch out for with many of the dealers is their shipping times. If someone has a very long shipping time, be very careful. Coin dealers have been known to go bankrupt as they take risks. If they are sending you the coins by mail, make sure you tell the coin dealer to insure them and have you sign for the package. If possible, take out cash from your bank, go to your coin dealer, pick up the coins and have them in your hot little hand. If not, try to find someone who is reputable, ask around. There are websites that you can buy silver from – but you can never be sure, because the only way to have it is in your possession.
However, if you are buying silver over the internet, don’t buy everything from one dealer if you can help it. In smaller countries there are only a few dealers so your choice may be limited, but somewhere like the US, there are many dealers so you will have a choice. There are no restrictions as to how much you can buy and as of this writing, there is no taxation in these coins and they never lose their intrinsic value. There are no restrictions as to how much you can buy and as of this writing, there is no taxation in these coins and they never lose their intrinsic value. From generation to generation, to century to century, from civilisation to civilisation, to all parts of the world, to every culture, to all of humankind, gold and silver have been and always will be a negotiable commodity and a store of value.

The issue with silver is storage because it is bulky and heavy. Security may be an issue so think in terms of where you could hide that amount of coins. On a humorous note, there was an ad for a wooden box marked coins. In hard times, just visualise someone coming into your house, seeing the box marked coins and just walking off with it. If you’re going to store gold and silver coins, try to be a whole lot less obvious.

Financial advisor, Michael Maloney, says in his book “Guide to Investing in Gold and Silver”

“For 5000 years, gold and silver have been the only assets that have never failed. Because they are tangible assets of inherent value their purchasing power will never fall to zero. They are financial assets that can be completely private and not part of the financial system. Although you have to declare any capital gains on your tax return in many countries, it is still a private investment. Real estate, on the other hand requires the financial system to transfer title. Gold and silver do not.”

Financial advisors seldom advise their clients to buy gold and silver because they don’t make any commission as they do with stocks, mutual funds, unit trusts and pensions. For the small investor, this is a blessing. He gets to eliminate the middleman. At this writing, there isn’t a long way that silver can fall and the logical assumption is that it can only go up. If ever there was a need to protect yourself against a failing economy, the time is now. And if ever there was an optimum time to buy silver, that time is now.

Gold Bullion and Numismatic Coins - How Should You Own Gold?

Today's blog will examine numismatic coins otherwise known as collectibles and the issue of how collectible is a collectible coin. The word numismatic is derived from the Greek numisma, meaning “current coin.” We are also going to be looking at the premiums that are connected with these coins. We’ll explore the issue of under what conditions gold coins could be confiscated, whether it’s too late to buy gold now and what are the warning signs to tell us when it’s time to sell our gold?

Under ordinary circumstances, I probably wouldn’t be devoting much time to the subject of numismatic coins, because it’s a very small part of gold collecting. But the main reason that I want to broach this subject is because thousands of people in various parts of the world have bought or inherited collectible coins.

This was brought home to bear when I was talking to one of my friends about the advantages of buying gold and she told me she had a very large collection of gold coins that go way back into the early 1800’s. They have been handed down from generation to generation in her family – and I said to her, are you going to be selling it? And she said – oh no – I’m going to be leaving it for my grandchildren. This was a very interesting concept to me because in the United States, gold bullion was confiscated from 1933 to 1971. These laws had no relevance in her life because she had no intention of selling her gold. If we wanted to do simple maths, based on what was paid for the gold in the early 1800’s to what it’s worth today, should she have decided to sell the gold now, she would be a millionaire many times over.

The downside of this is if my friend tried to sell these coins when there is a danger of imminent economic collapse, and many of these collections come on the market at the same time, she may be unable to sell them. But since she has no intention of selling them, this doesn’t apply to her. On the other hand, there are thousands of collectors throughout the world, who have in their collections coins that are not attached to sentimentality, and those collectors need to be aware that in a serious economic downturn, when people have to raise money very quickly, you may have hundreds of these collections on the market at the same time – and at this point, you might find they are not a very good investment, as you cannot sell them or you might have to sell them at a huge loss. There is a limited market for rare coins. …there is a saying that goes something like this: “The only thing rarer than a rare coin. ….is a buyer for a rare coin.”

With numismatic coins, you are paying many times the silver or gold content. You are paying for the rarity and for how much someone else covets that particular coin. So if you want to sell, you need to find the exact buyer for that coin, whereas with the bullion market which is worldwide and tradeable, you will always have buyers for your physical gold.

Let’s look at some of the reasons why numismatic coins may not be your best investment. While with gold bullion, you are just paying for the content of the metal and the dealer’s premium. With numismatic coins you are paying not only for the metal and the dealer’s profit, but on top of that you are also paying a numismatic premium, which is for the supposed rarity of the coin. Then you better keep your fingers crossed that that coin is really rare and will keep its value through the years.

If you have invested in gold bullion and the price rises by 5-10%, you are already close to being in profit. On the other hand, if you have invested in numismatic coins, the dealer has already charged you 15-100% on your purchase and the price needs to have gone up by at least 15-100% for you just to break even, which may be why, I read a quote that went something like this:

In numismatics, lots of money is made selling rare coins to noncollectors, and whenever a noncollector buys a collector’s items, the future loss of his capital is almost certainly guaranteed.”

There are many theories on investments. I’m going to take poetic license with one of Warren Buffett’s theories. He once said in reference to the stock market: “Put all your eggs in one basket and then watch that basket very carefully.” I took poetic license and decided that his theory works beautifully with the investment of gold. I would recommend putting all my gold in one basket, primarily because I wouldn’t have to watch it on a daily basis as carefully as you would the stock market. You can see more or less the gold trends before you actually have to make a decision, whereas with the stock market you really have to be paying attention each day. I’d recommend setting up an action plan that you can live with and then stick to it. If your action plan is to put most of your money into gold, stay with that plan. If your action plan is to diversify, then research carefully the areas in which you want to diversify and then stick to that plan. But whatever you decide to do, have a clear objective in mind and stick with it.

To summarise:
Numismatic coins

- limited market
- can be difficult to sell and make a profit
- attract high premiums from dealers from 15-100% or more
- you need to know what you are doing

Gold bullion

- worldwide market
- easy to buy and sell
- price only needs to rise by 5-10% and you are nearly in profit

Gold - is it too late to buy?

Today we’re going to be talking about the ABC’s of gold – how to buy it, how to sell it, the advantages, the disadvantages and why it is important to consider it as part of your portfolio.

From the earliest days of recorded history, what is that makes gold the most valuable commodity in the world?
According to Dr. Claude Mariottini, Professor of Old Testament in Illinois, in the US,
“It is a fact that in times of economic uncertainties, many people invest in gold as a way of dealing with the unforeseen problems caused by inflation or recession.

It is also a fact that in the ancient past kings and conquerors were fascinated with gold, not only as currency or as a means of commerce and trade, but for the beauty and splendor it conveyed to its owners.” One of the theories that he mentions is that in King Nebuchadnezzar’s time an ounce of gold was worth 350 loaves of bread and depending on the unit of measurement that was used at that time, and the unit of measurement that we use today, that same ounce of gold might still be worth 350 loaves of bread. If we use the current price of gold against the current price of a loaf of bread – so for example an ounce of gold at the time of this writing is $1100 an ounce and the price of bread is just over $3.00 a loaf, thus showing that the purchasing power of gold has not diminished since biblical times.

It’s astounding that in more than 2000 years, gold is still being used for the same things today as it was then – as a hedge against inflation, for commerce, beauty currency and insurance against the possibility of total economic collapse.

In the East, people are used to owning gold. In the West, governments and corporations own gold. In China for example, gold is sold nationally by the banks, in the West, however, you cannot just go into any bank and buy gold. It is sold and bought by bullion dealers and mints.

We know that major changes are taking place if a department store like Harrods in the UK is now selling gold coins and bars to the public.

So, should you own gold, how do you buy gold, what are the advantages what are the disadvantages?

The advantages

Coins and small bars are generally a liquid market, and you can find sellers and buyers when you need them. Easy to cash in.

They are relatively accessible to smaller investors

Insurance against collapse of economy

In volatile times it has always proved to be a safe haven

You are in control of your money and are not subject to a bank going bust or having to freeze your assets, the government being unable to guarantee your funds and thus lose all your money.

You have got cash if a good opportunity arises – you can move quickly

It is tradeable around the world

They are mostly recognisable, which makes them exchangeable for goods in some circumstances.

Just recently, I saw an advert on the internet for a landlord who wanted to rent out his house. He didn’t state the dollar amount, what he asked instead was for a certain number of gold coins as payment. If you will comb through the adverts on the internet, you might be surprised to see many of these adverts are now offering goods in exchange for gold coins. So as the expression goes, “these times are a-changing.”

Disadvantages of having gold

Hard to store safely

It may stay at the same price for years and years

Governments manipulate the price

If gold becomes really valuable gold coin usage is made illegal by governments, or is so heavily taxed and constrained that it is no longer a viable option. For example, the government may tax the sale of gold bullion at 50%. Bullion on a black market would be just as hard to sell without getting cheated. What you are unable to sell, you don’t really own.
(in April 1933, FDR forced US citizens to turn in their gold – it was under a threat of a 10 year prison sentence and/or a $10000 fine. Then in January 1934 just 9 months later he raised the price from $20.67 per ounce to $35.00 per ounce – an increase of 69%).

There can be a considerable premium to purchase the gold – anywhere from 4-10% or even more in times of scarcity – so you have to build this into your costs.

There are fakes and these are usually only spotted by dealers

Currency fluctuations can affect the price in your country

To summarise:
Advantages of owning gold
- easy to sell and buy
- accessible to small investors
- insurance against collapse of economy
- you have control over your money
- tradeable around the world not only for cash, but also for goods and services

Disadvantages of owning gold
- hard to store safely
- may be confiscated or taxed by governments
- premium of at least 4% to pay to the bullion dealer when you buy
- there are fakes out there so buy from a reputable dealer

When it comes to buying gold, the average person doesn’t really know how to get started. There are a number of gold bullion coins in circulation in the world. The attraction of these is that they retain near full bullion value regardless of either change of government or being transported outside their country of issue.
So the starting point would be to know which gold coins are sold in your country.

Major bullion coins:
Issuing country Coin
Australia Nugget
Canada Maple
New Zealand Kiwi
South Africa Krugerrand
United Kingdom Britannia or Sovereign
United States Eagle

For simplicity’s sake, let’s look at the country in which you are living. For the moment, forget about buying coins from other countries. Let’s just concentrate on what will be the easiest way for you to start your collection. If you know someone who routinely buys gold and silver and has a reputable dealer, that would be your starting place. If not, I would strongly suggest that you start researching the dealers in your area and do some comparison shopping. Find out how long they have been in business, find out if they have ever gone bankrupt, if they have ever had any lawsuits against them, if they follow through on what they say. Find out how much of a premium they charge you for purchasing your gold. Most dealers charge you a premium up front when you buy the gold, but do not charge you at the other end when you sell it back to them. But since things have a way of changing rapidly, you should still question whether or not you are being charged at the other end too.

Other ways of buying gold: gold mining shares – too risky as the quantity of a mine’s reserves is never accurately known. There can be unforeseen engineering problems in extracting ore. These can increase production costs and thus eat into the mine’s profitability.
The mine can be all played out and there is no more gold there
They are traded on the stock market and can just as easily disappear off the boards and you can lose all your money.

Egold
Now, let’s take a look at buying gold over the internet – or otherwise known as E-gold. There are various companies who offer online purchasing and selling of gold bullion.

What are the advantages and disadvantages of this method of investing in gold?

Advantages
You can buy very small quantities of gold at relatively economic price– you do not have to buy in ounces, but you can purchase grams of gold which at the time of writing is $35.00 per gram.

You can buy and sell your gold 24/7 and are not limited to store opening hours of the bullion dealers.

The premiums charged for purchasing the gold are much lower than bullion dealers or mints. Typically you will pay between 2-3% of the purchase price.

You can either allow them to keep your gold in their depository or, depending on where you live in the world, you can take delivery of your gold. These companies are currently based in the northern hemisphere and they will not deliver gold to the southern hemisphere at present.

You do not have to spend your gold grams. You can sit on them or you can sell them in return for straight cash.

Disadvantages of e-gold account:
There is a degree of intermediation in the holding. Your gold is the legal property of trustees who have a fiduciary duty to you. This means that it is not quite the same as outright ownership of the gold in your hot little hand.

There could be security issues in that a hacker may get into your account and make an unauthorised payment. Similar to the risks of doing internet banking.

Other ways: gold futures, gold backed shares – e.g. ETF’s – too risky for the average investor
Jewellery
It is a profitable business for those who buy at wholesale and sell at retail. But it’s a poor way of investing in gold.

Advantages:
Enjoyment of wearing it
Very easy to buy

Disadvantages
Acquisition costs are high. Retail jewellery is often marked up by 300% or more in the shops
The real value of jewellery is in the gemstones, the design and craftsmanship. These greatly outrank the value of the gold
All pieces are different and their values are subjective. If you don’t have experience you probably won’t know a fair value.
It is easily stolen.

Ways of buying gold:
Bullion dealers and mints
Gold mining shares
Gold shares – ETF’s (Exchange Traded Funds)
Egold
Jewellery

In conclusion, make sure that whoever you buy your gold from is a dealer or a business that has been in operation for a long time, that they have a good reputation and that they are not fly-by-nights.

Savings And Investments - How Can You Protect Yourself?

We are going to see vast fluctuations in the stock markets, in the housing markets, in the automobile industry, in technology, in the banking and financial sectors, in governments, and in international trade and currencies. And 2010 is just the beginning of these major changes. More and more people are starting to question whether their investments are solid and how they can best protect their assets.

For those of you who feel you don’t have assets to protect, you might be very surprised. Most people think of assets that need to be protected as millions or billions of dollars of pounds or euros or yen. The truth of the matter is that however much money you have, be it $100 or $100 trillion, they are your assets. And because they are your assets you need to be looking for ways to hold onto them and hopefully to make them grow.

With so many people being affected by the downturn economy and many having either lost substantial sums of money in financial institutions, banks, stocks and shares, or had their funds frozen, or had to take 60c or less on the dollar, it’s very difficult to know where to put your money and how to keep it safe.

After all, if the banks didn’t know how to look after our money, and they are supposed to be the experts, who can? In the old days, you used to be able to put your money into the bank and you knew it would be safe as houses.
Nowadays, with banks having behaved so irresponsibly – by lending to people who were not creditworthy – some were even on unemployment benefits, by lending them up to 100% or even more of the value of a property, and yet paying themselves millions if not billions of dollars in bonuses. This is one of the main reasons why we are in such a serious global financial crisis.

So what are the various options available to you?

Let’s start with the banks.
What are the advantages and disadvantages of leaving your money in a bank?
The advantages:
You do not have to hold cash on your person or in your home where it might be stolen or destroyed, (e.g. I knew an old man who used to sew his cash into the hem of the curtains in his house. He thought this was safer than having all his money in the bank. Unfortunately, he had a fire and the curtains with all his money inside them went up in smoke. So if you are storing cash, try to put it somewhere it will not be easily discovered or damaged.

You earn at least a little interest on your money. However, with most countries on very low interest rates at the moment, you might be lucky if you earn 2% or more.

By using the bank’s credit card and debit card facilities, you have the flexibility to buy goods online and by telephone from anywhere in the world. You would not have that freedom if you didn’t have a bank account.

There are several disadvantages in this current economic climate:
Governments around the world have stepped in to guarantee bank deposits – this means that should a bank get into trouble and be unable to continue trading, the government will bail it out so that it doesn’t collapse and you don’t lose all your money. This has already happened to so many financial institutions: in the UK, Northern Rock had to be rescued, in the US, Citigroup, Bank of America, Morgan Stanley, Wells Fargo, Indymac, AIG, to name but a few…

However, given the volatility of the world economy, there is no ultimate guarantee that the governments will be able to fulfil their promise to rescue all the banks that might need help. So I would advise you to spread your money around different financial institutions. At least that way, you don’t have all your eggs in one basket. Remember to trust your intuition if you feel that a particular bank is unstable and take your money out immediately.

Quite a few banks are persuading customers to tie up their money for 1 yr, 3yrs or 5 yrs or more in a term account or a cd. This generally pays a little more interest than if the money was immediately available. However, before doing this, calculate exactly how much extra money you will be making and whether it is worth the extra risk. When is your interest paid on the deposit – do you have to wait until the end of the term? Or is it paid on a monthly basis? What happens if interest rates go up and your money is tied in for several years? Will the bank increase the rate or could you be stuck on your original lower rate? Let’s say you go in at 3% and you’ve taken a 5 year term deposit or cd with the bank. It might be worth your while to withdraw your money and take the penalty and then reinvest at the higher interest rate.

To summarise:

Advantages of using a bank:
- you don’t have to risk holding cash
- you earn some interest on your money
- you get debit and/or credit cards which give you flexibility

Disadvantages of using a bank:
- in this downturn economy not all banks are safe
- government guarantees may not be honoured

Tips:
- try not to tie yourself into any deals even if it means you lose a little interest
- trust your intuition – if you don’t feel safe with a particular bank, take your money out sooner rather than later

Financial Predictions for 2010

Trends for 2010 and Beyond – Financial Predictions
- the Dow Jones Index will go down to 9000 or lower
- gold will go to USD$1500 or more per ounce
- silver will go to USD$22 or more per ounce
- the US dollar will fall to an all-time low
- unemployment in the US will rise to at least 15%
- more bailouts, more debt, more printing of money by governments around the world
- people power e.g. X Factor winner did not get the Xmas number one in the UK - Rage Against the Machine won because of people power on the internet. We will see much more of this.
- radical changes in the law
- taxes and more taxes and people’s revolts
- business and banking leaders will be disgraced publicly
- a major surprise e.g. terrorist attack, bird flu or some epidemic, a war, a revolution - but it will be unexpected
- a major medical breakthrough that will be beneficial for the masses
- more space exploration of galaxies, aliens and discoveries that are exciting and lead us onto a new level of consciousness and awareness
- most people ignoring the concerns about the economy and not being prepared for the changes
- we will have one world currency within the next decade
- we will have another major political party in the US within the next 4-5 years

Over the next decade we will see major changes. The huge schism between the haves and have-nots will increase and there will be much civil unrest. Some of my predictions will happen in 2010, while others such as the world currency will take longer to come about. However, the above information gives you some idea of the changes ahead.
Wishing you all the very best for the New Year!