Real Money Perspectives 2008
Gold's 'Public Era' Arrives on Time!
By Craig R. Smith, SATC CEO
2008: Your Golden Opportunity
By Dr. Fred Goldstein, Sr. Broker, SATC
Answers to the Top 10 Economic Questions of 2008
Craig R. Smith Interview.
Government Economic Stimulus a Bad Idea
Craig R. Smith on FOX News
47 Economists Expect $2,200/ oz. Gold
Sooner Than You Think
Private Wealth: A Thing of the Past
By David Bradshaw, Editor, RMP
Gold: a Conservative Buy with Liberal Benefits
By Dr. Michael Savage, host of the Savage Nation
Flight to Gold as Investors Lose Faith in Money
By Ambrose Evans-Pritchard, London Telegraph
Get Up to Speed Fast on the 21st Century Gold Rush
Uncle Sam Allows A Gold IRA to Cut Your Taxes!
Frequently Asked Questions
A Financial Word: If You Love Me, Let Me Struggle
By. Craig R. Smith
Swiss America Credentials
Gold's Public Era Arrives on Time!
By Craig R. Smith, CEO, Swiss America
Gold had a stunning start in 2008, soaring 10% in January (reaching above $925 an ounce) on the heels of more than 30% growth in 2007! Why?
The financial markets are betting the Federal Reserve will slash interest rates, weakening the dollar and boosting the investment appeal of gold further in 2008.
I'm now convinced the world will witness a gold price explosion this year, propelling the shiny yellow metal into the next and most exciting "public era" of this long-term bull market.
Back in January 2007, when gold was still near $600/ oz., we reported this would be the year the 21st century gold rush hit the mainstream and gold prices would rise to between $750-$850/ oz. And so it did!
"The big lure to gold continues to be its tendency to hold value when the rest of the investment picture turns septic. As it's done of late, with U.S. inflation measures hitting multi-decade highs, U.S. stocks starting off 2008 with their biggest drop in 30 years and the global outlook looking both inflationary and at risk of a slowdown," reports Marketwatch.com.
Even conservative bankers like Citigroup are now calling for $1,000 gold in 2008.
"Gold prices will test a record $1,000 an ounce this year, boosted by growing investment interest, safe-haven demand and strong market fundamentals. We believe gold has entered a new investment-driven phase. Catalysts are rotating from safe-haven demand, to currencies, to the deflation trade, as new buyers enter the market," said John Hill, director, metals research, at Citigroup in San Francisco to Reuters.
"The rise in gold prices to this point has been steady and sustainable. For much of its rise, gold has been in a stealth bull market. But the gold price advance is no longer stealth. The chart says it wants to go parabolic," reports The Daily Reckoning.
Since the new century began I've been proclaiming the new gold rush, but mainstream America has been slow to listen. Since we first released Rediscovering Gold in the 21st Century in 2001 we've added a new chapter each day online at www.swissamerica.com and a new summary every year with our annual Real Money Perspectives newsletter. <
For over a quarter century we've produced newsletters and CDs free to the public. In 2007, to help us celebrate our 25th anniversary, we released a new TV special GOLD 101 with Pat Boone compacting 25 years of experience into 25 minutes (if that's possible).
There's no longer any excuse for NOT owning gold. Even if you are financially stretched you can still protect your retirement funds by converting your IRA into precious metals, without any new contributions required!
2008: Your Golden Opportunity
By Dr. Fred Goldstein, Sr. Broker
Jan. 15, 2008
A proactive investor is an individual whom is able to assess current economic trends and subsequently take advantage of probable outcomes. A recent example would be wealthy investors like Warren Buffet diversifying out of US dollars and moving into foreign currencies. Out strategy at Swiss America is helping proactive investors acquire quality tangible gold coins while the gold price is in a major uptrend.
While owning gold in the form of commodity options, ETFs, and mining shares may be beneficial, taking possession of gold coins is unique. The benefits of physical ownership include intergenerational wealth transfer, personal control, privacy and non-exchange (Wall Street and Comex) dependency. For some, taking physical ownership is awkward. I will make the case that the benefits of owning certain gold coins will outweigh the minor difficulties of storage.
Many economists are predicting a recession in 2008 but this does not preclude good investment opportunities for astute investors. The probability is high that the upward trend in commodities will continue as the US dollar weakens.
Adding to this is the growing demand for oil and base metals from Asia's largest growing economies in China and India. As these two countries, especially China, continue to increase their exports to the West, they accumulate large amounts of US dollars. As they move these dollars into commodities this exacerbates the price action of gold and the US dollar.
With total world gold mine production around 2,500 tons and total world gold consumption at 4,000 tons, gold should continue to rise and catch up to other commodities, such as oil and platinum. In nominal terms, oil has more than doubled from the 1979 high and platinum is 50% above its 1980 high. Gold has just broken its 1980 high of $850/oz. Many analysts contend that $100/barrel oil and $1,550/oz platinum should correspond to $1,500/ oz gold.
If you have not yet taken action in acquiring a position in gold you now have an opportunity to but high quality U.S. gold coins at historically low collectible (or extrinsic) premiums, relative to melt (or intrinsic) values.
Although the gold price moved up over 30% in 2007 and is presently at all time highs (relative to Jan 1980), numismatic or generic "Double Eagles" are below their 2006 highs, and well below their all time highs in 1988-89. Following gold correction in May/June 2006, many Double Eagles fell over 30%. Due to the public's lackluster interest in gold coins as well as some negative sentiment expressed in the media, Double Eagle prices have been slow to recover.
We have seen the beginnings of a turnaround since August 2007 as dealer inventories are being pared down and prices are beginning to rise. Although some Double Eagle numismatic coins have more than tripled since 2001, we believe prices are too low relative to gold bullion.
Richard Maybury writes in his Sept 2007 Early Warning Report, p.8, "After gold punches above $850 and stays there, numismatics will catch up with and eventually far surpass what the precious metals and most other non-dollar assets have done so far. Numismatics are probably the least expensive non-dollar asset out there at this time-the most extreme laggards- and, therefore the best bargains, the ones with the most potential".
What he fails to mention is the benchmark the US Government established in the 2001 Patriot Act. Numismatic coins with a 50% collectible value are now recognized as a "non-covered" product; while bullion coins are a covered product. Based on this benchmark, I believe it is fair to conclude that high quality Double Eagles are a more private way to own gold than bullion coins.
At Swiss America we often refer to the phrase "the ratio". This is the number of ounces of gold it takes to buy a high quality $20 Double Eagle. Today the ratio is under 3:1 to acquire an MS-65 $20 Double Eagle; the lowest it has been since we opened our doors for business in May 1982. (Note:the ratio topped 13:1 in the summer of 1988).
It is out belief that as the gold price continues to rise the public will get more involved and once again Double Eagle premiums and prices will skyrocket. With premiums at or near record lows, we believe the downside risk is limited with the upside potential is enormous.
If you have not yet gotten involved in the gold bull market and feel you have missed the boat, think again. We believe over the next several years, we just might see a gold coin buying panic such as the world has never seen before.
Craig Smith Answers the Top 10 Economic Questions in 2008
Craig Smith, founder and CEO of Swiss America is a weekly commentator at Worldnetdaily.com and a frequent guest on radio and TV discussing global economic trends. Here is an overview of what Mr. Smith believes lies ahead for the U.S. economy and markets in 2008.
1. Most agree U.S. economic growth is now slowing. The question is by how much and could it stall? Will more Federal Reserve interest rate cuts give us a soft landing and avoid a recession?
The U.S. economy has been amazingly resilient over the last year, given the rising cost of living and the housing crash. 2008 will be a year of surprises I believe. As for the Fed, they are systematically driving the dollar down to help save the housing market and the economy, but this is just a quick-fix. The Fed has bowed to public welfarism and Wall Street market pressures.
Helicopter Ben Bernanke may yet live up to his name as the Fed is now caught in an extreme Catch-22. If they cut rates the dollar collapses, if they raise rates the U.S. economy collapses under the weight of either $900B in bad mortgage debt or $900B in consumer credit card debt.
This means we could be in for either a debt-induced depression, if the economy stalls or a Wiemar Republic- style hyper-inflation, if the Fed prints too much money. This is a worst case scenario. Best case scenario would be the U.S. entering a mild recession in 2008 with steadily rising inflation. This deadly combination is known as stagflation.
Americans are losing trust and faith in their government. They believe in the American Dream, but fear they may face a political and economic nightmare in 2008. The key to restoring hope for the future of the U.S. economy is to get control of the budget. The more we spend, the higher the deficit and the more we have to tax, borrow and inflate the currency. Spending cuts would help to restore a stronger dollar and purchasing power.
2. The saying used to be; "as sounds as a dollar", today its; "as soft as a dollar". The buck is now down 40% since 2002 against the euro. How long will it go before it hits bottom? If the Mid-east drops the dollar, could it collapse?
Yes, the U.S. dollar is floating over some very stormy financial seas today. The dollar is slowly but surely becoming an 'I-O-U Nothing', as former Fed economist John Exter once said. Why? Because all true money must be derived from a commodity, or at least have a substance to back it up, or it will gradually become fiat money.
True money must have four basic characteristics: It must be..1) Scarce 2) Portable 3) Divisible 4) A STORE OF VALUE over time. (Here is where the U.S. dollar lost it's status as "true" money)
The gradual devaluation of U.S. currency during the 20th century reflects a more subtle transformation as Americans have abandoned the morality and economics of our Founding Fathers which defined a "dollar" as a weight-measurement of true money: gold and silver.
The London Financial Times reports that according to a recent Merrill Lynch note to clients,
"We're in the beginnings of a global readjustment that will end the dollar's dominance as the 'gold standard' currency for the world's economies. The dollar is likely entering a long, slow decline - followed by a crash."
So it's little surprise that Iran's President Mahmoud Ahmadinejad recently announced they will end all oil sales in dollar transactions, "The dollar is not considered a trustworthy currency any more, considering dollar depreciation and the dollar losses experienced by crude-oil exporting countries."
Keep in mind Iran is the world's fourth largest producer of oil, and both Iran and Venezuela have joined forces to undermine the U.S. dollar by switching foreign exchange holdings out of dollars and into euros.
Then there's China, the 800-lb. gorilla in the currency market, with $1.43 trillion in dollar reserves. Our biggest concern is if China and other trading partners abandon the dollar, who will loan the U.S. the $2.6 billion a day we need to float our national debt and deficits? The only other alternative is for the Treasury to print money like crazy.
3. If the rising cost of living, inflation, is really as low as the government reports; how come food and energy costs are rising so much? Does slowing economic growth plus a rising cost of living spell trouble? Why?
"Inflation is the one form of taxation that can be imposed without legislation," said Milton Friedman, Nobel Prize winning economist.
Inflation is officially defined as a "sustained increase in the general level of prices for goods and services. It is measured as an annual percentage increase." So as inflation rises, every dollar you own buys a small percentage of a good or service.
Americans will begin feeling the impact of the rising cost of living in 2008 as $90+/barrel oil prices begin to trickle down to the consumer. Remember crude oil fuels the entire U.S. economy, so rising prices will eventually find their way into the costs of all kinds of other good and services farther down the chain. And that spells more inflation.
It's not just oil. Food prices have been on the same one-way elevator going up and up. Staples like wheat and soybeans prices soared in 2007. Healthcare, education, you name it, prices are rising much faster that the official 2-3% inflation the government reports. Alternative inflation indexes arrive at 6-7% inflation in recent years, which is 2 to 3 times higher than the figure regularly reported to Americans.
Bill Gross, head of the world's largest bond fund, Pimco, caused a stir years ago by proclaiming the way the CPI is calculated amounts to a "con job" by the government aimed at concealing the true rate of inflation.
No matter how the Fed spins it, the cost of key commodities we use everyday is rising. And it's the result of too much money and credit floating around the system, which is driving up prices. So, the answer to the problem is not ignoring what's happening in the real world. And it's certainly not pumping in even more money that will spark more inflation and send the value of the dollar even lower!
Finding financial numbers you can really trust today is almost as hard as finding a financial advisor you trust. Discovering "real world" statistics involves stripping out the political- financial spin by cross-checking the numbers with multiple sources. The alternative is to passively take a loss year after year.
So, the next time you hear the Consumer Prices Index figure is this, or the GDP figure is that, keep in mind that these numbers are calculated with a hidden purpose -- to help bolster public confidence in government and Wall Street.
4. Let's discuss the popped housing bubble. Some blame it on the lenders; others blame it on the borrowers. It's probably a combination of both. Will a government bailout program really help solve it? When do you expect home prices with bottom?
It was astounding that borrowers could get a mortgage at 4%, and this was all due to the Fed creating money and artificially lowering rates, which gets the people to do the wrong thing, and people borrow money and buy houses they can't afford. It seems we have completely lost out common sense. Far too many people and companies were lent money during the past seven years who should have never been lent the money.
The Bush administration's way of fixing the subprime credit mess is by keeping people who were never creditworthy in the first place in debt even longer and rendering signed contracts meaningless to the investors who bought the securities containing those mortgages.
Former Reagan administration economist Martin Feldstein told Bloomberg the Bush plan would forever change foreigners' perceptions of U.S. investments, "What are they going to think about investing in American securities in the future if the government can say, 'Well, you thought these were the interest rates and the contract, but we're going to roll that back now, and you'll just have to settle for less'?" Feldstein asked.
As for a bottom of this housing cycle. My best guess is sometime in late 2009 to early 2010 prices will begin to stabilize. Some markets will have fallen 40-50% form the market peak in 2006, others less, depending on how high their local market bubble ascended.
Hopefully millions of U.S. homeowners will finally learn; to live within their means and that a home should not be used as an ATM machine to fund a consumption lifestyle, but rather a place of rest, relaxation and a last resort nest egg for their family during times of a true crisis.
5. Debt is becoming a dangerous four-letter word. The National Debt Clock must be replaced in 2009 to add another digit after we hit $10 trillion. Can we even pay it off? If not, will America end up as a third world nation?
The U.S. national debt today is over $9 Trillion - up from $5.8 Trillion back in 2001. That's more seconds of time than God has created since Adam and Eve walk the earth!
"Like a ticking time bomb, the national debt is an explosion waiting to happen. It's expanding by about $1.4 billion a day - or nearly $1 million a minute. What's that mean to you? It means almost $30,000 in debt for each man, woman, child and infant in the U.S.," reports AP.
Debt has become the legalized financial drug of the last generation; after having been shunned for the previous 10 generations in America. Did you know that the root meaning of the word "debt" is "death"? Compare the words "MORTuary" and "MORTgage"... there's a clue.
"Chilling" and "infeasible" are the words U.S. Comptroller General David Walker uses to describe the budget outlook. Perhaps the best word to describe America's looming debt/credit crisis is irresponsibility -- at all levels.
Debt it enslaving and consuming modern American culture. Gradually, like a frog in the kettle over the past 60 years, we've allowed moneylenders to make the true destruction of our money system by extending mortgage loans from 7 years, to 10, then to 15, 20, and now 30 years -- to their great financial benefit, I should add.
Far too many Americans are now forced to live paycheck to paycheck. Any disruption in income or investment values could send tens of millions over the edge into bankruptcy; also sending asset values spiraling downward, dragging down stocks, bonds, CD mutual funds, etc.
From the beginning of recorded history; men have perverted "true" money and sought to counterfeit it. Our modern credit/debt system originated in 500 B.C. when Babylonian bankers loaned credit (which they "created" from thin air) and then charged interest (usury) on top of it. Sadly, most of us have given our consent to participate in the credit system without understanding the consequences.
The U.S. dollar has been the dominant reserve currency for more than 60 years, but never before in history has the guardian of the world's main "reserve" currency also been the world's biggest debtor. If America continues on its current path, the dollar will suffer the same fate as the once great British Sterling.
"Buy now - pay later," the mantra of the last 40 years, has now put a heavy price on our money system, our communities and our families. The modern disintegration of the family, teenage suicide, rising divorce rates and bankruptcy are just a few of the visible causalities of putting present wants before future needs. I say let's admit that debt is America's greatest drug problem today, tighten our belts and start living within our means.
Sadly, few are prepared to face the coming debt crisis with a financial house that is built on nothing more than paper assets, or real estate valuation - on paper. As for out clients, they sleep a lot better with a solid foundation of gold and silver to provide the capital preservation, liquidity and growth needed for the perilous days ahead.
6. Wall Street is the international showplace of the American Dream, but what's really going on? Should we expect rising volatility in 2008? Will stock prices rise or fall on lower interest rates and slowing growth?
An increasing number if economists predict the U.S. may slip into recession next year, yet investment strategists at the biggest U.S. brokerages say U.S. stocks will still manage to climb to new records in 2008 due to investment diversification and globalization.
Stocks usually rise during presidential election years, but 2008 may indeed become the "Year of Surprises" politically and economically. In the face of all this uncertainty, some tech stocks (like Goggle) will likely fall to more reasonable levels, while other oversold financial stocks may rise on speculation that the worst is over.
The biggest problem facing investors and investment banks is estimating potential future losses. Merrill Lynch said Oct. 5, 2007 that it would write down $5 billion of mortgage-related securities in the third quarter and then amended loss estimates three weeks later to $8.4 billion. Citigroup warned of as much as $11 billion of write-downs on top of more than $6 billion reported in the third quarter. UBS said in December that future mortgage losses were "unknowable".
That is why Swiss America's long-term investment strategy of asset diversification has not wavered a bit since day one. The old European strategy recommends; 25% in stocks, 25% in bonds, 25% in real estate, 25% in cash and precious metals. Since cash is becoming trash (instead of "king") investors should increase their gold holdings accordingly.
Wall Street loves easy money, a weaker dollar and lower interest rates. So you could argue that 2008 Fed rate cuts will spark a stock rally, but I wonder what will happen is consumers finally stop spending and the economy stalls as the Fed tries to push on a string without success?
So far in the 21st century stocks have lagged far behind commodities, when it comes to both safety and growth. My gut says 2008 will be no different. Gold has risen over 20% per year since 2002 -- four times faster than the major stock indexes. Wall Street stocks in general will continue to offer increasing volatility and more downside risk than upside potential, until we work through the housing and credit crisis over the next year or two.
7. Let's discuss the globalist economic assault. Arab countries are buying up vital U.S. assets, we've outsourced millions of American jobs to China and India, and what about the proposed new North American Union?
American is fast becoming a service-industry nation, rather than a manufacturing nation, thanks in large part to the new global economy and so-called "free-trade". You could say we're becoming a "may I help you?" workforce instead of a "may I build it for you?" workforce. Global outsourcing and open borders are now crushing the middle class.
Adding insult to injury, we have oil-rich Arab sheiks opting to buy U.S. assets and corporations rather than hold on to declining U.S. dollars. With oil rising over 400% since 2001 from $22 to $88 a barrel, oil profits are gushing into oil-producing nations at a record pace. Bottom line, the U.S. has major security concerns.
Since the 1970s the U.S. has been signing trade agreements to reduce or eliminate foreign tariffs in U.S. goods and create free trade, yet the Value Added Tax (VAT) charged instead today is even higher now than 40 years ago! Little wonder that Daimler Chrysler will soon build cars in China to sell to the U.S. -- at a cost of 11,000 manufacturing jobs at 2,000 white collar jobs.
What we need are not more "free trade" agreements, but rather "fair trade" agreements. So-called free trade has gotten us into a very deep hole, with our trade deficit of nearly $60B a month, or $664 ytd. Last year $230B alone represented our trade deficit with China.
China, the nation that uses near slave labor, subsidizes its currency (the yuan) and regularly exports defective, unsafe products may now hold America's future in its hands. China need not lift a weapon heavier than a pen to accomplish an economic strike against the U.S. by simply selling off their $1.4 trillion in U.S. dollar reserves.
Where does all of this lead America? Some hope it will lead down the path to a new North American Union, complete with a new currency over the next decade. Mexico's former President Vincente Fox is strongly promoting such a union to help North America compete with Europe and the Far East.
Canada's top professor of economics Herbert Grubel envisions a "NAFTA Superhighway System" running from Mexico through the U.S. into Canada and, to help the process, a new "amero" currency.
The Council of Foreign Relations Foreign Affairs magazine showed its support for the NAU last summer in an article, The End of National Currency which said, countries should abandon monetary nationalism."
So, will Americans fall for this North American Union hype? I sure hope not, but I worry that in the heat of an economic emergency a proposed government solution like this might gain support. If the dollar crashes hard, all bets are off on what will replace the greenback. One thing is for sure, precious metals will always maintain buying power no matter what.
8. How will all of these converging factors effect the prices of both oil and gold in 2008? Both have already tripled since 2001. Are we due for a correction, or more of the same? Where do you expect prices to be this time next year? With bullion rising so fast, do you expect coins to follow?
In a word, explosive! In 2007 we saw gold just begin to flex its economic muscles and prices flew news $850/oz., near the all time record in 1980. In 2008, I will be surprised if we don't end the year with four-digit gold -- that is $1,000/oz. or more!
Gold is a perfect example of a healthy long-term (or secular) bull market, now moving into its 7th consecutive year in 2008. By that I mean every time speculators try to drive up for short-term profit taking it allows the smaller investors to buy the dips. So far gold has taken two steps forward, one step back, but that may change in 2008.
According to Happy Schultz, on of the top financial newsletter editors: "Gold is starting into the most exciting part of its long-term bull market, the so-called second (and monetary) phase. Herein we normally see the biggest percentage gains, matched by biggest corrections. His tentative targets by end of 2008: 14% inflation, $1,600 gold and $45 silver."
Last year we documented over 30 leading economic experts forecasting $1,000+/ounce gold pieces, this year our list is up to 47 and growing. In fact, it's getting harder to find experts who do NOT see $1,000 to $2,000/ounce gold ahead, especially since gold must top $2,200 in today's dollars to match the $850 high back in 1980, using official government inflation-adjustment data.
Perhaps one of the most undervalued areas of the gold market today is investment-grade, historic U.S. gold and silver coins. These gems offer all the upside potential of precious metals plus the privacy and protection of a classic collectible, all rolled into one.
U.S. rare coin prices have risen slower than bullion so far in this bull market cycle, but I expect coin prices will take off in due time. As the reality of the falling dollar strikes more and more Americans in 2008, I think we will see U.S. rare coins, fine art and other collectible prices start to soar.
As for oil prices, I expect the falling dollar could easily drive oil prices above $100-$125 a barrel by 2008 year end, depending on geopolitical developments in the Mid-East. Terrorist attacks on oil facilities are rising, Iran is marching toward nuclear weapons and we are still at war.
The upside of rising oil is the possibility of greater oil independence as oil producers dig ever-deeper to discover the hidden reserves that lie miles underground. As oil exploration and recovery are becoming more cost effective. Who knows, we may discover all the oil we will ever need thanks to $80-$100 oil prices.
9. Let's discuss your diversification and retirement strategy. Most Americans work their whole life, trying to save; yet over 90% are still unable to retire comfortably. What steps can you give to insure out golden years are the best years of our life?
Asset diversification and monetary inflation are both covered in the Bible, along with just about everything else that's really important in life; like our family relationships, requirements for leaders, etc.
In Ecclesiastes we're told to spread our wealth around in 7-8 areas "for we do not know what disaster may come." In Haggai we are warned the financial consequence of bad economics is "putting your money in a pocket with holes."
Retirement dreams are turning into nightmares for too many Americans today as they're watching the dollar and their nest egg shrink. Many are not aware that the U.S. Government has allowed all Americans to place certain types of U.S. gold and silver coins into their retirement plans tax-free since 1986. This is an excellent opportunity.
A "Self-Directed Precious Metal IRA" allows every American to convert some portion of their existing retirement funds into gold or silver; without tax penalties or new contributions. Unless your retirement account has been growing an average of 20% a year since 2002, I'd say you need to call Swiss America and get started today.
It's true that Americans have come to expect their golden years would be the best years of their life. And they can be IF you take some simple (but important) steps of preparation now. For most this will require a paradigm shift from living for today, to saving for tomorrow. Here are five steps I strongly recommend in 2008: <
1) Reduce debt, learn to live below your means
2) Increase your income, develop your talents
3) Diversify some assets out of U.S. dollars
4) Support cutting government tax/spend policies
5) Pray for leadership with a strong moral compass
A Bad Idea
Craig Smith tells FOX NEWS Neil Cavuto Jan. 17, 2008
Author and Swiss America CEO Craig R. Smith was a guest on FOX NEWS "Your World with Neil Cavuto" recently discussing Fed Chairman Ben Bernanke's comments to Congress urging a $100B government stimulus package.
Neil: Wall Street does not want the government involved in stimulating the economy and Mr. Smith thinks today's 300 point sell-off on the Dow proves it!
CRS: I think the markets clearly said they do not want the government involved. It reminded me of "American Idol" as some in Congress proved their incompetence by the questions. One Congresswoman did not even know Chairman Burnanke's professional background!
Neil: You think the markets fell based on what the Fed, the President and the Congress want to do because it will make a bad situation worse?
CRS: Yes, that's exactly the signal the market is sending. When was the last time you can remember the government doing anything "timely, targeted and temporary"?
To think these politicians can fix a $12 trillion economy is laughable. If you believe in a free market you must agree the best thing we can do is to get the government off our backs, out of our pocketbook and away from our kids.
The markets need to work off some of these excesses and subprime mess. Merrill Lynch took a big write down this week and two years from now it will be forgotten.
Neil: Are we looking at a bear market in stocks right now?
CRS: I'm not sure yet, by Mid-February we will know for sure whether we are entering a short or long-term bear market. The markets are looking for confidence right now, not manipulation. Manipulation is what got us into the mess we are in now.
[Note: watch this and many other national media interviews online at www.swissamerica.com]
$2,200.00! Gold Ahead Say Experts
Dozens of economists agree gold's future very bright
By David Bradshaw, Editor RMP
The commodity super-cycle has swept gold prices to triple since 2001; but that's just the kickoff say the experts.
How high will this bull market in "real money" and commodities drive prices over the next 5 to 15 years? Get ready to be shocked!
Here's a sample of our list of forty-seven prominent analysts, authors and gold experts already on the record forecasting four-digit gold prices to arrive very soon. Their combined gold price expectation is $2,200 /oz.
Count for yourself the many good reasons for owning gold today. I've listed two dozen reasons at the conclusion.
DAVID GAROFALO, CFO, Agnico-Eagle Mines Ltd.
"We don't see any reason in this cycle why gold shouldn't reach its real all-time high, which is actually about $2,200/oz," he told reporters after a presentation on Toronto, adding to the time frame of three to five years. -Reuters, 1/10/08
OTTO SPORK, CEO, Sextant Capital Management Inc.
"The price of the yellow metal is en route to $1,500 an ounce within the next two years. We could easily see $35 or $40 per ounce for silver over the next couple of years. We feel that certainly the junior gold and other resource stocks are nowhere reflecting their true value."-
JAMES DINES, Editor, The Dines Letter
"We would be very surprised if the gold price did not blast right through the old highs, and we reaffirm our old targets for gold of $3,000 to $5,000 an ounce (Plus silver over $100 an ounce) ... gold is not merely a colorful trinket but a monetary asset, and when mass fear strikes at the heart of paper money, the stampede to gold will be awesome." -MW, 11-5-07
ROB LUTTS, President, Cabot Money Management Inc.
"Gold will hit $850-$870 by the end of 2007 and $2,000 gold achievable in this move, given the huge demand from ETFs and soon pensions and insurance companies will be buying gold as a new alternative asset class." - CNBC, 11-2-07
DR. DAVID DAVIS, Analyst, Credit Suisse Standard Securities
"The gold price will soar to more than $1,000 per ounce over the next five years as dwindling supply of the precious metal combines with increased demand. Upward pressure on the price of gold is being driven by the economic environment surrounding the US economy and a change in the supply and demand dynamics surrounding gold." -London Telegraph, 11-1-07
JOHN HILL and GRAHAM WARK, Citibank analysts
"A 'Reflationary Rescue', in a new cycle of global credit creation and competitive currency devaluations could take gold to $1,000 an ounce, or higher. Central banks have been forced to choose between global recession or sacrificing control of gold, and have chosen the perceived lesser of two evils." -London Telegraph 10-1-07.
PAUL O'BRIEN, Analyst, Raymond James Ltd.
"We believe this rally is still in its infancy with a 'toe in the water' ahead of the upcoming 4Q. The gains for gold can be attributed to the interest rate cut by the Federal Reserve and continued weakness for the greenback." -National Post, 9-24-07
AUBIE BALTIN, CFA, CTA, CFP, PhD
"When FEAR combines with full blown Greed, there is no longer any more talk of correction as prices begin to jump 5% to 10% in one day and people line up to buy bullion as signs pop up everywhere, "WE buy and sell gold". Once both fear and greed take over the market and the short squeezes begin in earnest, there is no way of predicting how high the high. $2,200 gold and $100 silver seems the barest minimum targets, maybe $5,000 or even $10,000." - FiendBear, 9-24-07
JOHN HILL, Analyst, Citigroup
"Gold appears to be entering a new investment-driven phase and has re-asserted itself as a safe haven. Gold will be one of the top beneficiaries of the 'Re-flationary Rescue', which should bode well for hard assets and basic materials. I would not be surprised if gold were to break its all-time high of $850, or even $1,000 or higher in a new cycle of global credit creation and competitive currency devaluations." - National Post,9-21-07
CHRISTOPHER WOOD, Chief strategist, CLSA
"Market ructions, the sub-prime conflagration and a collapse of the dollar could send gold prices to more that $3,400 an ounce within the next three years. This is not a sub-prime crisis. Sub-prime has merely exposed the bigger scam of structured finance; a scam that is about pretending that bad credit is good credit." -London times, 9-19-07
DONALD LUSKIN, Chief investment officer, Trend Macrolytics LLC
"I've written in this column about inflation often over the last three years. I've said gold was going to $1,000. If the Fed cuts rates, then I'm going to have to admit I was wrong. Then gold isn't going to $1,000. It's going to $2,000." -Smart Money, 9-7-07
AMBROSE EVANS-PRITCHARD, International Business Editor, London Telegraph
"Gold will fly once investors can see that neither of the two reserve currency pillars (euro and dollar) is on a sound foundation, and once the pair are engaged in a beggar-thy-neighbor devaluation contest to stave off a slump, this would amount to a partial breakdown of the monetary system. Gold will not stop at $800. It might go well beyond $2,000." -London Telegraph, 7-23-07
NEW W. SCHMIDT, CFA, CEBS, Schmidt Management Co.
"Monetary illusion evident in the value of paper equities versus the return on paper equities should not be ignored. Asset meltdown now taking place below the surface in mortgage related investments held by speculative hedge funds. As the happens and carnage spreads, the U.S. dollar will come under increasing selling pressure. Gold will be the investment that benefits, and continue the move to more that $1,400." -Financial Sense, 6-20-07
JP MORGAN CHASE & CO, Third largest U.S. bank
"Gold may rise to more than $1,000 an ounce as demand from India, China, and exchange traded funds increases and production of precious metals falls." - Bloomberg 6-7-07
DAVID ROSENBERG, North American Economist, Merrill Lynch
"The current bull market for gold could last another five years, if certain conditions are in place, and the metal's price could soar to an incredible $1,500 /oz. Investors should buy gold to beat the current period of stagflation.", -Platts, 4/11/07
JIM SINCLAIR, Author, Chairman of Tan Range JS Mineset
"Gold has no agenda, no allegiance and functions as honest money in a world of lies, corruption, overstatement and spin. $700 to $705 might well be a place certain interests will try and block gold, but their only hope is for momentary success. $761 is yanking at gold from the front with great power. $887.50, a break above $1000 and $1650 are putting their grip on the royal metal as well." JSmineset.com, 2-25-07.
24 Reasons to Own Gold Now!
1. Gold is still be far the optimal choice for most investors
2. Likely ruptures in the stability of the global-money system
3. $900 gold prices will eventually peak well about $2,000
4. The most powerful factor affect in gold is monetary inflation
5. Gold supply/demand dynamics have created irreversible changes
6. Gold's downside risk is paltry compared to the upside potential
7. Some insiders see gold saving the US dollar as reserve currency
8. Central banks buy gold to diversify reserves away from dollars
9. Portfolios designed to hedge inflation must be bedrocked in gold
10. Shortest commodity bull market historically is 15 years, longest 23 years
11. Gold now accepted as fourth global currency (with Dollar, Euro, Yen)
12. Most bullish factor: Mainstream has still not discovered gold
13. Investors should not worry about good/bad gold entry points
14. Commodities now an asset class for the first time in history.
15. Gold is out of the closet and the press is now taking notice
16. Price corrections a sign of a healthy bull market, buy dips
17. If there's shooting in Iran, gold/oil will go through the roof
18. Hard currencies (gold) boom as people notice soft currencies fall
19. Gold market knows inflation is already here, explains 2007 surge
20. More and more investors allocating more assets into gold
21. Gold you hold in your hand: Numismatic coins or bullion best
22. Gold gaining strength from ETFs, corporate and pensions money
23. A gold bubble 5-7 years out could launch gold above 5,000/oz.
24. Regardless of what the media says, gold prices are still cheap.
For the full story with another 30 expert forecasts on gold visit: www.swissamerica.com/2kgold
A Thing of the Past
By David Bradshaw
Today Americans enjoy unlimited benefits from new technologies in our wired world. But those wires send information in two directions, and the access to our personal data is very vulnerable. Your right to privacy has been called the civil rights issue of the information age.
"The all-you-can-eat packages of voice, video and Internet services offered by phone and cable companies may be convenient, but they represent a potentially significant threat to people's privacy," reports LA Times
The same is true of your financial information. You holdings in stocks, bonds, cash, even gold (in most cases) are literally on display for the world to see today, unless you take some specific (and legal) steps to privatize your wealth.
Businessweek reports an "Invasion of the stock backers. An alarmed SEC says that teams of thieves are lifting passwords from home PCs - and emptying online brokerage accounts. Consumers have $1.7 trillion worth of assets with online brokerages," says TowerGroup, a financial research and consulting firm.
Owning paper promises for real assets can pay off, but in today's increasingly paperless world, you assets could also be wiped out with the stroke of a key on a computer keyboard. At least temporarily your wealth could become illiquid at the very moment you might needs it, unless you have something "outside the system" so to speak.
While gold bugs boast of the wonders of gold ownership in today's mixed-up financial world, those who stick with only gold stocks, gold or silver ETFs or even gold and silver bullion coins have no more privacy than equities, bonds, real estate or cash.
A Shiny Alternative
In today's world of ultra-transparent investment, it may surprise you to discover there are only a few legitimate investment niches that offer the small investor 100% privacy of ownership.
An excellent example in investment-grade United States gold and silver coins. In addition to being completely invisible to prying eyes, these gems provide better average returns than gold and silver bullion historically.
Unlike most other asset classes, investment-grade U.S. coins do not require a Social Security number or 1099 IRS reporting upon either the purchase or sale.
In the U.S. Patriot Act, Section 352 Anti-money laundering and terrorism, the government states; "Anything that derives 50% or more of it's value from it's metal content is covered or reportable." Translation: your bullion holdings are not private!
However, under the authority of the Emergency Banking Relief Act of 1933, President Roosevelt issued Executive Order No. 6102, which specifically exempted gold coins having a recognized special value to collectors of rare and unusual coins.
Treasury claims power to seize bullion
The U.S. Government has the authority to prohibit the private possession of gold and silver bullion coins by U.S. citizens during wartime, declared emergencies and to freeze the ownership of shares of mining companies, the Treasury Department told the Gold Anti-Trust Action Committee in August 2005.
But gold and silver owners aren't alone in such jeopardy. For the U.S. Government claims the authority in declared emergencies to seize or freeze just about everything else that might be considered a financial instrument.
The government's authority to interfere with the ownership of gold, silver, and mining shares arises form the Trading With the Enemy Act, which became law in 1917 during World War I and applies during declared wars.
When the Trading With The Enemy Act was passed in 1917, gold and silver formed part of the official currency of the United States and were essential to ordinary commerce. So perhaps an argument could be made then against "hoarding," even if "hoarding" could not be well defined. That is no longer the case; the United States has officially disavowed gold and silver as money and they no longer have a meaningful role in commerce.
Gold and silver investors may want to ask their members of Congress to seek repeal of the statutes that give the government the authority to interfere with the private ownership of gold and silver, emergencies or not.
In addition to offering privacy, U.S. rare coins are also very portable. You can easily put a million dollars worth of rare coins in a briefcase and go anywhere in the world to liquidate them in a pinch.
What other tangible asset offers such a great combination of 100% privacy and 100% portability? I can think of none, except perhaps diamonds or other raw gems, but they're not nearly as liquid as U.S. rare coins, which have over 5,000 dealers in the U.S. alone.
Gold stocks may be a great long-term growth asset, but whenever you are dependent upon a company's solvency or a mutual or exchange fund to maintain liquidity, you have added another layer of risk and given up privacy.
Physical ownership of rare gold alone allows you the opportunity to have 100% ownership and 100% control of your gold assets without a single worry that your gold may also become someone else's liability.
A collectible, not a commodity
Investment-grade U.S. gold and silver coins are not a commodity, they are a collectible. So while the bull market in precious metals may help to propel rare coin prices upward, buying an investment-grade coin is not the same as buying a commodity; like sugar, wheat, oil or even gold bullion.
Have you ever seen a 100-ounce bar of gold? Some bars are ugly and beat up and some bars are brand new and shiny, but they both trade for the exact same value. Not so with collectible coins. High quality and rarity are the primary drivers determining value.
Because the investment-grade coin market is smaller than the bullion market, it is less prone to speculation and more geared toward being a long-term hold. This means rare coins are one of the least volatile forms of gold to own.
Every American has the ability to put themselves on a personal gold standard by simply purchasing some physical U.S. rare gold and silver coins.
Virtual gold, such as ETFs, may be a great new product for Wall Street, but Swiss America recommends physical gold coin ownership as the foundation of a diversified portfolio.
Charts illustrate that gem-quality numismatic gold and silver coins are in a long-term bull market, like precious metals, but rare coins tend to move up and down more gradually. Perhaps this stability is one of the reasons WSJ, MarketWatch and other mainstream news outlets have been so positive about this market niche over the last few years.
As technology brings us closer together, the fragments of information about you are becoming much easier to piece together, revealing the more intimate details of your life, unless you take steps to privatize a portion of your wealth today.
Maintaining private wealth in the future may require owning collectibles form the past. Investment grade U.S. gold and silver coins are fast becoming a new American icon because they offer investors financial stability, profit potential AND privacy!
GOLD: A Conservative Buy... With Liberal Benefits!
By Dr. Michael Savage
Host, The Savage Nation
For years I've presented my conservative perspective on current events and politics. Now I would like to introduce you to a conservative perspective on investing that even liberals may take a shine to!
That's right, liberals AND conservatives need to listen to my good friends at Swiss America, the company that's inspired America to rediscover gold for over 25 years!
Gold is amazing! It conserves and grows wealth!
To "conserve" means "to keep and guard", which is a big part of what gold does. It guards wealth from political uncertainty, a higher cost of living, higher taxes, a weaker dollar and lower home values, etc. That's why gold is considered the perfect safe haven during uncertain times like these. Gold also grows wealth liberally, having tripled in value over the last six years.
Experts say gold could rise for another five to ten years taking prices well over $1,500 or $2,000 an ounce! That's why gold is such a hot commodity worldwide for both institutional and individual investors.
Gold's appeal is nothing new. Since the dawn of creation, gold has been a store of value, a universal monetary substance, in all civilizations. Gold has united mankind regardless or race, religion or politics.
Gold transcends left-right politics because its value is based upon ultimate economic truth and substance. Rather than symbolic paper wealth, which rests upon a shaky U.S. dollar foundation.
So regardless of whether you're a conservative or liberal, gold should be a part of your portfolio and family legacy. A good way to start is by converting some assets into a Precious Metals IRA.
Take it from Savage, gold is a conservative buy!
STOP Worrying and Watch $1,650 Gold Unfold
By Jim Sinclair
Jan. 16, 2008
This is the script for my formula:
1. Recession begins.
2. Central Banks seek to offset slowing of the economy by expansion of monetary policy.
3. Monetary inflation turns into price inflation with lower business activity.
My FORMULA supports the rise in price of gold from its recent high at $913 to $1050 and then to $1650.
*The meltdown is not billions- it is trillions. Central Banks will seek to hold off the deluge by standard operating means that will only feed the INFLATION side of the STAGFLATION equation.
*The recent drop in equities markets has the Bush administration extremely worried. At present the White House holds Bernanke's strings.
*The Bernanke Federal Reserve will not fail to serve its Masters and in fact will exceed any such effort in the past.
*The disinformation that a major slow down in business is negative to gold is totally incorrect. Rather it is the foundation of the next major move to the upside.
*Those of you overcome by fear are operating on your emotions.
*The system has gone broke and the meltdown has only so far hit credit derivatives. There is much, much more to come because of the present recession and the fact that more than 50% of major international banks are investment companies are heavily into derivative creation.
*The financial groups are now facing plummeting earnings, restricted capital positions and super-sized litigation against which there is no defense.
If you do not have gold for insurance you are naive.
Flight to Gold:
Investors lose faith in money
By Ambrose Evans-Pritchard, London Telegraph
Jan. 7, 2008
The last time gold touched $850 an ounce, the world was visibly spiraling out of control.
Soviet tanks had just rolled into Afghanistan. The Mullahs had seized US hostages in Iran. Paz Americana was on the ropes, and so was capitalism. Inflation had reached 14 percent in the United States.
The final spike in bullion occurred when the Hunt brothers tried to corner the silver market, forcing up gold in tandem through arbitrage links. It collapsed within days.
If you strip out the Hunt anomaly, it is fair to say that gold established a "safe-haven" level of $600 - or $1,500 in today's money - that roughly lasted through the final phase of the Carter malaise, the oil shock, and the collapse of confidence in the monetary order.
By this benchmark, last week's jump to $869 looks tame. Yet gold is undoubtedly flashing warning signs. The price has jumped 42 per cent since the US credit markets suffered their heart attack in August. It has tripled since Gordon Brown sold over half Britain's reserves, deeming it a barbaric relic. That conceit has cost taxpayers 3.4bn pounds, after adjusting for returns from dollar, euro, and yen bonds.
The mounting risk that Pakistan's nuclear weapons could fall into the hands of al-Qu'eda is playing a role. So are fears that Western leaders have no credible answer to the banking crisis as it drags on for month after month.
Note that gold smashed the 28-year record just days after the European Central Bank launched its monetary "shock and awe", showering half a trillion dollars on the banks, with parallel moves by the Fed, the Bank of England and the Swiss. Clearly, a small army of investors is betting - rightly or wrongly - that our debt-bloated democracies are now too decadent to take their punishment. The elites will opt for the easy path of reflation to postpone the day of reckoning.
Ben Bernanke, the Fed chief, is viewed as an inflationist. He once talked of dropping bank notes from helicopters. Loose words have consequences if you are a Fed governor.
"The central banks are flooding the market with paper," Peter Hambro of Peter Hambro Mining, said. "Does anybody now take the dollar, the euro or the pound seriously? People are turning to gold because it is the only hard store of value," he said.
Joachim Fels, bond guru at Morgan Stanley, said that the central banks will tolerate an upward creep in the underlying level of inflation because the pain required to kick the habit at this late stage is deemed to high. "I strongly doubt that they will tighten the screws. I expect 2008 to mark the beginning of another global liquidity cycle."
Blame the return of 1970s stagflation. The China effect has turned malign, pushing up global prices. The easy trade-off between growth and inflation is over. All choices are now bad. Infecting everything is the looming end to US dollar hegemony. Mid-East and Asian states are importing America's bailout policies through their currency pegs (or dirty floats), stocking an inflationary fire. Prices are now rising 14 per cent in Qatar, 10 per cent in China. The pegs are near snapping point. Bretton Woods II is dying.
For a while Asia, Russia, and the petro-powers seemed happy to accept the euro as the anti-dollar. Long-term capital flows into the eurozone reached a net $200bn in the first seven months of 2007, according to BNP Paribas. Then the money dried up.
Perhaps Asians were shocked to learn that German, French and Dutch banks had gorged on sub-prime debt, or perhaps they began to take a closer look at Europe's fertility rate and vanishing youth, or woke up to the deflating property bubble in Spain. Yes, the euro reached record highs in the autumn, but this was driven by hot money flows. Such fickle finance will drain away as soon as the ECB hints at rate cuts.
So are the new powers turning to gold instead, mistrusting the euro as much as the dollar? Their footprints have not yet shown up in the IMF reserve data, but there can be long delays, and China does not report data. Vladimir Putin has told Russia's central bank to raise the gold share of its $469bn reserves to 10 per cent. We know that those Asian and oil states now holding most of the world's $6.6 trillion reserves possess very little gold, yet most have an historical affinity for it. Draw your own conclusion. We know too that the little guys are buying defiantly, at last able to invest in gold through exchange trade funds (ETFs) on the main courses. The ETF holdings have reached 834 tonnes, putting them in seventh place ahead of the Bank of England, the ECB and Japan.
Gold's latest surge has caught the bullion banks off guard. Most expected the price to fall back at the end of India's Diwali marriage festival. Speculative "longs" on New York's Comex market exceed levels that have often led to a sharp sell-off in the past. Jewelery demand- still 80 per cent of the market- has stalled. With all the moons aligned for a correction, Goldman Sachs advised clients to go "short" in November. That was $60 ago. Ouch.
The gold bears may yet smile. James Steel, an analyst at HSBC, said gold in shackled to oil since the commodity funds ($140bn) allocate fixed shares to each component.
Energy makes up 65 per cent of the weighting, so the indexes must buy gold whenever oil shoots up 0 as it did last week, kissing $100 a barrel. "The oil gold correlation has risen 0.9 since the emergence of these funds, which is very high," he said.
So what happens if a slump chills oil? We will then learn whether gold is a commodity, or once again a currency.
"We think gold is fundamentally overvalued by about $150 but that can go on for a long time," John Reade, the precious metals chief at UBS and top forecaster this year. "A lot of our clients have been buying gold since the credit crunch because they think central banks will respond with aggressive monetary easing. If that becomes a mainstream view, gold will soon have four figures on it. The feeling is that there is a lot of money around, and not much gold," he said.
Indeed. Mining bosses complain that the earth's crust is yielding less gold. Output in South Africa has fallen to the lowest since 1932. Canada has passed peak output. Gregory Wilkins, head of Barrick Gold, says: "Global mine supply is going to decrease at a much faster rate than people generally believe."
In the Middle Ages gold fetched nearly $3,000 an ounce in real terms. The price fell to nearer $550 when Spain flooded the world with Aztec and Inca riches, and there is hovered for three centuries.
But the modern era has been an aberration. Supply is exhausted. Perhaps we should now regard the Middle Ages as the proper benchmark price. One thing is certain: gold will outperform paper as long as governments keep increasing the global money supply 15 per cent a year.
Quality Data Leads to More Accurate Gold Predictions
By Patrick A. Heller
January 21, 2008
If you want to know where gold is headed, analyze better data.
As gold topped $900, much of this past week, why are so many "gold experts" so wrong in their analysis of the gold market?
I won't embarrass them by naming names, but at least two major gold analysts, who should know their stuff, have been calling for a $100 correction since gold topped $700 in early September.
Those with the most accurate predictions over the past several months usually factor into their analysis the impact of surreptitious gold price manipulation by governments, central banks and their private sector trading partners. Once you factor the amount of gold being "leaked" into the market, and the reasons this is done to support other segments of the overall economy, a lot of price moves become understandable.
Research about this price manipulation published by Bill Murphy, James Turk, Chris Powell and many others who support the Gold Anti-Trust Action Committee (GATA) (www.gata.org), has proven best at explaining gold (and silver) price movements. Analysts who try to understand the gold market without incorporating GATA's data have been and will likely continue to be off the mark. To know where the price of gold is headed, utilize better data.
Everything you need to know about gold investing...in about a half-hour!
To help celebrate 25 years of inspiring America to rediscover gold, Swiss America has released A RARE OPPORTUNITY: GOLD 101, a new television special DVD hosted by Pay Boone.
Covering all the basics investors need before buying gold, including; four types of gold worth owning, five steps before buying gold, and six major forces driving gold higher.
A RARE OPPORTUNITY: GOLD 101 features excerpts of CNN, CNBC and FOX NEWS interviews with Swiss America CEO Craig R. Smith between 2002 and 2006 discussing the bull market in gold and his 2001 book, Rediscovering Gold in the 21st Century.
"This documentary-style program will help viewers grasp why gold has become the best investment of the new millennium and quickly gain the knowledge needed to become a successful gold investor," says producer David Bradshaw of Idea Factory Films.
"The 21st century gold rush is now entering its seventh consecutive year. The appeal of owning gold is spreading fast as the U.S. dollar's decline accelerates. GOLD 101 brings into focus a time-tested strategy offering: safety, privacy and growth," says Craig R. Smith.
GOLD 101 presents both the upside potential and the downside risks of gold investing. Host Pat Boone's advice; "Don't wait to buy gold, buy gold and wait, but first learn... then earn!"
WHY LISTEN TO US?
*In 2001, we published Rediscovering Gold in the 21st Century which announced the beginning of a new bull market in U.S. gold and silver coins based on market trends, diversification principles and common sense.
*In 2002, we published "The New Gold Rush" which documented the paradigm shift from financials to tangibles.
*In 2003, we released "Gold: The Color of Hope" which exposed why 39 economists finally agreed that gold and silver are the buy of the generation.
*In 2005, we offered "Economic Solutions in the 21st Century" addressing the growing problems of debt, deficits, the falling dollar and the retirement/pension fund crisis.
*In 2006, we offered "The Rule of Gold" covering 2006 Economic Trends, Why $500 Gold is Still Cheap and the 2008 Investment Scorecard (2000-2005)
*In 2007, we offered "The Future of Gold" and "Gold 101" a brand new 25-minute DVD and magazine covering everything you need to know about gold investing.
Uncle Sam Allows a Gold IRA to Cut Your Taxes!
Most individuals currently saving for retirement may qualify for a precious metal IRA or 401(k). However, many are not aware this choice even exists.
Since 1986, the IRS has allowed individuals to hold precious metals within their IRA. Physical metal, over time, has always offered a hedge against the plague of stock market volatility.
In 1995, Dr. Raymond Lombra, presented a 40-page report to Congress on the use of gold and rare coins in IRAs stating, "A detailed analysis of hypothetical portfolios reveals that over the 1974-1993 period a portfolio consisting of 5% coins, 5% gold and the rest stocks, Treasury bonds and Treasury bills would have increased portfolio returns at the same time decreased overall portfolio risk."
FAQs... about a Gold or Silver IRA
Q: Will I physically hold the metal?
A: No- If you purchase gold or silver within your existing IRA you will not take possession of the metal. It is stored at a depository in your name. Once you reach the age of 59 1/2 you may then take delivery without penalty. The depository, Goldstar Trust Company uses HSBC bank USA, a major long-standing bank well-respected in the area of precious metals depository services.
Q: How long does the transfer process take?
A: Each application is unique and may vary. On average, the process is completed in two weeks. Using your existing IRA information, we will help you complete the paperwork.
Q: Will I have a tax implication?
A: No- there are no tax implications for transferring assets from one qualified retirement plan into another.
Q:Will I incur a penalty?
A: No- there are no penalties incurred for transferring assets from one qualified retirement plan into another.
Q: Is this expensive to set up?
A: On average, the setup fees range from $150 to $325. These fees are solely based on the amount being transferred.
Q: Is there a minimum amount I must transfer?
A: Yes- the start up amount must be $5,000 or greater.
Q: What type of metals are allowed in retirement accounts?
A: All U.S. Gold, Silver and Platinum American Eagles coins, and certain other bullion coins or bars that meet IRS requirements. Please call us for more detail.
Call your Swiss America representative at (800) 289-2646 to answer any questions you may have regarding a precious metals IRA.
A Final Word: If You Love Me, Let Me Struggle
By Craig R. Smith, CEO Swiss America
The story is told of the compassionate little boy who sees the struggling butterfly attempting to shed his cocoon and decides to help the process along by prematurely cutting open the cocoon, only to discover his shortcut may cost the butterfly his very life.
Sometimes I feel like that little boy when I see those struggling through some of life's toughest challenges, financial or otherwise. The universal economic law of "sowing and reaping" should not be altered, nor ignored by individuals or governments. The reason: the possibility of failure is essential for human growth. On other words, "if you really love me, let me struggle!"
There are times when true love means we must temper our compassion for others needs with our trust in our Creator's ability to meet those needs. If we've sown bad seeds in the past we should not be surprised to find our life, or economy, is now full of weeds.
There is an upside potential to downward mobility if we allow life's economic challenges to force us to look in the mirror and start redefining our life goals. The self-centeredness and greed so characteristic of the last two decades must now change. In it's place I hope we witness a rebirth of concern for true wealth.
True wealth is not measured in dollars, but in our contentment level, our relationships and the legacy we leave to the next generation. Embedded in this growing need for contentment is an appreciation of our unique American heritage.
Americans tend to reconnect with their roots during hard times; they also begin to think more inter-generationally. Instead of living beyond our means, Americans will soon discover true wealth is not measured by the abundance of 'things' but by the fewness of our wants and a willingness to sacrifice.