It’s very hard to give too specific of advice when it comes to gold coin investing, because we aren’t psychic. We haven’t seen your tax reports, so we don’t know how much money you made last year. We don’t know how much of that money you have free to invest with, or what your specific goals are for investing in gold, but the beauty of the metal is that you don’t really need to worry about all of that too much.

The fact is that gold is always a solid, safe, secure way of protecting yourself in case of recession, and as such, you can simply invest at your leisure, buying coins when you want to, selling them when you need to, and investing in whatever way you’re comfortable investing.

That said, we do have some specific advice depending on your goals...

Gold coin investing for profit - The main thing with gold coin investing for profit is, as with any investment; buy low, sell high. Keep an eye on the spot price. When the metal has a slow week, feel free to buy, and then go ahead and sell some of your coins when the metal is back up. Ideally, you want to buy during times when the dollar is going strong and sell when the dollar is weak, but, unfortunately, the dollar has been weak across the board for several years. That said, if you have the money to invest in large amounts of gold at a time, you can still turn a profit on the small jumps and falls in the metal.

Gold coin investing for safety- Simply put, buy some coins now, and hold onto them for the time being. Sell some off if you see a substantial jump in the metal, but mainly, your coins are there to offer you a backup plan should other financial matters not go as expected.

Long term gold coin investing - If you’re hoping to retire on your gold coin collection, our advice is to simply add a little more to your collection whenever you have a little more money to invest, and then... just leave it there. Don’t worry about it, just let it grow over time.

The main thing you need to know about gold coin investing is that it offers investors peace of mind. While you may just get lucky with an odd stock or real estate (it is possible, if not plausible, even in this economy), the fact is that those options do not offer you any sort of security. If you lose money on stocks, your money is simply lost. However, gold never crashes and becomes worthless in any circumstance, because gold is a real, tangible commodity with literal, real value.

As such, when the dollar price of gold drops, it’s not really the value of gold that’s going down, but the value of the dollar that’s going up. Remember that the dollar was only ever a substitute for gold in the first place. So during a recession, it’s not so much that gold coins are worth more, but that dollars are worth less, and vice versa in times of economic comfort.

Again, the only advice we can give that applies across the board to every gold investor is to simply invest at your own pace in whatever amounts you feel comfortable investing in. If that means putting thousands at a time into your gold coin investments, or only buying a few tenth ounce coins when you have the money to spare, so be it. However you like. As long as you cover yourself, it really is difficult to go wrong with gold as a backbone for your financial plans.

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Linda Hess

Aug 24, 2009

The answer is... well, if you could get a time machine and go back to 1940, before the gold standard had ended, but after it had been made legal once again to own gold, then the gold you buy then would be worth hundreds of times now what it was then... Of course, that’s not possible. Rather, the real answer is "buy gold coins as soon as you comfortably can".

Gold is on the rise, and it most likely will not peak anytime soon. We’re in the middle of a recession right now. Not at the end of a recession, but in the middle.

If you want to know how gold performs during a recession, you need only look at the 1970’s. In the 70’s, gold wasn’t worth much at the start of the decade, but by 1980, the price of an ounce of the metal had more than tripled.

So as we see, gold tends to perform excellently during times of economic crisis. In fact, just look at the last ten years. In 1999, gold was worth less than three hundred an ounce on average. Today, the metal averages around nine hundred an ounce in recent months.

We’ve seen unprecedented numbers of new investors looking to buy gold coins over the last few years and, along with the sinking dollar, this has had a significant, positive impact on the value of the metal.

The only downside for these new investors who’ve opted to buy gold coins is that they didn’t get in on it a bit sooner. Essentially, no time is a bad time to buy gold coins, as you could always use the solid backbone of a metals investment to safeguard yourself against economic crisis, however, some times are better than others.

Ideally, you want to buy gold coins while the prices are low, but on the rise. Right now, we don’t exactly have the option of buying gold coins at a remarkably low price, but that’s only because the metal is seeing such a remarkable period of growth.

That period of growth is not likely to end any time soon, so don’t let the spot price turn you off of buying more coins right now. Again, the price has not peaked and most likely will not peak for some time to come.

In fact, the price will probably not peak until the end of the recession, and as we’ve seen, the recession is not over, and will probably not be over for, perhaps, a few years to come. President Barack Obama has said as much himself, stating that this economic crisis will not be over in one year, or perhaps, even one term.

In other words, if you’re not safeguarded with a solid gold investment yet, then the right time to buy gold coins is right now. Even when, and if, this recession does end, this is not the first recession that we’ve ever faced as a nation, and it most definitely will not be the last. It is certainly better to already have gold before the recession than it is to wait until the last second, but in any event, it’s never undesirable to have gold.

When you buy gold coins, you’re really buying not pieces of metal, but peace of mind. Gold is simply a great insurance policy against times like these, in that you might not need to cash any of your gold out until you’re ready to retire, but when crises like this one do happen, it is, as always, better to have it and not need it than it is to need it and not have it.

So, short of building a time machine, the best time to buy gold coins is right now, or at your next possible convenience. Gold generally tends only to increase in value over time, and while it does have slower periods, those periods occur during times when the dollar is strong and it’s less of a necessity to have the metal, but nonetheless, the metal is there for you when such periods end. In short, buy gold coins, and you will have quite a bit less to worry about through this recession and the next one.

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Linda Hess

August 9, 2009

The first of these coins were minted back in 1967 in an effort to pick up sales for South African gold, issuing the one-ounce bullion coin. While American Eagles are offered for a variety of reasons, the South African Krugerrand has a single purpose in mind: To sell South African gold.

In the beginning, the only size offered was the one-ounce coin, a full troy ounce of fine gold. This was known as a “Kruger”. It was in 1980 when the makers of the Kruger realized that there was a market for smaller coins, as well, and they begin offering them in three more sizes: The half ounce, the quarter, and the tenth ounce. After this point, the one-ounce South African Krugerrand began going by the name of the “full”, or the “one ounce”.

The Krugerrands are currently quite popular in England, but it’s interesting to note that they were virtually unknown to all of Britain until 1971, as it was illegal for the British to acquire gold bullion coins.

It’s interesting to note that the South African Krugerrand was never intended to be a pretty coin. “Handsome” may be a fair word, but the actual design was only intended to indicate the value. As such, it may not be as “pretty” as the American Eagle, but it has a distinct charm all its own.

It’s also interesting to note that there is simply no such thing as a silver South African Krugerrand. If you go on EBay, you’ll find a few coins being marketed as such. Now, while these coins are, generally, real silver, they are not real Krugerrands. That doesn’t mean they’re worthless, just that they’re not certified.

The South African Krugerrands are not, in fact, actual “legal tender”. They are money, in that they are gold and, well, gold is money and that’s that, but, their markings bear simply their weight in gold. The coins are actually produced by a private company, the South African Mint, and as such cannot be considered actual legal tender. This sets them apart from the government-minted Maple Leafs and American Eagles.

That said, if you simply want to invest in gold, then the simple fact is that gold is gold. Whether a South African Krugerrand, a Buffalo Dollar, or just a chunk of metal with “1 oz.” marked on it, it’s all the same stuff. Krugerrands are just as safe and reliable an option as any other investor grade coin.

Most American investors may opt to stick to American coins, but with these shortages of 22 karat blanks at the US Mint, there’s no telling when they’ll get back on track and end the suspension on gold investor coins. As such… well, like we said: It’s still gold. Whether it has Lady Liberty, a Maple Leaf, or Paul Kruger on the obverse, the metal content is the same.

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Linda Hess

Jul 12, 2009

So if you're thinking of picking up a few more $20 Saint Gaudens or Canadian Maple Leaf coins, it may be wise to do so now so that you can capitalize on these gains before the price starts to level off, as it most likely hasn't quite peaked just yet.

While you don't need to be obsessive about monitoring the spot price when you purchase the $20 Saint Gaudens, it's still a good idea to keep an eye on them, nonetheless. Whether you're buying a $20 Saint Gaudens or looking into the South African Krugerrand, their value is based on their metallic content (plus rarity and condition for certified rare coins). You can easily pick up as many coins as you need for investment purposes and leave it at that, but by watching out for the peaks and valleys in the spot price, you can maximize your potential based entirely on when you choose to buy. Of course, the spot price is rarely the exact same value as the coins themselves, as the Mint doesn't adjust the price on an hourly basis or anything, but rather, at certain intervals.

When you buy the $20 Saint Gaudens during a period where the price seems to have levelled off, you may be able to get in early before the next big climb in spot prices occurs. By starting at the beginning of a climb, you can fully enjoy the profits made over time as it grows and later levels off.

Of course, even if you choose to buy at the very tip of a peak, you can still rest easy knowing that gold is a long term investment rather than an overnight rise-and-crash market. Last year, gold broke the thousand dollar mark per ounce for a very brief moment before settling back down into the nine hundred dollar range. Now, if you had bought gold at that exact moment, then it would be a tad less today than it was then. However, many analysts are expecting the current rises to actually level off at over one thousand dollars per ounce, so in the long run, should that happen, you would still be seeing positive growth on your investment even though you bought the metal just as the climbs peaked.

This is why many consider these coins to be a "worry-free" investment. You're not likely to double your investment in one week or anything like that, but you won't see your investment cut to half your initial holdings in one week, either. Simply put, it is investing with very little in the way of serious risk involved. As long as you buy only from certified dealers, it's very hard to lose serious money in the metal.

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Linda Hess

July 1, 2009

True, these gold coins don't really have the same sort of iconic, archetypal appeal to Americans looking to purchase gold coins as the Saint Gaudens coins like the Lady Liberty, but they are a solid choice for coin investing, nonetheless, following many of the same standards of purity, weight and content as the United States Mint gold coins.

To provide a basic introduction to the Canadian Maple Leaf coins, each type of coin has something of a theme to it. In 2007 they minted a two hundred dollar coin being a one troy ounce disc of .999999 pure gold with a leaf on one side and the Queen on the other. They also minted five “Million Dollar Coins” that year, weighing in at a hefty one hundred kilograms of .999999 pure gold. The next year they minted 1,700 more two hundred dollar pieces, being “special limited edition first strike” pieces.

Certain limited collector’s edition coins include the colored gold Canadian Maple Leaf in 1999 with the theme of “20th Anniversary of the GML”. They’ve also produced hologram coins in 1999 and 2001 with a ¼ ounce coin being sold at $195 Canadian and the others being sold at $1,995 Canadian.

Now to provide a crash course in Krugerrands, the official gold coin of South Africa…

The coin was first minted in 1967 and while it does have legal tender status in South Africa it is not meant to be used as currency of course. The coin was actually the first bullion coin that could be used as legal tender at the face value of its gold content. So while the American Eagles are not actually worth a scant twenty dollars, the denomination on the one troy ounce Krugerrand actually reads 1 oz. The various sizes available to gold investors are similar to the American investment coins; the one ounce coin, the half ounce coin, the quarter ounce and the tenth ounce.

The coin itself is adorned with an image of the face of Paul Kruger, facing to the left, on the obverse, and an image of an elk on the reverse.

It should be noted: If you invest in silver coins, avoid the silver Krugerrands. The real coins are made in gold only for a number of reasons (the official website of the South African Mint Company and the Rand Refinery both list these reasons if you’re curious, as there’s simply too much history to relate here), but the bottom line is that the silver coins are, according to the companies which produce the real coins; “Not official, have no legal tender value, are not produced or sanctioned by the South African Mint or Government, not Krugerrands, and not even coins.” Ouch. Of course many of the knockoffs are real silver, but don’t think you’re buying a real Krugerrand if you choose to buy through “Acme Kruggerands Ltd.”

If you prefer to simply wait for the US Mint to resume sales of your favorite American investment coin then by all means feel free, but understand that when it comes to coin investing you can purchase gold coins from anywhere in the world and, as long as you're buying from legitimate vendors and the coin's metal value is verified, then no matter where you buy gold coins, for investment purposes a Krugerrand is just as good as a Twenty Dollar Saint Gaudens.

Of course in the end it really is your choice. The most important thing to remember in coin investing is that you need to invest in what you're comfortable with and that you should buy and sell at your own pace. Investing in precious coins is about peace of mind, and providing yourself with a solid foundation for your finances to ensure security in the event of unforeseen circumstance and to free yourself up to pursue other interests. So in short, if you don't mind waiting for the US Mint to start selling Gold Eagles again, then just relax and wait. On the other hand, if you notice an upwards trend in gold and you want to capitalize on it before the peak hits, then go ahead and look into Canadian Maple Leafs and Krugerrands. Again, it's your choice.

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Linda Hess

May 16, 2009

It seems governments of all kinds have communication problems and it will never change. For example, US Congressman Barney Frank said that Treasury Secretary Paulsen was told to help people in danger of their homes being foreclosed when he was distributing bailout funds. No..no…no…said Paulsen. He claimed he was told to bolster economic stability and that has nothing to do with economic security.

What was that again? Could you repeat that?

Gee….I thought helping taxpayers find economic security was a major factor in finding general financial market stability. It seems to me that people who are secure in their jobs and secure in their finances make sound consumers who stimulate the economy. When you don't spend and I don't spend and your neighbors don’t spend, the economy quickly sinks. And that is exactly what is happening. The banks may not want to use the taxpayer dollars to ease credit markets for consumers, but they are also going to be crying foul soon. The banks are facing foreclosing on another 5 million homes in the next 12 to 24 months. And because they are making it extremely difficult to get a loan, people are not buying cars or major appliances or anything else that cost more than a bag of groceries (which is expensive enough).

The banks are, in effect, telling US taxpayers to eat cake since they can't afford bread.

Mr. Paulsen was thumbing his nose at Congress and pointing out that cake could be cut different ways. Paulsen was saying "my way or no way".

Everyone agreed that what President Barack Obama really needed to do was announce who he planned on making the new Treasury Secretary. Back then Treasury Secretary Paulsen had the luxury of being able to be defiant because he wouldn’t be around much longer. In fact, he said he did not want to ask the US Congress for the second half of the $700 billion bailout package and was going to let the next sucker…..I mean….Treasury Secretary…. handle the job.

The world is watching the United States to see if it can restore financial stability. What is puzzling is that gold prices are not moving up like they should be. But what a great opportunity for precious metal buying while prices are stable! There is a lot of pent up value residing in gold and there will be a rally in the near future.

The speculation among gold investors is that the Feds are manipulating the price of gold to avoid the appearance of inflation through rising gold prices. This is purely speculation, but these speculations back up the belief that the price of gold is not going to stay at its current level much longer. The price is predicted to rise significantly as it becomes a safer and safer financial investment in view of fumbling and stumbling equity and currency markets.

The fact is that US Treasury securities and gold are the two safest investments, and of those two, gold is best choice. The US Treasury securities look like safe haven assets, but there is a lot of doubt built into the economic system right now. The US has been unable to prevent a continued slide towards recession (depression) and the expected recovery time is extended every week. It looks like it will take all of 2010 for the US economy to start heading in the right direction again. What this means is that the government gurus are really uncertain about what they are doing to salvage this economic mess.

To all US citizens, here is a question. How does it feel to live in a country that has single handedly brought down the entire global financial markets?

A financial analyst made an interesting point. He said that what is going on in the United States is a crisis of the system and that system is capitalism. What a downright frightening thought. The very credibility of the US currency is in question. Who would have ever thought things could get so bad? And is hyperinflation the next order of business?

Gold prices will go up. There is general agreement among analysts that it should be going up now, but it will rise in the near future as the impact of the currency injections into the world economies shakes out. Right now gold is at its lowest level. It is at an arbitrarily low price instead of the "should of – would of" price if the free commodity markets were operating normally.

There are other factors which are making it a great time to buy gold. Institutional selling of gold is at high levels right now as companies seek ways to raise cash. In fact, the institutional selling is offsetting the retail buying of gold bars and coins. The demand for gold bars and coins remains extremely strong, and it is due to two primary factors: the suppressed price as discussed and the need for investors to find a safe place to park their money.

In the long term, the global financial markets are going to have to be redefined. The crisis in the capitalistic system has created a crisis in every other financial system in the world. If anyone has ever wondered exactly how "global" global can get, they now know. I really don't think the average investor, not the big time movers and shakers, understood how intricately entwined the financial markets were/are are no matter what kind of government a country had installed.

This integration of the financial markets has made it clear that part of your investment portfolio should be in the safest investment possible which is gold. There is just nothing like gold when it comes to maintaining long term value. It also gives your portfolio a lot of selling and buying flexibility. As other assets fail to perform, you can be assured that you will be able to trade in gold.

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Danny Burns

April 18, 2009

Like many other gold and silver coins, their value being nearly a whole ounce (0.859 troy ounces or 26.73g) of 90% silver and 10% copper (for a total silver weight of 0.773 troy ounces), some Peace Dollars have been removed from circulation for melting down, but most often as a economic and political ploy. A far larger number have been maintained as collectors' items and the object of rare coin projections.

Though not as easily exchanged as 1-ounce silver bullion coins, these increasingly rare coins have a numismatic value far beyond their face value. Even when silver was up over $20 per ounce in early 2008, only the poorest specimens would fail to be worth the $15 of silver value. Indeed, the rare coin projections of most numismatists concerning Peace Dollars exceeds this many, many times over.

Designed in 1921 to commemorate the end of the war, this coin is so-named for the word “PEACE” emblazoned on the reverse of the coin, under the feet of an eagle in profile. The front features a stylized rendering of the artist's wife, Teresa, as Lady Liberty.

The Peace Dollar is curious for having been struck in relatively low numbers while the Morgan Dollar, resurrected after a 17-year hiatus, had a massive run of over 40 million coins earlier in 1921. Rare coin projections are largely based upon the relative rarity of the minting in a given year, and several years of the Peace Dollar were extremely small.

The Peace Dollar was made possible, by the Pittman Act, signed into law by congress in 1918. This called for melting silver bullion and dollars – about 280 million ounces of silver (much of it found in Pittman's home state of Nevada) – and selling most of it to UK. Subsequent US silver production would be purchased by the US Government at a dollar above the spot price for the manufacture of new silver dollars to replace the old ones, effectively functioning as a silver subsidy until the 280 million coin total mark was reached in 1928..

The first run of the Peace Dollar, in 1921, was problematic due to the unique features that led to such a dramatic design. The relief on the coins was too high, breaking the dies and making them difficult to strike. As a result, the coin was redesigned, with subsequent strikings conforming to the adjusted design.

There are very few proof sets of Peace Dollars in existence, and it is thought that the Peace Dollar is one coin that is most often used to fool inexperienced coin collectors into purchasing coins of lesser value based upon faulty grading. These coins are graded by slightly different standards than other Peace Dollars.

In the year of Francisci's death, the Peace Dollar was minted one more time, just after congress decided to recall all silver coinage and melt it down in response to a silver shortage in the early and mid-1960s. Though over 300,000 of these last silver dollars were minted, they were all melted down at the special request of congress, making the last normal year of production, 1928. The few coins minted in 1934 and 1935 were issued to honor silver certificates.

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Joseph Morton

April 12, 2009

Back in November the big three US auto makers showed up in front of a Congressional panel asking for a loan or a bailout or a mix including some of each. Congressmen and women huffed and puffed and blew the CEOs right back to their expensively decorated offices and told them to rethink their request.

So on 2/December/2008, they returned and asked again for a loan or a bailout or a mix of some of each. Sigh! What’s a Congress to do?

The fact is the US economy is receding fast and there is not much good news to tell. The equity markets are bouncing around like a rubber ball thrown against the wall. The only thing that is remaining fairly stable is the price of gold. Though the price was over $900 last week, it had dropped to $882.80 per troy ounce in US dollars as of April 11, 2009. This is a 2.98% decline but when you compare it to the 5% to 8% declines in the equity markets, gold looks safer by the moment.

The fact is that no one knows for sure what is going to stop the continued deepening of the recession. The financial markets are constantly poised right now to respond to even tidbits of news. Some analysts say that the bleak news is already built into stock prices, but if that is true, why are equity markets seeing triple digit decreases at this point?

So we are back to the question of who is minding the store. One of the reasons investors are turning to safe haven investments such as gold is because they simply have no confidence in the economy right now nor in the people like Secretary Treasurer and Federal Reserve Chairman to deal with the financial problems.

For example, why is the US government trying to stimulate consumer spending and employment with a stimulus package when the problem is in the banking system? Maybe the banks should be stimulated…or punished…depending on your viewpoint. Oh wait….the banks were supposedly stimulated with some of the original $700 billion bailout money from the US Treasury. Because of the determination of banks and loan institutions to create false value through paper transactions called mortgages, investors are now barely able to track equity or currency rate changes on a day to day business.

Then Austan Goolsbee, an economic adviser to the President, made the profound statement, “I don’t know what the number is going to be, but it’s going to be a big number. It has to be. The point is to, kind of, get people back on track and startle the thing into submission.” The “number” he is talking about the amount of stimulus funding necessary to get the US economy moving in the right direction. The “thing” is the economy itself. The “kind of” is somewhat of a mystery.

Reading those words, it is no surprise that investors are not really feeling a lot of confidence in the ability of the government to handle this national or global crisis.

With investors approaching the financial markets with no confidence, it is not surprising that equity and currency markets are jumping all over the place. The US dollar weakens and then strengthens and then weakens against other global currencies such as the British pound and the euro. Economies that seemed to be at least under control, like Japan, have announced they are officially experiencing a recession.

It is no wonder that commodities like gold look so safe. Gold is a precious metal that will always have value. A stock can suddenly lose value that makes it almost worthless. If you don’t believe that then consider how General Motors stock value fell below $5 a share. This is one of the biggest companies in the United States for Pete’s sake. It is sad when a company like this has stock that can be said to “gain” to $4.85 per share. When General Motors CEO Rick Wagoner submitted the company plan for spending the government’s money, he said the company would be out of cash by the end of this year. He also claimed the GM plan was for the good of the US economy and not just for GM.

You may or may not believe that assertion, but what you can believe in is the importance of keeping a portion of your investment portfolio in a safe asset such as gold. That way you can sit back and watch and listen as the saying goes. You can watch and see if anyone really has figured out how to manage this financial crisis, and you can listen to the theorists try to explain why their particular stimulus plan is the best.

And that takes us right back to the original question. Who is minding the store?

If you are one of the investors who is uncertain about how to answer this question, then you probably cannot get too excited about investing much money in the equity market. And if you don’t buy stocks, what are you going to buy that has the most potential to appreciate?

The obvious answer, of course, is gold. Gold prices are considered to still be too low right now, which means the latest drop in price is a great opportunity to invest in one of the safest commodities possible. Some investors are choosing to put their money into the ultimate safe investment of US Treasury securities, but the yields are so low to be almost embarrassing. The Treasury security yields are sitting near 1940 lows.

The too-low gold prices are not going to stay that way. That’s a promise. The price of gold is understated right now, but eventually investors are going to realize that and then begin buying this precious metal in large quantities. When the price begins its ascent, it is expected to experience a significant gain.

You may not know who is watching the Federal store, but you can certainly watch your own store by keeping an inventory of gold investments in any form.

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Danny Burns

April 11, 2009

Though gold is a precious metal with a brilliant shine when polished, as an investment it has lost some luster for people, but not for the reasons you might think. The Wall Street vests made buying stocks the sexier thing to do and trading currencies became the intellectual investment strategy. In the meantime, gold has quietly risen steadily over the last 8 years until it now sits at over $800 per troy ounce.

The metal itself may be brilliant, but as an investment it is a solid portfolio addition because it is stable. The stock market can’t make that claim. It would be lying if it did.

If you want to talk about market instability, then just pick up a business newspaper and read the headlines.

Stable economies? Obviously not! In fact, even if the equity markets began to take on a semblance of stability it will take many months, if not years, before the full implications of the economic crisis play out. Here are some possible future headlines in a newspaper printed during 2009. · US Treasury Department Unable to Sell Enough Securities to Cover National Debt · Inflationary Pressures Continue to Rise · How Will the Euro Zone Restore Confidence in the Euro? · Major Financial Group Files Bankruptcy

Businesses come and go and so do their profits and asset value. But when you are buying gold bullion or you buy US gold coins, you are buying a level of portfolio stability you could not find anywhere else. Gold and silver are precious metals and a gold investment in particular has proven itself to be a hedge against instability in other markets.

Declining US Dollar?

You can find plenty of analysts and economists right now who are projecting the US dollar will decline in value when paired with other major global currencies by the end of 2009. The main premise of this prediction is the fact the US will have to raise enormous amounts of funds to cover a trillion dollar national debt. The big question is whether there will be problems accomplishing this goal…especially considering the benchmark interest rate is at 0%.

Gold investing can take a couple of forms. You can buy bullion or gold coins. But why should you? You should include gold in your portfolio because it is a great hedge against the possibility of a weakening US dollar and an unstable world economy.

Many investments are tied to the value of the US currency. For example, when the US dollar weakens investors turn to higher yielding assets which may lie in bonds or stocks. But gold has value in and of itself. The US dollar can fall or weaken, and the gold will still have value as a precious metal. When the demand for gold investing rises, the value of gold rises. So the dollar can weaken while the price of gold remains stable or rises which protects your investment portfolio against some of the losses you would have experienced otherwise.

Will the US dollar weaken when paired with a currency like the yen? It probably will, because there is still so much economic uncertainty in the financial marketplace. What this means is that the price of gold is expected to rise in 2009 as investors seek safe havens for investing. It will be the investment that can be made which will offset inflation and the loss of profits due to a weakening US dollar.

Selling The Kitchen Sink

You can debate for weeks whether it was a good or bad idea for the US to create so much national debt to bail out private businesses. There are two schools of thought of course.

The first school teaches that too much government intervention is not necessary even during a global crisis, because it leads to government ownership of private assets and excessive debt that may not ever get paid back. That leads to free market interference and many people believe the marketplace will adjust as necessary on its own.

The second school of thought believes governments had no choice but to assume private assets and prevent the collapse of the global banking system.

What is going to be the result of all this money injected in the market? The answer is there will be eventual inflation and a currency devaluation during 2009. You can get gold and silver spot prices and use the information to buy precious metals in order to protect your investment portfolio from the ravages of an uncertain marketplace funded by devaluing currency.

As governments sell more and more debt to pay for the bank bailouts, the dollar is sure to weaken. Money printing never deflates prices…it inflates. Gold reached its highest value in March 2008 at $1,032.70, but has fallen to a current $894.30. But here is the most important point to remember. Gold has risen in price for 8 straight years and is expected to do so again in 2009.

Through thick and thin, good and bad, inflation and stock declines…it’s gold you will find in the smart portfolios.

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Danny Burns

April 5, 2009

You have to ask yourself why gold is such a great investment no matter what financial conditions are like. Of course, one of the reasons is because it is a precious and limited metal. Anything that is limited in quantity will hold value. But gold is also seen as one of the most stable of investments, because the price may get temporarily dragged down when the economy causes falling metal demand, but there is never any doubt it will rise again. That leads back to the fact it is a precious and limited metal.

Precious metal investing has been popular since man discovered gold. Even ancient civilizations traded pure gold jewelry and coins for other commodities. With the current economic conditions, it sometimes feel as if we are going to have to return to trading shells and beads again to survive. It’s a doom and gloom world right now with investors seeking safe haven investments. Gold is a soft metal for hard times.

Deteriorating Conditions

Investors had really hoped that early 2009 would bring better news about the recession. Instead it has brought more instability. The markets are weak and that is why they swing by such large numbers at every piece of bad news. The news is bad around the world too. · US based Bank of America has asked for more bailout funds from the US government signaling a banking system that remains unstable · UK housing prices have fallen for several months in a row · Germany’s economy is expected to contract by at least 2.5% in 2009 · US housing foreclosures rose by an astonishing 81% in 2008 · Stock markets lost an estimated $29 trillion in value in 2008 and many stocks continue to decline to new lows · Retail sales continue to decline · Export-based economies are suffering losses as a result of the recession leading to less demand

The reductions in exports by countries such as China and Mexico are causing currency declines that are alarming. The current economic crisis is unique and has no precedent. Sure…it reminds you of the 1929 recession, but it’s not the same thing at all. In 1929 the federal government began a public works campaign to put people back to work but it did not buy bank or private assets. In 1929, the global economies were not so intricately tied together either. Before the current crisis began, how many average investors understood the US subprime mortgage market was funded by countries around the world? It was a house of cards waiting for a big wind.

A Gold Rush

Gold price projections for 2009 vary depending on which analyst report you read, but the majority of predictors are bears. In other words, they see the average price of gold rising in 2009 as it did in 2008. When you consider that 2008 was one of the worst years in financial terms, and 2009 is predicted to be more of the same, looking to gold investments as a hedge against portfolio losses makes sense.

Here’s another way to look at it. In 2008, whoever decided to buy US gold coins or gold bullion on New Year’s Eve 2007 would have seen close to a 3% average increase in value by the end of 2008. But there were plenty of opportunities along the way to buy and sell and make a substantial profit. If 3% does not sound like much, just consider most investors lost up to a third of their portfolio value when the stock markets plunged. Gold increased in value during a year that will go down in history as one of the worst years economically.

In good or bad economic times you can depend on gold over time to preserve your investment value. There are expectations for a weaker US dollar during 2009 and gold prices normally go in the opposite direction. A weaker US currency will mean stronger gold prices as investors seek safe haven assets.

A Safe Haven From What?

Gold prices have declined so far in 2009, but that is not going to continue over the year. In fact, some analysts are predicting it will reach over $1000 an ounce from its current $894.30 per troy ounce price. But even if you just look at the current price you realize what a haven an investment in gold can be.

Despite falling housing prices, falling equity markets, falling interest rates, and falling consumer spending….gold prices are holding to a level over $800 an ounce. That is really remarkable when you consider the severe problems financial markets are having.

Unfortunately, the government cash injections into the global economies are simply not working yet. In fact, US Federal Reserve Chairman Ben Bernanke said it would take significantly more government stimulus in order to halt the recessionary slide.

So how much is enough? No one knows how much is enough and that thought is scary in itself. If the government doesn’t know what will work to stimulate the economy, how are you supposed to know how to invest your money to avoid large losses in 2009? That’s the trillion dollar question, and one of the best answers is to buy gold whether it’s in the form of bullion or coins. Gold is a safe haven asset…always was and always will be.

When It All Looks Bad….Gold Looks Good

Interest rates are at zero percent for many investments now which make investments like government securities uninteresting and unproductive. The stock markets are expected to remain volatile in the months ahead meaning those who have already lost so much will be seeking safer places to put their money.

Gold, on the other hand, is expected to outperform other asset classes in 2009. The price may rise and fall but the trend is expected to be upward as the recession unfolds.

When things are looking bad in the financial markets….gold looks even better!

Article Archive

Stewart Lawson

April 4, 2009

The US scenario is being repeated around the world. Governments are scratching their proverbial heads trying to figure out what will work, because so far there is little indication the past cash injections are doing much good. Instead of solving the problem, the US and other governments are talking about instituting policies of quantitative easing. Quantitative easing is a strategy that basically involves printing money as fast as the printing presses will work and implies you can worry about inflation later.

A Flood of Cash

But what happens when you flood a market with anything? Think about flooding a market with a new electronic gadget. It initially sells at a high price and then rapidly falls as more and more are sold. The US dollar and other currencies are no different. If the economy is flooded with cash the value of the US currency will drop. Unless you are a savvy and lucky forex trader, your currency will buy less and less. Another way to look at this situation is the fact your savings and retirement accounts will also have less spending power, but it takes more currency to buy everything from food to houses.

Quantitative easing was developed by the Japanese in the early 2000s in response to a recession much less severe than the one faced now. It worked then but will it work now? Who knows? No one knows! The fact is that the fiscal policies being implemented right now are intended to add liquidity to the consumer and financial markets. What has been the response? People are saving again! They aren't spending….they are saving! There is more cash stored on bank balance sheets and in mutual fund accounts than has been seen in years!

Between Now and Eventually

The recession will work itself out…eventually. But between now and then there are a lot of losses yet to be realized. And there is a lot of proof that governments really are not sure what the right answer is when it comes to reversing the recessionary trend.

You can almost see the government analysts wringing their hands in frustration. Australia and Canada are working on giant stimulus packages. Japan is wondering if it needs to begin a policy of quantitative easing again. Germany is not happy with the ECB because of the interest rate issues. Currency values around the world remain volatile as exports continue to drop. China's industrial production is declining at an alarming rate. Russia's ruble has been devalued multiple times over the last 3 months. Oil prices for a barrel of crude don't know whether to go up or down.

Gold is the Real Bargain

This is really not meant to be seen as a doom and gloom scenario. It is just a snapshot of the volatility that remains in the financial markets. You could put your money into a stock right now that is called "undervalued" and a "real bargain" on strong fundamentals and find yourself holding worthless equity when the company goes bankrupt.

In 2009 the prediction is that bankruptcies and insolvencies are just beginning to gather steam. They began with the bankruptcy of Lehman Brothers Holdings, Inc. and haven't stopped yet. Giant retailers like Circuit City in the US and UK Woolworths have gone broke and they are just two out of hundreds of large and small companies not expected to make it through the recession intact.

Inflation is the next major concern facing consumers and businesses. The government balance sheets are growing by leaps and bounds. By the end of 2009, the US government is going to have to borrow almost $2 trillion dollars to pay for all of these stimulus packages. Security yields are sitting at or near zero so who is going to want to loan money to any government trying to sell bonds with such low returns? It would have to be the Armageddon of recessions before investors would loan money at the end of 2009 expecting to make almost no return. The bond yields today are at the lowest level they have been since World War II. It was after WWII that government spending and debt began the first cycle of growing faster than the Gross Domestic Product.

So is history repeating itself? If so…it's time to invest in gold bullion or gold coins or to make some other form of gold investment. Gold has been, and probably always be, the most solid and reliable financial investment. It has consistently risen in price over the years and is one of the few investments that is at its most attractive when times are uncertain and difficult like now. When banks and businesses are failing and inflation looms and interest rates are so low, gold takes on prominence as the best alternative investment. As people invested in equity markets continue to lose money, gold has risen in price for a solid month with February delivery futures currently sitting at $855 an ounce. The more aggressive believers in gold are predicting it could reach $1,200 to $1,500 a troy ounce within the next year.

Billions of Ounces

You may want to debate what the price of gold may be in 12 months, but you don't have to question the fact that all the money printing going on right now is going to lead to inflationary pressures and a declining US dollar. In fact, every country following similar bailout programs involving quantitative easing policies, government loans, and near-zero interest rates are going to face the same problems over the next year.

Last year there was US$20.2 trillion of gold traded in 2009. This was the equivalent of 23.2 billion troy ounces. In 2008 there was 19.3 billion troy ounces traded. Notice the increase? Smart investors know buying gold during uncertain financial times is the smart strategy for protecting portfolio value.

Gold is a solid safe-haven investment all the time, but especially during declining economic conditions.

Article Archive

Arthur McGuire

March 26, 2009

If you are an optimist, your happy thoughts are probably being thoroughly tested. The news in the last week alone has been very bad with global wars, deepening recessions, and weakening currencies. In the US, 2.6 million jobs were lost in 2008 and more are yet to claim unemployment. The number of new claims was lower than expected in December 2008, but realists are quick to point out that many people have already given up even trying to find a job or have fallen off the unemployment rolls and are no longer counted.

Speaking of unemployment, there are numerous US states that are telling the Federal government their state unemployment coffers are already broke. This means they have no way to pay unemployment claims unless they take money from other accounts such as education or health care or get Federal bailout money. Great choice they have to make, isn’t it?

The banks have had a rough year around the globe too. The collapse of the subprime mortgage industry followed by extensive government bailouts has created a whole new bubble analysts are just now beginning to talk about. This bubble is caused by bailout assets on bank balance sheets that now must either work to stimulate the economy or become a nonworking loan. From the other side, the governments are now faced with owning private assets as a result of the emergency bailout purchases and really have not thought much about what this means for the future.

The equity markets did not fare any better. Millions of people are now trying to figure out if they can retire due to the loss of as much as a third of their retirement accounts when stock markets fell. Around the world, the story is pretty much the same. There has been economic dislocation of a proportion not seen in history. Equity and currency markets are still unpredictable as a result of this dislocation.

Enough (Loss) is Enough!

So where does this leave the average investor? It seems the typical investor right now has two goals that must work in tandem. First, he or she wants to prevent further losses in portfolio value. Second, the average investor wants to recover, over time, some of the value already lost. These are two goals that are easy to put into words, but they are sure hard to meet in times of such economic turmoil.

A few weeks ago there was speculation the triple digit stock market swings were coming to an end. So what happens? the Dow Jones Industrial Average (DJIA) market dropped! What’s an investor to do?

To answer that question, ask yourself another one. Why is it that conversations always turn to precious metals as safe haven investments when the rest of the financial markets are going sour? The answer is that people get nervous about the stability of currencies in the foreign exchange market.

Whoa! What does that have to do with the US dollar which is considered the most stable currency in the world? The US dollar is the world’s benchmark currency after all and is the one against which other global currencies are paired when it’s time to measure stability and value. But even the US dollar, for all of its stability, is proving to be susceptible to market forces which are causing unpredictable strengthening and weakening based on the day’s news.

Don’t misinterpret this statement though. The US dollar remains the benchmark currency because the US has the most economic power to control and recover from even a severe recession. But one of the consquences of the global recession has been investors fleeing to safe haven investments. Remember the two goals listed earlier? The first one is to prevent further losses in portfolio value which means putting money into mostly safe assets.

Who Wants to Make Zero Percent?

The equity markets sure aren’t safe right now. In 2008, equity markets around the world lost $32,000 billion. US Treasury securities are safe, but you might as well hide your money in a mattress for all you will earn. The US Treasury yields are at zero on the three-month securities. You could trade on the foreign exchange, but that is risky right now because it requires a paired exchange. So you will you choose the euro which doesn’t know whether to stay up or down or the UK pound which recently was predicted to reach parity with the euro in 2009 and then suddenly strengthened but only after weakening for weeks?

The point is that predictable financial models are not working well right now. The economic crisis was caused by a never-before-seen mortgage calamity and so the “fixes” are not certain to fix anything. Even the most seasoned analysts and government experts, such as the ex Federal Reserve Chairman Alan Greenspan, have found themselves apologizing for not seeing this crisis forming and then not knowing for sure how to fix it. There have been massive stimulus packages issued by global governments and no knows for sure to this day if they are going to work, and if they do work, what kind of long-term impact they will have on the future economies and financial markets.

So what is a stable investment? A stable investment today is the same stable investment for last year, ten years ago, 30 years ago and earlier. It is precious metals and most specifically gold. With the uncertainty in the equity, mortgage and government markets there is no real stability in any investment except the one that has proven itself to be reliable, liquid, and profitable.

The Language of Profit

Gold is also the perfect hedge against a declining currency. The US dollar buys less now than it did just 6 months ago thanks to ongoing devaluation resulting from the recession. Everytime bad news is published about the economy, the dollar value drops. Gold values are not directly tied to the value of the US dollar or the value of any other currency. That is the primary reason why it makes such an ideal hedge against such an unstable market.

If you think about it, it doesn’t make sense to buy more currencies before buying gold. The value of the US dollar in the currency market is related to its pairing with another currency. Yet other currencies are facing the same problems as the US dollar. But when currency weakens, the price of gold, silver and platinum rises.

In an unstable market like this one, where large portfolio values have been lost and the market remains unstable, investing in gold simply makes sense. As people look for a safe haven asset they can count on to hold its value and appreciate over time, they only need to look to gold. As banks fail, equity markets drop, recessions deepen, and interest rates fall, it is gold that comes out of the fray still shining. While investors were losing up to 30% of their equity values in the stock markets, gold investors saw a 5.8% appreciation in 2008.

When the economists are talking “doom and gloom”, gold is speaking the language of profit.

Article Archive

Stewart Lawson

March 23, 2009