That has turned out to be precisely the case. A 15 percent yield for less than a month’s investment is a pretty good return. Also, this mirrors particular situations we’ve seen in the recent past. During the September correction that brought the price of gold down from its all-time nominal high of $1,923 an ounce in late August and early September of 2011, central banks around the world swooped in and bought gold at 40-year highs. The price of gold had only drifted to between $1,650 and $1,750, but central banks were buying at rates not seen since 1971 and the end of Bretton Woods.

We’re seeing the same dynamics now as the market rebounded with a bang from a New Year’s rally that extended into a full-on bull market rampage that saw the price of gold breaking through the key 200 day moving average without so much as a blink. The breach of that key technical indicator in the month of January means gold has entered a new phase in its market growth that breaks, in some ways, free from the constrains of the previous two corrections. We will be seeing new territory in gold in 2012, in other words.

In addition, there are several fundamental indicators that show the price of gold extended its long-term bull market for many months to come. The declaration by the Federal Reserve’s Federal Open Markets Committee that interest rates will remain low through the end of 2014 is a very good example of the fundamentals lining up for the gold market to grow and prosper through the coming months. When the announcement was made, the spot price rose $40 in twenty minutes. That is a pretty good indicator of where the price is going in the next two years. Gold coins are the primary way to get a piece of the action and, as the US Mint is itself breaking records for the most popular gold coin on the planet, now is a good time to get in and watch the action over the coming months.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Gold just had its best week in three months, essentially since the all-time nominal high was achieved in late August-early September at $1,923 an ounce. Since that time, we have experienced two corrections, or temporary and dramatic shifts downward in price. In September the price of gold dipped below $1,700 and at the depth of the correction in December the spot price was in the $1,500 range. These represent significant moves downward of 20 percent or more, which shocked a lot of people out of the market. But the market fundamentals always indicated a long-term bull market which we are now seeing manifest.

The buying trends in Asia are particularly pertinent to understanding the forecast for the price of gold because China and India are the top two consumers of gold on the planet. It was recently reported that imports to China in tonnage began a dramatic increase beginning in the September timeframe. Before then, imports to the mainland had remained relatively steady at 20 tons a month. Then, in November, that number increased to 102 tons. This is an incredible increase as world gold mine output, not counting China, is less than 200 tons a month.

The impact of this figure on gold coin prices is imminent and signals that investment in gold coins will perform very well in the coming months, based solely on the staggering volume of Chinese demand. This week, after the Chinese lunar New Year celebrations, the official press agency of the government, Xinhua, reported on the massive 49.7 percent increase in gold-buying over the week-long Chinese holiday. The Chinese market remains a mystery to many, but the sheer size and volume of the market combined with sales indicate that gold coin investment in America will be bolstered and supported by the massive increase in consumption in Asian markets.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

In addition to the Federal Open Markets Committee, gold benefitted from other policy events out of Washington this week as Secretary of the Treasury Timothy Geithner went back to Congress for an additional $1.2 trillion raise in the debt ceiling. The debt ceiling, all will remember, was the issue that brought DC to a standstill this past summer as Republicans, Democrats, and Eric Cantor waited until the last minute possible to allow the debt ceiling raised. This did little else than cause serious shock in the markets, as the raise proposed was actually minimal, necessitated a raise at the current time, and any other fiscal policy out of Washington has been unheard of since the beginning of World War II.

The more debt the government keeps on its balance sheets, the more valuable gold will become as Americans continue investing in gold coins to “hedge the idiocy of the political cycle,” as legendary hedge fund manager Kyle Bass puts it. When you buy gold coins, you’re buying insurance against the failures of Washington, which have been considerable if not damnable these past years. In order to protect your worth, your labor, your family, and your future, you buy gold coins. “It’s that simple,” Bass says.

Under the current circumstances, everything the Federal Government is doing is benefitting those who own and buy gold. In the first month of 2012, the US Mint is breaking records for sales of gold and its been selling gold and silver on a dollar for dollar basis, ensuring January will be a month to remember for gold and silver sales. The gains in gold and silver will continue through 2014. The Federal Open Markets Committee made that clear this week. After a decade of a bull market, it’s interesting to think that investing in gold coins and silver coins can be so staggering in quantity and have so much more to gain in value.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

The main driver in the price of gold coins is, of course, the unraveling of the European problem, which promises to keep price levels intact and gives every indication of prices rising further than the all-time high reached in August-September of last year at $1,923 an ounce. The latest project by Goldman Sachs, one of the many banks who have put gold squarely on the front burner for 2012, is that gold could climb to $1,940 in the near term, as reported by Bloomberg. Actually, Goldman has released several reports citing high expectations for gold, with numbers as high as $2,500 an ounce for the precious metal in 2012.

And Goldman is one of the more conservative forecasters out there. Credit Suisse put the high end of the figure north of $2,750 and Societe Generale, under duress as it faced bankruptcy prior to a central bank intervention, released a report that essentially said gold is the only safe currency in this market. Paper burns; gold and silver are forever.

Gold coins are the premium method of owning and investing in gold. The American gold eagle is the most recognizable coin on the planet and the US Mint has been breaking sales records in January of 2012, with orders expected to continue at strength for the foreseeable future. The European problem is not going away and Greek bonds are maturing with a few key dates in the next couple months. While prices are slightly lower due to the weakness in the Euro, a lot of smart investors are buying the dip, a strategy that will pay off in the next two months. We are about to see gold coin prices go much higher.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Now, gold has consolidated the gains it made after breaching the 200 day moving average, which effectively ended the correction. The news out of Europe is bringing the price higher for the time being as investors seek to hedge any exposure to European risk with the buying of safe haven assets.

The Thomson Reuters survey reports that global gold investment increased 20 percent last year to $80 billion. This is not surprising in a year that we saw a nominal high in the price of gold in late August and early September at $1,923 an ounce. However, in terms of quantity, the buying of physical bullion as expressed by the Thomson Reuters Survey is very impressive and reflects the full weight and power of the market.

Further, purchases of gold coins increased by 13 percent in 2011 and are projected to increase by 2.7 percent in the near term. The purchase of gold bars shows a very strong gain of 36 percent, highlight the quantity of physical bullion that was transferred last year.

In Asian markets, gold buying on the dip has resumed and increased. India and China have a long-term relationship with gold, which had cooled a little recently, but since the correction in December buying has resumed at a fast clip. Consumer demand for gold jewelry rose in India from 5 to 7 percent in 2011 and the largest retailer in the country projects growth at 10 to 15 percent this year. Indians store their wealth historically in gold and more than the West in jewelry. Such significant demand will affect the prices of gold coins in the rest of the world even more this year.

The Thomson Reuters Survey places the price of gold reaching $2,000 an ounce this year, which is conservative compared with the published projections of Goldman Sachs, Credit Suisse, and JP Morgan. Still, a projection of $2,000 an ounce is a fair projection and it demonstrates the robust power of gold to gain and advance in the market in the coming year.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Barron was particularly vocal in response to the many pundits and analysts who have mistakenly declared gold to be in a bubble, which is well-earned considering how many people erroneously advised that the gold market had peaked, entered bear territory, and the bubble had burst last month during the December correction. With the correction clearly over, marked by the breach of the 200 day moving average last week, and the price of gold up 5 percent this year so far, those pundits were clearly wrong and didn’t deserve the air time they were given. As for the gold bubble, Barron said, “It’s not in a bubble because the average Joe is not buying.” Barron is right on that one. Physical ownership in America accounts for less than 3 percent of the population.

Barron is particularly bullish on gold right now because of the global political and economic situation. He sees gold going to $2,000 to $2,500 later this year alone, which would be a sweet yield on any investment, and, “the catalysts are going to be international events and fear of inflation.” Those are some of the primary drivers for the price of gold and the value in gold coins in the recent years, but this will be true even more so in the New Year as the global situation, long on the back burner, is now coming to a boil.

“The whole (financial and economic) situation is looking really sick. The only way to bail these various countries out of the messes they are in is to print more money,” Barron said, reinforcing the regime of inflation that has so far kept the too bigs from failing and kept all of us tied to a global Ponzi scheme that has been running full speed ahead after hitting an iceberg. Considering that each ounce of gold purchased is an ounce of freedom from slavery, madness, and extraordinary austerity, as seen by a 27 year veteran of the mining industry, gold coin prices are the most affordable investment one could make and should make now.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Precious metal consumption in Asia had cool slightly in the fourth quarter of 2011, contributing to the December correction but also as a reaction to the fiscal decisions made regarding the European sovereign debt problem. This is very significant because Asian countries are historically more invested in gold than Western countries. India is the world’s largest consumer of gold jewelry because in that culture gold jewelry is a form of wealth storage.

China has been encouraging its citizens to invest in gold, specifically after key announcements by the Federal Reserve and central banks. Clearly, the Asian nation doesn’t trust the monetary policy or the plans undertaken to salvage the solvency of the European Union and, given that they have refused to bail out any European nation, they are taking steps to hedge themselves for the future of Europe, whatever that may be.

Gold traders are the most bullish in two months as mainland China imported the most metal ever from Hong Kong. This, as investors are buying US Mint bullion coins at the fastest pace we’ve seen in more than two years. China imported 102.8 metric tons in November, or around $5.4 billion.

This massive increase in buying is definitely a sign of things to come. Both in Asia and in the West where the US Mint is very busy keeping up with orders for bullion, investors are rightfully flocking to gold coins in 2012 as we are looking at the fundamentals for a long-term bull market unfolding, bring a return on any investment in gold you make.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Not a bad start for the year, considering two weeks ago some analysts were selling their gold and calling a bear market. Gold is already up $76 in the first eleven days of the year. That’s a 4.8 percent yield in seven trading days. And it looks, as the 200 day moving average was the line in the sand most analysts were watching, like the New Year’s rally will be extending into a protracted bull market rally. Gold has made all the technical moves necessary to indicate strong rises in price in the near term.

In the coming weeks and months, we will see gains on gold that will rival 2011 and possibly the 24 percent gain in 2011. Most banks are already aware of this and are buying gold and advising their clients to buy gold accordingly. The latest report comes from Citi, which projects the price of gold reaching $2,400 an ounce in 2012. That may seem like a stretch now, but Goldman Sachs, Credit Suisse, and Societe Generale are all projecting similar gains and the price of gold in the past 24 months has made greater gains in percentage. It is entirely possible we will see gold breach $2,000 an ounce this year and it may do so by a comfortable margin.

Right now, gold is down 14.7 percent from its all-time high of $1,923 an ounce on September 6, 2011. This makes gold coins a significant buy, as they are currently undervalued in a post-correction market. As the 200 day moving average has been breached and gold is reestablishing is firm upward trend, more and more investors will be reallocating into gold and the price will show in the coming week. Now is a good time to buy gold coins.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

However, the market influences currently in play make it particularly difficult this New Year to determine just how much of the current market is a New Year’s rally and how much of this market is a result of both economic crises and their effect on the gold market.

Everyone knows that exposure to European debt is what brought down MF Global. Shortly after the bank failed, a little-known lawsuit was filed in the Southern District of New York over who owned approximately 800,000 paper contracts for gold and silver. Hence, the term rehypothecation came into existence as banks had to explain, in a way as confusing as possible, how they were using the same precious metal accounts at the same to finance different risky investments.

No one knows how much actual physical metal underlies the paper contracts in existence. However, like derivatives, which are valueless debt instruments, there are paper contracts upon paper contracts upon paper contracts. Gold coins, and all precious metals, are traded on a fractional reserve basis, meaning there can be one underlying ounce of gold for, say, a hundred contracts in existence. If there were ever to be a crisis in which the value of the paper contracts was questioned, the actual value of the price of the underlying ounce of gold would skyrocket beyond any expectations.

In the coming months, there will be a move from the current stage of the European into a new stage. Exactly how this will work out and how it will affect the market is as yet unpredictable. However, it can conservatively estimated that many American institutions, perhaps more than we will know, are very much exposed to bad European debt and any ripple across the pond will bring about further bankruptcies here in America which will poke holes in the paper precious metals market. The resulting price increase will be astonishing. The gold coin prices available to you now may be the best opportunity to hedge this market and make money.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Gold is actually on track to outperform the Dow as it is now up 3.6 percent year to date while stocks are only up 1.9 percent. Gold has performed well, even during the correction against currencies also. In the face of the fiscal stimulus from central banks and the continued political problems in Europe, gold’s performance is pretty remarkable despite the attacks that have been made on its status.

The fundamentals of the market have always been intact. Supports around the $1,550 area remained strong and gold performed well against currencies considering the political upheaval occurring in Europe and its resultant effects on associated countries. The September correction in gold reached 28 percent before gold resumed its bull market upward climb. The December correction breached 20 percent, but the reversal has been pretty swift and strong.

The moves this week have prompted Citi to release a report projecting the price of gold to reach $2,400. They join an impressive list of major banks that have made similar claims in recent months including Goldman Sachs and Credit Suisse. Currently, the psychologically important level of $1,600 is holding and it is highly unlikely gold will dip below $1,550 an ounce. On the upside, there are resistance levels, per the Citi report, at $1,802 and further at $1,920 an ounce.

Currently, we’re at the very low end of that spectrum, which makes gold coins an incredible technical buy right now. The New Year has started off with a bang and it is very possible the gains will be extended into the next week as more and more investors recognize the correction is over and the bull market rages on. The time to get in is before the crowd. Buy gold coins now.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Yesterday’s price pop comes just one week after gold technically fulfilled the correction, falling 20 percent below its record September high of $1,923 per ounce. This dynamic had a lot of analysts and investors coming out of the woodwork to call the end of the gold bull market. It sounded ludicrous at the time to anyone who’s been with the precious metals for a few years, but it is clearly ridiculous to everyone now.

Now, with gold trading again above the psychologically important $1,600 level, we are seeing a different kind of dynamic. John Embry of $10 billion Sprott Asset Management has predicted that gold will never trade below $1,500 an ounce again. Barring major political or economic upheaval, he may be right as he has so far been correct about gold not trading below $1,000 an ounce.

The value of gold coins, especially numismatic gold coins, really shines in this kind of market because you see more stability in their added value. At times the market can seem a little volatile for some investors and numismatic pieces offer an additional level of support outside the spot price of gold and premium. It is something to keep in mind as we watch the market over the coming week to see how this current pop will work into the greater shape of things.

It is entirely possibly, probable even, that the price of gold could actually reverse the gains by week’s end or the end of next week. Of course, it is always a possibility that a further correction to a significantly lower level could unwind, but it is, right now, the most unlikely event. Also, fundamentals of the market are still intact for a long-term bull market, and even investors who do see a possible move lower recognize the price of gold will be significantly higher in the coming months than it is now.

It is advisable to purchase gold coins, specifically numismatic gold coins if possible, in the current climate to maximize your investment in gold and take advantage of the added value of numismatic gold coins.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

This was the second correction in gold for the year, the first occurring after an all-time high of $1,923 an ounce was reached in August and early September. We now know due to official reporting that following the September correction central banks around the world bought gold at record highs not seen since the end of Bretton Woods in 1971. Central banks haven’t bought this much gold in forty years.

The current correction, which already shows some signs of stabilization and possibly even reversal, offers a similar entry point opportunity. The market fundamentals are still intact and gold is a confident bull market for the foreseeable future, no matter what academics or television pundits say in the meantime. Just as they were wrong about gold in 2010, when the precious metal showed a 29.62 percent gain, they are wrong about gold being in a bubble or entering a bear market.

That will become incredibly clear over the coming days and months as investors, and central banks, take advantage of the relatively affordable prices by swooping in and buying as much gold as possible. The markets in 2011 were sluggish at best and there is not a single indicator or fiscal policy on the table to make one think otherwise for 2012. This makes gold coins the investment of the past year and the coming year.

Tangible commodities, gold, will be the star performer of 2012 as the system recognizes the constant injection of worthless paper debt instruments into the markets has a diminishing return, just like real estate. There are now over $707 trillion worth of Over the Counter derivatives in existence, with over $100 trillion having been created in the first half of 2011 alone. Markets will eventually recognize the difference and the unsustainability of the ratio. It would take the entire world’s GDP for 11.2 years to pay off the amount of derivatives currently loose upon the world. In this climate, and we may see a crossroads this year in 2012, gold coins are the best possible investment because they are real, tangible, and have an inherent value that has made it the historical store of wealth.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

For any who may have forgotten, it has since been reported in mainstream media that following the September correction central banks around the world were net buyers of gold in quantities not seen since the end of Bretton Woods in 1971. Corrections are to be expected here and there as they signal a healthy market that still has room to grow upwards.

And as far as analysts bashing gold, keep in mind who those analysts are and what they do. George Soros might be selling some gold now, though it would be a very bad investment strategy, but why should that matter to long-term investors who are making their money work for them, protecting their retirements, or providing for their children? George Soros is the guy who called gold “the ultimate bubble” in January 2010 when it was trading at $1,225 an ounce. Meanwhile, off-camera, he was a net-buyer of gold.

Then, the Telegraph reported in May of 2011 that George Soros had sold “almost his entire holding” of gold. This sparked huge concern in the market that the man who broke the Bank of England was signaling an imminent price collapse. Of course, Soros lost a lot of money when gold hit an all-time high in August of 2011. Missed that one, I guess.

The market fundamentals for gold such as permanently low interest rates per Federal Reserve policy and negative real interest rates indicate a gold bull market for a long time to come. We will experience corrections, as we’re experiencing now, but these are also known as buying opportunities. We have seen three 20 percent corrections in gold since the bull market began in 2000-2001 and each time the fundamentals kept the market intact and gold rebounded. Expect the price to be in correction territory and know that means the price of gold is more affordable right now. Investments in gold coin made now will pay off and pay off big in the months and years to come.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

At the top of the list of major events waiting to influence the price of gold is the European problem. There is no solution to the European sovereign debt crisis and the rift in the European Union, and its leaders, threatens the validity of the Euro. Any crisis in the Euro, past what we have already seen, will directly affect the price of gold as investors flock to the precious metal for its safe haven powers as well as moneymaking abilities in any currency crisis.

Further, as we have seen with the collapse of MF Global, American banking institutional exposure to European sovereign debt will bring that crisis to our shores in varying degrees. Unfortunately, more trusting bank depositors will find their savings “missing” or with a “trustee” until further notice. $1.5 billion worth of customer money is still unaccounted for after MF Global used its depositor’s accounts to make investments.

This is one of the major crises staring down the American banking system. Even the gold and silver contracts that were held by the bank are totally gone. The importance of holding physical gold and silver will come to the fore in the New Year, even if just one more crisis a fraction of the magnitude of MF Global occurs. Gold and silver contracts in the hands of a big bank is the equivalent of giving a bullets to a maniac with a sawed-off shotgun. The odds of seeing those bullets again are pretty low.

So, as the New Year approaches and you make your plans to increase your positions in gold and silver, remember that the physical ownership debate will be pretty big in 2012. Provided you own more than paper and you’re not keeping that paper in JP Morgan, which currently has a lawsuit pending over which bank owns the same contracts lost in MF Global’s collapse, you can count on the gold you invest in serving you well in 2012. Now is an extraordinarily good time to buy gold. Gold coins are some of the best ways to make your money work for you.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

So, if we were to look at the list of pressing issues confronting the world markets today, we would start with Europe. Measures taken to keep Southern European countries in a stable state of solvency have failed and Northern Europeans countries are no longer willing to finance the politically unpopular bailouts. Foreign countries, such as Brazil and China, have sent Europe packing. Recent disagreements at the European Summit in Brussels have revealed major rifts between European leaders and nations and the crisis literally threatens to undermine the validity of the currency, the Euro.

Meanwhile, stagnation continues in the United States as less than 500 homes worth more than $750,000 have sold in the past four months. Unemployment is already rising before the end of the holiday season, and market targets for the holiday shopping boost have missed by a mile, making 2011 one of the worst years for US consumers in history.

2011 is also notable because in the first six months of the year more derivatives, the financial instrument responsible for taking the world to the edge of the abyss, were created than at any other time in history. There are now over $707 trillion worth of Over the Counter derivatives in existence, $100 trillion more than this time last year, which literally threaten the validity of the markets.

Fiscal policies put forth recently by the Federal Reserve, the Bank of Switzerland, the Bank of England, the Bank of Japan, and several other central banks has demonstrated just how serious the global system remains. On November 30, the central banks agreed to lower the swap rate of US dollars, possibly, according to Forbes, following the near-failure of a major European bank. This action made borrowing between banks ridiculously easy, sparking a concern that a further credit crunch would have already taken place without the measure and may still be in the works.

The value of gold coins in such a market is difficult to determine precisely. Gold is certainly undervalued right now considering its position as a tangible commodity in a paper market on fire. The reasons to buy gold are very easy to see. When the dust settles, and it’s all ash, gold coins will still be here and will still be shining.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

It was a great surprise to most that the price of gold fell after the European Central Bank, the Bank of Switzerland, and the Bank of England decided to make lending easier between themselves. The European crisis was largely to account for the bank decision that has caused a 15 percent drop in the price of gold. This dynamic has caused many analysts and investors to start calling the price of gold an indicator of a bear market.

However, the price of gold no more predicts a bear market than the Federal Reserve decision has provided a solution to the European debt problem. Technically, a downward correction in the precious metals consists of a 20 percent price change. This has happened three times since gold began its rise as a star performer in 2001. There was a 34 percent drop in the price of gold in 2008, with a significant decrease following the bankruptcy of Lehman Brothers.

Gold actually hit $681 an ounce at that time. I’m sure there were the typical analysts incorrectly calling the gold market at that time, as well. Perhaps they used words like, “barbaric.” However, if you were to have bought gold in 2008 at $681 an ounce and held it today at $1607.07 an ounce, you would agree quite wholly with the larger fundamentals of the gold market.

Gold is the star performer of this year and the best performing asset of this decade. While it may be down 15 percent on the month, gold is up roughly 14 percent from the 2010 settlement at $1,421.40. Each ounce of gold you bought in 2008 at $681 an ounce has earned you $1,000, just by being. The price of gold today is very clearly an indication of a market that has, continually, performed very well.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

There are now $707 trillion worth of valueless derivatives in existence. That is the equivalent of the entire gross domestic product of the planet for 11.2 years. That’s a whole lot of paper. Currently, several economic and political crises threaten the extraordinarily fragile economies of the world. Fitch is now reporting that it will downgrade seven European nations. Britain, that mighty empire upon which the sun never set, has a debt-to-GDP ratio of over 900 percent. It is a very precarious situation.

As such, the policies of printing money literally cannot stop. Ben Bernanke, once he turned the printing presses on, pretty much ensured they would keep going. This is not hyperbole. The Federal Reserve has officially announced it will keep interest rates low indefinitely. That means endlessly. The effect of such a drastic monetary measure is a reverse incentive to owning dollars. Each dollar you own that is sitting in an account inactive is actually losing value by the day due to Federal Reserve policies.

The value inherent in gold, under these circumstances, is many times enhanced. It’s difficult to guess exactly where gold will go in price or when, but we can make very good estimations based on data. Currently, the price is down 15 percent on the month and many analysts are incorrectly talking about the market reversing. Gold has been in a bull market for 11 years and has had three corrections of 20 percent in those 11 years. The fundamentals are the same. It will correct upward and will continue to rise.

In addition, the more derivatives that are created in the financial sector as a means of keeping it alive, the more notional value is added to gold. All that money out there allocated to inherently worthless things reflects back on the best tangible commodity in existence, gold. You can’t debase a currency without strengthening gold, and that’s how we know the value of gold coins can be trusted more than any paper currency.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Over 400,000 accounts at MF Global representing $1.5 billion worth of money customer deposited in the bank are currently missing. As Jon Corzine testifies before Congress about the bankruptcy of the institution he ran, MF Global officials have stated that money is with a “Trustee” and customers “may” see it again. Why was MF Global using customer money to finance shaky bets on European sovereign debt? Because the Commodities Futures Trading Commission, the governmental agency responsible for overseeing the banks’ activities, issued a ruling that specifically allows them, and all banks like them, to do so.

The question that arises is whose money is safe? The short answer is, if it’s in a big bank, nobodies money is safe. Several customers at MF Global, including well-known pundits who have been advocating gold and silver as a means of wealth preservation for years, lost the gold and silver that they had been holding in accounts. Banks can and do use the gold and silver their customers deposit for safekeeping as collateral on questionable bets.

The best way to avert the entire scenario of a banker fuddling with your money and using it to pay off debts is now to put your money in gold and silver. It is highly advantageous in this market to hold that gold and silver yourself if it’s possible and it makes sense to you as an individual. While in your hands, no banker can use your gold and silver in ways that are completely legally sanctioned, extraordinarily morally questionable, and do not require disclosure to you as the owner of that money, even if the bet loses and your money goes to pay for it. With the investing environment now, the gold coins you buy increase your wealth over time while making it more difficult for banks and bankers to lose or erode your wealth. Fight back with gold coins.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Calling the low is like calling the high—most analysts do it afterwards. The truth is we’re talking about a relatively low percentage in lost or gained yield, given you’re buying in the overall trend line. The price of gold coins is set to continue its bull market; so catching the curve most likely means you’ll miss it. The fundamentals show a market that is ready to go higher with currently low prices.

A similar action happened just in September of this year. We now know that during the third quarter, in response to the correction at that time, central banks began buying gold at forty-year highs. Central banks haven’t bought as much gold as they did in September since the 1970’s when Nixon first took us off the gold standard. Each correction that occurs is a buying opportunity in this market and central banks know it.

This of course is taking place as banks are taking significant risks with customer money. We’re still in the wake of the MF Global crisis, with Jon Corzine answering yet another round of questions before a Congressional Committee. The money’s pretty surely gone, however Corzine answers, and the bad trade MF Global made that caused the bank’s failure was completely legal per rulings from the government agency in charge of regulating the bank, the Commodities Futures Trading Commission.

This week, the buzzword is “rehypothecating,” which sounds almost academic, but it’s actually quite dangerous in that it means using customer gold instead of customer money as collateral on bank bets. Gold coins are the best way to get your money out of a system that has proven time and again that it cannot operate while leaving your account intact.

The current correction in prices is an opportunity for every kind of investor to take their money out of the banks that are misusing it and put it into gold coins, where the bull market will see your investment’s safety and growth over the next year.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Investment demand for gold bullion and gold coins remains robust worldwide, so the price difference cannot be due to investor demand. It is being reported that gold-buyers in India and China are taking advantage of the gold price and buying on the dip.

October became the fourth successive month of an increase in overall imports of gold into China via Hong Kong. This is very significant because China amounts to about a quarter of estimated global demand for gold and that demand in China has a direct effect on prices here in the US. Demand for gold has risen, not fallen, and this is typified by the numbers coming out now.

Certainly, if central banks are any indication, the current dip is a major investment opportunity. In September, when a more pronounced correction took place, central banks began buying gold at forty year highs. While banks typically do not disclose changes in their reserves, it was subsequently published how much buying they’d been doing in the third quarter and the amount of gold central banks bought is staggering.

Several major banks, including Goldman Sachs, Credit Suisse, and Societe Generale, have published to their clientele in the past month that gold is set to perform very well through the entire year of 2012. These reports generally cite the key low interest rates in the US and negative real interest rates as a quantifiable source for this projection.

In addition to low interest rates, the money-printing that central banks are doing will also benefit the price of gold. While the most recent round of fiscal stimulus has taken on a different name and face from previous actions, it is the same in terms of macroeconomics. We can expect the price or gold to benefit, though it may take a little time.

The US dollar has been bolstered by the action of the central banks, but there is little reason to expect that effect to continue indefinitely. It’s a question of when you want to take advantage of that leverage through buying precious metals. Barring further intervention, the price of gold must rise and as it does the price of gold coins will rise with it.

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Kevin Johnson

Senior Staff Writer - GoldCoin.net

Things may be progressing a bit further, now. As the European summit has ended, rifts in the EU are beginning to show, and Moody’s has its downgrading eyes set on France, traders and investors are waiting for the next phase to kick in. The stimulus in the form of the Federal Reserve decision to lower US dollar swap rates with the major central banks of the world seems to be keeping liquidity in the system, but eventually the European problem will have some effect on US markets.

This kind of risk in the system proves the strength of gold coins not just as an investment mechanism but as a store of actual physical wealth. So long as your gold is not in MF Global, you’re still have your money and are most likely enjoying a return. That’s quite a bit in this market.

Especially as we go forward and further complications necessarily arise the value of gold will become more apparent. It is the best performing asset of the past twelve months, but it is still undervalued in this market. The actual, real value of gold coin is almost indeterminable considering the nominal amount of OTC derivatives in existence. Contrary to common sense, there has been a vast acceleration in the creation of derivatives on the open market with $107 trillion worth coming into existence this year alone. All of those valueless paper debt instruments debase the fiat money and strengthen gold.

The price of gold cannot be nearly accurate for the actual underlying value in that kind of climate, but it can be reasonably understood that precious metals are a lot more valuable than we think. However decoupling actions work out in the market is fairly irrelevant when considering real value of gold is many times what is currently paid for it at market.

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Kevin Johnson

Senior Staff Writer - GoldCoin.net

It’s always entertaining to listen to what he has to say, given he holds a PhD in economics. Lately, there’s been a lot of talk about an interview Dr. Faber did for Bloomberg TV in which he was asked about the outlook for the Euro while the summit in Brussels met and the ECB announced it was lowering rates. Faber replied, “I have a very special stock tip for you. The symbol is g-o-l-d. That is what I prefer to hold. Both the euro and the dollar are long-term undesirable currencies, especially given zero interest rates in the US.”

Given that the ECB just slashed its key interest rate by a quarter of a percentage point and made it practically free for European banks to get loans, Dr. Faber’s insight about the price of gold and its relationship to the interest rates of central banks is pretty timely.

While no one can truly say yet what the effect of the decision made by the ECB will have on the European sovereign debt crisis, we know that past interventions, bailouts, and policies have been limited in their effectiveness at stemming the tide of the debt crisis. In addition, any policy has failed to address what are acknowledged to be the root issues of the debt crisis. This has allowed the problem to fester.

Economists like Marc Faber, as funny as he is in his interview appearance, take this situation deadly serious and protect themselves with gold. International investors, like Faber, are not exposed to the European risk. In fact, some stand to benefit quite handsomely. Gold coins are an effective and easy way of owning gold for average Americans. They are a great store of wealth, they require little space, and gold coins are a perfect way to physically hold your worth in the palm of your hand. Whatever happens in Europe and whatever effect it has on American markets need not bother you if you listen to Dr. Faber’s stock tip and buy gold coins.

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Kevin Johnson

Senior Staff Writer - GoldCoin.net

Standard & Poor’s is now effectively threatening to downgrade the credit rating of all seventeen nations of the European Union and, on November 29, downgraded the credit rating of thirty-seven global banks, including fourteen of the largest banks and brokerage firms in the US. Famously, the price of Bank of America’s stock is testing the $5 a share level, creating a financial crisis that may have prompted the Federal Reserve agreement with several central banks last week to lower the swap rate of the US dollar.

Everything is certainly far from business as usual in finance, and while one must hope that Forbes was inaccurate in reporting last week that we nearly saw the collapse of yet another large bank, it is important to recognize very clearly that your hard earned money and the wealth of your family is not safe in the American banking system. The customers of MF Global can attest to that. MF Global, whose boss, Jon Corzine, former Governor of the State of New Jersey, will be testifying before Congress tomorrow as to his role in the bankruptcy of that once-venerated American institution.

The best thing you can do in this market, given the problems confronting Europe and the effect it has and will be having on the American banking system is to put your money in gold. The store of wealth has served man for millennia and will continue to do so. Comparatively, the stock of Bank of America has been around for the blink of an eye. And from an all time high of almost $55 dollars a share in 2006, Bank of America stock has fallen to just over $5 a share.

In the same period of time, the price of an ounce of gold has risen from $720 in 2006 to today’s $1,730. That’s an increase of 240 percent. The price of gold has beaten every stock in its performance and, given the troubles in the markets and in Europe, gold is set to continue as the best investment available.

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Kevin Johnson

Senior Staff Writer - GoldCoin.net

Several European banks were involved in the agreement, and beginning Monday, the lower rates for the swapping of dollars will take effect. Forbes is now reporting that higher gold prices are expected next week. “The central bank liquidity injection to help make it easier for European banks to access U.S. dollars is considered bullish for gold.”

The more banks fiddle with the value of the US dollar, the more the dollar benefits. This has been true since the beginning of this crisis with an asset that is up 600% in the decade and up 19.3% in the month. It is expected that the central bank’s action in the coming weeks will continue that trend and accelerate it.

This is a traditionally safe and smart bet, considering the history of gold. When artificial debt instruments really began accelerating, from about 2001, the price of gold began its rise. There are now over $707 trillion worth of OTC derivatives in the world. It’s not particularly believable that such large amount of derivatives will not affect the money supply in some way. Many consider the creation of derivatives themselves to be a form of currency dilution. Historically, the debasement of any currency has been good for the price of gold.

The price of gold coins will benefit from the agreement banks made this week, no matter what else it does. The debasement of any currency will increase the price of gold nominally. To keep up with the creation of dollars, gold could actually be priced up to $8,500 an ounce, per a report from Societe Generale. The price of gold is headed in one direction and the value of gold coins will reflect this move upward this coming week.

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Kevin Johnson

Senior Staff Writer - GoldCoin.net

Gold has already done quite well, considering the problems in Europe. It is partially American bank’s exposure to bad bank debt on European balance sheets that propelled gold over $1,900 an ounce in August. That fear has proven itself founded in the past month as we have seen a major American financial institution declare bankruptcy after a bet on European debt.

For a moment, never mind a bank used its customer’s funds to make that bankrupting bet and that it was completely legal and allowed by the associated regulatory governmental body. And it’s not like there are many Americans out there who are currently out a total $1.2 billion of money they had assumed was safe in their bank accounts. That would teach anybody to invest in gold and to own physical gold in bullion and certified coins.

Unfortunately, that all did transpire with the MF Global bankruptcy. If Americans haven’t got the message about gold, they’ll get other opportunities. Now, as Moody’s declares that “the probability of multiple defaults by Euro area countries is no longer negligible,” and openly announces it has the ratings of multiple European countries in its crosshairs, we should prepare for the fallout here on American soil.

There are no two ways around it: American institutions are at risk and your money is not safe in American banks. We will see more of the consequences of the European debt problem in America. It is only a matter of time before these all play out. As banks are exposed to that risk, they will use any money in an American bank to feed the crisis in Europe the moment the bet goes bad. When banks need liquidity, they have it. The only problem is it belongs to their customers.

The message is not only a “head’s up” as to where the price of gold bullion will go under these current conditions or a desperate plea to use your money to buy gold coins. There is a fundamental problem with the money in America and the only way to safeguard yourself from it is with precious metals. Gold bullion and gold coins are a very effective, and a well-recognized, way to do that now.

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Kevin Johnson

Senior Staff Writer - GoldCoin.net

It is most likely the event is positive sign for the price of gold and the event will contribute to the factors in the gold price over the coming week. The first shipment of gold from London arrived in Venezuela this weekend, according to Bloomberg. Chavez’s move has not prompted similar repatriations in South America yet, but is an indication as to how countries around the world are reacting to the debt crisis in Europe.

Recently, Brazil rejected a plea to buy European bonds, saying, “They have to find solutions to the European problems within Europe.” A disengagement from the European debt problem by the countries it formerly colonized provides a relatively immediate negative sentiment in the market but is not necessarily a make or break decision.

The price of gold, on the other hands, reacts very quickly and strongly to this news. As Venezuela takes its first shipment of physical gold and the debt problem rears its ugly head yet again this week in Europe, the path markers for the price of gold to increase are certainly present.

This is also an international statement on the value of owning physical metal. While allowing your gold to be held for you is sometimes simply a necessity, there is no substitute for holding physical gold. Gold does operate on fractional reserve lending, so institutions can trade in multiples of the actual underlying physical gold. If that in itself is not enough of an argument to own physical gold, consider that Hugo Chavez, widely called a dictator, has taken physical ownership of his country’s gold from vaults in London.

Any kind of news about the transfer of physical ownership of gold from one party to another typically instigates a rise in the price of gold coins. In this case, we also see a very strong statement, which you can interpret as you see fit, about the nature and status of physical ownership of gold . Clearly, Venezuela’s gold is worth enough to Hugo Chavez to formally have it shipped to his home from London.

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Kevin Johnson

Senior Staff Writer - GoldCoin.net

Despite the spot price, silver is generally regarded as undervalued in terms of the gold- silver ratio. The ratio dictates an historical relationship between the two metals that should give a rough estimation of their worth. Historically, the ratio runs from about eight to sixteen. In other words, it should take eight ounces of silver to buy one ounce of gold. Any more than that suggests silver is undervalued. Any less suggests silver is over valued. We are currently at a ratio of 54.161 and silver investors are clearly moving in on the market.

Recently prices have been kept low by the strength of the US dollar in response to the European debt problem but that suppression won’t last. An increase in the price of silver due to the buying activity of one Canadian billionaire will most certainly spill over into the gold market. This may partially account for why Sprott has been keeping his rather large move relatively quiet. Keeping outside investors from front running his purchase ensures he gets the best deal.

However, any news that will affect the prices of gold and silver is news to take into account when planning your purchase. And Sprott’s activity reflects a major market player that will generate a few waves in the pond. Typically, central banks are the biggest determinants of the price of precious metals as they are the biggest buyers. Central banks are not required to disclose their reserve changes and rarely do so.

However, a single Canadian billionaire making a purchase so large as to affect the prices of gold and silver in the entire market is a different story. This is more confirmation that big money is taking advantage of the best prices we may see in gold and silver as investing in gold coins and silver bullion is heating up.

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Kevin Johnson

Senior Staff Writer - GoldCoin.net

Black Friday actually refers to the time when merchants kept ledgers in which they recorded expenditures and income. The expenditures would be marked in red ink. The income from sales would be marked in black ink. Thus, on the busiest day of the holiday shopping season, there would be a prolific amount of black ink in their ledger.

We are only as good as how we spend our money and far too many Americans misunderstand the value in that. By spending too much money, money one doesn’t have, or overspending on one particular type of good, there is an indication of a problem with the spender, not necessarily with the good. Americans have had their heads pumped full of bogus propaganda for so many years with the sole aim and goal of getting them to spend more and more that it is no wonder so many of us no longer understand what is of value.

Did you know the moment you pay for a car it drops in value by 30 percent? Any electronics you plan on buying for yourself or your spouse this holiday are instantly worth 30 percent less the second you hand over those bills or sign on the line. That doesn’t sound like a very good deal to me.

Gold, on the other hand, never loses its inherent value. It is the store of wealth in history. It always has been and it always will be. And it’s comforting to know that you hold and possess the true measure of wealth.

Why not manage your life like the businesses of old? Make Black Friday one where your ledger is full of black ink. On Black Friday, purchase that which will gain in value after you purchase it. Gold coin’s value does not drop the instant it is purchased. The value is inherent. Gold will be worth far more in twelve months than any plasma screen you buy today.

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Kevin Johnson

Senior Staff Writer - GoldCoin.net

The slowdown in growth in China has been affecting the markets for some time. Most recently, a slowdown in manufacturing to 8 per cent is partially to account for the movement to the downside in the American and European stock markets. If the stocks are so sensitive to such a number, the burgeoning Chinese investment in gold will affect world gold markets and will affect gold coin prices in the United States in the months to come.

The Chinese government has been strongly encouraging its citizens to buy and to hold physical gold, and now silver, in various forms including jewelry. Depositors in the Bank of China have had the option to convert their savings to gold for years now. In recent months, silver has become an option for them as well.

Following the lead of central banks around the world, the Chinese gold imports also reached a record high in buying after the September correction that saw the price of gold reach as low as $1,534. As the price fell, Chinese investors were buying.

In fact, no one knows accurately what the Chinese holdings currently are. We do know, however, that China, as well as India, has a long history associated with gold. It is traditional in Chinese culture to own wealth in the form of gold. We do not share that tradition in the United States. This accounts for the buying of bars, coins, and jewelry. The buying of gold for jewelry this quarter in China has literally popped, the percentage being in the double digits.

As Chinese citizens continue to move into gold and Chinese demand for gold reflects traditional Chinese values, the world’s largest consumer of gold will contribute to a rise in prices here in the United States. This is not an overnight effect, but has certainly been occurring, and will continue to occur for some time. Gold coins, which are highly prized in China, may be the biggest beneficiary.

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Kevin Johnson

Senior Staff Writer - GoldCoin.net

There is a report out today that JP Morgan has a balance sheet that is leveraged beyond the levels of Enron. Enron corporation was one of the world’s leading energy companies its sudden and shocking bankruptcy in December of 2001 that included accounting fraud, criminal charges, and the destruction of employee investments and retirement savings.

While there is not any implication that any type of fraud or criminal behavior is currently happening at JP Morgan, there is the keen comparison between the two balance sheets as an indicator for how Americans are feeling about their banks.

Last week, MF Global went belly-up and now cannot account for at least $600 million of its customer’s funds. There are reports today that number is actually over a billion dollars. MF Global was also allowed by CFTC rules to use customer’s funds in the investments that caused it to go bankrupt, meaning what it did was completely sanctioned and made legal by the governmental body that set its regulations. The CFTC Democratic Commissioner Bart Chilton has since said “something nefarious” was happening at MF Global.

It’s impossible to quantify this much negative sentiment but it follows logically that Americans are increasingly fed up with the bad behavior and untrustworthiness of banks, they will reallocate their funds to safe and smart money. Regardless of what you think of banks, there is so much bad press these days you must take it into account when considering the future price and value of gold coins.

While we won’t see the shift overnight, there is a lot of room for Americans to grow into gold. It is estimated that only approximately 3 per cent of Americans own physical precious metal. As there is a resurgence of trouble in the banking sector and more and more Americans look to safe, reliable, and sound money, the price of gold coins, in a few month’s time, will benefit. The market is set for the metals.

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Kevin Johnson

Senior Staff Writer - GoldCoin.net

Rogers went to Wall Street in the sixties after studying at Yale and Oxford and co- founded the Quantum Fund with George Soros. He knows the Street. Rogers has the reputation of a rebel, however, for moves against the trend like selling his New York City mansion and moving to Singapore in December of 2007. A few years after Rogers makes his move, others tend to follow.

An outspoken proponent of free markets, the financial policies that have taken effect have proven, in Rogers’ view, highly destructive to the markets. “The world has been spending staggering amounts of money it does not have for a few decades now, and it is all coming home to roost,” Rogers said. He sees the United States experiencing further crises with major events in 2012 or 2013.

The concern that debt problems in the United States have been made progressively worse by further and further fiscal intervention does not belong to Mr. Rogers alone. However, due to his unique position on the outskirts of the market and his unique bona fide credentials, investors listen to Mr. Rogers and that gives weight to his prediction.

In such a market, the value of gold is brought into the spotlight as an inherent store of wealth and a commodity of real wealth. While the markets continue to overextend themselves and make the eventual problem worse, gold increasingly reigns as the best solution for workers, savers, and investors.

We generally have little influence or effect over the policy of politicians and bankers but we do have power over our own funds, no matter the size. Choosing to use our own money in a fashion that is responsible, given the behavior of the bureaucrats, means investing in tangibles with an inherent value. Gold is the embodiment of this description. Gold coin investing, which Mr. Rogers continues to do, will prove to be particularly wise in this market.

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Kevin Johnson

Senior Staff Writer - GoldCoin.net

MF Global, the recently failed big bank associated with Jon Corzine, is a grand example of how the American economy interlocks with the global economy. Through a Commodity Futures Trading Commission ruling, the bank was able to use customer funds to invest in European sovereign debt. Last Monday, unknowing customers received a phone call informing them their money was inaccessible and is currently held with a “trustee.”

Today, Reuters is reporting that a court will consider releasing $520 million of customer cash. “Consider” should be clearly emphasized. It is unknown the court decision will not take into account the nearly $600 million of customer funds are currently “unaccounted for.”

The sad truth is this is the new reality of American investing. Savers who work hard and keep their money in banks or invest through futures contracts are being fleeced and getting a phone call. With low interest rates that look to be staying with us for the foreseeable future and negative real interest rates, there is absolutely no incentive to keep money in savings. If you invest your money in futures markets, you risk losing it to the bank you’re investing with and the banks have the legal right to do this.

The value of gold coin shines in these examples because of its fundamental resistance to manipulation, exploitation, and outright fraud. Owning gold coin in this market is like having your cake and eating it, too. You get the store and value of your wealth, the accumulation of wealth that comes from investment, and the satisfaction of knowing your wealth is safe with a good company far from the reaches of a bank or in your own possession.

Forget Europe, forget China, and let yourself forget big banks with Washington connections robbing honest Americans. Purchase gold coins and free yourself.

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Kevin Johnson

Senior Staff Writer - GoldCoin.net

But when the bank failed, the losses were passed on to the customers. Famously, Gerald Celente, a longtime advocate of buying not only gold but physical gold, had his account confiscated in the proceedings. Celente is the Director of the Trends Research Institute and the Publisher of its journal and has been warning about bank failures for years. Celente had been planning on taking delivery in less than a month on a December contract after managing an account of gold futures.

Last Monday, Celente got a call from the big bank explaining he had no access to his account and his money was with a “trustee.” His account was worth six figures.

Generally, people reading this story are shocked that Celente would be caught up in it as the forecaster of trends who has been warning against such bank failures for years. Sadly, however, this story is all too common and too easy to happen in current day. Good customers, solid wealth managers, and responsible people everywhere are having their funds taken from under them as the too big to fail banks are forced to make bets that fail.

Perhaps it makes more sense to consider that Celente, had he taken delivery of his physical gold last month, would now be in possession and ownership of it. The physical ownership of gold cannot be overstated. Once you hold it, you own it. And, as Celente’s experience indicates, a bank cannot hold it for you.

If it could happen to Gerald Celente it could happen to any of us. Taking money away from bankers who would use it to finance bad bets, purchasing gold coins, and taking possession of the physical gold you purchase is truly taking power.

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Kevin Johnson

Senior Staff Writer - GoldCoin.net

Low interest rates would be bad enough for savers who deposit their money in banks. Forbes, however, just released a report that MF Global may have used customer funds in a $6.3 billion bad bet on European sovereign debt. That might be acceptable if the bets these banks were making were paying out. Of course, savers would never see any of that money, but at least they wouldn’t be punished for simply depositing their money in a bank. Much like the real estate bets of a few years ago, any bet on European debt that didn’t predict disaster is imploding right now and savers are footing the bill.

Shockingly, this policy was made not only possible but legal through a CFTC ruling. The ruling states that the investment of customer funds in instruments will not be prevented or prevent the retaining of interest of profits.

The effect of this policy is clear in that it will continue to erode the savings of hard working Americans. Beyond low interest rates and negative real interest rates, Americans who deposit money in banks now have to worry about the banker’s legal bets.

The price of gold coins reflects Americans desire to preserve their wealth and their unwillingness to cooperate with bad monetary policy. Historically, gold is the best store of wealth on the planet. A banker can’t dilute your gold with a balance sheet the same way he can dilute the purchasing power of a paper currency and more and more people are seeing and appreciating that difference now. As banks continue to lose their customers money and gold continues to perform admirably well, savers will increasingly be buying gold.

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Kevin Johnson

Senior Staff Writer - GoldCoin.net

And I feel it today as the Dow regains what it lost on Wednesday, showing how dependent the stock market is on news coming out of Greece and its cousin, Italy. Right now, you can’t sneeze in the Mediterranean without feeling it in New York and that’s what scares me about the markets.

This instability is showing elsewhere. The big indicator is in the foreign currency exchange markets. The market is up, but the dollar is down and the Euro is showing the possibility for a sell-off. This on the heels of the IMF’s report on last week’s G-20 session in which it blatantly stated that the recovery remains in a near-stall in the major advanced economies and there is an elevated risk of slipping back into recession.

Ten years after 9-11 changed our lives forever, ten years of service from the best of America’s young men and women, I would have hoped for a better climate in which to thank our veterans. For me as a young worker, investor, and analyst, the veteran’s involvement in the Occupy Wall Street movement is understandable but does not account for the injustice of bankers getting away with extreme crimes while veterans lose their houses.

My buddy started investing in gold a year and a half ago and thought the price was high then. As gold has regained over 60% from the September correction, my buddy and I are still buying with good reason. As the Euro and US dollar continue to languish and worse, gold will survive as a font of stability in the uncertain market.

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Kevin Johnson

Senior Staff Writer - GoldCoin.net

So what is making gold coins such an attractive investment? By having gold coins as part of your investment portfolio, you are assured to attain growth, no matter where your additional shares are placed.

Wise investors are taking on gold coins, rather than investing in shares. So why all the hype about gold coins?

Reasons behind the Gold Coins Fad

Gold coins, unlike shares are a portable investment. In case it is needed, investors can store their gold coinage in a suitcase or storage case and take them where needed. Liquidity is important, especially in today’s economy. Gold coins have been listed as a liquid asset because they are easier to sell than shares, which mean in tough economic times, an investor can quickly sell their investment without waiting for the stock market or another investor to take it over.

In terms of storage, coins are easy to store. Though most investors keep them within a gold coin storage center, others store them at home in a safe. When it comes to certified gold coins, the market is safe, secure and easily stored. It is recommended that first-time investors start out with bullion coinage and work their way up to certified gold or Quarter and Double Eagles as their expertise and collection grows.

The gold market’s price rises and falls, however, each type of coin has its own rarity and quality within the marketplace. Investors are informed to remember that they are not just investing in something, they are purchasing a collectible – not something you can say about the average stock share.

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Kevin Johnson

Senior Staff Writer - GoldCoin.net

Still we refuse to stand up to fate. We look for answers where none are to be found. We accede to Wall Street propaganda promising riches from ruin. We cling to blind faith in the benevolence of our government as it strips away the last remnants of our wealth.

The plain bitter truth is that the empire is falling, as all empires must. Those who dare to proclaim that truth are branded as traitors while those who are tearing apart this once great country are lauded as heroes. It is time to turn the tables.

Our forefathers envisioned a great and prosperous America built on a solid foundation of gold. A land where the government would have only the powers they enumerated in the Constitution and where the markets would be free to create lasting wealth for the nation. They were bold and extraordinary men leading a bold and extraordinary people to greatness.

But governments are insidious seekers of power. To achieve their goals they always find a way to subvert their mandate, even one so carefully crafted as our Constitution. And they begin by usurping control over the nation’s money.

When America’s currency was gold and silver coins we fulfilled – and exceeded – our forefathers’ vision. But it was only a matter of time before the government would find the loophole they were so fervently seeking. The only remaining problem was to make us swallow a bitter pill with a smile on our faces.

Keynesian economic theory gave them the solution: hardship and war. Both stir up the most primal emotions and expose our vulnerability. Without blinking an eye we handed over control of our wealth to the Fed, grateful for the government largesse bestowed upon us. Overnight the American dream slipped through our fingers.

From the moment we first allowed paper money the final script was written. No fiat currency has ever survived for long, the average is only 40 years. Our clock started ticking in 1971 when with the stroke of a pen Nixon severed the final link between the dollar and gold.

Do the math. The dollar is not special. It has had its day and now it is over.

As the dollar takes its place in history alongside every other failed fiat currency gold coins will rush in to fill the void.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

If you invest in gold coins at the present time it will prove to be profitable in the very near future because the precious metal is not full of deceitful Wall Street tricks made from precarious paper which they call currency. Gold is not scam-oriented and will not suffer from counter-party uncertainty. The precious metal is authentic capital.

The Gold Standard is just around the corner but with it will come a struggle for the greenback to survive. They will defend the present monetary system with tooth and nail to debase the chief currencies in all conceivable manners, at the utmost acceptable capacity. Foremost currencies will be demolished while gold will bask in higher value in analogous opposite fashion. The Western frontrunners have no aspiration to restructure, to yield power, and to set up a worthwhile monetary system. Banks should develop into places of valuable service, not casinos and be in the driver’s seat of market control.

Just this past Tuesday, Europe supplied the spark for the $50 increase in the gold price as well as $1.50 boost in the silver price. Their financial world is slipping from their hands and there will be impending losses. There seems to be no solution in the near future. The overthrow of big banks will be uncontrollable. And as the Greek government becomes insolvent by way of a systematic default, the people accountable are still unsure of what to do or where to begin. Germany does not want to held responsible for saving the world and it, at the present time, is looking towards new horizons with Russia and China and Persian Gulf support. They are searching East because the West is no longer reliable.

Italy has now entered the picture fully and is being downgraded consistently. Their prime minister is calling it a trick by the press as the government continues to refrain from strict measures while their debt remains uncontrollable. A steady debt has increased to over EUR 200 billion and ‘must be’ dissolved before 2012 finalizes. The distress signal has sounded with the bond yield overriding the 6.0% level. Add on new deficit and the situation is surmounting to inconceivable standing. The Germans have just divulged the restitution of the Deutsche Mark. It will be assessed for exchange at one Euro to 1.95 DMarks. This is a déjà vu for them because it is the same as the 1999 exchange rate when the doomed Euro was created. This will be the beginning to the road of stability once more. These are sensational yet, precarious times; full of menace but, at the same time, laden with favorable circumstances. There couldn’t be a better time to invest in rare gold coins as well as gold bullion overall.

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Kevin Johnson

Senior Staff Writer - GoldCoin.net

This past weekend Japan sought to temper the inflationary pressure of the yen rising to its highest level against the dollar since the end of WWII by devaluing its currency. The yen fell, the dollar rose, and gold took a dive. But there was no corresponding transfer of wealth. The price of gold coins may have fallen, but not their worth.

That’s the root problem of the never ending money games. Without actual transfer of wealth only short-term artificial imbalances can be created, and those are soon offset by retaliatory measures. That their dollars can buy more yen today than they could last week means nothing to American consumers. They care only that their dollars can buy fewer groceries today than they could a year ago.

Investors likewise care only about what their investments will be able to buy when the time comes to rely on them for their livelihood. And they are growing more concerned every day as market volatility threatens to tear down all that they have spent their lives building.

It is crucial to our sanity to stay focused on the long term. Today’s wild gyrations in equities and currencies are one in the same phenomenon, a clear symptom of a monetary system in rapid decline. Growth and stability are out of the question while money and wealth are treated as separate and unrelated entities.

Still, the powers that be owe their power to fiat money and they won’t give that up without a fight. It is a losing battle, but they will struggle to the bitter end, taking down anyone and everyone who stands in their way. When the day finally comes that defeat is inevitable, they will move en masse to shelter all they have stolen in gold.

It behooves all of us to beat big money to the punch. Those who invest in gold coins today will not only find peace of mind as uncertainty mounts, they will come out winners in the greatest redistribution of wealth mankind has ever witnessed.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

As of today the price of gold has risen roughly 24% since January 4. GDP, on the other hand, grew at an annual rate of 0.4% in Q1, 1.3% in Q2, and then surged to 2.5% in Q3. Better, I suppose, but also supremely misleading.

Is your income rising anywhere near the same? For most Americans the answers is ‘no, in fact it is falling.’ The GDP is also a poor reflection the increase in the true cost of living. Not to mention that millions of unemployed and homeowners hopelessly under water in their mortgages are still desperate for any ray of hope.

Since the collapse of the credit bubble people have had to come to terms with the economic realities forced upon them by the Fed’s monetary policies. They have borne the consequences of their personal fiscal recklessness, learned their lessons, and are eager to move on.

But the Fed – and its cohorts around the world – aren’t about to give in. At least not before they have squeezed every last dime out of the economy with their fiat money scam. In the meantime they keep doctoring the numbers hoping that will keep a gullible public ignorant of what they are up to. But that gullible public is waking up to what investors in gold coins have known for years.

Back to the GDP for a case in point. All the government has to do to inflate the figure is print more money and keep interest rates unrealistically low. Dollars get cheaper, prices go up and Presto! Up goes the GDP. Cheaper dollars also mean fewer imports. Nudge the GDP up a another notch.

And there’s another, even quicker way to fudge the GDP – through government spending. The neat part of that trick is that the money the government spends has already been removed from the economy in the form of taxes or has been created out of thin air through new printing or higher debt.

Like the core CPI, the GDP has little to do with life on Main Street. People don’t need to study charts and analyze endless data to know how things really are. They just have to look out the window.

Say you bought $10,000 worth of gold coins at the beginning of the year. You could sell them today and put nearly $12,400 in your pocket.

Compared to gold coin investments, how’s the economy really doing?

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Add the destructive ramifications of severe tail-risk calamities and we have more reason to diversify investments.

Despite this certainty, gold coin investment is still a small part of many portfolios even though numerous alternative asset classes have achieved entrance amongst professional investors trusting them to swell their risk-adjusted returns as well as add diversification. Nevertheless, gold generates prosperities that place it within a unique class.

Two highly important benefits:

1. Perfect basis of diversification for an investor’s portfolio.

2. Imparts a foundation which investors confide in to manipulate risk and safeguard capital more efficiently, particularly in times of economic mayhem when a balance is most needed.

Likewise, giving gold coin investment its share in any portfolio affords investors with the certainty to invest in a larger range of strategies which include the alternative ones.

The World Gold Council has demonstrated through a recent study that including gold to portfolios which currently hold traditional assets and commodities is conducive to an increase risk-adjusted profit. To prove that gold is truly profitable in a portfolio, they embarked in a study to examine its outcome within a portfolio which is made up of mainstream and non-traditional assets. The impact exhibited that expanding a portfolio with gold (between 3.3% 7.5%), an investor can achieve a preferred projected profit while provoking less liability than on a corresponding portfolio devoid of gold.

Bottom line: Gold reinforces portfolio fulfillment.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

To paraphrase an old television commercial, it’s not nice to fool with Mother Market. She is choking on a glut of fiat money and is righteously ticked off. Yet central banks everywhere are preparing to fire up the presses one more time.

Here at home the vaunted Deficit Commission has proven to be as divisive as the whole of Congress, and probably more so. Republican members have all signed the Norquist pledge for no new taxes and the Democrats aren’t about to agree to entitlement cuts with that off the table.

Politicians have proven once and for all that they have no intention of putting their house in order. The Fed knows it has failed to pass the proverbial buck back to where it belongs and now finds itself backed into a corner.

“Securities purchases across a wide spectrum of maturities might become appropriate if evolving economic conditions called for significantly greater monetary accommodation,” Federal Reserve Vice Chairman Janet Yellen said before the annual meeting of the Financial Management Association International. Yes, they are preparing for QE3 to set sail.

It’s lose-lose no matter how you look at it. Without responsible leadership our economy will continue to spiral out of control. Uncertainty over the future of the dollar will turn to certainty that it is too ill to be revived. And Mother Market will clean house, sweeping it clean of worthless paper money.

What would it take to bring the global money supply into some sort of balance with global wealth? That is what a return to the gold standard would do, and it means that gold would have to start selling for $11,000 an ounce. Every day that we lollygag drives the price ever higher.

I doubt we’ll see prices that high any time soon, but Mother Market will make sure it heads in that direction. She neither creates nor destroys wealth, only facilitates its transfer. Many will decry their loss of riches, but wealth created by and stored in fiat money never really existed.

On the other hand, wealth stored in gold is real. Mother Market will see to it that wealth secured by gold coin investments will endure.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

The possibility of a return to the gold standard is no longer remote. As the political campaigns heat up Republicans are discovering that Dr. Ron Paul’s lifelong cause strikes a chord with voters. Americans are growing ever more suspicious of the Fed and, according to a recent Rasmussen survey, 73% “of all voters believe government and big business work together against the interests of consumers and investors.”

Disenchantment with the government is nothing new. A more telling revelation of the survey is that Americans trust their own thinking more and respect the so-called expert opinion less. Nearly two thirds now say that they “trust their own economic judgment more than President Obama’s” and just 9% “rate Congress' job performance as good or excellent.”

The return to some sort of gold-backed currency is inevitable. That will have an enormous impact on the value of the dollar, and therefore the price of gold. Surprisingly, however, it should have little influence on the purchasing power of investments in rare gold coins.

In his classic book “The Golden Constant,” Roy Jastram quantified the relationship between changes in the purchasing power of gold and the price of commodities. Jastram’s study covers more than four centuries of both inflationary and deflationary periods, with data for the USA detailing five distinct periods from 1814 through 2007. (Dan Ascani updated the work with data from 1976 on.)

Jastram’s data clearly shows that changes in the ratio of gold’s purchasing power relative to growth in commodity prices has cycled between roughly 1 and 9 over that time.

If the cycle continues through this new period – as 400+ years of data suggest it will – the growth in the purchasing power of gold can be expected to outpace that in commodity prices by at least 8 to 1 before it peaks. And that holds true regardless of whether this new period proves to be inflationary or deflationary.

The future for gold coin investments looks exceptionally bright.

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Kevin Johnson

Senior Staff Writer - GoldCoin.net

Finally. Is the Times right in assuming that we have at last come to see that “incomes have declined, many people cannot find jobs, [and] few trust the government to make things better”? Or is something else at play?

Believe it or not, according to the Time’s article, “a growing number of economists … argue that the collapse of housing prices, a defining feature of this downturn, is also a critical and underappreciated impediment to recovery.” Duh. It seems that dumb old us actually noticed when our wealth got swept away underneath out feet.

Their next revelation is nothing less than a Tom Madden statement of the obvious: “They lack money, and they lack the confidence that they will have more money tomorrow.”

How could that possibly be? Could it be the 46 million Americans on food stamps? Maybe the 100 million who have forgotten what it was like to get a raise in pay. Or maybe the 25 million who haven’t found meaningful work or the 20 million who can’t find any work. Or the one in five who owes more for their home than it is worth.

The reality is that expectations for economic growth have fallen to the lowest level since May 1980. And that reality frees us to take a proper course of action.

The average American may not understand the nuances of macroeconomics, but we do know when we are being dealt from the bottom of the deck. And we know when we are being made pawns in a game in which we hold no hope of sharing in the victory.

Call it doom and gloom. Call it paranoid delusion. Call it what you may. But America is hurting. We are being drawn into a conflict amongst ourselves for the sole purpose of distracting us from the real problems at hand.

The gloom is real. The fears are real. And the threat is real. I can’t say for certain that any future will come to pass, but I can say for certain that an investment in gold coins will make that future better.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Two crusty old pioneers had just negotiated an exchange of much needed staples and seed for a cut in the following year’s harvest. They sealed their deal with a handshake. No money changed hands and no papers were signed.

In essence, it was trade conducted in fiat money. It was a time when a man’s word was his bond, and honor held him to it. That code of honor still exists, at least within our minds.

At their core the vast majority of Americans still cling to that simple code. We want to be treated honestly and with respect and will return it in kind. But we also know when we are being scammed and we will return that too, in spades. The problem is, there is way more of the latter these days than the former.

None-the-less, we find it difficult to hold the government to the same standards. Instead we presuppose altruism in everything the government does. When Roosevelt took our gold coins there was no revolt. The government is honorable and does what is best for its people, even if its actions are beyond our ken.

When Nixon took us off the gold standard it was for the good of America. It freed the Treasury to print as many greenbacks as it thought necessary, which we saw as no more than a good faith promise. America is honorable and its promises will be kept.

Unfortunately we are stuck in what psychologists call euphoric recall. America’s honor has been pushed aside by greed and lust for power, but ostrich-like we bury our heads in sand that had run through the hourglass long ago.

There is but one way to bring back the good old days: bring back the good old values of honor, trust, and respect. Bring an end to the imperialism that has drained our coffers. Accept our failures and set on a course to make amends. Bring wealth and hope back to America by putting the government in its place and taking our economy out of the hands of bankers.

If the recent protests are any sign, as I believe them to be, the day of reckoning for the status quo is fast approaching. And the days of our disinterest in gold coins will soon pass.

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Kevin Johnson

Senior Staff Writer - GoldCoin.net

The Commencement

April 2, 1792 — First Coinage Act approved

It ordained the United States Mint to supervise all mint procedures, including its employees, which consisted of:

• an engraver
• an assayer
• a chief coiner

Pre-hiring requirement for EVERY employee: $10,000 bond

The original United States coins were minted from gold, silver, or copper, with engravings of words and messages of liberty.

The gold to silver ratio was 1: 15, meaning one troy ounce of gold would get you fifteen ounces of silver.

The first coins minted with year of mint were the:

GOLD

$10 gold eagle with 270 grains (17.5 g) of pure gold

$5 gold half-eagles with 135 grains (8.75 g) of pure gold

$2.50 quarter-eagles 67 and 4/8 grains (4.37 g) of standard gold

SILVER

Dollars with 416 grains (27 g) of pure silver

Half-dollars with 208 grains (13.5 g) of standard silver

Quarter-dollars with 104 grains (6.74 g) of standard silver

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Kevin Johnson

Senior Staff Writer - GoldCoin.net

Tackling the protests straight on just won’t work, and the status quo knows it. But they also know how to derail any effort to expose the truth and hold them accountable: turn the people against each other.

How else can you explain those who have been hurt the worst rising in defense of Wall Street? Sadly, it has become far too easy to turn things around in the minds of Americans. We have forgotten how to solve our own problems and are now concerned only with casting blame. The good news is that more and more of us are finding it impossible to keep buying into the lies.

If that weren’t the case we could buy gold eagle coins for a grand apiece today. But gold is the vanguard of the free market, and the free market is fed up with the Fed’s shenanigans.

The minutes of September’s OMC meeting leave no doubt that QE3 will eventually fire up the presses one more time. Bernanke is just waiting for things to get bad enough to make it palatable. It won’t work. It can’t work. And the world will respond swiftly and decisively.

If the Fed stays true to form – doing absolutely the wrong thing at the worst possible time – we could see QE3 coinciding with the opening of the Pacific Asian Gold Exchange, where trade will be in renminbi and only physical gold will be traded. A new global monetary system may be a lot closer than anyone imagines.

Still, the endless diatribe in support of our failed system will only grow more intense. Like an American tourist trying to be understood in a foreign country, the status quo will keep repeating the same things, only louder.

We need to filter out the noise so we can concentrate on survival under a government hell-bent on self-destruction. The free market is the overarching reality and it will soon emerge triumphant over the greatest scam of all times. We need to stay keenly focused on that.

Gold is showing us the way and we need only to follow. We have the choice to ensure our future in the new free market with gold coin investments.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

The New York Times, not noted for doom and gloom coverage, reported this week on our falling incomes. In the two years after the recession officially ended in June of 2009 “inflation-adjusted median household income fell 6.7%” and “during the recession - from December 2007 to June 2009 - household income fell 3.2%.”

In other words, since December 2007 our incomes have fallen nearly 10%, adjusted for inflation. And that is using the government’s core CPI figures which are designed to conceal the real growth in the cost of living.

So how have gold coins fared through it all? Over the same period they have doubled in value. Or from another perspective, the value of the dollar relative to gold was cut in half. Put those two things together and we are now making 10% fewer dollars that are worth 50% of what they were just four years ago.

Of course the decline in wages is only an average. The income of those fortunate enough to have kept working through the recession distort the true picture. The Times article cites a study that found “that people who lost jobs in the recession and later found work again made an average of 17.5% less than they had in their old jobs.”

That study was conducted by Henry S. Farber, an economics professor at Princeton University. His conclusion is quite unusual for an academic cloistered in those hallowed halls: “As a labor economist, I do not think the recession has ended” and this downturn is “fundamentally different” from previous ones in that “job losers are having more trouble than ever before finding full-time jobs.”

Americans are indeed growing poorer every day, but only those whose wealth is measured in dollars. There is no better way than buying gold coins to turn that around.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

There should be little doubt that the Fed and other central banks are out of bullets. Nothing they have done has been able to turn around the decline of fiat money. Every day they grow more desperate to find some way to postpone the inevitable. The temptation to raid private reserves of gold may soon become irresistible.

The legality of confiscation is irrelevant. By the time an executive order gets tested in the courts the damage will already have been done. And it is far easier now for the government to quickly grab vast amounts of gold than it was in 1933.

The stores backing paper gold are immense and highly centralized, an easy target for seizure. Next we can assume that the government would turn to the vaults where private bullion is stored. Only after those resources have dried up would the government even consider going after privately held gold.

The last time around there was a great deal of gold in circulation making it worthwhile to target individuals. It’s entirely different today and whether the government would undertake to root out individual holdings is highly questionable. Even if it were to try, it is almost certain that rare gold coins would be exempt as they have been before.

It would be foolhardy to dismiss the possibility of the government raiding the private sector to bail itself out. The Fed has made its intentions perfectly clear and the politicians are all too willing to do the bidding of big money.

Taking physical possession of gold bullion coins makes it hard for the government to get its grubby mitts on your wealth. Buying rare gold coins makes it even harder.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

The government created bullion coins as legal tender, believing that nobody would ever consider using them as such. But there is no apparent legal basis for prohibiting it. Of course it would be foolish to fill up at the gas station and hand over a $50 gold eagle to pay for it, but, as they say, there’s another side to the coin.

Suppose workers were given the option of receiving their wages in gold coins. Since they are legal tender and the government assigned their face value, that should be the basis for taxing the income.

As wild an idea as that might seem, it has already been tested. In “End the Fed” Ron Paul reports that “some enterprising and brave constitutionalists” in Las Vegas did pay their employees with bullion coins, who then filed taxes based on their face value. “As expected, it was challenged in court, and miraculously, litigants ‘won’ their case in a hung jury.” They were cleared of fraud charges because the jury found “it was the confusion of the law that was at fault.”

This sort of thing can quickly get out of hand and the government will certainly not sit idly by and let that happen, despite any precedent. “Courts, as they did in the Civil War and the 1930s, have always ruled in favor of the tyrants when push comes to shove in dealing with the money issue.”

Maybe, however, this is just what we need to bring the absurdity of the Fed into the limelight, the thread to pull to unravel that insidious bureaucracy once and for all. And in doing so it could be the first step on the path back to a sound currency and rational fiscal policy.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

The tale begins with the Bretton Woods Conference in the waning days of WWII. The world was facing unimaginable reconstruction and the need for unprecedented global cooperation to establish a new global monetary order was clear. It took 14 years to get it done, but the agreement was reached to unseat the pound sterling in favor the much stronger US dollar as the new global reserve.

It seemed like a good idea at the time to tie all currency to the greenback, which after all was unrivaled for strength and was convertible to gold. Besides, the Bretton Woods summary of agreements clearly stipulated that “they should outlaw practices which are agreed to be harmful to world prosperity.” What could possibly go wrong?

Only 13 years later the US woke up to find itself in a state of insolvency. Fearing a run on US gold reserves our government unilaterally terminated the Bretton Woods accord by summarily ending the convertibility of our dollars and debt to gold. Overnight, the ‘Nixon Shock’ instituted the fiat dollar as reserve and gave America the unique power to print it.

That rightfully caused grave concern among those who adhered to the Austrian school of economics. They needed a means to protect their wealth against the major economic catastrophe they knew was inevitable. But private ownership of gold was still illegal.

Fortunately Mexico was quick to recognize a golden opportunity. Possession of numismatic gold coins, which at the time were defined as those dated 1947 and before, was still legal. So the Mexican mint dug out the dies for the 1947 “Centenario” and commenced a massive restrike. Americans eagerly consumed vast quantities of the beautiful 1.2-ounce coins, which could be bought at near bullion prices.

Today, with that train of the future bearing down on us, we should heed the lesson. The wise and brave investors aren’t waiting for it to run over them, they are getting up off the tracks and buying gold coins.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Land, ho! Greece! Banks, notably Societe Generale, UniCredit, and, the latest, Dexia, are holding so much bad Greek debt on their balance sheets it threatens to sink the ship. Just the threat is enough to get banks almost everywhere shaking in their boots because a major default associated with the Greek problem could debase the Euro and undermine the political stability of the European Union. Pretty scary, right?

The result is a conservative credit crunch. We don’t quite see it just yet, but it’s been going on behind the scenes for a few months now at least. As banks reel in the lines of credit to cover their losses and hedge their bets, they are partially pulling that money from the futures markets and the price of gold suffers.

A lot of people may have misunderstood the dynamics of the market in the past month and done something irritatingly stupid, like, oh, sell their gold coins for far less than they could have. Other investments might look a little shinier than a gold coin, briefly, but if the house burns down I’m not betting on paper. A gold coin in a storm is worth ten in fair weather. Remember that.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Guess which category I belong in. I can’t understand people who work hard for their money and then invest it in a stock market that has consistently performed poorly in the last three years. And then they complain about it!

Why not keep the money you earn? It’s your money. You earned it, you keep it. The best way to do that is buying gold. John Brynjolfsson, former PIMCO fund manager, has recently stated that because the European Central Bank is so exposed to the Greek crisis, the ideal way to both preserve your assets and play the crisis is buying gold.

Investing in gold coins allows you take advantage of coin prices and the beauty of gold coins—not to mention freedom from the stock market. Whether you have your heart set on a $20 Gold Eagle, a Canadian Maple Leaf, or more rare gold coins, I can assure you your money is safe when you yourself are holding onto it.

I can walk around with a one-ounce Gold Eagle in my pocket all day and watch my coworkers fret over a computer screen as the market slumps, falls, and stutters. I’m not watching decimal points on losing stocks—I’m working confidently, enjoying my day, and living my life.

There’s really nothing quite like carrying a symbol of your hard work and your self worth around in your pocket and knowing that whatever happens at work or in the stock market you’ll always have that gold coin with you and it will always have value. Get off the treadmill of the stock market already! Why wait for more bad news? Purchase the security and value of gold coins and gold bullion.

Gold is the best performing asset of the past twelve months. Don’t you think you’re worth it?

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Greece’s miss on its budget reduction targets, which it set just months ago, is a strong indication that the bailout package may not be enough to keep the country solvent. Angela Merkel, Chancellor of Germany, is losing regional elections because of her support of the Greek intervention. It is not currently known how the problems Greece is experiencing will resolve or whether Germany, if required, will pledge more money to bolster the troubled Mediterranean nation.

While this is causing negative sentiment to reign in world markets, it is making for a rise in the gold market Monday. Increasingly, investors are moving to the relatively safe investment gold offers in the wake of the Greek crisis.

Gold was up 2% during intraday trading, or $32.50, which is a very nice gain for a Monday morning and will have investors smiling. Generally, persistent worries in the world’s stock markets are continuing to fuel a flight to the stability gold offers at this time. If you bought stocks on Friday you might be wincing right now. If you bought gold on Friday, you’re smiling.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

We all have our own image of doomsday, social and political situations that strike at our most basic fears. Preparing to deal with those conditions, no matter how remote their possibility might be, is always more rational than living in fear of them - if for no other reason than to preserve peace of mind.

One of the most common fears we Americans have is being forced to do without the most basic needs, to live through another great depression. If that were to occur things would be vastly different this time. Our population is now far more concentrated in urban areas and lacks the skill and resources to provide sustenance for themselves. Social unrest would be a lot meaner and would develop much faster; those lacking an acceptable medium of exchange will quickly find themselves locked in a daily do-or-die struggle.

What sort of odds against that happening would justify taking no action to prepare? One in a million? A thousand? That depends on the cost, of course, and the practicality of the preparations. Trading in a bucket of decaying greenbacks for some real money – gold – doesn’t cost a thing and is a darned good idea in this economy anyway.

The possibility, I believe, is no where near that remote, and for a preview of things to come we need only look to Greece. The stock market is buckling in light of that crisis, despite great anticipation of another handout from the Fed. As always dire news is driving up the dollar, and therefore driving down the price of gold. It just can’t last.

The question you have to ask yourself is this: Which do you honestly believe will better hold its value down the road – greenbacks or gold coins?

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Of the 165,000 tons of gold out there somewhere central banks and ETFs are sitting on less than 28,000 tons. That means that 137,000 tons, give or take, is just being held and gold coins and bars keep adding a little more every year. Looking at that another way, if the holdings were liquid they could replace mine production for half a century.

But of course held gold is not liquid supply. That’s why they call it held. To be sure gold moves about in the market, but less than 1% makes it into the supply stream by way of recycling. Clearly the movement of gold within the market sets the price, and that’s where conventional analysis models break down.

The gold price at any instant is simply what a buyer and seller agree it should be in an exchange. Buyers have a quantity of dollars that they are willing to exchange for some minimum quantity of gold (bid) and sellers have a quantity of gold that they are willing to exchange for a minimum amount of dollars (ask). Sales take place until bid and ask prices no longer meet and the market is cleared.

It might appear, then, that the gold price depends on the whims of the traders. To an extent that is true, but even on the heaviest trading days only a minute fraction of above-ground gold actually changes hands. Not that the gold isn’t for sale, it’s just that the most buyers are willing to pay is less than the minimum sellers will accept.

That’s the secret. The gold price is only what the majority of gold investors think the dollar is worth. Regardless of short-term surges in their opinion of that you can’t build a credible case that the greenback can somehow reverse it’s downward spiral, and so gold must continue to climb.

Even a frenzied run on gold coins would cause but a tiny ripple in that very large pond. Even total divestment of a big ETF wouldn’t have any permanent impact. Gold coins will remain a sound investment for as long as the dollar is in decline, and that promises to be a very long time.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

1. The United States Bullion Depository (aka Fort Knox) The world’s most famous gold vault, Fort Knox is an American legend that holds a massive amount of America’s gold bullion. A solid granite wall perimeter, squadrons of expert marksmen and a 22-ton vault door makes Fort Knox a gold vault so secure that not a single robbery has ever been attempted. God bless America!

2. The New York Federal Reserve Vault The New York Federal Reserve Vault is located deep underground below the streets of downtown Manhattan and it is the world’s largest and most secure gold vault. No human can enter the vault because gold is moved by a team of robots. The vault is so secure that many foreign governments use it to protect their own gold reserves as well. Don’t even think about breaking in here.

3. The Bank Of England Gold Vault The Bank Of England Gold Vault is the world’s second largest gold vault, holding more than 4,600 tons of gold bullion in its completely bombproof infrastructure. The vault can only be accessed through an intricate security system that includes voice recognition, 3 foot keys and several other confidential security measures.

4. Teikoku Bank in Hiroshima, Japan Towards the end of World War II, the United States dropped a massive atomic bomb on Hiroshima, Japan, leaving the city in absolute shambles. In the middle of this Japanese wasteland, the gold vaults in the Teikoku Bank stood strong in excellent condition. Talk about an impenetrable vault!

5. The Gold Vault In Dubai Dubai is known as the City of Gold, and over the past decade they have constructed one of the most secure gold vaults in the world incorporating the latest and greatest of security measures. Located in the Dubai Multi Commodities Center, this gold vault is one of the most secure high- tech vaults in the world.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

I’d like to take this opportunity to put a little pizzazz into what promises to be another dreary display of Keynesian claptrap by minds unalterably locked onto a track heading off to the horizon in completely the wrong direction.

Even the markets are failing to whip up much enthusiasm this time around. America is getting bored with the Vaudeville act and would just as soon watch something different – anything, just as long as its different. It’s called insanity when you keep doing the same things expecting different results and although we may be slow, we aren’t nuts.

Unfortunately we also want our cake after we have eaten it. We too need a reality check, so here goes, the Reader’s Digest version for the attention impaired: The government is broken. The economy is broken. The former can’t fix the latter. We broke them and only we can fix them.

That’s right. If Americans joined forces we could put anybody we choose in Congress and the White House to do whatever we tell them to do. And we could put people there who actually have a clue about what went wrong. Instead we let the wing nuts sway us nonsensical but appealing rhetoric and the big money steamroller right over us.

It is claimed that one needs tons of money to get elected, but why is that? For one thing, we have to be spoon fed everything from the boob tube, and TV time doesn’t come cheap. But we also have instant access to the internet, where political diatribe is abundant and free. With the slightest of efforts it is easy to sort out the chaff and verify the truths. But we can’t be bothered.

Here’s what I think we need to do to get a real recovery going: Wake up and smell the coffee. Quitcher bitchin and get serious about putting the right people in charge. Start thinking and stop believing everything we read and hear. Break the gossip chain - verify “facts” before passing them on. And when election time comes, bully our way right past big money.

Well, the intermission is over. I give you the Bearded Soothsayer and his Wall Street Wizards! Enjoy the show.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

They considered the move to have prevented what would have added to a risk of survival of numerous companies. However, apprehensions remain.

The association declared that the more time a period of considerable overvaluation persists; the costs to the economy will be a menace to all Swiss business including exporters and, of course, tourism.

Remarks from exporters were on target with the SNB saying that they had used up all their options to expand productivity and reduce costs, and were now enduring immense distress from dwindling margins to safeguard their foreign sales. •

• There has been caution as to the consequences of a strong franc and a handicapped global economy as Clariant, a specialty chemicals group, recently experienced this week when its shares fell 16 percent.

Switzerland is an exposed economy with limited natural resources and is very reliant upon trade which is why the exchange rate holds so much significance for them. •

• Novartis and ABB are examples of multinationals that have the ability to adjust production amongst factories in diverse currency zones, smaller groups, on the other hand, frequently seen as the true support of the Swiss economy, do not enjoy comparable amenities.

In attempting to undertake the effect of the rising franc, some exporters have declared surprising tactics such as requesting that staff put more effort into working extended hours for no extra pay. •

• During the summer, a leading life sciences group, Lonza, petitioned employees at its key Visp site in Switzerland to labor an extra two hours a week, an action that was ultimately acknowledged by unions to guarantee employment conservation.

At the same time the Swiss National Bank limited the currency’s ascent, two of Switzerland’s foremost economic forecasters described the hazards to growth and employment in their newest viewpoints. •

• BAK Basel exhorted that the economy was on the border of a recession because of the strong franc and weakening world growth.
• The forecaster reduced its forecast for growth for the upcoming year to just 0.8 percent, less than half the 1.9 percent projected for this year, and the 1.8 per cent forecast for 2012 as recently as last June. • •
• The consultancy made clear that circumstances for foreign trade have worsened in recent months.

Despite Switzerland having to endure investment disadvantages, next year’s unemployment rate was likely to rise somewhat, to an annual average of 3.2 percent, paralleled with 3.1 percent this year. •

• Credit Suisse was more bullish, predicting growth of 2 percent for 2012. “While the coming months will see growth tail off, this slowdown is already factored into the existing forecast for 2011 which is unchanged at 1.9 percent”, the bank said.

BAK Basel and Credit Suisse acknowledged the means supplied by Switzerland’s strong domestic demand, facilitated by a flood of white-collar immigrants, particularly German professionals all due to the simplification of residency procedures.

The predictions were made previous to the Swiss National Bank’s unexpected stance, and may necessitate amendment, depending on the success and length of the judgment to enforce a minimum exchange rate.

Fredy Hasenmaile, a senior bank economist, said that Credit Suisse was maintaining its original viewpoint, “We’re keeping to our forecasts, as they were made on the assumption there would be no world recession and the franc would depreciate slowly.”

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Suppose you have taken the family on a vacation in your new motor home. Your first stop is a park next to an old fort, where the tour takes you through a massive underground bunker. Around dinner time you are startled by tornado sirens, but for a time you ignore them. Then, when you go outside to check you see a mile-wide tornado bearing down on you.

You have just enough time to gather your family and head for one of four places: 1) back inside your RV, 2) a massive but open pavilion, 3) your neighbor’s old Coleman pop-up trailer, or 4) the bunker. Where do you go?

That’s not a foolish question, because in investment terms only a few choose the bunker. Say your RV is the franc, your neighbor’s Coleman is the dollar, the pavilion is debt equity, and the bunker is, of course, gold.

The manufacturer of your motor home had just put you on notice that it is not be considered safe shelter. The pavilion, while still somewhat crowded, is obviously too vulnerable. That leaves the dilapidated Coleman and the bunker.

You remember the times when you went camping with your parents in a Coleman much like your neighbor’s, and you weathered several storms all snug and comfy inside. Since you have never experienced a tornado, you decide to go there.

And so it is now that the Swiss have told the world that the franc will not be allowed to rise due to speculative demand. But rather than rushing out to buy gold coins, investors who had sought safety in the currency are ignoring the klaxons and are cashing in their gold for dollars.

The storm brewing now, however, is unlike anything today’s Americans have ever experienced. Only the sturdiest shelter will protect their wealth, and there simply is no safe haven in currency, stocks, debt equity, or even commodities – except for gold.

It’s a no-brainer. Don’t go for the green, go for the gold. Keep buying gold coins, and I’ll see you in the bunker.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

That should not be surprising, however. When a government grows so large that it’s purpose becomes only self preservation, it will not turn to the people for support. Instead it will coddle big money because that’s where the power really lies. And it makes it easy to shift public blame off from itself, the real cause of the problems, and onto the evil capitalists.

It’s a very old game. A political cartoon from the 1934 Chicago Tribune that is making the rounds of the internet could well have been written today. This is its “Plan of action for U.S.”:

“Spend! Spend! Spend! Under the guise of recovery – bust the government – blame the capitalists for the failure – junk the Constitution and declare a dictatorship.”

A dictatorship has already been declared, headed by Bernanke & Co. Our government is impotent, powerless to stop the relentless destruction of the economy as they go about “depleting the resources of the soundest government in the world,” as the cartoon says.

If you still think fat cats are the disease and not just a symptom then consider this: take the government out of the equation and see what happens. The markets will see to it that the greedy die by their own deeds. If risk isn’t socialized capitalists would never go so far out on a limb. If the government wasn’t there to meddle in the markets, in short order you would also see something quite startling – the business cycle would moderate tremendously.

Mr. Market is not so complex, and he is very single minded. He exists only to bring two parties together so they can reach a mutually satisfactory exchange. Fundamentals are in full control and prices ebb and flow by the straightforward laws of supply and demand, always gravitating towards equilibrium.

When governments interfere in the markets they upset the equilibrium, creating faster and greater swings. Today they have gotten things so far out of whack it will take a major collapse to put it all back together.

Luckily, gold coin investments are still heavily under the influence of the fundamentals and are virtually immune from the impending chaos.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Debunking Bernanke’s dogged insistence that gold is not money, the former chairman minced no words: “Gold, unlike all other commodities, is a currency.” And he adds the demand that is driving up prices is “a fiat money system, paper money, that seems to be deteriorating.”

Greenspan is particularly concerned about the euro, which he believes is seriously hurting the American economy. “The general feeling out there is of a lull before the storm,” Greenspan said.

The Greenspan that held the reins at the Fed is very much at odds with both the former man and the man he is today. In a 1966 essay Greenspan argued “in the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value … Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.”

More than four decades ago Greenspan warned that “the gold standard is incompatible with chronic deficit spending (the hallmark of the welfare state). Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes.” The politicians knew they couldn’t keep raising taxes to fund the welfare state and stay in office so “they had to resort to programs of massive deficit spending.”

It would seem that Greenspan succumbed to hypocrisy on his way up the ladder, but now he is making an attempt to rectify some of the Fed’s misdeeds. He knows the game all to well and we should pay close attention to what he has to say. Especially when deciding whether or not to invest in gold coins.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

There are two very sure signs of panic, however. The first is a strong surge in the M1 money supply, which is now at historic levels. People – and corporations - don’t hoard cash when the future looks rosy. The second is a strong downturn in mortgage applications, which despite the state of the market had been climbing thanks to low interest rates. Folks clearly aren’t interested in playing along with the Fed’s program to gets us back to living beyond our means.

Never before has the chasm between Wall Street and Main Street been this obvious, but the government still doesn’t get it. While the people clamor for fiscally responsible government, the government keeps trying to restore fiscal irresponsibility among its citizens. That pot is about to boil over when the government closes out its fiscal year next month.

Americans, along with the rest of the global community, would love nothing more than to see Congress fulfill its duty and come up with a serious budget that all could agree is in the best interest of our economic recovery. And we would like to see it done before the deadline passes. Sadly, however, that is far out of reach for the most infantile leadership in this country’s history.

There is no reason to expect anything different from the debt ceiling fiasco that made a laughingstock out of our government. If even a trace of confidence remains somewhere, it surely will not survive the looming budget battle.

Shortly before the deadline, however, comes the vaunted two-day Fed meeting amid mounting pressure for the central bank to do something – anything – to breathe some life into the economy. Eventually Bernanke will have to yield even though he has been dropping hints left and right that it’s Congress’ turn and there is precious little he can do. Whatever he comes up with will certainly be aimed only at appeasing the stock market and will likely do more harm than good to the economy.

So we plod along getting nowhere while the machinery spins another spate of indicators into a glorious tapestry of good times that lie ahead, just around the bend. But it’s getting hard to lure customers into the sideshow. The midway crowd has thinned – the smart ones are leaving to buy gold coins.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

The price is dashing back and forth like a crack crazed squirrel. The price shoots up and frenzied traders sell. So the price plunges and frenzied traders buy. It’s insane. But why?

Chairman Bernanke didn’t hand over the reins this morning, but at least he acknowledged that the Fed needs to puzzle over the economic problems a while longer before taking any further action. Wall Street didn’t get even a whiff of another handout and the best Bernanke could do to calm the masses was state that while recovery has been “modest,” no permanent damage has been done to the economy.

Nobody got a warm fuzzy but neither did anybody get a slap upside the head. All we got was a can kicked a few weeks down the road to a special two-day meeting in September. With nothing else to go on the pundits will turn to speculating on what will come out of that meeting, and that can only fuel the volatility.

The NY Times recently gave us a clue to the root of all the craziness with this incredibly moronic tidbit: “The renewed willingness and confidence to spend money we don’t have is vital to the continuing recovery.” Say that to the wino on the corner and he will tell you that you’re nuts. Rarely does one see ‘reductio ad absurdum’ – proof by contradiction – apply so well to a premise. But that is the mentality that got us to where we are today.

In these days of global economics any policy based on the precept of spending more money than one has is necessarily doomed from the start. Consuming more than is produced is the fast road to a third world economy.

Regardless of how wild the market gets, and perhaps because of it, the wise move is still gold coin investing.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

For two days running the other world markets have done their best to correct the unfounded price drops here, and it won’t take long for gold to get back up to where it should be. Yesterday the London PM fixing barely moved from the day before while prices here dropped some 60 bucks. And as I write the price here is heading for an even deeper trough, this time approaching $100 off the London price.

Either all of the other global markets have got it wrong or traders here have gone stark raving mad. Since no matter where I look I see the same old stuff that sent the gold price soaring, and not one scintilla of improvement anywhere, I’ll go with the latter.

As absurd as it may seem, the only explanation can be that traders here – unlike anywhere else in the world – still believe that Dr. Bernanke is about to unveil his latest elixir that will miraculously cure all of our ills. Or maybe they are preparing for one last money grab, some off-the-wall Keynesian slight of hand designed to trick us into believing it is safe to return to equities.

I don’t know who Bernanke would think he is fooling if that were the case. That cat got out of the bag a long time ago. The odds of QE3 even creating the illusion of budding prosperity are slim to none. But I would be elated to see the Fed try anyway, in whatever guise they can contrive. It just possibly could spark the beginning of the end for an institution that has far outlived its usefulness.

Whatever the American traders are expecting, it won’t be real and it won’t last. The rest of the world has tired of our foolishness and they are marching to their own drummer. Gold is going to recover very quickly because very real things are driving the price. I suspect you will have very little time to cash in on this spectacular opportunity to buy gold coins.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

That, of course, comes from a time when there were no gates and flashing lights to get our attention – and to tempt us to dodge around them to beat the train. One knew that trains ran on railroad tracks and it was left up to us not to tangle with them. It was just one more way of thinning out the herd. But then, as in every other part of our daily lives, the government stepped in to protect the fools.

Not surprisingly, that is same mentality that made a train wreck of our economy. Americans who aren’t playing chicken with the runaway locomotive are either sitting numbly before lowered gates or cruising past lifted gates without as much as a glance either right or left. Nobody bothers to look and listen for themselves.

We can no longer afford to let the government tell us how and when to proceed. Yet once again all eyes will be on Jackson Hole this week, hanging on Bernanke’s every word, hoping for a sign that it is safe to move on. Here’s a hint: the Fed cannot help breaking anything it tries to fix. So let’s get back to basics.

Stop. Stop cashing in that gold because you are only exchanging good money for bad. Stop worrying about your 401K, it’s out of your control. And above all else, stop letting the government do your thinking for you.

Look. This one’s easy – just look in your wallet after buying groceries. Look at the unemployment lines. Look at the people behind the counter at the burger joint. Look at the for sale signs up and down the block. Look at the faces of the people all around you.

Listen. This one is a little harder because it involves thinking as well as hearing. Listen to what the world is saying. Listen to the voice of reason, especially when it is saying things you would rather not hear. And listen to your own inner voice.

If that sounds overly simplistic, then I have made my point. There is nothing complicated about common sense and that is something we need a whole lot more of these days. If we all stop letting the government do our thinking for us and defer to common sense, we’ll come out of this recession intact, our wealth secured by gold coins.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Stateside, of course, we are inundated with campaign rhetoric as even the President sees it more fit to woo voters than address the pressing underlying issues tearing apart our economy and our country. And sadly the one true maverick in the bunch, Tim Pawlenty, has been forced to withdraw because nobody wants to hear what he has to say.

Mr. Pawlenty was single-minded in his message: get rid of the Fed first because only then can we hope to recover. He knew that no matter how grand the plan it would be doomed to failure in the existing framework. Pawlenty was spot on, and for precisely that reason he was cast aside.

An eerily similar situation exists in Great Britain. In The Mises Daily Andy Duncan discusses “the real sickness at the heart of British society, which is the constant-inflation policy of the British government.”

We should pay heed to Duncan’s remarks about the recent riots in London. “We have seen this policy massively extend the power-hungry reach of these moronic busybody politicians into our lives,” says Duncan, “as it funded the welfare-warfare state and eventually generated the terrible events of the last few days in Britain.”

As Duncan sees it, the Bank of England with “its own abysmal record of incompetence, predictive failure, and dismal Keynesianism” lies at the heart of the problem. “It is clear that these hapless central planners have no clue what they are doing and no idea what damage they are causing with their policies, but they are still unbelievably confident about their ability to precisely predict the future down to the second, five years out, despite having been absolutely wrong about everything for the last five years and more.”

Duncan could just as well have been talking about the Fed. Bernanke & Co. is not the cure, it is the problem. “This economic crisis has not been visited on us by aliens. It is not an act of nature. It is an act of man. And men can fix it, if only they had the wit to realize it.”

Not too far down the path we are on awaits reaction as we have seen in London but on a much larger scale. But I expect we too “will potter along with constant low-level depression fed by constant low-level stimulation, punctuated by societal breakdown, until ‘something turns up.’”

The wise and wary aren’t waiting for that to happen – they’re buying gold coins right now.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

It is almost comical that vast numbers of investors have found themselves huddled together under the tattered umbrella of Treasuries, the same downgraded instrument that started the panic in the first place. A great many others, still refusing to move beyond their unfounded prejudice against gold, took shelter in the Swiss franc only to discover that the Swiss are not at all happy to have so many uninvited guests and they are doing everything within their power to make them leave.

When all else fails, investors will simply have to let old paradigms die and accept the obvious: gold is back and it’s not going away. Analysts at J. P. Morgan have dramatically underscored that fact by adjusting their year-end gold price upward from $1800 to $2500! In that context, when it comes to buying gold coins a price movement of $100 or so is clearly irrelevant.

Earlier this week the CME group raised its margin requirements for gold by 22%, but failed to curb the stellar rise in prices. Today it seems like the opposition has joined forces to drag the price back below $1700, but by noon the resistance had been overcome once again, reversing well above that mark.

No matter what happens in the stock market over the coming weeks, and regardless of how long Treasuries remain in demand, there is unquestionably a sea change underway in investor sentiment – the realization that gold is taking over as the universally acknowledged safe harbor. It is up to individual investors to decide for themselves when it is prudent to head for that shelter.

Now looks to be a pretty good time to consider doing just that. The Reuters consumer sentiment index is at its lowest level in 31 years, plunging from 63.7 in July to 54.9 this month. The Fed has as much as conceded that they are out of bullets, so all they can do is inflate the stock market once again hoping to fool us into thinking things are better.

You don’t have to jump in over your head, but it you should at least test the waters. Buy a few gold coins today and see how it feels a little bit down the road – it could be the best investment decision you will ever make..

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Whether gold retreats in the coming weeks or not, the seed has been planted and the soil is rich with rotting fiat money. I have always held that the best gold strategy is buy and hold because the goal should be wealth preservation, not wealth creation. The latter is merely illusionary, nothing more than the mirror image of the declining value of money.

Analysts have no shortage of charts and graphs and technical tools to “prove” scores of other investments outperform buying and holding gold, but when it comes to core wealth the assurance of sound returns easily trumps the exchange of greater risk for the possibility of better returns. We all like to gamble, but the guiding rule has always been to wager only what you can afford to lose. In other words, limit risk investing to only excess, or discretionary, wealth.

With that in mind, the current gold price should be of little consequence. Investment averaging, investing a fixed amount at regular intervals, is the best assurance that your money will benefit from long term trends.

Individual investors are at a distinct disadvantage playing short-term movements because those are driven by a vast array of complex automatic triggers. When gold surged to nearly $1800 at noon today, for example, it tripped a lot of triggers and the resulting selloff dropped the price $25 in less than an hour. That is not to say, however, that we should blind ourselves to the signs of a fundamental shift in the long term trends.

This week’s surge has all the makings of such a shift. When put in the perspective of the 30-day charts we see the turning point actually occurred back around the first of August – before the downgrade. Looking back over the year it becomes clear that the first departure form the long-term trend occurred a month earlier than that – now it is just picking up steam.

Investment averaging is designed to protect us from the self-destructive impulse to buy high and sell low, the bane of individual investors. On occasion, however, the prospects of a major shift in trend such as we have today present a justifiable reason to depart from the strategy. You might want to consider buying a few extra gold coins today.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

And no, I don’t mean the credit downgrade. That is just a sideshow, exactly what you would normally expect to set off a wild day of emotion driven trade. Instead, however, the markets are behaving in a most unusually rational manner. If that holds – an we have to give it at least the week to tell – then it represents a sea change in investor mentality.

Consider the Asian markets, which had the first shot at reacting to the downgrade. They have left absolutely no doubt about their perception of American creditworthiness, so to them the change has meaning only in how others perceive it. What matters most to them is minimizing their losses while they convert their reserves of US debt over to hard assets. The sharp drop in yields, which corresponds to a 3.6% increase in price, suits their needs nicely.

Asian equities markets were already struggling, and the 3.8% drop in the Shanghai Composite Index marked only a month-old low. The real story is gold, and it gives the new Asian futures exchange its first real test as a trendsetter.

So far, so good. Despite the considerable differences between the missions western and Asian exchanges, the price held up through London trade and NYMEX has driven intraday trade up to just shy of $1720 as I write. But I won’t click my heels together three times just yet.

The rise in the gold price is eerily similar to that in treasuries and nearly opposite the Shanghai index. It remains to be seen if time will temper the safe haven exit to gold in favor of treasuries or the other way around. Most important to investors, however, is whether we are seeing a short-term reaction to what in truth is a non event or the early moments of the long anticipated breakaway.

If it is just a reaction, any correction will be short lived and the price will soon be back to today’s levels. But if it is a breakaway, the window of opportunity is rapidly closing. Either way, there is no reason to let the price scare you away from buying gold coins today.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

“The last time (Q3 2008) the markets headed for a crash, in fact, gold dropped 30% peak to trough,” the author says. Compared to other assets, that drop was puny. “Since then, gold has almost doubled,” the author continues, in seeming self-contradiction. But wait, “in the world of asset bubbles, the bigger the bubble the harder the fall.” Apparently in this author’s mind resuming a decade long trend after a brief setback constitutes the mother of all bubbles.

“No matter how you look at it, there is no safety in a crowded trade,” he says. Very true, and crowded trade is where bubbles really do form. But gold trade is about as crowded as Antarctica, accounting for only a miniscule fraction of total global financial assets.

Hyperinflation? “That story has come and gone and the evidence clearly says no,” he confidently tells us. And what magic bullet has been shot into its heart? Let’s see, there’s The Deal, but only one in five Americans got buffaloed by that nonsense (perhaps the author is one who did). And now, having kicked the can well past elections, our illustrious Congress turned off the lights and headed home.

The politicians are back on the campaign trail, spin doctors in tow, trying to convince their constituents that everything’s under control and not caring one iota about actually turning things around. If our leaders don’t start taking the threat of hyperinflation seriously, they will soon find themselves powerless to prevent it.

The author adds one last mind bending bit of logic in defense of his thesis: Gold cannot be a safe haven because it “has no yield and no principal protection.” QED. If we choose to disregard gold’s stellar capital gains and ignore the fact that the yield on paper assets is running negative adjusted for inflation, then perhaps we can concede his first point. But no principal protection? How many centuries of proven wealth preservation does the author need as evidence to the contrary?

“If you are not selling, you are not listening,” the author says. “If you are not buying gold coins,” I rebut, “then you must be blind as well as deaf.”

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Kevin Johnson

Senior Staff Writer - GoldCoin.net

If the first few days of post-Deal gold trade are any indication, we are at the breakaway point. Although early trade today has been more typical in regards to volatility, the surge appears to be continuing unabated. While it is too early to be certain, the market may be signaling a growing awareness that for the immediate future gold is the only safe haven.

I am surprised by the reaction only because I have grown cynical about Americans’ seeming lack of ability to see the forest through the trees. I am ecstatic over the possibility of being proven wrong.

The Deal accomplishes two things: it guarantees further deficit spending and it forestalls any real action until 2013. The natural outcome should be a credit downgrade, and if the rating services hope to resurrect even a modicum of credibility they will have to follow through. Meanwhile, if by some miracle reason should prevail over the special committee, they will come to the conclusion that the only option available to get us out from under this mountain of debt is serious devaluation of the dollar.

It all adds up to one thing: any possibility of curbing the bull run in gold has been kicked down the road to 2013. Our government has lost all credibility and whatever it does next can only add fuel to the fire.

The rest of the world is stepping up their efforts to cut their losses on US debt before devaluation of the dollar brings about technical default. If the credit ratings agencies fail to downgrade US debt, which would raise the interest and buy our big creditors a little time, we are likely to see a massive dumping of treasuries. That’s an economic shock that nobody wants to consider.

There is no stopping the global move away from the dollar, and for now gold offers the best store for the excess liquidity. If the tide has indeed turned, and American investors have had their epiphany, then today’s gold bullion prices will prove to be bargain basement after all.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

The S & P didn’t disappoint, starting off the day with a jubilant jump of 17 points – most unusual for the first day of August under any circumstances - but gold barely sputtered, then got right back to business. Oh well, the day is still young and many Americans have not yet had their morning coffee. And of course, Congress has yet to approve what their leaders agreed upon, and it is anything but certain that they will.

More than anything else our representatives will be remembered for their my-way-or-the- highway attitude. Their simplistic thinking and all out dedication to furthering their political careers at the country’s expense typifies the ideals of the “me” generation and only impedes any sort of economic progress. None-the-less, it would be to their peril not to play to the changing tide of American sentiment – we’re tired of the this debacle and are ready to get back to the comfort of delusion.

So I think The Deal is just the tonic America wants. It proclaims itself a bipartisan victory, “a win for the economy and budget discipline.” Who needs to read past the headline? But the fact sheet is short and well worth the read.

Consider the can thoroughly kicked – clean into 2013. Because of that The Deal concludes it will be impossible to “to use the threat of the nation’s first default now, or in only a few months, for political gain.” We shall see.

Rather than tackle deficit reduction head on The Deal merely calls for a “down payment” while members of Congress come together in newfound brotherhood “to seek a balanced approach to larger deficit reduction through entitlement and tax reform.” And they stuck a sword of Damocles into the ceiling over their heads to ensure they act in good faith. Anything else and they will find themselves in the exact situation they were in before The Deal, only this time “that outcome would be unacceptable to many Republicans and Democrats alike.”

Maybe it’s just too transparent this time. The ratings folks certainly should see through it easily enough and early signs indicate investors aren’t being fooled. As for me, I’ll keep looking for that euphoric reaction to create some bargain days but I’ll keep buying gold coins regardless – the road gets a lot rougher ahead.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

“There has been a general loss of confidence in the ability of central banks and governments to manage the economy,” said SICA Wealth Management's Jeffrey Sica. “That will continue to give gold and other precious metals a boost” because of a “painfully high probability” of continuing trouble in the months ahead.

Clifford Bennett, Empire Economics’ chief economist, foresees an interesting supply side quirk: “There is risk in the second half of the year of a bit of a 'panic spike,' if you like, as everyone thinks there isn't enough to go around and starts to hoard.”

But we cannot ignore demand, and Franco-Nevada Chairman Pierre Lassonde sees a global mania looming that will dwarf that of the 1970s when the only players were American: “58% of all the gold sold this year will be sold in [China and India]. When we reach that mania phase... watch out, because it will truly make your head spin.”

And the Chinese aren’t about to get scared away by high prices, says Antaike analyst Shi Heqing. “[Chinese investors] are likely to chase the rally and continue to buy gold because paper money feels increasingly worthless and they are worried about inflation.”

Individual investors are also expected to drive up demand. As reported in Reuters, “Potentially there's a whole new market for small-sized gold bars if these investors lose faith in paper.”

Even though the Swiss franc is already one of the world’s strongest currencies, Thomas Jacob is leading a crusade for a new gold coin. “I want Swiss people to have the freedom to choose a completely different currency,” Jacob said. “Today's monetary system is all backed by debt - all backed by nothing - and I want people to realize this.”

The list goes on, but you get the point. The need for protecting wealth with gold is going to get only stronger. The demand for gold has nowhere to go but up. The Chinese –the world’s consumer of gold – aren’t worried about prices. And the issuers of the world’s safest currency are moving to a gold alternative.

Plain and simple: gold coins make a darned good investment.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

For example, Kirtley cites this myth: “Unlike paper currency that is impossible to manipulate in any way, gold can be accumulated by a group of connected buyers for the sole purpose of eliminating supply from the market.” That statement is so profoundly ignorant that it begs dissection.

What exactly has the Fed been doing all of these years if not manipulating paper currency? Whenever central banks adjust their interest rate, they change their currency’s market position. And printing up fiat money has always been a great way for governments to weasel out of debt.

OK. Maybe the author meant to exclude governments and central banks in his argument. But if that were true, what mythical collaboration of buyers has the wherewithal to eliminate supply? Even the gargantuan holdings of big ETFs pale compared to the total above ground gold reserves. And it is absurd to assume that gold hungry central banks around the globe would just sit back and watch the evildoers orchestrate their scheme.

Much of modern gold mythology centers around the premise that gold does nothing but sit in a vault. For one thing, looking only at an investment’s ability to generate income is unbelievably myopic. So what if gold doesn’t produce one cent in interest when it realized capital gains of 30% in 2010? After all, dividends and interest are just cash, and way too little of it to keep pace with the dollar’s debasement at that.

Another absurd side of the do nothing argument is that gold lacks utility, other than as a decoration. I will give them that, gladly. Gold is gold, a stable time proven store of wealth and medium of exchange. It doesn’t need to multitask. Because of that gold is good hard money and in my book that’s pretty darned useful these days.

Turn that around. I can think of few commodities more ubiquitous and useful than wheat, but it would make one lousy currency. Not only is supply subject to the vagaries of the weather, the wealth you accumulate would quickly rot into worthlessness – unless, of course, you ate it first.

The point I want to make is take what you hear with a grain of salt. Consider the source. Check out the facts. Then make up your own mind whether it makes sense for you to invest in gold coins.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Over the next 50 years scarcity will become an ever more dominant part of life. There are hundreds of scenarios that would seriously challenge our survival, yet the few who take the threat seriously are dismissed as paranoid lunatics.

Is it paranoid to have flood insurance when you live in a flood plain? Insure your home and belongings against fire and theft or your car against injury and damage to others? It would be foolish not to, but a great many people fail to take even those simple measures because they assume somebody will always step in and bail them out.

It follows that the reason most Americans see no need for survival preparedness is they believe the government would never let things get so bad. The same government that can’t even make its mind up to pay the bills. The government that is rapidly driving our country headlong into a crisis of scarcity brought about by the overabundance of cash.

Long before predictable shortages of fuel, food, and water start wreaking havoc on our society hyperinflation might well have already made everything scarce. And it begins with the most basic of necessities – food.

Profit margins on the things we eat are slim, and with runaway inflation producing and distributing food to the masses quickly becomes unprofitable. Very few will have the enormous quantities of legal tender it will take to feed their families. Some will have gold to spend and that will get them through. And others will be able to live off the land, assuming they are equally capable of defending what is theirs.

Everybody else – and there will be a whole lot of them – will be in trouble. Think of the rage over petty issues you see every day, then imagine what it would be like if tens of millions people were deprived of food. Are you paranoid yet?

One thing is absolutely certain: Those who had the foresight to lay away stores and build a reserve of gold coins will not be inclined to take care of people who chose not to take care of themselves.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

We don’t live our lives cloistered in the ivy covered walls of academia, we have to make our way out here in the real world. Yet we allow academicians toy with our future with policies formulated on outdated theory that has no relevance in the new order of globalization.

One thing in particular has become abundantly clear: Fiat money has run almost every major western economy on the rocks and has proven to be completely unsuitable for underpinning the global monetary system. Europe continues to founder and America’s credibility has suffered an enormous blow as political infighting drives us to the brink of insolvency.

World economists have been looking ever more to China for salvation, but that country is facing its own liquidity dilemma as it struggles to ward off inflation and reduce the risk of asset bubbles and loans defaults. Early in July China failed to fully subscribe a bond auction for the first time since 2003, and one week later a second auction fell short of its target by a full one third.

Fiat money invariably declines to virtual worthlessness and in the process drives up prices for life’s essentials. That is particularly devastating in third world economies, causing desperate people to take desperate action. But America is not immune from social unrest, which will become clear as our safety nets deteriorate and ultimately disappear.

Yet we remain curiously complacent, trusting the dollar to see us through. When Jack Hough declares in the Wall Street Journal that “no country uses gold as money today or has plans to do so,” we take his word as gospel and disregard the IMF’s call to action and the global clamor for a sound monetary system.

No, Summers is not a doomsday radical. When he says the real crisis “will be the equivalent of 2008 all over again, along with food shortages, civil unrest, outbreaks in crime, bank holidays, and the like” he is only calling our attention to a very real and very serious situation.

And saying “if you haven’t already taken steps to prepare yourself and your portfolio for the coming disaster, you need to do so now,” does not put him in what Hough labels “the tinfoil underpants crowd.” He is simply urging us to take prudent measures to protect ourselves should the worst come to pass.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

That word should strike fear in the bravest of souls, but whenever I bring it up in conversation it just gets shrugged off. So I decided to take the issue head on, and started asking people what hyperinflation means to them.

To my astonishment the most prominent reply was along the lines of “Oh, we’ve been through inflation before and we always manage to catch up.” Ignorance may be bliss, but it can also be deadly.

They are thinking of runaway inflation – double digit escalation in prices that lasts for just a few years and then cools down. And yes, we have gotten through that before and emerged relatively unscathed. But those were only storm surges, whereas hyperinflation is a mega-tsunami.

For anyone who has not lived through hyperinflation it can be very difficult to grasp the concept, but a few examples from Casey’s list might help.

In 1993 Yugoslavia issued notes for ten billion dinar. We are accustomed to seeing foreign currencies in units of tens of thousands, but this is a million times greater. The note was no less than an official declaration that the dinar had become worthless. But Zimbabwe took worthlessness to a whole new level just a few years ago when the government began printing 100 trillion dollar bills.

Other, only slightly less mindboggling examples abound. In the 1990s alone we saw denominations of 100 million in Bosnia; 10 million in Nicaragua; 5 million in Turkey and Zaire; 1 million in Georgia; 500,000 in Brazil and Angola; and 100,000 in Belarus.

Substitute dollars for any one of those and you begin to get the picture. Now divide the denominations by 1,000 (at most) and you get an idea of what you would pay for a loaf of bread. That’s hyperinflation, the threat is real, and we are not immune by a long shot.

We need not learn the lesson the hard way. People in those countries who clung to their cash lost everything. But those who had the foresight to buy gold coins before their currencies tanked got by just fine.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Granted, corporate profits remain strong, but at what expense? Clearly they are not coming from a growing economy; they are due to cutting back on labor and squeezing ever more from the workers that remain. And companies are not ramping up in preparation for a new wave of consumer spending – without which there can be no recovery – they are instead hoarding cash to survive what they see as an extended downturn.

The so-called bull equities market is a sham; the market is struggling to correct without its daily handout from the Fed. The only life it has seen lately is the result of occasional teasers injected by ‘QE Lite.’ The fire cannot keep burning without accelerant because all of the fuel is spent.

Honorable men, when faced with irrefutable evidence that they have erred, own up to the fact and work together to put things back to right. They learn from their mistakes and move on, ultimately making their world a better and stronger place. But our leaders care only about elections and are driven by the misguided belief that admitting failure shows weakness.

That’s why it doesn’t matter in the least what future folly our government has in store as it bumbles along chasing after broken dreams. The economy will gain momentum in its downward slide, further polarizing the decision makers. Both sides will only shout louder, championing causes that have nothing to do with the underlying problems whatsoever.

Average Americans, meanwhile, are wising up. We are tired of business as usual in Washington. We want solutions, not senseless campaign trail rhetoric. That not being forthcoming, we will cover our own tails and duck into our holes.

The market for gold coins has been relatively unharmed by government interference. To the contrary, it remains driven by fundamentals that Fed policy has immeasurably strengthened. Today gold passed effortlessly through the $1,600 barrier in Europe and is on its way to untold highs.

Eventually our government will be forced to let the markets find their own equilibrium. Only then will the upward pressure on gold begin to moderate. Meanwhile, in the absence of sense gold coin investments will shine.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Get ready for the breakaway. Something is deadly wrong when it puts a smile on Wall Street’s face in the midst of the fiasco over the debt limit, Moody’s warning, and the never ending stream of dire economic news. That would take the unthinkable – say QE3. But clearly it would be insane to flood the market with more liquidity when there is nothing there to spark growth, would it not? Surely the powers that be must realize by now that QE2 did far more harm than good and QE3 would be devastating.

But Bernanke’s magic bullet is back in the gun and the rest of the world is shaking in its boots. Whether Bernanke is insidious or just insane, his policies are certain to erase what little faith remains in our government’s ability to handle its own economy, let alone direct the world’s. And that faith was all that was keeping the global reserve currency from becoming toilet paper.

It no longer matters whether we raise the debt ceiling or not. Whether we default is likewise immaterial. The damage has been done and our so-called leadership has proven beyond a shadow of a doubt that it is capable of no more than petty squabbling. Our government has degenerated into little more than a Vaudeville act.

The world tired of the show some time ago and was already weaning itself gradually off the dollar. If we push it hard enough and flood it with even more cheap paper, however, it will go cold turkey. The dollar might survive for another decade or it could commit suicide at any moment.

Each of us has a decision to make. Should we bet the farm on Bernanke or beat a hasty retreat to the shelter of gold coin investment?

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

The warning flags were first raised long ago and now they are flying everywhere. Bernanke gave it his best shot and proved that academics can’t hit the broad side of a barn. Brave souls from Geithner to half of the Open Market Committee are stepping forward and confessing that they are stumped. So too is Bernanke, but he just can’t admit it, even to himself.

Whether the chairman is an ideologue or simply an idiot is irrelevant. The world stopped listening long ago. They see our government for what it is, a relic so knotted up by its own politics that it is no longer capable of getting anything meaningful done. And it’s not only us, as one quick look across the pond will confirm.

Maybe that’s why nobody seems to care whether Congress raises the debt limit or not. Maybe they have already placed their bets on us going down the tubes and they are sitting back waiting to collect. We will never know for certain because the twisted system crafted by the demons of Wall Street has allowed bets to be layered upon bets to the point where all traces of the trail are lost in the maze.

Meanwhile, gold keeps playing the role of Punxsutawney Phil, popping its head out of the hole every now and then only to retreat, frightened by its own shadow cast by the light of day. The clouds are steadily gathering, however, and one day soon gold’s winter will come to a sudden and profound end.

Investors, overjoyed by recouping most of what they had lost in equities (assuming they were wise enough to hold them), are gradually coming to the realization that even the stock market “recovery” was a sham. The much heralded 23+% “growth” is just an illusion created by a dying dollar. In hard money terms the S & P 500 lost 2% to gold and the DIA fell behind by more than 2.5%.

The entire system is tanking, and it will take just a very small shock to initiate a cascade failure. When that happens gold will break away at the speed of light and the opportunity to protect your wealth with gold coin investments will be gone.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

As Friedrich August von Hayek noted in “Denationalization of Money” (The Institute of Economic Affairs), “The past instability of the market economy is the consequence of the exclusion of the most important regulator of the market mechanism, money, from itself being regulated by the market process.”

Hayek, who was a leading economist of the Austrian School, understood that “great financial and economic crises are not inherent in capitalism, but result from government interventionism in monetary affairs,” says Thorsten Polleit in the Daily Mises. “In other words, monetary policy … fights the correction of the problem by recourse to the very action that has caused the debacle in the first place.”

The free market often moves at a glacial pace, but its progress is inexorable. Governments rise and fall but the markets remain. “Free markets allow for productive and peaceful economic cooperation nationally and internationally,” says Polleit. “Suppressing them would therefore come at a fairly heavy price.”

Governments today face a decision: either return to sound money or have their nation’s prosperity dwindle to nothing. Sound money is simply free-market currency, its value determined by economic fundamentals. The most direct and widely recognized sound money policy is to pin currency in some fashion to gold, but it is not the only means to the end.

Hayek argues that an even better approach would be to abolish all legal tender laws (and therefore central banks) and let currencies vie for the favor of all money users. It’s a Darwinian solution in which only the fittest would survive. Reaction to quantitative easing in such a system would be swift and deadly while nations such as Switzerland and Venezuela - which hold gold reserves equivalent to at least 80% of their money supply - would surely come out winners.

It is extremely unlikely that either of those policies will be adopted here any time soon – the Funny Money School is far too deeply entrenched – so eventually the markets will force the issue. Seeing their wealth disappear before their eyes people will rush “to exchange their fiat money … for sound money media such as gold and silver, thereby driving down the exchange value of fiat money (even to the disappearing point),” says Polleit.

For centuries the free market has done quite well preserving the value of gold coins while driving all fiat money into oblivion.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

This is more akin to hitting oneself on the head with a hammer – it just feels good when it stops. I agree with Paul B. Farrell who says in MarketWatch, “We need to fix America’s looming credit default, failing economy and our screwed-up banking system. Now, with a Good Depression.”

Sometimes good is better than great. But how could a depression ever be good? In the words of Warren Buffett, “There’s class warfare all right. But it’s my class, the rich class, that’s making war, and we’re winning.” It’s time for a comeuppance, and we need a really big hammer to bring it about.

Farrell believes the problem is “not the economy, not markets, nor even politics. Yes, our economic pains are real. But they’re just symptoms. Something’s structurally wrong. Since 2000 endless bad news: Greed, deceit, stupidity, corruption, unethical behavior, lack of moral conscience … we lost our soul, our moral compass. America’s character is measured by our net worth.”

Former U.S. Comptroller General David Walker noted a striking similarity between the factors leading to the fall of Rome and the conditions in America today: “declining moral values and political civility at home, an overconfident and overextended military in foreign lands, and fiscal irresponsibility by the central government.”

The thing about depression is that it forces us to take a cold hard look at who is really running this country. When life is OK, we tend to let the status quo have its way. But when things turn ugly, we revert to the spirit of the frontier: we will fight for survival, and we will have no truck with anyone whose greed stands in our way.

We are being called to reinstate that which has made America great. “So pray for a Good Depression earlier rather than later,” Farrell says. “Choose now and we can be prepared for whatever comes. The longer we postpone the inevitable, the more intense the pain will be.”

And the higher the value of gold coin investments will climb.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

The Rasmussen Investor Index fell 15 points last month and a recent survey shows that less than half of investor portfolios made any gains year to year while 41% declined – and that’s not adjusted for the true rate of inflation. Gold, however, returned 23%.

The Rasmussen Consumer Index, which measures confidence in the economy, is a scant 0.1% above its lowest level throughout 2010 and 2011, and six out of every 10 Americans believe the economy is getting worse. Another Rasmussen poll reveals almost two thirds of Americans now believe that politicians are incapable of implementing positive change.

Summing it all up, we know the economy is going downhill and the government can’t fix it. We know our traditional investments are losing value against inflation. And we know gold is not only holding its own, it is gaining. So why the indecision?

Understandably, Americans – especially the older ones – are cynical and don’t know who they can trust. No matter where they turn they cannot find a leader they can faithfully follow. And unfortunately there are as many crackpots promoting gold these days as there are “investment advisers” trying to lure investors back to the Street so the average individual can’t make heads or tails of the endless barrage of conflicting analyses.

There is a very simple solution to the conundrum: stop letting others do our thinking for us. These words from the Declaration of Independence should inspire every one of us to take back the rights and powers granted to us and demand fundamental change:

“But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.”

We survived the Revolution and flourished with little more than the American spirit and the secure wealth of gold coins – there is no reason we cannot do it again.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

In a 24/7 Wall St blog reprinted in MarketWatch, Douglas A. McIntyre says it is very likely that the “DJIA could drop below 7,000 again before the middle of next year.” And he gives us several solid drivers of the fall.

Two of McIntyre’s drivers are global – Greece’s crumbling economy and the slowdown in China. When Greece tanks – and only a miracle can prevent it – it will push the EU past the tipping point, and the domino effect will undermine a crucial market for US exports. With exports to China reaching nearly $92 billion in 2010, even a small percentage drop in demand would wipe out what little “growth” our manufacturers have experienced through exports.

On the home front, McIntyre pulls the veil from the recovery. Thirty percent of our states are not even participating in what Bernanke keeps trying to sell as economic growth. Construction, which had played a major role, is playing out. “The US economy cannot grow at a rate of 3% or better,” McIntyre says, “if large regions of the country are shrinking economically.”

According to McIntyre the biggest damper on the economy is underwater mortgages. Already more than a quarter of mortgages are floating on negative equity, and that number is growing as housing prices continue to fall. “The ripple effect from a rise in underwater mortgages will affect everything from bank earnings to consumer credit to consumer spending,” says McIntyre.

“No matter what the Federal Reserve says, inflation is in full bloom … [it] is a poison to consumer spending and to the profit margins of companies that have commodities or transportation-based businesses,” McIntyre says. The Fed’s denial only drives a wedge between us and the rest of the world while robbing us of our ability to compete abroad.

Unemployment, of course, also gets strong mention. According to McIntyre, “the Brookings Institution recently said … that the single biggest threat to the economic recovery of many cities is layoffs of government workers.” Workers are being shed in the private sector as well as corporations hoard cash – between the US and Europe a staggering $2 trillion - rather than spend it to create jobs.

The market may not collapse all the way to 7,000, but there is no economic law or precedent that says it can’t. Stocks today are a risky business, and at today’s prices, buying gold coins just makes a lot more sense.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Consider what the real intent of Fed policy makers has been since 2008 – to re-inflate the credit bubble. But that is not about to happen because the bubble has some very large holes in it. All they are doing is “squandering time and public credit that we desperately need to take policy steps that stand a chance of producing lasting economic growth by re-building the foundation of a productive America,” says Eric Janszen on iTulip.com.

Our problems are “rooted in the inability of our national economy to produce enough primary surplus to grow, create jobs, and also pay debts left over from a previous splurge” while at the same time trying to deal with “an energy intensive transportation infrastructure as oil import costs rise.”

Soaring energy costs are merely the camel’s backbreaking straw. Janszen points out several disturbing conditions that can lead not only to economic decline, but social collapse as well:

“We will not be able to afford the cost of 2.5 million incarcerated Americans.”

“We will not be able to bail out retirees for trillions in unfunded corporate pension liabilities.”

“We will not be able to afford 1.5 million men at arms, but we will grow this force anyway.” “Forty-four million Americans [are now] living below the poverty line … [and] a fifth of the US population is on food stamps.”

As each special interest group hunkers down to protect its entitlements our nation becomes ever more fragmented. “Not since the draft and the Vietnam War has public policy so divided the nation,” Janszen says. “We are seeing a wide range of social domestic conflicts develop as budgets are cut and at the same time the basis for real economic recovery diminishes … All macro economic trends are going in the wrong direction to reverse negative social trends.”

Those negative social trends are what concerns me most. We were warned long ago that “a nation divided against itself cannot stand.” Yet that is exactly where we are headed. Barring some miraculous reversal of fortunes, a period of social disorder is rapidly approaching in which the old rules will no longer apply.

There will be no credit and our cash will be worthless. Buying gold coins now while the price is low is not just for the paranoid, it applies to all prudent Americans wishing to preserve the future for their families.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

In a sense, that is exactly the case, only the game is age-old - we are being forced back to the fundamentals. Very few remember the days when debt was a necessary evil of last resort, something we used to accommodate some greater purpose and then dispensed with at the earliest opportunity. Today we have leveraged debt for more debt past the point of no return.

The problem has been masked by the last gasp efforts of consumers and the government alike to stay afloat. Unbelievably, consumers have grown mortgage and credit card debt over the past five years, desperately trying to keep a lifestyle that is no longer sustainable. But falling home values have wiped out equity lines of credit and credit cards are maxed out.

With wages stagnant and prices rising consumers have no choice but to stop consuming. When consumers stop consuming, businesses stop investing and hiring new workers. And banks hold cash, leery of issuing new credit to overextended borrowers. The only way to break the cycle is for both consumers and the government to greatly reduce their debt load.

Instead, the Fed lowers interest rates, encouraging further debt. It’s a quick fix that at best will sustain the delusion of stability until after elections. But if progress is to be made “you have to get comfortable with the idea that it's going to take a long time for the markets to adjust and the economy to get back on solid footing,” says Tom Luster of Eaton Vance Investment Managers.

Pumping money into the financial system “doesn't stop the need for the private sector to heal itself,” Goldman Sachs Group’s Dominic Wilson said in the Wall Street Journal. But that won’t happen until the Fed stops encouraging reckless borrowing and starts rewarding fiscal prudence.

There is still a long downhill stretch ahead for our economy before we even begin to start climbing back up. Through that time gold coins will remain a premier source of security for the wise investor.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

The Fed lowered its growth forecast, extended its predictions for easing of unemployment, and raised its estimate for core inflation – so what is the plan to address those issues?

Oddly, officials are taking a wait and see attitude towards the economy – waiting to see if the poor performance is, as Bernanke continues to espouse, a transitory situation caused by unexpected global shocks, or something else altogether – say ineptitude on the part of the Fed.

In the meantime, according to the FOMC release, conditions “are likely to warrant exceptionally low levels for the federal funds rate for an extended period.” Worse, Pursche believes Bernanke “left the door slightly open to revisit the potential for monetary easing.”

Surely Bernanke must have shared some profound insight to justify continuing the ruinous interest policy and the mere suggestion of printing more money.

“Part of the slowdown is temporary, part of it may be longer lasting,” Bernanke said. Hard to argue that, but how about a little clarification? “We don't have a precise read on why this slower pace of growth is persisting … weakness in the financial sector, problems in the housing sector, balance sheet and deleveraging issues—some of these headwinds may be strong or more persistent than we had thought.” Oh, I see – in other words, you’re clueless.

When does enough become too much? How far do we have to sink before our politicians close ranks around the Republicans who are now calling for and end to three decades of the self- serving, power-grabbing, big-money cronyism of the Federal Reserve? I suspect we’ll see the devil riding a snowmobile first.

All in all, I found absolutely nothing of merit in the press conference. And I disagree with Pursche – there never was a downside risk in buying gold coins.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Jimmy Carter brought the index to public attention in his 1976 campaign when he stated that an index of greater than 12.5% should take away an incumbents right to reelection. At the time the misery index was 13.7%, but under Carter it climbed to a record 22%.

CNBC reported that the index today, at 12.7%, is at its highest since 1983. But that is using the new gimmicked calculations that the Fed has adopted. Doing them the old way, Shadow Government Statistics’ John Williams puts inflation at 11.2% and unemployment at 22.3% - a misery index of a whopping 33.5%. “I believe we are in a depression right now and have been for a while,” Williams says.

While many economists blame oil prices for inflation, says Gregory Bresiger of the NY Post, according to Williams “the problem isn't energy. The problem is the Federal Reserve printing too much. The problem is the government running huge deficits.”

Although others may hesitate to declare that we are in a depression, there is a broad concern “that economic problems go beyond rising prices … [that] inflation, combined with a weak recovery, could push the economy toward a double-dip recession.”

According to Pace University economics professor Joseph Salerno, “the unemployment rate remains stubbornly high and job growth is far below the average job growth we have seen during recoveries.”

Monday’s mayors’ report concluded that it will take until 2014 just to reach prerecession employment levels in the Labor Department’s 363 metropolitan statistical areas, says The New York Times. And nearly 15% of those areas “are unlikely to bring back all the jobs lost in the recession until after 2020.”

Interestingly, “New York metropolitan region … will get back to its prerecession peak by 2013, in part because the financial sector did not lose as many jobs as feared,” says the Times. But “that could change as Wall Street, facing falling markets and an uncertain regulatory climate, plans further cuts to its work force.” Misery loves company, especially from Wall Street.

It looks like there will be plenty of misery to go around for quite some time. Unless you are partial to being miserable, take the antidote: buy gold coins.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Tomorrow will be just a little better, with the release of May’s existing home sales data. But nobody is expecting that to be encouraging, and lousy home sales is hardly news. Neither are reports of earnings, which are so bloated these days that only a fool would believe that they can be sustained much longer. And, of course, the Fed is meeting once again.

For me the highlight of the week will be Bernanke’s press conference. This one promises to be a gem because he will be unveiling the plan to bring QE2 to a close and take us forward from here. The trick is he must allay the fears of both the citizens and global investors alike, so I think we might see a fine example of doublespeak and twisted statistics. On the other hand, Bernanke could just drop the ball once again and fool nobody with political spin.

Also midweek is Tim Geithner’s appearance before the House Small Business Committee. That could be interesting as well for devotees of fairy tales, at least for those who have missed his performances on the Sunday talk show circuit.

Thursday’s highlights will include two more big reports – new unemployment claims and new home sales. Nothing has changed, of course, but it is always amusing to see how the government and the media massage the data to present a picture that is rosier than reality.

We finish out the week with the report on durable goods orders, which likely will show signs of continued decline in the temporary export advantage the Fed gained us by undermining the dollar. For fiction lovers, coming in a close second to Bernanke’s press conference will be the Commerce Department’s third estimate of first-quarter GDP. Apparently it takes three months to accurately peg that number – or to figure a way to make a silk purse out of the sow’s ear.

Well, I guess it won’t be that big a week after all, only more of the same tired diatribe. A really big week would be one in which the news is about a workable plan of action, a cooperative effort among politicians, business, and individual citizens that addresses real problems and implements real solutions.

Don’t hold your breath. The message is abundantly clear: Buy gold coins because all the effort is going into glossing over the past and prettying up the present, not to turning around the economic decline.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

The other evening a network newscaster added to a colleague’s comments on economic recovery, “if the economy recovers.” Such an utterance would have been considered heresy a short time ago. But the reporting lately has gone far beyond subtle asides.

The History Channel is running a two-hour special called “The Prophets of Doom.” This is not a documentary on the ranting of the lunatic fringe but rather a serious discussion of looming crises by some of America’s top minds. While they debate some specifics and each seems to have his own pet concerns, there is clear consensus that things are about to get substantially worse.

That is to be expected because the themes are all interrelated – the depletion of fossil fuels, the deterioration of the water supply, and global hunger. And they are all symptomatic of overpopulation and rapid advancement of emerging economies. Crises the likes of which we have never experienced loom a scant few years down the road, yet there is little action taking place to avert them.

The developed nations should be the best equipped to deal with the issues but we’re broke. Our efforts to climb out of the hole are serving only to exacerbate the problems. And many of the “prophets” believe we are already out of time.

It’s no longer a question of economics. We are rapidly running out of the necessary resources to sustain today’s population, let alone support its staggering growth. Competition for food and fuel is already intensifying at an alarming rate. The tipping point will come when there is no longer enough to go around. Hunger is a powerful primal force, and no nation is immune from its effects.

It seems inconceivable that society could regress into total anarchy, but that is exactly the road we are on. It will take unprecedented global cooperation and determination to change course, but I think that is most unlikely. I also think it unlikely that mankind is coming to an end. Things will get ugly, no doubt, but we are resilient and will ultimately adapt.

If a tornado is bearing down, you head for the shelter. With social chaos bearing down, you buy gold coins.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Fareed Zakaria’s “The Post-American World” warns us all to face the reality of the third great power shift of the past 500 years – “the rise of the rest.” First came the emergence of the western world followed by the rise of the United States. We reached our zenith in the 1990s, as nearly a century of social, political, and economic dominance culminated in “an American imperium, a unique, unipolar world in which the open global economy has expanded and accelerated dramatically.”

We should take great pride in what we have wrought and not resist the change. Instead we have frittered away our wealth in defiance. But in the beginning we were engrossed in a consumption binge, voraciously devouring everything emerging economies now put within our means. As our own production slipped we didn’t slow down – we merely substituted credit for cash.

Noted scientist and economist Chris Martenson compiled the Fed’s total US credit market debt and found that it has doubled five times over the past four decades, almost ideally fitting an exponential curve. Had we incurred the debt for financial growth instead of consumption, it is unlikely that we wouldn’t be in this fix today. But when credit flattened out in 2008, we suddenly fell far behind the trend.

“This is why Bernanke can print a few trillion and not really accomplish all that much,” Martenson says, “because the main engine of growth expects, requires, and is otherwise dependent on credit doubling over the next decade.”

The era of borrowing to fund “outsized government budgets and promises, overconsumption of nearly everything imaginable, bloated college tuition costs, and rising prices in healthcare utterly disconnected from economics” is over and “there's no possibility of a return of generally rising living standards for most of the developed world.”

As the rise of the rest carries us into the post-American world, the dollar will decline to worthlessness in the global markets. With gold coins, on the other hand, we will always be able to buy the things we need.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Sub-standard housing. According to the AP, HUD reports that “the number of people using shelters or transitional housing in suburban and rural areas increased 57% from 2007 to 2010,” with half a million people seeking help just last year. That’s a “direct result of unemployment, the economic challenges we’ve seen,” explains HUD Secretary Shaun Donovan.

Unemployment. Jobs are scarce in third-world countries, and no amount of desire to work can overcome that. Today millions of Americans are trapped by structural unemployment, willing and able to work but treated as lepers by the corporate community.

Poor education. Our public schools are already pushing countless functional illiterates through the system while our math and science performance has steadily fallen behind every other developed country. The cost of higher education has soared while the prospects of finding a job commensurate with a college degree has sharply declined. With vast numbers of college graduates being forced into work that requires only a high school diploma at best, the value of higher education is being seriously questioned.

Hunger. The soaring price of necessities is far outpacing income growth, causing a disturbing decline in the quality of the average American’s diet. Far worse, among those in more dire straits - particularly the children - malnutrition is rapidly approaching epidemic proportions.

Wealth inequality. In third world countries wealth resides almost entirely with the very few elite while the rest of the population has very little hope of rising above poverty. The concentration of wealth in America is little better, and the chasm is widening.

Hyperinflation. As the GDP of third world countries deteriorates, the governments turn to their printing presses, igniting hyperinflation. The Fed’s policies have already done significant damage to our economy and fear is growing that it will again try to take the easy way out, “unleashing inflation and disrupting financial markets,” according to 38 leading economists surveyed by the AP.

There is a common thread to these symptoms: wealth. In a country of the rich, by the rich, and for the rich the system exists solely to channel money from the masses to the few. Eventually such a system must self-destruct, and those who had the foresight to buy gold will endure.

Just the thought of that being America’s future is incentive enough to invest in gold coins.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

The history of 20th century America is one of a country that had risen to greatness and was now seeking perfection through government – perfect security, perfect opportunity, and perfect equality. In hindsight it sounds perfectly absurd. And in its quest, the government destroyed all three.

While we were wallowing in governmental beneficence we gradually lost the ability – and the right – to think for ourselves. In its quest for utopia, the government substituted rule for responsibility and lost its ability to govern.

Our legal system was founded on British common law and has evolved through court decision to fit our own beliefs and to maintain relevance through changing times. Laws were meant to define society’s expectations and provide remedy for transgressions. The courts were meant to assess each case in the context of the law but also under the “reasonable man” test – what a reasonable person could be expected to do in similar circumstances.

In the 20th century, however, the government attempted to legislate fairness by assuming that everyone was not only capable of evildoing, desirous of it as well. It tried to define every possible action that could conceivably cause harm to someone and then create laws to prevent them from happening. In the process all citizens, regardless of innocence or guilt, are now punished equally, forced to comply with volumes of incomprehensible one-size-fits-all rules.

The cost of maintaining such a massive bureaucracy and the inefficiency it engenders lie at the roots of today’s economic crisis. Recovery efforts have failed because the economy is just a symptom of much larger systemic ailment, a bureaucracy that has collapsed under its own weight.

We cannot vote in a change of the necessary magnitude because our government has abdicated its powers to the same book of rules. All we can do is wait for it all to crumble to dust and with a revived true American spirit begin to rebuild.

Buying gold coins not only shows the government our intentions - it gives us the means to bring back the real America.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Not surprisingly, Bernanke also told the group that “the central bank's policy to help stimulate the economy is still necessary, reiterating the expectation that interest rates will remain low for an ‘extended period.’” It is inconceivable to me that anyone present could believe that continuing down that path will somehow miraculously pull us out of the muck.

The average American, it seems, agrees. According to a recent Rasmussen survey a solid half of the population now expects we are heading towards another Great Depression in the very near future – the highest level in two years - while only 31% expect the economy will be stronger one year down the road. Only 9% are confident that a depression is not at all likely.

Mark Mobius, renowned hedge fund mogul and head of Templeton Asset Management’s $50 billion emerging markets team, confirms our fears. “There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis,” he told Forbes’ Addison Wiggin.

Wiggin points straight at derivatives, which he estimates to be on the order of 10 times the global GDP, as the culprit. And the Fed is no small player, holding more than $1.6 trillion “in mortgage derivatives alone, junk that the banks needed to clear off their own balance sheets,” Wiggin says.

Thanks to Mr. Bernanke the Fed has leveraged $52.5 billion in capital into a $2.7 trillion balance sheet. That means a depreciation of just two percent would completely wipe it out. Compare that to the big investment banks that the Fed rushed to bail out, which were leveraged 30 to 1.

With the government now holding their most toxic assets and leveraged a whopping 50 to 1, there is only one way this can end. The economy is not going to bounce back and all the wishful thinking from on high won’t change that fact.

Staying the course can only dig the hole deeper. And that will give gold coin investments a real shot in the arm.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

The Journal’s Peggy Noonan adds “The debt crisis in Europe is not easing but worsening, the U.S. bond markets could bail tomorrow, the culture of Washington will kill any serious attempts at reform … If we don’t make progress on [the debt], we are going to near our endpoint as a nation.”

That sort of cut-to-the-chase discourse is as refreshing as it is ominous. It is what the American people need to hear so they can get their heads out of the sand.

Ms. Noonan believes the people are already aware of the gravity of the situation but she questions “whether they'll now trust the politicians to take the right action.” After all, “the very politicians who are trying to get us out of the mess are the politicians who got us into the mess … [and] some of the politicians talking about how to stop the spending crisis are the same politicians who, for many years, said there was no crisis.”

The next step for the American people is to accept that we must take our future wellbeing into our own hands, but there we fall a little short. The rhetoric throughout the taxpayer revolt underscores the simplistic view the majority of voters have regarding budget issues. While on one hand they rightfully indict big government as the root of the economic crisis, on the other they are as yet unwilling to pick up the slack of a significantly diminished government. “People like government programs but not government costs,” Ms. Noonan says.

You simply cannot have it both ways. While I do not concur with Ms. Noonan that the average American has fully grasped the situation, the frustration of having to cope with everyday life while the government incessantly bombards us cheerful news is wearing down the denial.

Charity – and self preservation – begins at home. Closing our eyes and hoping for the best is no answer. And counting on Uncle Sam to eventually get things right is folly.

As individuals we have but one clear avenue to take: roll up our sleeves and get to work taking care of ourselves. We can start by protecting our remaining wealth, and there is no better way to do that than buying gold coins.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

According to an AP release, “For every $10 the typical household earns before taxes, almost a full dollar now goes toward gas … [more] than they spend on cars, clothes or recreation.” With wages stagnant that is a sure sign that quality of life is in decline. And it severely limits the possibilities for the millions who are looking for work.

But what about all of the jobs that have been created? Just a cursory examination of the data released last week reveals that each one of them cost us taxpayers some $800,000. Unless they were all Wall Street Banker positions, that is one terrible return on investment.

Perhaps the biggest sign that we are on the fast track to second fiddle and third world quality of life is that while we are wallowing in our woes Germany has taken a giant step towards the future, doing what we seem capable only of talking about any more: the country has announced plans to completely abandon nuclear energy over the next 11 years.

Chancellor Angela Merkel wants to show the world “how it is possible to achieve growth, creating jobs and economic prosperity while shifting the energy supply toward renewable energies.” That is precisely what used to be America’s strong suit, but now we are apparently willing to sit around bemoaning our fate and let somebody else takes the lead, “with all the opportunities that brings for exports, developing new technologies, and jobs.”

If we had poured those trillions of dollars into such a purpose and let the fat cats fend for themselves, I bet we would be a lot farther ahead today. But we have lost our vision, and it looks like things will have to get a whole lot worse before we collectively suck it up and get to work on real change.

Until such time, every day will be a good day to buy gold coins.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Gold coins are just money, pure and simple. When we take physical possession of gold – and that is a very important distinction – we have not entrusted our wealth to another party. We are not compensated through returns, but neither have we put our capital at risk. We have only put our money in storage.

That is why “smart money” rails at buying gold coins. Stored capital from their perspective is guaranteed to lose value over time. I agree wholeheartedly – when that capital is currency or currency based paper. But the argument doesn’t stand up when the capital is gold coins.

The difference is that paper assets – whether equities, bonds, or currency – depreciate in terms of purchasing power, and rather quickly at that. Real money, however, neither appreciates nor depreciates. Gold coins stored away today will buy as much in ten – or a hundred – years as they will today. No more, no less. The question about the wisdom of buying gold coins has no relevance in terms of traditional investment and needs to be reframed.

Say you have the equivalent of one year’s groceries to invest or store for the next 10 years. If you invest you will be paid returns, but you will have to plough them back in to keep up the investment’s worth as the underlying currency declines. Or you can receive stronger returns by putting your capital at greater risk.

Either way, the trend over the past several decades virtually assures that when you cash in you will be fortunate to buy 8 or 10 month’s worth of food. And there is a real possibility that you couldn’t afford even a loaf of bread. Had you bought and stored gold coins, however, you could eat for an entire year.

Regardless of your appetite for risk, prudence dictates that a good portion of your wealth be safely stored for the eventuality that your traditional investments lose their worth. Regularly buying gold coins and storing them securely will ensure there will always be food on the table, no matter what happens.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

The strong sales of gold coins is representative of a broader growth in investor demand for physical gold. “What drives people towards physical metal, as opposed to ETF or futures, is fundamental insecurity. It’s like safe haven in extremis,” Ross Norman, chief executive officer of Sharps Pixley Ltd., a London-based bullion brokerage told Bloomberg.

Even though investor participation in the physical gold market is negligible, in 2009 investment demand outpaced that of jewelry for the first time in 30 years. Since then it has been steadily growing and is expected to increase nearly 10% this year and 11% in 2012.

Bloomberg surveyed 31 analysts, traders and investors – mainstream experts not known for their warm feelings about gold – and found that 81% of them expect gold’s bull market to continue throughout 2012. The median of their estimates puts the gold price at $1,750 by the end of the year.

The head of commodity research at Goldman Sachs Group concurs, expecting sovereign default risk “will continue to support gold prices. We see them trading up to the high $1,600s at the end of this year and going into the mid-$1,700s next year.”

There is, of course, some peril in growing investor demand - eventually investor participation could reach a level where a real bubble could form. But we are far, far from that point today.

As Rob Arnott, chairman of California-based Research Affiliates, told Bloomberg, our economy is “bottom bouncing and showing no signs of recovery … It’s hard to identify uncertainties that could drive markets massively higher, but relatively easy to identify those that could drive them massively lower … which means now is a wonderful time to have a very defensive investment posture.”

By its very definition, that equates to a very strong investment in physically held gold coins.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Regularly purchasing gold coins will average out any price volatility, and the investment will track gold’s long term trends. I am not a gambler, so I invest for the long term – speculation on short term movements is just too risky and more than a little harrowing.

When the economy is on the upside I expect gold to fall accordingly – but its value remains intact. All that means to me is that my periodic investment buys more gold coins. When the cycle reverses again, gold will rise accordingly but my investment will also continue to grow.

The trick is to consider gold coin investments differently than all of the others. Before inflation began to strip away the dollar’s worth it was common practice to hoard cash. It made sense because the banking system was fraught with danger, costing many their life savings. Cash stuffed in the mattress, however, would always be there – assuming no catastrophe occurred – and it would buy essentially the same things it did when it was stashed away.

Gold coins in a safe-deposit box is today’s version of the greenback stuffed mattress. It’s not put there to earn dollars but to ensure that the wealth it represents will always be at your disposal. No matter what happens to the dollar or the economy in general, gold’s purchasing power remains constant.

Many experts predict the dollar will soon become worthless, possibly in just the next few years. Wealth denominated in dollars will be meaningless, but those “do-nothing” gold coin investments will have the same true value as the day they were bought, put away, and forgotten.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

Americans tend to dismiss the possibility of hyperinflation because we cannot envision that happening here. But it can and most likely will. In light of continued worsening economic conditions ShadowStats has moved its estimate of when it will hit forward to 2014, and that leaves very little time to prepare.

In fact, we have been moving inexorably in that direction for decades. The astute began preparing long ago, the most fervent of which have hoarded food and other supplies in heavily fortified remote locations. For years they were dismissed as the lunatic fringe, but recently far more conservative minds have taken up the cause. Suddenly such action is being less regarded as paranoia and more as prudent preparation, not unlike that we make for the eventuality of hurricanes or other natural disasters.

When a nation is in the grips of hyperinflation social order disintegrates as people rapidly devolve into the animals we truly are, doing whatever we deem necessary to ensure the survival of our bloodline. Stores of food and weapons are merely a stopgap measure, much the same as the fallout shelters that were the rage in the 1950s. While the shelters might keep people alive for a while after a nuclear attack, eventually they must emerge and find a way to survive and rebuild in the aftermath.

For a brief period people might get by with barter, but supply will quickly outstrip demand, rendering their possessions worthless. Gold coins, however, as they have throughout history, will remain a viable and universally accepted medium of exchange. One gold eagle will keep a family of four fed for several months, just as it would today. And, if necessary, gold will facilitate relocation to some safe haven and be accepted there at full value.

It’s heads you win, tails you don’t lose. Keeping a sizeable stash of gold coins within arm’s reach ensures your survival through economic calamity, and because gold does not lose value it costs you virtually nothing to hold it.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

The current price of gold coins is immaterial. The coins don’t leach out their gold content and their number doesn’t grow or shrink at random. The value of their gold content is a timeless and universal constant, a measure of purchasing power against which all other investments can be unambiguously evaluated.

By that measure the returns from traditional investments are suspect. When compared to real inflation the safest traditional investments are now producing negative returns. PIMCO’s Bill Gross, who manages the world’s largest bond fund, has been scrambling to keep his investments productive, upping his short position on US debt and increasing emerging market holdings while decreasing domestic exposure including mortgages, investment grade credit, and junk bonds.

“Treasury yields are … substantially less than historical averages when compared with inflation,” Gross told Reuter’s. “Perhaps the only justification for a further rally would be weak economic growth or a future recession that substantially lowered inflation and inflationary expectations.”

That it would take a recession to change Gross’ sentiment on US debt is a sure sign that the dollar, like every other fiat currency throughout history, is in irreversible decline. His complex manipulations, however, are of interest only to investors who depend on their investments for income. Until retirement the key objective is to preserve the value of the wealth we accumulate throughout our lives.

In comments made last Friday Former Federal Reserve Chairman Paul Volcker warned us in no uncertain terms that we are running out of time to deal with the debt and deficit crises. I believe that was more a polite way to tell us that in the current political climate it is already too late. The dollar is dead and only artificial life support is postponing the official declaration.

While the cash in your wallet is worth less every day, it is comforting to know that the gold coins in your safe deposit box will buy as much or more today as they did when you first bought them.

Daily Updates Archive

Kevin Johnson

Senior Staff Writer - GoldCoin.net

John Williams, editor of ShadowStats, said in an interview with the Gold Report that “The US is really in the worst condition of any major economy or country in the world … accounting for unfunded liabilities for Social Security, Medicare and other programs on a net- present-value (NPV) basis indicates total federal debt and obligations of about $75 trillion … [or] five times the gross domestic product.”

The dollar’s strength – and the persistence of our AAA rating – is nothing more than an anomaly of a rating system that is based on lowest risk of default. The dollar is the world reserve currency so the US is incapable of default as long as it can simply print money to pay its debt. Thus we set the benchmark for the ratings - at least for as long as the dollar remains boss.

Once other nations start insisting our debt be held in other currencies, however, our rating will plummet. Most people believe that it would take a monume