Gold Smells Blood

By Greg Hunter’s USAWatchdog.com

One day after the Federal Reserve announced a $600-$900 billion second round of Quantitative Easing (QE2), gold and silver hit fresh all-time highs.  Yesterday, the yellow metal surged more than $40 an ounce to well over $1,390 before falling back a few dollars in after hours trading.  Silver, also, had a monster move!  It was up more than a $1.50 per ounce.  It, too, retracted slightly in after hours trading.  That surge in precious metals is a debilitating rebuke of the Federal Reserve’s wild and unprecedented money printing policies.   How bad is it, really, for the Fed to feel this is a good idea?  Gold is acting like a predator that smells the blood of wounded prey.  In this case, the prey is a much weakened Fed that seems desperate to keep its banking cartel afloat from the undertow of a sea of red ink.

It is reported that Sprott Asset Management bought 6.5 million ounces of physical silver at nearly $26 an ounce.  Respected financial blog Jesse’s Café American wrote yesterday about the deal, “Some might consider the price that Sprott paid to be a ‘leading indicator’ of where silver will be going. I think when the paper Ponzi scheme actually collapses silver will be much higher than that. After all, “he who sells what isn’t his’n must buy it back or go to prison.” Unless, that is, they are running the game. Then they just pay a fine and admit no guilt.” (Click here to read the entire post from JCA.) This kind of silver buying is a big plus for the physical market and a big negative for the often questionable paper market.

Big-time buyers are driving over-sized price moves in precious metals.  Hedge Funds, Sovereign Wealth Funds, big banks (like Goldman and JP Morgan) and Central Banks are now moving the markets in gold and silver bullion.  Movements like the one yesterday are not mom and pop retail buyers looking to purchase a dozen Silver Eagles or a Gold Eagle coins to put into a safety deposit box.

Record high gold prices caused by the Fed printing press are not lost on Republican Congressman Ron Paul.  He is the Federal Reserve’s most adamant critic and is now on the winning side of mid-term elections. A bill that would have forced a Fed audit (HR1207) failed in a House of Representatives controlled by Democrats earlier this year.  Now, with Republicans taking control, Congressman Paul will gain some real power to, once again, probe into secret Fed policy.  Yesterday, Reuters reported, “Paul is currently the top Republican on the House of Representatives subcommittee that oversees domestic monetary policy, and is likely to head the panel when Republicans take control of the chamber in January. . . ‘It’s an outrage, what is happening, and the Congress more or less has not said much about it . . . Eventually we’re going to have monetary reform. I do not believe the dollar can be the reserve standard of the world,’ said Paul, who has called for returning the United States to a currency backed by gold or silver.” (Click here for the complete Reuter’s story.)

It is not just the announcement of the second round of QE that has precious metals gushing new highs.  It is, also, the open-ended nature of the Fed’s policy that reads, “. . . will adjust the program as needed to best foster maximum employment and price stability.”  This could mean $600 billion or $6 trillion before this round of money printing has run its course.   Gold (and silver) clearly smell the blood of a wounded Federal Reserve Note that is being drained of its buying power.  I’ll close today’s post with a quote from a recent Jim Willie article from Goldenjackass.com.  While vexing about a second round of QE, Willie wrote, “The centerpiece question, when the US bond fraud is coupled with European sovereign debt distress, comes down to WHAT IS MONEY? The answer is Gold & Silver and not much of anything else. (Click here for the goldenjackass.com.)

Comments
  1. Joe

    This is really troubling. What am I supposed to do??? I haven’t bought ANY gold or silver coins yet. I have NONE, ZERO, NADA!

    I have been thinking about it and hoping the prices would come down a bit more, but haven’t as of yet and now think it is too late for me as the prices are up way too high already to realize a long term profit (meaning when the economy does rebound).

    My other concern is that if I do buy now, I really believe that the price of gold and silver will tank after the economy does rebound…leaving myself and family open to an even worse situation in the future.

    Unless I am totally wrong about gold and silver prices tanking to less than current prices after the economy rebounds. Am I? Won’t gold and silver dip way lower than what they are selling for now after the economy rebounds?

    In that case, is it really worth it to be on that roller coaster ride only to lose more money? Unless I really don’t get it…which I admit I probably don’t as I am a newbie when it comes to PM, but really working on learning about what to do.

    Please help!!!

    • Greg

      Joe,
      I don’t know what to say other than read some of the other posts on the site. I really cannot convince you to buy. You know in your heart you should have done that already. The dollar is in big trouble because we have very big debt. You are going to have to convince yourself to protect your wealth. One last thing, if you really want some expert opinion Google the phrase Greenspan 1966. You should be able to pull up the former Fed Chief’s view on gold in 1966. The Fed is robbing you, and they announced the continuation of theft of your money’s buying power on Wednesday. Good luck.
      Greg

    • FamilyForce6

      Joe,
      You’re best bet is to buy some every month, an amount you’re comfortable with- this is called average costing. Make silver (and gold if you can afford it) part of your monthly savings plan. I truly believe silver coins in your matress are safer than dollars in your bank account.

      Silver is extremely volatile (as we’ve seen over the last 18-24 months, and yesterday!) but the Fed has signaled to everyone that they are intent on destroying the dollar. Gold and silver will never go to $0 worth- those pieces of paper in your wallet (or electronic credits on your bank statement) on the other hand… well I guess they can be used for fuel in a fire on a cold winter night! (see the Wiemer republic of Germany)

      Greg, thank you for this site and mentioning Ron Paul. He’s been sounding the alarm of a dollar crisis for years, but the MSM and his own party have ignored and mocked him- sad.
      -Sean

      • Robert

        Can you imagine- here he is, an M.D., a highly trained professional, who has also spent a great deal of time becoming knowlegable in economics and monetary policy, who has read the Constitution and believes in the rule of law- and who does the Republican Party pick for its Presidential running mate but a semi-literate (but photogenic) woman who knows nothing, has an opinion about everything, and in the debate over values declared pride in a daughter about to give birth to an out-of-wedlock daughter. In other words, the party is a joke. Ron Paul hoped, in coming back into the fold, to be accepted as part of a sincere movement toward honest, competent governance, but he and his son are routinely marginalized in the press, and, like Ross Perot (whose remarks about “those sucking sounds” were nothing less than prophetic) shoved into the background.
        Paul should completely break with the GOP. A third party is badly needed- a Constitutional Party.

    • Spider

      In regards to the price of gold & silver you need to look at it as less a rise in the gold price and more as a DECLINE IN THE DOLLAR PRICE. What we are seeing is not a bubble in gold, but rather, the start of the bursting of the dollar bubble. As evidence of this just look at the price of any commodity – its not just gold/silver that is increasing but the price of iron, copper, nickel, oil, uranium, corn, wheat, and the list goes on and on. The dollar bubble that has allowed this country to issue debt at very low rates compared to the true riskiness of its debt is bursting…

      Yes I know it seems risky to buy gold/silver and it seems safer to keep your money in cash but its the EXACT opposite that is the case. The dollar market is tens and possibly hundreds of trillions, while the gold market is much smaller. Any true panic in the dollar market will cause a stampede out into everything – which we have NOT seen yet. If we see that then all of those people who thought they were safe in cash will have their wealth destroyed via the loss in purchasing power of their dollars. It is MUCH SAFER for you to put your wealth in true commodities and unfortunately the illusion of dollar safety is what will hurt a lot of ordinary people in the next few years.

      My advice to you is to forget the gold/silver price and put AT LEAST 5-10% of your wealth in gold/silver – that will be true financial safety. If you dont like these prices, divide it into tranches where you purchase 5% now, and then 5% later in the year – if the price drops then you can get it cheaper and if the price rises you have an initial position that will offer you protection and returns.

      Your Friendly Neighborhood,
      Spider

      • Greg

        Good stuff Spider.
        Greg

    • slingshot

      “Hey Joe,
      Where you going to run to now”. Just a little bit of Jimmy Hendrix brightens my day. If your only in precious metals for profit instead of wealth preservation then maybe the roller coaster ride is not for you.
      The Gold/Silver Arena is not for the faint of heart. As it was then and as it is now. You have to believe in what you are about to undertake for yourself and family. Research is what you need to do.
      I would also get information on what is really happening in the world instead of stateside only propaganda. There are great Precious Metal sites that will guide you on the internet.

      “And the wind, cries, Mary.” J.H.

    • Kelly

      Heh Joe,

      Your post shows that you have given this some thought but to answer your question I think you need to think a little farther.

      You briefly mentioned “after the economy does rebound”. Herein lies your answer. By your post it sounds like you are investing for the longer term future and not just short term profits. Let me ask you, what does that future rebound in the economy look like to you? What drives it, what is it based on. What role if any do you think that gold / silver will play in that recovery.

      If you think that gold / silver are only a barometer of the economy and play no active part then sure, they will both tank when the economy recovers.

      On the other hand if gold and silver play an active role in the recovery then as the economy recovers they will retain their value.

      Take the possibility that the Fiat currencies go back to a gold standard. Under this scenario paper currencies are linked to gold (and/or) silver. By definition gold can’t tank if the currency is linked to it. We have a currency balance between gold and paper that will remain as long as the standard is maintained.

      Think about it.

      Kelly

      • Robert

        Some sort of other-than-vaporous backing for the currency is the only defense against not just massive inflation, but a shift of the middle class into ever-higher tax brackets (like the IRS bill, the AMT was supposed to snare only the wealthy who were paying no taxes, but has never been properly indexed against inflation). In fact, nothing could be simpler: instead of mylar foil, make the little “security strip” in currency out of an actual alloy of gold or silver. What a revolutionary idea- money of real value in the hands of the people, and no inflation! Of course, the budget would have to be balanced. (and in the process, ask yourself,”What self respecting country, determined to keep spending in line with income, has any need for a “Central Bank”? Send the Fed packing back under the rock from which it first crawled.

    • mell

      Yeah me too,

      I look at the Kitco chats every day watching over the years it goes from 7 to 26 and I have no money to buy any.
      I don’t know what to do either.

      Mell

    • Cogito Man

      Hi Joe;
      Here is advice from the guy who put 80% of his liquid assets in real gold in yes, believe it or not, when is was selling under $300. Other 20% I was using to speculate in gold futures, now those 20% are much bigger stake than the real metal. Here is THE ONLY thing you have to understand, US dollar IS COOKED so are the other fiat currencies.It is terminal and there is no way out. It means that purchasing power of most if not all paper currencies is going to near zero. It is not about but’s and if’s it’s done deal. I do not intend to elaborate on that, I have educated myself in those matters in mid to late 90-ties. If you are too lazy to do the same you will never be sure what to do and you will always lose. Your panicky post is perfect exemplification of your state of mind, you know nothing and you sound extremely stressed. The most important thing in any investment is knowledge that leads to self assurance and that is must from the psychological point of view. If you are not sure of your opinion you will be prone to succumb to outright lying or some other form of bs propaganda spread by so many paid scumbags like for example Jon Nadler of Kitco. The other thing I consider very important to my success is that I have learned early on to IGNORE ALL OFFICIAL MEDIA as they are shills who ALWAYS work against small guys like you. This includes CNBC, WSJ and IBD at least until the point when you can easily screen the lies they propagate.As the matter of fact I do not watch tv at all for last 10 years and I am better informed than 99% of Americans. As an example good starting point in your education will be to regularly check Jim Sinclair website and subscribe to Australian “Privateer” newsletter. One more thing….buy all REAL GOLD you can (Bullion only, no numismatics) now, or soon you will not be able to buy any at any price.

    • Casey Lloyd

      I can state, with relative certainty, that the dollars in my pocket will be literally worthless in my lifetime. The only question is this: When will we reach the point at which by investing I will no longer increase my purchasing power more than the appreciation of the equivalent value of purchased durable goods, or commodities.

    • Francisco Almeida

      .

      Dear Joe,

      I understand your anxiety, but …

      The root cause of your anxiety is that :

      1) – You BELIEVE that typical “market cycles” rule will ultimately prevail, and therefore you believe that markets WILL rebound …

      2) – What you do not realize, Joe, is that we are at once-in-a-century tectonic shif … a cataclismic event of VAST proportions !!!

      3) – You look at a tsunami, Joe, and all you can see now is a wave, just slightly bigger than normal …

      Dear Joe,

      You just be cold-blooded and accept the FACTS that :

      1) – The debt WILL collapse, it is inevitable, because: a) Balanced budget is politically unthinkable, too much arrrogance in DC; b) Printing presses are at warp speed, and savers are getting away from dollar devaluation like rabbits run at the smell of a fox.

      2) – As dollar collapses, so will your dollar-pegged savings, be it in stocks, UST-bonds ore notes.

      3) – As it happens, smart money will seek safe haven, and GOLD CANNOT BE PRINTED, so it cannot be reached by government theft, therefore cannot be devalued – though it has been temporarily manipulated, but it cannot last during a dam blast.

      4) – The economy will NOT rebound before the debt collapses.

      5) – The economy will tank and reach a bottom, AFTER some years from “The Century Collapse”. Them you sell your gold !!! :)))

      ( I will buy oil stocks after that, it will be rock bottom …).

      Francisco Almeida.
      from Brazil.

      • Francisco Almeida

        .

        Erm .. Hey, Joe … a last word :

        Stop watching Mass Media !!!

        It damages and spins your perception of reality !!!

        It’s a W.M.D. = weapon of mass deception .

        .

        • Francisco Almeida

          .

          And, joe …

          … hoard your gold OUT of the reach of governmental confiscation.

          Roosevelt did in 1933.

          In 1970, Nixon defaulted in 60 billion of gold.

          Obama can do it again, why not ?

          The circumstances arr posed, and are favorable to wards it.

          .

      • Greg

        Francisco Almeida,
        Great comment!! I could not have said it better, Thank you!!
        Greg

        • Francisco Almeida

          .

          You are welcome, Greg.

          Your compliment is generous,

          that of a polite gentleman. :)))

          Greetings from Brazil :)))

          • Greg

            Francisco,
            Brazil will be a nice place to live in the coming years. I have never been there, but I hear it is a beautiful land. Thank you for your support and comment.

    • James M

      I took $10,000 out of a gauranteed 5% annuity in August and bought 1 oz silver bars at around $19.75 and paid a dollar per ounce over market and $40 shipping. Im glad I did. Even if I sold them back at 10% loss I am still way, way ahead right now. Thanks to good advice that I didn’t get on TV or a newspaper. I am taking out another $10k and doing it again. This would represent almost half of my annuity but a gauranteed 5% with 10% inflation is a freaking joke. I should take out the other $20k and buy gold. My girlfriend thought I was nuts and all her friends were laughing at me until silver went from $19 to 26 in 4 months and I made $3000. Now I am laughing and they want me to be their financial advisor. I knew absolutely zero about economics until I got laid off 3 years ago and did a lot of reading. That’s pretty good for a stupid carpenter lol. James

      • PatriotWatch

        You are on track my friend other than I would buy locally and with cash. Everyone you do not want to know you have gold and or silver now knows by your credit transaction. ive got metal and nobody knows how much or where. When Obama comes I will give him one round and tell him to get the heck off my property before I snap. I’m just saying……………

        If it gets as bad as half of us say they will have a list of buyers and where to find them. Use cash

    • Luke

      Gold is a hedge against inflation.

      Inflation is expected to occur in the near future. It could be hyper-inflation. This is why Gold/Silver is still a great buy.

      • Greg

        Right on Luke.
        Greg

    • PatriotWatch

      Joe, I feel your pain. I got going way too late in my opinion. Take this to bed with you tonight, “THEY DO NOT HAVE IT.” Gold and Silver is being sold and stored when there is NONE to sell and store.

      JP is at a minimum 108 billion oz short of silver. That is one bank alone.

      70% of silver is a by-product mined today. It takes 2-4 years to increase silver production. YES it is starting to get steep for those of us directly hit by the Obama economy but buy one silver round a week until you can’t any more.

      The economy rebound? Well it hasnt started to rebound yet. In fact we have not hit rock bottom yet so you have plenty of time

  2. Joshua

    When silver hits $400, $500 and then $600 and higher an ounce in the not so distant future, the sheeple of America will (I hope) finally wake up!!!!!! But if they don’t, everyone else that invested in gold/silver back in the day and NOW will definitely be OK!! THOUGHTS???

    • Greg

      Joshua,
      I agree. That is sound logic.
      Greg

    • Cogito Man

      Nonsense Josh. I expect silver to go to about $200 at most and when new paradigm shift occurs (linking gold to new currency regime) it will be the best bet to short.It even might be a great bet to short it much earlier, that is when scumbags that manipulated it for so many years like JP Morgan and Goldman Sucks (pun intended) will be squeezed out of the market. In real life silver usage is 99.9% INDUSTRIAL, not monetary, so supply/demand will define the final price.

      • Greg

        Cognito Man,
        You are fighting the last war. How do you know that silver will not be used for investments in the future? Sprott Just bought 6.5 million ounces. He did not buy silver for industrial use. Thank you for the comment.
        Greg

        • Cogito Man

          Simple, silver does not meet criteria that are required for money as gold does. There are many but most important one is big reserve of gold vs new production. This cannot be said about silver, This makes for stability of REAL price of gold as it cannot be manipulated (in real terms) by manipulating existing stock/new supply ratio. BTW Sprott ( I have high regard for that guy) bought it precisely because of anticipated squeeze. But such happens in pork bellies also, still it does not mean that the price will stay high.

          • Greg

            Cogito Man,
            “Simple, silver does not meet criteria that are required for money as gold does.” This is not correct. Silver has been used for thousands of years as money. The Romans used silver as money throughout the empire. Great Britain used silver during its dynasty. There money is still called Sterling. The U.S. used 90% silver coins from the beginning of the Republic up until 1964. Yes, there is a big industrial component to silver, however silver has been, is, and will be money. And Sprott is not taking possession of 6.5 million ounces of silver as a short term trading position. Thank you for your comments. As I always say, “Good men can disagree.”
            Greg

          • Cogito Man

            It does not matter what we think is money. What really does matter is if something officially recognized as a money. If silver does not achieve that status, it will not fulfill that function. Even gold in future will not be assigned role of money, it will simply work as a “barometer of trust” for otherwise still fiat money.Again the fact that something did function as money in the past does not imply it will in the future. Today for example copper is functioning “as money” in the role of 1c coins. Does it mean price of copper represents it’s value of money? Definitely not, copper is still foremost commodity.

            • Greg

              Cogito Man,
              Thank you for your follow up.
              Greg

          • James M

            Silver has been money for centuries even more so than gold has been. From what I have been reading a lot of people seem to think silver is a better bet than gold. Their traditional ratio is way off right now and it is needed more than gold for industrial uses. Also there could be a shortage coming because most silver is a byproduct of other mining operations that because of a lack of demand in this depression right now are not in full operation. If I have silver and the dollar crashes I firmly believe it will become money again. It is only logical. You could easily buy things with 1 oz silver coins or bars. It is a small enough ammount that you could easily use it in every day transactions. The downside is that $10k worth of silver is pretty heavy lol. James

            • Greg

              James M,
              You are correct sir. I think silver is still a deal. Thank you for weighing in.
              Greg

          • PatriotWatch

            How much cooper is in a penny. lol

  3. bean

    i watched a video once of a man in zimbabwe’ trading gold for bread. you tube it. point being that if you can’t afford gold, flour may be just as valuable one day. stock up folks, its gonna get rough.

    • Greg

      Bean, John and Paul,
      Good advice men.
      Greg

    • Joanne

      How long can flour be stored? Can you carry flour around if you need to? How much can you store in your apartment? This is what I think about when I decide to buy flour or gold……..

  4. John Bernard

    Many people, like Joe, who are just waking up to our situation are naturally torn as to what they must do. First, they don’t really believe there is a big problem. This is evident from Joe’s expectation that the economy will bounce back or recover. That’s the hope part. Gold will not tank because at the moment any appreciation in gold is simply treading water for the depreciation in the dollar.

    Second, folks like Joe are trapped by the fear of appearing stupid for buying gold. Well Dave Ramsey thinks you are stupid for buying gold; he recommends Treasuries. I leave it to you to decide which course is safest.

    Gold is expensive today relative to the current purchasing power of the dollar which in itself provides a major clue for action. (Substitute silver wherever I use gold as an alternative) The point is that things will not return to “normal” without a tremendous amount of pain and danger. Precious metals are one form of asset protection, a way to ensure barter strength once the lights go out.

  5. PaulE

    Buying gold and silver is a good idea as it may provide the greatest insurance in these financially challenging times.

    In addition to this, it also demonstrates your stance in relation to the corrupt procedures that abound within most financial sectors you care to think of. Good brownie points accrued!

    Remove your wealth from the current financial system in the form of physical metals and take possession -no paper or vault promises. The stocks may rise and so be they. Be mindful inflation is no threat to physical gold and silver.

    There will be dips, buy on them, but its onward and upward for the PM’s IMHO.

  6. MarkM

    Hey Greg,

    Progressives are doubling-down on policies that don’t work. Keynes was wrong and the history proves it.

    When our economy does improve, Bernanke won’t be able to constrict the money supply quick enough to curb inflation, his claims aside.

    Thanks for your article.

    markm

    • Greg

      Thank you MarkM for pointing out that progressives are doubling-down. That is another good way to look at it.
      Greg

  7. Dr. Neal Joel Houston

    Hello Greg,

    Great article. As for (reader/comment)Joe he said “This is really troubling. What am I supposed to do??? I haven’t bought ANY gold or silver coins yet. I have NONE, ZERO, NADA!”…I would like to say to him – PLEASE don’t just jump in the Precious Metals market- do alittle research, visit websites, get as much knowledge as you can. Find a mentor.

    Greg I really enjoy your articles (thank-you)- which are informative and current with a twist of humor.
    As for your reader’s comments: One word “AWESOME”
    Best Regards,
    Dr. Neal Joel Houston

    • Greg

      Also good advice Dr. Houston. Thank you.
      Greg

  8. Art Barnes

    Besides gold and silver (precious metals) the real rise will be the basic commodities for the American people that they consume. The
    Fed is not only creating a rush to metals but the inflation will hit
    hard for food stocks, fuel, you name it. That is when the American people may realize it, when their food and utilities bills goes up another 25 percent with the Fed’s underminding (and criminal) work on the dollar. This will happen quite fast too, but not fast enough that the wall street boys will not get the benefit first before inflation sits in and the people realize that they been had again. You see the money printing creates a big bear rally quickly as you saw yesterday on the Fed announcement, the boys are riding it up, then when the inflation hits and the economy stops growing again, they sell and take their profits leaving the high prices in tack for the little people to hold the bag. Inflation will follow the move by the Fed, then the Fed will “ease” again and again trying to stimulate growth to keep the people employed and trying to handle the inflationary treadmill. This balancing act will fail, must fail, because each time you “ease” the dollar suffers, world investment goes south, american people become poorer, etc., etc. Clearly, deflation is what is needed but the Fed believes that is like getting the plague. Deflation will cause stagnation for a brief amount of time for us to get our footing, then when the dollar will come back in vogue it will come back with value. Don’t be afraid of deflation America, dollars might be hard to come by but when you get one you can buy something with it!

    • Greg

      Art,
      Thank you for adding to this post.
      Greg

  9. Brian from Australia

    Hi Greg and other posters,

    Stirring stuff here. Greg always puts out a great article, he’s one of the very best. I truly feel for the guys and gals in the States who don’t know what’s coming. The Fed and the pollies have so much to answer for it isn’t funny. In all truth the American people have a lot to answer for also as they have CHOSEN, on the whole, to remain oblivious. I don’t mean to sound harsh but this is the way I see it. It beggars belief that “we the people” tolerate the fraud, lies and ‘sameness’ of the political parties over there. You reap what you sew. I feel for the children who will have to pay for this mess. Good luck USA, I pray Australia doesn’t follow you down this slippery trail. Thanks again Greg for your articles, it is VERY much appreciated to have a balanced and informed view I can trust. Cheers all, from downunder!

    • Greg

      Brian thank you for your kind words and perspective from Australia!! I have heard from everybody who has been there it is a wonderful country.
      Greg

  10. M SMITH

    To Joe,I am not telling you what to do,OK! I would go to http://www.goldseek.com, read “The Goldsmiths by:R.D. Bradshaw-11/5/2010″. On the same site, 11/4/2010 read “Silver Alpha by Jim Willie. It will give ideals on how to take action. If you have IRAs there are plenty of places to turn those into PMs IRAs. There will come a time when you have to make a choice to protect your family & it’s way over due. Also,I would read Jim Sinclair’s free site http://www.jsmineset.com. He has been my guide with sound advice & true data that the MSM will never give you, how do you think I found “Greg’s great site”. Also http://www.silverseek.com & http://www.nia.us has a Q&A link. I don’t have the means anymore to buy PMs,but I got my family & friends to act after they lost their butts in the 1st crash of 08, after begging them to protect their 401Ks,IRAs, now they got back what they lost & then some! 50 yrs of coin collecting gave me something to fall back on! I find coins from pocket change. It’s hard work to search the rolls of coins that ends up at my local Small Town Bank I get each week to search. Folks are hurting really bad, but unknown to them, they have coins that collectors will buy.(knowledge is priceless) I have known these collectors 40 plus yrs & used to be one of them.Just don’t give up,get to work now.
    Silver is the most manipulated PM on earth,Gold is right behind it,don’t expect the CFTC to do their job either,it will be a SWF or a few billionaires that stop these crooks,but as you read the “Goldsmiths” you will find out these cartels of bankers have deep pockets & can scare the hell out of the weak & crush them. As Greg said, the posters & internet is rich with great data,also there is just as many crooks that will try to sell you the wrong form of PMs,steer clear of them.(Those collectors I talked about are very well off & the depression will not effect them like the millions in the USA who fail to act soon)!
    Greg, you are doing a great service to your fellow man, GOD has blessed us & I thank you!

  11. DougR

    I took action 6 months ago and converted my IRA into physical gold and silver coins. There has been minimal coverage by the MSM, but there are reports the government((Sen. Tom Harkin (D-Iowa)) are proposing to
    confiscate 401,IRAs, and pension funds and transfer those into a Guaranteed Retirement Accounts controlled by the US government. I am sure that I am not the only one that has convert an IRA to gold and silver, so how do we protect ourselves? My thinking based on the current trends is Guaranteed Retirement Accounts are around the corner.

    • Greg

      DougR,
      That was a good idea!! Thank you for sharing your comment and perspective.
      Greg

    • Tom

      Good move, Doug. I did half of mine last January (for exactly the reason you cited), the other half gets done in two months.

    • PatriotWatch

      This is great comment. Have friend on Chicago Board of trade. The inside whispers as of a year ago are exactly what you say. The “Traders” think Obama will collapse the economy and come on tv and say “SEE” evil wall street took you for a ride again. Transfer all funds penalty free and US gov will give you 3.5% each and every year risk free.

  12. Dan Pipes

    Hello Joe-

    I’m glad to see you are taking the first step in protecting yourself from financial problems by asking questions and doing due diligence.

    I concur with “M SMITH” that you should go to Jim Sinclair’s web site and read and read. He’s been in the PM business for 50 years; see his bio at the website. It took me awhile to understand all the terminology but you’d be surprised at what sticks. Mr. Sinclair has predicted that gold would go to $1650 by 1/14/2010 for years! Now he thinks gold will go way beyond $1650 in the future.

    Not too late to buy. If you adjust for inflation gold should be at $2130. When to sell? Rule of thumb is when the DOW and the price of gold are approx equal.Ie, Dow 6000 and gold $6000. This happened in 10/1980 when gold reached $850, DOW hit $850 then gold receded to ~$250.

    Wholesale prices are way up and several company’s such as McDonalds and General Mills announced they are raising their prices. Look at recent charts for sugar, cotton, corn, soy, PM’s, they are way up.

    When I saw the first sign that Bear Stearns was having troubles, I closed up our 401ks and IRAs, and closed our accounts at Washington Mutual in March 2008. It was well worth the 10% penalty.

    We are in PMs (bullion) and I buy some GLD (Gold ETF) shares every $10 increment in gold. You can place a stop loss to suit your risk tolerance, as well.

    Hope this helps.

    Thanks again Greg for your work in informing the people.

  13. Dan Pipes

    Sorry, my post should have read “Mr. Sinclair has predicted that gold would go to $1650 by 1/14/2011″ not 1/14/2010.

  14. Bob

    Most of us will end up using inflated dollars,other words we are taking a pay cut. Nobody can tell how big this pay cut will be. So think about the job you got, is the job going to be gone with inflation. Maybe a job that pays little but you get to take home some of the left over food. A job that is in walking distant are a job that comes with room an board. Small farms with food prices going up are opening up new chances if you like growing food. I know a couple of people with little farms who are doing better all the time. Trade an barter and buy stuff you need a year ahead of time it always beats a little inflation, like TP,TOOTH PAST.Good luck in this lawless nation.

    • Greg

      Thank you Bob and JP Mor.gan.
      Greg

  15. j p mor . gan

    - 1933 : “AU confiscated” yanks volunteer to turn in most coins.
    . . Next: higher windfall profits taxes. . .
    what a safe way to collect p . metal coins?

  16. Diane Carol Mark

    Hi Greg,
    If you have a 401K with your current employer, you cannot remove any funds unless you qualify by retirement age.

    So, for most of us what we can do is invest in gold shares/funds and Rare Earth Metals stocks. Then, pray that the government doesn’t confiscate it before we can withdraw and turn it into physical gold and silver. I’ve done this research and also informed Bob Chapman theinternationalforecaster.com as well.

    :) Diane

    • Greg

      Diaane Carol mark,
      A 401K plan should not be your only savings account. That should be one of 3 or 4 ways to store wealth. Cut back on contributions and divert money into PMs. Thank you for the info and comment.
      Greg

  17. John

    Joe…you are worried that gold and silver have risen to much. They haven’t risen Joe, the dollar is declining. Ask yourself, in light of what is going on, can the dollar lose more purchasing power? How much was a loaf of bread worth 30 to 40 years ago vs today? I hope this perspetive helps.

    Greg… you have a great site. Keep up the productive work.

  18. John

    Doug R. don’t you still have to leave your physical metal in the hands of a custodian or trustee?

  19. Geofizz

    Good places to buy without any middlemen (i.e., sales people):

    APMEX.com

    onlygold.com

    …to name just a couple. Good prices and the latter keeps their transactions confidential (they have a page on legal matters). I would add to M Smith above, that Sinclair’s book “Pocketful of Gold” is also very helpful.

    According to Trader Dan at jsmineset.com, the buyers are starting to overwhelm the market manipulators. Add to that the latest RICO lawsuit against JPM and HSBC in the silver market, and prices are looking poised to shoot higher.

    • Greg

      Good stuff Geofizz, thank you.
      Greg

  20. FuffyC

    If I buy physical gold at the spot price today. Who do I sell it to tomorrow or next year for a fair price? It appears that there is not much of a secondary market for this stuff. As an exercise, I purchased a 1 oz gold coin for spot. I then tried to find a place to sell the coin (like pawn shops, friends, etc.). The pawn shop only wanted to pay half of the spot prices. Friends and family were not interested. The grocery store would not exchange it for a fair amount of food, etc. etc. etc. So how do I spend it? What do I not understand. How does gold help the guy on main street? I just don’t see the value of holding physical gold if there is not a fair secondary market for it. Thanks….

    • Greg

      FluffyC,
      I guarantee you will be wiped out holding dollars. Good luck to you. Thank you for the comment.
      Greg

    • Francisco Almeida

      .

      dear FuffyC,

      Here is the deal :

      0) – there are market like Comex Exchange in a few more countries, and there, you are safe from US-Gov confiscation risk !!!

      1) – You open a bank account overseas, specifically in a country that has accredited gold warehouses with large local reputation: Switzerland, Australia, Canada, Germany, Austria, and … Brazil !

      (by the way, I live in Brazil, and I did it here!).

      2) – In your chosen local market, you then will “remote control” such account; next, you hire an locally accredited brokerage company to buy your gold in ‘local Comex Exchange’, which will remain stored in accredited warehouses, and … it remains ‘prime’ gold, certified by accredited audits.

      3) – As your gold will NOT leave ‘prime circle’ , then you will not need to go to local secondary market to sell it: your broker will do it for you, ofering your bullion in local official ‘exchange and clearance house’, just transfering property ownership from you to buyer, and, next day your cash is in your account !!! Just like in Comex !!! With no gov-risk on you !!!

      :) Greetings from Brazil ! :))

  21. Tom H

    Joe says:
    November 5, 2010 at 12:45 am
    This is really troubling. What am I supposed to do??? I haven’t bought ANY gold or silver coins yet. I have NONE, ZERO, NADA!
    *******************************************************************
    Joe, it is a miracle of God that you can still buy real silver with fake paper dollars. The powers that be are absolutely depending on you having faith that things are going to get better. If the dollar collapses, you are screwed, and all of your savings will disappear into the thin air from which it was created. If the price of silver collapses, you still own the silver and it is real and has never been worth zero. The only thing that will make the price of silver collapse is a complete recovery of the economy. While most people who have an understanding of the history of paper money don’t believe that likely, I would love nothing more than the economy to completely recover, in which case I did not need the silver, but because the economy is good I am working and making money.

    Every paper money system in the history of the world has hyperinflated and collapsed. If this is the beginning of hyperinflation, and I believe it is, then when are you going to buy silver? When it’s at 40? 50? There will be pullbacks in the price of silver but if you buy at 24 or 26 won’t make a difference in a hyperinflationary death spiral. You will be happy you hold the currency grocers are accepting for food. Get guns, bullets, emergency food, antibiotics, and silver and gold. Then do a whole bunch of praying that you never need to use it. Better to have all of these things two years to early than 1 minute too late. God Bless you and your family, now ACT!!!!!

    Greg, may God protect Patriots like you and Ron Paul that have the gonads to publically tell the truth about the Federal Reserve. Evil triumphs when good men do nothing……..

    • Greg

      Tom H,
      Thank you for your comment, support and blessing!
      Greg

  22. Tom H

    By the way, I’ll leave you with two Wayne Gretzky quotes that apply to silver and gold right now:

    “A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.”

    “You miss 100% of the shots you don’t take.”

  23. Russ

    Hi! Cautious Joe:
    uR concerns are shared by all of us today. We always would like to work with the truth; when it comes to making our primary decisions in life in responsible ways right?
    However, sometimes life throws us some curveballs we weren’t expecting and hence we are caught off guard?
    If our nation would have kept faith with our Constitution most of these troubling outcomes we’re harshly facing today would have been totally avoided for everyone’s sake but it would appear we’re still very nieve about financial matters after all doesn’t it?
    So, none of us has recoarse to a perfection pill daily which means we are entitled to make mistakes but I realize uR asking for help anyway; as U have the right to do and should do.
    Perhaps therefore a little self help education will help U see the inner workings of how inflation errodes our $’s purchasing power and how over the years both gold and silver have been acquired by those wishing to hedge against that errosion? This is an area in which U can educate & help uRself tremendously ASAP.
    Please go to “The Von Mesis Institute” website on the net and look for their FREE online copy (over 70 pages) of “Fiat Money Inflation in France” by Andrew Dixon White the cofounder of Cornell University. The topics are: How It Came (the inflation); What It Brought; and How It Ended”. U can also purchase copies of Mr. Whites’ treatise for $10/copy pluss a nominal fee of around $5-$6 shipping. 4 copies were in my mailbox yesterday and having them here with me allows me to hand copies out to interested but often confused potential hedgers against inflation. We can not post those 70+ pages here and Mr. White really helps the reader understand the total evolution of what happened in France from the begining to the unavoidable end. U will be a thoroughly informed purchaser of “specie” which is the term used in Mr. Whites’ book which is the true name we should apply to both gold and silver coins.
    With uR selfhelp background in place, U will more readily discover uR own personal reasons to place some funds into specie coins for the days when our economy will return to them for sutaining a true round of honest prosperity we are all meant to experience in this wounderful life we’ve been allowed to live without being harassed by the present inflationary environment that now disrupts all our nations’ hopes/dreams. U owe it to uRself & your friends/family to be as informed as possible; so that U can help them too through these harsh economic realities.
    I oz. of 999.99 industrial silver can be used by Eastman Kodak to produce silver haloids they use in producing silver based colored photographs. From one single troy oz. Eastman can produce more than 5,000 colored films that we use to take family pictures etc. Also, that same single troy oz. of 999.99 industrial silver can be used to draw a fine wire for use in all electronic devices from autos, TV sets, refrigerators, CD players etc., etc. etc. which is (believe it or not) 50 miles long. This valuation of silver is what we call intrinsic value which is totally missing within any Helicoper Ben Bernanki paper/ink $$’s. U can learn more about all these aspects pluss many more, after U have finished your self education program reading Fiat Money Inflation In France and/or other informationals on inflations that have destroyed paper money all around our world.
    If the monetary authorities initiate a currency exchange like say 1 new $ for 100 present $’s my thinking is that at that time we would be better off in our present clad coins. If U had $100 when they exchanged it, U would end up with 1 new $ but, if U had $100 in clad coins wouldn’t U have $100 of their new money? If gold were $3,000/troy oz. prior to their exchange 100 to one; their new price in the new money would be $30 but if U had sold uR gold for $3,000 worth of clad coins U would have $3,000 of their new $$’s and so forth. That $40,000 auto would then be only $400 in their new money and, if U sold uR gold for $3,000 in clad coins (this is just an illustration and not telling U when to sell gold), @ $400 each U could purchase roughly 7.5 new autos but there’s no telling what our monetary authorities are up to and so we need to be on our toes all the time looking into these matters, in order to catch wind of any direction they may take our currency like now with QE2 etc.
    My final words of advice: “Fear not little flock; for it is uR Heavenly Fathers’ good pleasure to give U His kingdom!” May God richly bless U and every poster here on this wounderful boardgroup trying to help one another through these very perilous times!
    RUSS SMITH, California.

  24. UKguy

    Greg,

    A few of your Founding Fathers, creators of your Constution, spent years in France at the time of the French Revolution.

    They came away with detailed knowledge of the many faults of Fiat Currencies, and the criminality it created in the creators of “money”, and those nearest the source, – the major beneficiaries. Towars the end those major beneficiaries were feverishly converting their fiat into hard assets.

    Raging inflation was present in France at that time, created by a fiat currency rapidly falling in purchasing power. Towards the end even imports of mundane value were beyond the reach of rich people.

    Many words have been written about the French Revolution, mostly from a political bias, and mostly, therefor, incorrect! It was always about a body politic that was corrupted by fiat…never about primarily politics …. that was created by later writers.

    There are many lessons to be learned from the French Revolution, not least the repeated, more frequent as time passed, demands, for more and more issues of what we now term QE, with each issuance of fiat growing ever larger, and each delivering vastly reduced economic value.

    Here is a link.

    Enjoy reading, and then weep for the West.

    http://www.gutenberg.org/files/6949/6949-h/6949-h.htm

    • Greg

      UKGuy,
      I always enjoy reading your comments, and I am sure I am not alone. Thank you for the kind words and link.
      Greg

  25. Dennis

    Joe,
    Rest assured the United States is in serious trouble. Go to jsmineset.co and goldenjackess.com for the stright skinny. You also might consider buying junk silver pre 1964 silver u.s. coins which can be used for barter. There are sellers out there that will sell at less than the standard package of $1,000. face value. You might read about Weimair Germany in The 1930′s. This will give you an idea of what may be coming down the pike. Also whatever you do, take delivery do take paper receipts. Gain as much knowledge as you can, only you can protect yourself and your family.

  26. Gary B

    Such solid advise from these usawatchdog people/I can only chime in:
    Always read Jim Sinclair. Always read Jim Willie. Always read R.D. Bradshaw/Goldsmiths. Always read Greg Hunter. JW said silver will out-perform gold (did he say 3 to 1 ?). Silver is still cheap. JW has also warned of the ease with which a Latino country can nationalize a gold/silver mine. We need to keep that in mind each time we evaluate/reevaluate our PM shares. And also remember JS advise on paper certificates in hand.

  27. Jack

    Not to be negative… but there’s far too much group think here.
    Look folks, I’m a big proponent of physical PMs, however…there really is an issue in their resale.

    Even now they are subject to capital gains tax. Next year the $600 government mandated transaction reporting comes into play. As the US economy disintegrates… who knows what Congress will implement in its desperation.

    These are real concerns and I don’t see them being addressed by goldbugs. Well you’d better have a plan for these eventualities.
    So let’s start brainstorming on how to negotiate them instead of back slapping ourselves on the wisdom of buying into PMs.

    • Greg

      Good point Jack.
      Greg

    • Coin Dealers Will Die

      “Jack says:
      .. however…there really is an issue in their resale…
      Even now they are subject to capital gains tax. Next year the $600 government mandated transaction reporting comes into play…”

      Jack, practically nobody declares their ‘profitable’ sale of precious metals to the IRS, and thus the capital gains tax is currently irrelevant to virtually all physical holders.

      You make a good point about the $600 transaction reporting change to take place in ’12, and the lack of discussion about how to deal with it. However this will also become irrelevant, since I expect that eventually most all buying and selling will take place at coin shows in bigger cities, on a more regular basis, between non-dealers. Individuals who are not operating in a business capacity have no 1099 obligation, so the status quo would remain for private individual transactions. Expect to see me operating a table at a coin show, when selling, with a sign posted in the front of my table stating “No ID or 1099 Form Needed Here”. So, who’s the prospective buyer going to purchase from: Me, with no paper trail involved, or a dealer at the show who needs to see your photo ID and social security card, and address to where he’ll be sending the 1099 to? All of the prospective buyers will be lining up at my table! This will eventually catch on to the point where only private individuals will be making the sales, and the dealers don’t even bother to show up at coin shows. Coin shows will thus become the new black market, and the only market for major precious metals transactions. Since the dealers can logically expect that this would happen (since they know that most PM investors will refuse to be tracked to pay such an outrageous income tax resulting from the currency devaluation we’ll be getting), they’ll fight real hard to repeal this new 1099 law in regards to their line of business. If they can’t repeal it, they’ll surely end up losing most of their business, and many of them will be going out of business. However, I do expect that many of them, after going out of business, will then turn to the coin show black market in order to buy/sell as private individuals, as opposed to operating in any formal business capacity. The end result is that the entire PM market thus becomes a black market, as a result of the criminal bankers who run our government, effectually trying to steal ~ 1/3 of our PM via taxation, resulting from currency devaluation.

  28. Jan

    It took me a long time to decide to buy a little PM insurance. That is all it is to me, insurance. I continue to make purchases as the budget allows. I feel less stressed knowing it is sitting in the safe if we need it. I have read the history of the Weimair Republic. People were wiped out overnight. The money was useless and hyper-inflation made it costly and difficult to survive. It is hard to imagine this happening in the US, but conditions give us all reason to consider the worst case scenario.

    I add a little extra each shopping trip. Someone had a question about how long flour will keep. In the freeze for about three years, at room temperature about a year. You need to add bay leaves to flour and rice to keep the critters out if you cannot freeze it.

    Not many people have spare cash to go out an buy a lot of extra groceries, but adding a few more items to the cart each shopping trip will give you peace of mind.

    • Greg

      Jan,
      Good advise. Thank you.
      Greg

  29. Bob

    The place your at is very important if your in the middle of a big city gold will not buy you much and the price of gold could inflate fast. If you can have a small house in a older farming area the price of food might be a lot better. People will need to look back how things were without truck loads of goods coming your way everyday . I been building little one room cabins and live in a couple of them over the years. One room gives a little family room to stay warm and help one another also the change will be talking and playing games,which will cause better health. A cabin 16 by 16 with a good wood stove to cook on is more then is need for four people. We are talking change that most people could be drive mad by. No milk no eggs no stores stocking the things you need. Some off us older people would rather have the cold war fears back then whats going on now. I wonder what the amount of inflation will cause the tipping point, were people just don’t order more stock. I’m going to double down on chickens my dad said the chickens and goats are what save them in the great depression. It wont be anything that good those people back then were still outside people not the people of today. I live without power chop my wood grew my food for many years and know how without being able to buy fuel and supplies you won’t be living very will very long. All I’m saying if you understand the money history and I really don’t. You best be thinking about the world after gold, some parts of town don’t care much about gold. It’s going to be interesting the next week to see what the talking heads say. Every channel is like brain dead and lying, like 150000 jobs mean something and that might be a lie to. I know one thing , they make 30 cents a hr in China is that how much inflating we need.If 911 was a inside job were in some kind of troubles and more people believe that, then believe those talking heads on TV.

    • Greg

      Thank you Bob.
      Greg

  30. Daxiong

    Joe and All,

    Greg, thank you once again for a very consice and informative article.

    I retain gold for after the collapse as surely the Gold Standard in some form around the World will be revived.

    I have 90% Maple leafs and eagles as my Savings Account. Every month i take my Savings and purchase Junk Silver. I just bough t more today. Whatever I have remained for savings for the month I convert. Kind of like the Dollar Coast Averaging Strategy so touted for Stock Investing.

    Joe, try to think of Metals purchase as a way to keep your wealth not as an investment per se, because it is not that Metals are increasing in value, its the Dollar is losing its value. You can go to any Country in the world, and the price of Gold remains the same.

    Inflation is coming and in a big way. The most effective way to keep your earning power is to by durable goods. Most Toilet paper is made in canada, rice, beans, toothpaste, Dish Soap, Shampoo, Lithg Bulbs, Canned goods.Spices, Flour etc. All of these items will be dfreadfully expensive in the near future.
    I have a 5 years supply already stored, and iot was after this that I began purchasing Silver. Take this Christmas season to get you several years supply of clothing.

    I have also completed the conversdion of my place to a Homestead where I raise chickens, Ducks, and rabbits, fruit, and veggies that I aquired all from recycled or reclaimed materials.

    Make sure you have the essentials before worrying about Gold or silver, but do not ignore them either as it importtant to be diversified in your portfolio of goods.

    Joe, you also mentioned if you get caught owning once the recovery arrives. I think there is enough supporting documentation that a REAL recovery wont be happening untuil the dollar is reborn.
    Hope this provides a little food for thought.

    • Greg

      Daxiong,
      You are doing the right thing. we will have a replacement currency for the dollar and when that happens you can convert it. My point here is you have to have something to convert. Bravo Daxiong.
      Greg

  31. Jack

    Nobody so far has mentioned the fact that the US Govt passed a law this year that will require all holders of physical PM’s to be issued a 1099 form for any transaction over $600.00 This law was ramrodded in with the so called healthcare reform, Obamacare. The over 600 amount also includes other transactions but don’t you find it ironic that they specifically singled out PM’s?! Any coin or bullion.

    So herein lies that problem. For many of us began buying PM’s when they were cheap, silver at 10,15,18 and gold 400,500,800,900 etc. Some are sitting on 100% profit. The IRS is going to tax you bigtime on that if you sell. And how can anyone sell legitimately without avoiding this 1099?? Before all this anything was considered a coin collecting hobby. Not anymore. So what goes Greg and others have to say about this? When it comes time to cash in these PM’s when we really need them (to pay our living expenses, food, mortgage etc) the Fed will tax the crap out of us. I read at least 45%, possibly more. You will have to prove your dollar cost average on your sale.

    This law kicks in Jan 2012. Sure people will opine that there will be a black market/barter but if that is the case, the USA will look like that Bartertown scene on MadMax, Thunderdome! I think food and water will be more valuable, who will care about PM’s?

    Also what does everyone think about the real possibility of massive deflation? When the fed stops the QE, which I believe they will be forced to stop and then default, deflation will distroy anything that isn’t needed for survival. Food, water, and essentials go UP, everything else go DOWN. That is what I think will happen.

    Comments on these two topics?

    • Greg

      Jack,
      Paying tax on a profitable investment is a good problem to have. That law you are talking about might get repealed with the Republican Congress. Let’s hope so. In deflation gold will also perform well. Yes, food and water will be very important but it we have a Mad Max scenario so will shotgun shells. Let’s pray it doesn’t get that bad.
      Greg

      • Joshua

        Greg,

        Since you really didn’t get too deep with some VERY IMPORTANT points from a few commenters on PM tax issues, please let me probe deeper on your comment:

        “Paying tax on a profitable investment is a good problem to have”
        - – Yes, but it is dependent on what the tax rate will be – which one cannot know going forward. What it is projected to be in 2012 isn’t enough to go on, as I can assure it will be changed again to BENEFIT the govt after the S#@T hits the fan. And then what about gold/silver confiscation, etc. This is very serious stuff that most PM advocates tread over without ever really disclosing/covering with any real thought.

        Don’t get me wrong, I agree about buying gold/silver, but also firmly agree that it also DOES have a downside and it also MAY not fully protect ones current net worth because those that have the podium and an audience on the internet DON’T stress the tax and possible confiscation aspects of owning gold and silver. With a tax structure being what it could possibly be, one may need 2x, 3x or more gold and silver in their portfolio to cover themselves, but yet to hear or read this aspect. THIS IS IMPORTANT!

        “That law you are talking about might get repealed with the Republican Congress. Let’s hope”
        - – Seriously? Do you really believe this? Let’s call a spade a spade, if things are heading where we all think it is heading, all bets are off and all current/future laws to protect PM owners from a large tax hit will be off too! There will be no doubt about it that the tax on gold coins and silver coins will in fact be in place and the tax will be quite high to boot! Do you really think otherwise Greg?!?!?

        • Joshua

          BTW – what I meant by…one may need 2x, 3x or more gold and silver in their portfolio to cover themselves…is that based on what the tax will be, you will need way more gold and silver holdings than what you have now or risk being literally screwed. But it is very rare to ever see someone say “you need to take into account a possible or projected tax of (blank) when building your gold/silver portfolio”

        • Greg

          Joshua,

          I do not pretend to know what will happen because we are in uncharted monetary waters so to speak. Nobody does, and that includes you my friend. You did not probe anything with this comment because there are no sources, no links, and no research. This is just your opinion. Yes, I do think the tax law contained in the health care bill will have a strong chance to be amended. It is a job killer and a giant negative for small business. Many in Congress have stated this publically. Of all the things in the bill that could be repealed, this probably the least trouble because it affects all business and not just PMs. We will have to hire thousands more IRS agents just to handle the paperwork associated with this bill. I agree with you the tax issue it “VERY IMPORTANT” but please do not try to pass off your opinion as some “deeper” probe. I also say, folks are much better off with PMs than without them. Thank you for your comment and support.

          Greg

  32. dave

    In the stage and predicament that we’re currently in, I don’t see a huge rise in silver due to industrial demand, our econoomy would have to bounce back to do that (not likely).
    If anything, gold & silver will rise in response to the mania investment mentality which IMO is almost upon us.
    I bought gold in 2006 and sleep like a baby.

    Thank you Greg for your site, it along with other sites have educated me about the demise of our dollar which has kept me in the black.

    • Greg

      Dave,
      Gold and silver are no where close to the “mania” phase. How many of your friends have it? Big players are buying both AU and AG now. The mania phase comes much later. History will prove, buying gold will be the smartest investmment in a lifetime. You are way ahead of the pack. Thank you for your kind words and comment.
      Greg

  33. Mark M

    Greg, I found this article by Dan Ammerman informative, and more than a little scary.

    http://danielamerman.com/articles/Monetize1.htm

    If I read it correctly, QE 2, despite being labeled as a repeat of QE 1, is a vastly different entity. One which leads to direct monetization of debt and almost certain inflation.

    Just wanted to share with all the folks out there

    • Greg

      MarkM,
      Thank you for adding to this post. We all really appreciate the content!!
      Greg

  34. nm

    Diane:

    You can withdraw your funds from a 401K prior to reaching your retirement age. You’ll just get taxed at 33% but considering where the dollar and economy is headed, it might be a small price to pay in order to protect yourself.

    Doug Said:
    “I took action 6 months ago and converted my IRA into physical gold and silver coins”. How exactly did you do this? Did you literally cash out your IRA then buy the physical coins?

    To everyone else:
    There seems to be two camps of readers here. Older people who have more money and thus are seeking to protect their investments by buying gold and silver and younger people like myself who don’t have high incomes, are in debt and outside of our 401K’s have no savings to speak of.

    So, when someone above asked: “What will I do with my physical coins if there’s no secondary market to sell them to”? – I get his point. If you are making 60K a year and need all the cash you get from that wage just to get by …it is difficult to conceptualize holding a bunch of coins in your house because you still need cash for your basic essentials (e.g. to pay for gas, food, bills, etc, ….)

    Lets say I manage to save a miniscule $3,000 dollars. I know I should use it to buy gold or silver, but what if I run into a financial emergency and need to buy a fridge or pay a bill? I can’t do it with my coins. I need cash (no matter how devalued it is)

    I await answers on these questions.

    • Price

      The time for analysis of what’s happening is over. Its clear that each one of us has to defend ourselves financially, or become toast.

      Don’t wait for your 401(k) administrators to figure out the situation. Borrow or otherwise get money out of your 401(k) and do something reasonable with it. I did that a year and a half ago.

      I’m not too worried about Roth IRA confiscation. The current rules specifically state that you can withdraw every contribution you’ve ever made without penalty. An attempt to change the rules may be made, but remember that government always has to have at least the passive consent of the governed.

      Special tip to young people who are reading this: bring forward your inheritances now and do something reasonable with the capital. Your parents and grandparents are economic idiots and will become financial failures, if they aren’t there already. Don’t trust them to be able to handle your inheritances.

      The world champion debtor (U.S.) is on a mission to destroy the value of it’s creditors’ holdings. You’ll benefit from this debt destruction to the extent that you can encumber an asset such as rental real estate with fixed-rate debt. Any changes in the value of the asset won’t be significant in comparison.

      I’m 56 years old. My family’s net worth, not including rental real estate, went up over 6% in USD terms last week, 3.5% in gold terms. Read http://www.runtogold.com as to why you always need the second calculation.

      Are you prepared?

  35. OTE

    I tend to hate the term “fiat” currency. I would tender the correct term is “transactional” currency. Its intent is usage for transactions, ie. limitted buy and hold. In an inflationary system, purchasing power falls and taxation by bracket creep gets you.

    A Federal Reserve Note is just a prommissary note redeamable in promissary notes denominated in the same amount. $10K of FRNs bought in 1980 have exactly the same denomination today. Inflation has reduced the purchasing power.

    PMs have the advantage over other tangibles based upon durability and faith backed by 1000′s of years of usage. Most all tangibles have higher long-term value over FRNs. A bag of flour has practical use. Same for tools or other commodities.

    If we buy and hold FRNs, we accept loss of purchasing power. If we buy commodities, we have the purchase price locked in. All we have to worry about is the storage issue.

    Notice I stated buying FRNs. This is exactly what we do when we trade labor or materials for FRNs and save them. We are effectively trading tangibles for a declining value intangible asset.

    Perhaps gold is out of your purchasing range. Look to junk silver coinage available on the online auction sites at a fairly low premium. The resale can be by the same mechanism. Pawnshops aren’t the place to sell PMs and never were. Admittedly I am not a fan of bullion products due to the assay fees you will probably be hit with. Silver content of coinage is a known.

    I use FRNs for transactions, but tangibles are my long-term savings. I have watched the economy since the days of Johnson’s “guns and butter” days. It has been downhill from there. Just like a boulder rolling down that hill, you can’t stop it and the speed increases. You can only wait for it to stop at the bottom and then try to get it back up the hill. Economic discipline is mandatory. We forgot that credit’s best use is for growing a business. Never for accumulating stuff.

    Whatever tangible you choose will never lose true value of utility unless and until something better comes along. It is all about protecting accumulated wealth from inflation. Since the dawn of recorded history, groceries, tools and PMs retained thier value. Prices change, but a shovel is always a shovel and has transactional value. Your grocer might not want or need it, but someone does. Such is the nature of tangibles.

    If you don’t understand PMs, consider purchasing groceries and tools needed to repair your most needed equipment to survive. Besides, the banksters have repeatedly stated that the economy needs faster money velocity. Buying and holding FRNs doesn’t do you or the economy any good.

    I would argue that savings should never be taxed. Tax the transaction, but never the property. However the IRS has ruled PMs as collectables and taxes them accordingly. Again an argument for groceries and tools. Psst, currency and PMs are just tools of commerce. Use them wisely: if you must sell them, do it privately.

    Quick note on gov’t confiscation. You can’t confiscate what you don’t know about. Old gold coins still exist in private hands after Roosevelt’s actions. The Treasury effectively confiscated siver coins after 1967 or so. Silver coins still exist in private hands. Would you brag to thieves about your home entertainment system?

    Lastly, how many shots does the FED have to fire across the bow of the goodship “your family’s economic future” before you notice what they have publicly stated they are doing to your accumulated FRN denominated wealth?

    • Greg

      OTE,
      Fantastic comment. Thank you for taking the time to write this.
      Greg

    • Bob

      OTE good lesson. The youth have the long haul to save some goods for later, that’s the gold you can’t get back.

  36. Jack

    Thanks Greg…

    I certainly do hope that stupid law will get repealed, its a massive burden on small business.

    One more question to you and any others who want to reply:

    I sold some gold coins back when it was at 990. Made an ok profit from it and purchased a car with the funds instead of taking out a loan. I felt debt free was better. Of course for 18m I have been kicking myself over this bc the same coins have gone from 990-1400. So now I do have the funds again to purchase them back but (as we all know, looking for that “dip” to get back in never really happened!) the price has been just going up. I have emergency savings on top of the funds it would take to buy back as well.

    So do I just bite the bullet and buy them or does anyone anticipate a real pullback in these prices? Even if I could get back in at a 10% correction from these prices it would be easier to buy back.

    Any advise!?

    • Greg

      Jack,
      All I know is dollars are and will be at risk for currency devaluation. If you have not done so you may want to think about buying silver. It will go up more on a percentage basis than gold, but both will go up in value. Good luck.
      Greg

  37. steveo

    I have a nest with a little bit of everything. If you look on Kitco.com, they have a listed buy and sell price, so it is definitely simple to convert to FRN in any case. I have not converted my 401K yet, the PM shares have done well, but I am thinking about cashing it in for some 50-100 acres of land and building a small house on it and getting more self reliant. I have several months of food, lots of new guns and many thousands of new bullets. So I am trying to diversify and cover many areas at once.

    I also have FRN savings for 2 kids colleges that bugs me the most. I have this in a trading account in commodities and precious metal miners. has done well lately. It is certainly hard to prepare for everything, have to focus on what you can do. Be sure to get the basics covered first, water, food, gas, guns, and gold/silver.

    • Greg

      Good advise Steveo.
      Greg

  38. S. Bond

    Ben Bernanke knows that QE2 will not work. The decision is made behind the scenes by the shadow government and they tell Ben what to do. The dollars from QE2 will go to the top and the American people will get nothing. QE2 means dollar devaluation and inflation. QE2 will be very inflationary….The ruling elite have set out to destroy the dollar right before our very eyes. Many Americians either have no idea what is going on or they are in denial. If you don’t know your history, you are doomed to repeat it. Remember the crash of 1929/1930? Remember how they covered it up? They covered it up with World War 2. The dollar devaluation/collapse is a coordinated agenda.

    • Greg

      Thank you S. Bond for the comment.
      Greg

  39. The Seer

    HI Greg
    I may have been low in my last prediction for silver at $350. It may go to US$3,500 if enough
    supply lasts to trade it.

    The NYSE will no longer exist in the not to distant future.

    Also, in less than 250 -300 years natural materials will be depleted by humankind.
    There is the possibility of the manufacturing of “androids” for lower end work en masse to
    support fewer humans in existence down the road.

    Take care,
    The Seer

    • Greg

      The Seer,
      One thing is for sure, silver is going to take a moon-shot. Thank you for your support, it has been too long between comments. Please come back sooner. Peace.
      Greg

  40. nm

    Jack Said:

    “I sold some gold coins back when it was at 990″

    Who did you sell your gold to?

    Hey Greg – consider putting up a quote option on your site that way, we can quote readers comments in our replies. It would show up a block quote.

    • Greg

      NM,
      I’ll look into that.
      Greg

  41. Friend786

    I think of it this way; currently U.S. and western debt (both gov’t and private) has reached a level where it can never be paid back unless we debase our currencies. However, despite this we are still able to keep financing this debt. Once it becomes impossible to finance this debt, all hell will break loose. The Fed will do everything it can to avoid this. Either way, high gold/silver prices are inevitable. Whether the economy rebounds or not will only hasten or delay the inevitable.

    • Greg

      Friend786,
      You sound like economist John Williams! I agree with your assessment.
      Greg

  42. Dan Pipes

    Hello Jack,

    You can “leg” into a GLD position. You could buy 10 shares (equals 1 oz of gold) every $10 increment / $10 decrement in gold price, but do not buy the same level.

    For those of you who are a little skittish about a possible fall in price of gold, buy 1 At-The-Money JAN 2012 GLD Put contract for every 10 ounces of physical gold bullion you hold.

    To see what happened to the people who lived through the Weimer period of hyper-inflation (1923), may I suggest reading “When Money Dies” by Adam Fergusson. There are actual excerpts from people’s diaries and historical German documents.

    A couple of items from the book:
    The German inflation rate doubled every day. Also, poor people would swarm the countryside butchering farmers’ livestock where they stood!

    They (CNBC) say this round of QE2 will equal to a 20% drop in the USD when done. This doesn’t include the high probability of a loss of confidence in the USD followed by nations dumping the USD triggering hyper-inflation.

    In my humble opinion, they (G20) are already planning a world-wide conversion for all people to use SDRs (Special Drawing Rights) as the new world currency. At that point we’ll be part of a world government.

    Good luck.

    • Greg

      Dan,
      You give some good trading advise but I am not a fan of GLD or SLV. I perfer physical gold and silver coins. That is what someone should have as a base investment. After that, then trade only with money you can afford to lose.
      Greg

  43. nm

    “Once it becomes impossible to finance this debt, all hell will break loose. The Fed will do everything it can to avoid this”

    When will this impossibility occur? in 10 years? 20 years? 30 years?

    What exactly will the Fed do to avoid it?

    • Greg

      nm,
      Renowned economist John Williams at shadowstats.com says hyperinflation will occur within 4 years, but he is warning that a dollar collapse and thus a systemic collapse could happen at anytime.
      Greg

  44. Dave

    Greg, Do you remember me saying few comments above, several days ago, that I thought we were about to enter the mania stage?
    Well, at this writing it is $1420.
    How many more days of this type of growth before the herd figures it out?

    • Greg

      Dave,
      This is a mania for investors. The common man (you are not) simply has no idea what is coming. When the common nman wakes up then you will have a real mania. Congrats on your gold buys. You are way ahead of the pack. Thank you for the comment.
      Greg

  45. kc ramone

    I’m late to the game and feel the sense of urgency as “Joe.” Desperado behavior is not my way but reality is reality. My plan is to liquidate my portfolio tomorrow, get a bank draft within 48 hours, and then walk down the street to the Scotia Bank and buy Scotia Mocatta Canadian maple leafs and some silver. Is there a particular type of silver that you suggest? Does anyone think precious metals commodities are still viable? Or get out of the market altogether? Any input/advice would be greatly appreciated. I really feel like I’m in this on own, especially in quiet conservative Canada but we’re all in this world mess together. Thanks-kc

    • Greg

      KC Ramome,
      Buy one ounce Maple Leafs in gold and silver coins. Not Bars, Not and ETF, Not stocks, COINS. I like both gold and silver, silver has a much bigger upside but you must own both. That is my best advise and you are NOT alone. Peace bro DO IT Now.
      Greg

  46. kc ramone

    Just checked, J&M have less taxes than Scotiabank. Otherwise, it’s the same scenario. Again, any input/advice etc…thank you, kc

  47. kc ramone

    I had figured that out about coins; Canadian Maple Leafs. As I said I’m liquidating at noon, should have a bank draft within 48 hrs and then off to Scotia Mocatta. What percentage do you advise of gold and silver? What do you think about 75% gold, 25% silver? Thank you for being so prompt with your answer. Also, yesterday, the Bank of Canada agreed with what the Fed is doing. The inmates are truly running the asylum…thanks kc

    • Greg

      KC,
      That depends on your storage. Silver will probably go up much higher on a percentage basis but you need both. Maybe 20 AU to 500 AG would be a nice mix, but you and you alone will have to decide. Good luck.
      Greg

  48. kc ramone

    I had the numbers backwards. With those guidelines, I’ll do about double that amount which is comfortable. I sincrerely appreciate your information. Very best wishes and may God protect us all-kc
    (Just heard that the interest alone on the federal US debt is about a trillion a year. I don’t get why people do not see that this president is openly destroying America…well, some people see it.)

    • Greg

      Good luck KC.
      Greg

  49. kc ramone

    Back again. I just thought I would share this with all of you who talk about the Weimar Republic. My mother was born in Germany in 1921. Her father had the good sense to get the family out in 1929 and come to Canada. She used to tell me stories, that as a little girl, in Mannheim, she would take her little wagon, piled way high with millions of marks to go buy a loaf of bread. The German mark was literally not worth the paper it was written on. These are sobering times and a little too similar. Best wishes to all of us…

    • Greg

      KC Ramone,
      Thank you for sharing this.
      Greg

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