Here’s Why I Like Gold So Much Right Now

 

I’m sure it’s no surprise to you that I like gold. But here’s the key…

The Last Currency Standing

Gold has had a rough year. It’s trading around $1,090 an ounce today, about the same price as 2010 – and 43% below its all-time high of $1,900 set in 2011.

For me and you, that is actually a good thing. Because low gold prices give those of us who understand that central banks are destroying the global financial system a chance to buy more before it rises sharply in price.

10 Year Gold

Gold should no longer be thought of as a commodity in a monetary system driven to ruin by central bankers printing tens of trillions of dollars in a desperate attempt to stave off the insolvency of bankrupt governments whose politicians don’t have the guts to cut spending and adopt pro-growth fiscal policies.

Instead, gold is the anti-paper currency. When central banks are done destroying the value of paper money, gold will be the last currency standing.

The financial world, which basically consists of wits and wags, is holding its breath waiting to see if the Fed will raise interest rates by a measly 25 basis points for the first time in nine years! This is pathetic – but it is also a warning sign that paper currencies are being epically mis-managed by so-called monetary authorities that actually have no idea what they are doing.

Just look around. The United States is considered the strongest economy in the world. Yet we haven’t managed to grow our economy faster than 2% a year since the financial crisis. Moreover, we did that with the Federal Reserve buying $4 trillion of government debt that is now sitting on its bloated balance sheet while it lowered interest rates to zero.

Gold remains the anti-fiat currency in a world where central banks have declared it their mission to destroy the value of paper money. Anyone who believes that has changed, or the reason for owning gold has disappeared, is not paying attention. Investors should continue to own gold and save themselves.

Buy Physical Gold and Select Gold Stocks

Coins and bars: My view is that if you want to invest in gold, invest in gold. I prefer to buy gold coins, which can be done with any number of reputable dealers. I like the one-ounce American Eagles, stored within reach.

Securities: If you want to own it in the form of a security for any reason, I recommend the Central Fund of Canada Ltd. (NYSE:CEF) or the Sprott Physical Gold Trust ETV (NYSEArca:PHYS). Both funds own both gold and silver and give you an opportunity to buy these precious metals at a discount to their spot price. The SPDR Gold Trust ETF (NYSEArca:GLD) is a third way to own gold but tends to attract more speculative fund flows than the other two.

Gold miners continue are best avoided unless you can take a very long-term view. They are a leveraged play on gold on the way up and the way down, and right now gold is going down.

But not forever.

Years from now, gold will be trading at thousands of dollars an ounce, which will be a reflection of the demise of the dollar more than any rise in the inherent value of gold. Gold is a hedge against monetary disorder and policy incompetence, both of which are in huge supply. Save yourself and start buying some.

37 Responses to “Here’s Why I Like Gold So Much Right Now”

  1. Reference previous questions…….I have ordered from 3 different companies, all through the mail. I was skeptical too having them shipped but they are insured. You have to sign for them and I had no trouble at all. Not sure if Michael wants companies listed, you can search the net and find some companies that have been around.

  2. To everyone here with a question about who to buy from and the safety of shipping …

    There are plenty of reputable dealers. You can even buy Eagles directly from the US Mint if you like. I use two dealers … Liberty Coin in Lansing Michigan for coins … just because I got to know them a little 30 years ago and I trust them completely. They’ve been easy to deal with and everything’s gone like clockwork … and Mike Maloney’s goldsilver.com for 22 karat jewelry. I wouldn’t hesitate to buy coins from them too. I have no tie to tie to either one. It’s just who I use. But there are LOTS of others. Beyond those who are solely “coin dealers,” Sprottmoney.com sells coins, Everbank sells coins. Peter Schiff’s Europacific sells ’em. If you want storage, especially overseas storage, check out the Hard Asset Aliance or James Turk’s goldmoney.com or Sprottmoney.com

    There should be no problem finding a dealer. But be careful Some dealers such as goldline will try to upsell you into collectible coins … numismatics, because they make a lot more money. Dealers make very little on “bullion” products that have very little or no collectible value. Stay away from numismatics and just buy bullion coins.

    As for shipping, the coins are insured, so there’s no need for concern. Mine have come via the postal service. Tens of thousands of coin are shipped every day. Now, if you’re talking huge orders, yeah, maybe arrange for secure shipment, but to where? Your home? Uh, not a good idea. With large amounts, look for private vault storage with Brinks, Viamat, etc. arranged through HAA, goldmoney, Sprott, etc. NEVER buy any gold through a bank, with the sole exception of Everbank, which doesn’t operate like a regular bank. And never buy unallocated gold if you’re storing it anywhere. Make sure your name is on the stash and you know the serial numbers if you hold bars.

    But for most people just looking for some insurance gold to keep close at hand, just contact two or three dealers, get prices on bullion coins … Eagles, Maple Leaves, Koalas, Philharmonics, Kruggerands, etc. … and place the order. Your check will have to clear before the coins are shipped, but then they’ll be delivered. You’ll have to sign for them.

    Don’t make it into a big thing. It’s as simple as ordering anything else online or buy phone and just as safe.

  3. You might consider 1/4-oz gold coins instead. When (not if) gold prices go through the roof, you might liquidate them more readily, especially piecemeal. One-ounce coins are OK for silver. That’s the advice I’ve been hearing, from reputable sources.

  4. I store my silver and gold with Hard Assets Alliance which has a great reputation. It’s the securitized global storage in vaults that they offer as well as the ease of buying and SELLING that persuaded me to use them. Remember, when the time comes you always have to have an exit strategy and this company fits my needs just fine. I store my metals in Salt Lake City and Singapore It is once way I can get global diversification as well as being outside the banking system. Also insured, bonded bullion delivery .anywhere in the world. I have bought gold and silver from other places like Kitco, but I like Hard Assets the best.

  5. My advice is to buy bars not coins, unless you a coin collector as well. You will pay a premium for the same weight with coins. I aslo like the idea of samler pieces, like 10gm bars. But the same time, buying a 5oz. bar would be cheaper than buying 5-1 ounce bar. you save when buing bulk.

  6. I agree with fallingman’s comments above, re unallocated gold and large quantities. A holding in unallocted gold or silver is NOT equivalent to holding the metal. It is an investment with the bank with a value that is index-linked to the price of the metal. When you give money to the bank for unallocated precious metals, you are doing just that – giving money to the bank! The bank has a legal obligation to repay you according to the T’s & C’s of your agreement with them. However, if the bank has financial difficulty, it has a legal obligation to use its liquid assets (including the money you gave it as a deposit in any type of account including unallocated gold and silver accounts) to meet the liquidity requirements placed upon it by regulators.

    Allocated metals a different. The bank holds allocated metals as a special deposit – in the same way if you were to deposit an expensive artwork with the bank for safe-keeping: they have an obligation to hold that precise object safe for you until you require its return.

    Having a delivery of gold turning up outside your house in a security van really isn’t a good idea. Insured post is much better: it is the responsibility/liability of the courier to keep the consignment safe until it reaches you and you can sign for it. If you don’t want to take the risk of your precious metals being stolen from your house, or wherever you keep them, you need to hold them in a vault, for which there will be vaulting and insurance fees. (Banks will do this – that’s what allocated gold/silver is – but generally their charges are high.) If you want someone to store your gold and silver securely for you, I suggest you look into bullionvault.com. Their charges are extremely reasonable and you have the added advantage that the holdings are extremely liquid – you can trade them on bullionvault’s own exchange for tiny fees – and, in three steps, the more you buy or sell per year the lower the transaction fees – and usually very close to the spot price.

    Bullionvault holds the metals for you as a bailment (like a special deposit) so the gold or silver belongs to you, not to just an interest in the value of it. (For a price) you can arrange to take delivery at any time. But it is as bars not coins. I don’t know the tax position in the USA, but, in the UK, there is VAT on silver (but not gold), however, you don’t have to pay the VAT on goods until you receive delivery, so any trading in silver at bullionvault is VAT free. Again, in the UK, there is capital gains tax on both gold and silver, but not on coins of the realm, so, if you think you’ll make a great profit from trading the metals – even, or perhaps especially, if it is over a long time span, then coins may be better (UK, again).

    I have no commercial relationship with bullionvault – other than as a user of their services – I am just very happy with the services they provide.

  7. APMEX (American Precious Metals Exchange) & JM Bullion are 2 very well known/highly respected Precious Metals Dealers. Customer Service at both entities is outstanding. My favorite items to buy from them are: Pamp Suisse (Versican) Gold Bars; Sunshine Minting (AKA Sunshine Mint) Silver Bars & Rounds (Both with V2 Security) & American Gold or Silver Eagles. Even with very limited income, you can quickly build a substantial portfolio (place at least $100.00 on each order to facilitate FREE shipping and DEFINITELY take advantage of on “SALE” items for maximizing purchasing power).

  8. I have used some of the dealers listed above. But National Numismatic Associates in St. Simon’s Island GA, 912.638.3511 has been the best for ordinary gold coins. The premium is lower than most everyone else. They are a bit smaller than some of the others which allows them to do that. And just like every one else, they may or may not have the specific item you want. some times it may require a little wait. Gold Eagle (1 oz) and Gold Maple Leaf (1 oz) coins are almost always available.

  9. I too believe in buying gold. I however also believe the “Deflation” is next, rather than “inflation” I like both Peter Schiff and Harry Dent, and they agree on most things with the exception of whether we will have inflation when things go south (Peter Schiff, Micheal Lewitt and most gold buyers) versus Harry Dent’s version of what will surely happen first which is Deflation, saying that all things will plummet when the SHTF, and Gold will drop to $300 and Real Estate 40%, The Dow to 6000 etc….. and the Dollar goes up up up ( As stupid as that is) This is all happening too as we speak. As the dollar is debased daily, gold that “should” be rising is dropping, the dollar is going up up up. I believe in gold and want to buy more, but believe there will be a big hit in all things and that is when you spend your dollars and move out of them. The world is such a mess that the dollar still represents value compared to other countries situation and I would wait for the deflation story to hit. Inflation is coming but after things crash.

  10. Tobias Armstrong

    I like the idea that gold hasn’t changed, but the industry surrounding it has. It’s also clear that it will maintain it’s value much better than paper money for longer. After paper money loses value, like you said, gold will still have value. Great tips, now I just need to see how to get into buying it. Thanks for sharing!

  11. Looking at the graph, it looks like the price of gold is starting to level out. I am really excited to see if the price will go back up. I am looking for gold buyers so that I can make a couple of extra bucks on the side for a ring.

  12. Charles Kemp

    I didn’t know that gold was that expensive right now. It would probably be smart to follow the trend and make sure that you can sell the gold for the most money that you can. I think if you hold out long enough you will get a good price for the gold.

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