“Those people who know how to listen are also people who learn. The moment you stop learning, you die. Age is not the number of years you have been living. Age is the condition of your soul.” – Armen Sarkissian* (Lunch with Financial Times, 6-15-2019)
“Life is always preparing you for something you just never know what.” – Armen Sarkissian
“If you don’t own gold, you know neither history nor economics.” – Ray Dalio, Bridgewater Associates
“For twelve consecutive years, gold was up every single year whether there were inflation fears, deflation fears; strong dollar, weak dollar; political stability, political instability. It didn’t matter – strong oil, weak oil. . . Gold went up for twelve years. . . When gold embarks upon its next move, I believe that you will see that long wave take gold relatively quickly, but it will be measured in years, up to $3000 to $5000 target that I believe is fundamentally justified based on the facts we have today.” – Thomas Kaplan, Electrum Group (Peer to Peer Conversations with David Rubinstein)
* Armen Sarkissian is the president of Armenia. Prior to his stint in politics, he was a theoretical physicist in the old Soviet Union where he won the prestigious Lenin Prize.
*Contiguous date sets: 1998-2017 (Each set includes one each of every date)
*Only 20 Sets Available – Sold First-Come, First-Served
*Just $3.5 per coin more than common 1/10 oz Eagles (roughly $154 ea.)
A USAGOLD special offer!
Shipping included. Available for immediate shipment.
First come – first served
Those of you who participated in our recent offer of Australia British sovereigns – which sold out in less than three hours (May 15th) – might take an interest in this offer of the popular “Military” German 20 mark from the World War I era. These items rarely surface so we are pleased to be able to make this offer. It consists of only 25 coins and likely to sell out quickly.
An exclusive Premium Bulletin Board offer!
Shipping included. Available for immediate shipment.
First come – first served
(USAGOLD-May 1, 2019) – The U.S. Mint reports sales of American Eagle gold and silver bullion coins running ahead of last year’s pace at the end of May. Silver Eagle sales have been notably robust – up 40.39% over the same period last year with 866,000 one-ounce coins sold in May as opposed to 380,000 sold in May of last year. Gold Eagle sales are up 8.33% over the first five months of last year. Month over month, Gold Eagle sales were down significantly from May of last year when 24,000 ounces were sold as compared with 4000 ounces this year. Silver Eagle sales, on the other, were more than double sales for May of last year.
Many analysts consider bullion coin sales a bellwether for overall interest in the precious metals among investors. This year’s uptick over last year indicates increased activity among American investors interested in including gold and silver in their holdings as safe-haven hedges and an underpriced asset class with that latter motivation particularly striking in the Silver Eagle category.
• Taking advantage of the high gold-silver ratio – especially in IRAs
• Buying US $20 gold pieces while premiums are at all-time lows
• Buying hard-to-get pre-1933 European gold coins at bullion-related prices
Here’s a quick snapshot-breakdown on each:
Taking advantage of the high gold-silver ratio – especially in IRAs
We have processed several swaps of gold to silver within IRA’s over the past 30 days. At the moment, the ratio is almost 88 to one. We haven’t seen the ratio that high in twenty years. In fact, the only higher ratio over the past 30 years came in 1990 at 100 to one. The ultimate goal for most investors is to end up with more gold by trading the silver back for gold when the ratio narrows, thus ending up with more ounces of gold. That strategy worked well in both the early 2000s and in 2007-2008 just before the credit bubble implosion. If you have an interest in taking advantage of this market opportunity, give us a call and we will be happy to walk you through the numbers and help you with the transaction.
For those, who own gold but don’t own silver, now would be a good time to add balance to your precious metals portfolio while prices are cyclically low.
Here’s a gold-silver ratio chart for your review –
Buying U.S. $20 gold pieces while premiums are at all-time lows
Gold investors like to buy off the bargain table and the premiums on U.S. $20 gold pieces are now at all-time lows. The volume in this area over the past six months at USAGOLD has been nothing short of remarkable with a large number of six-figure transactions processed. There are a variety of options too numerous to list here. Too, we try to fit the items purchased to the particular objectives the client has in mind. Once again, the best way to go about this is to talk with your broker directly. At times, we pick up special opportunities at good prices and we can pass those savings along.
Buying hard-to-get pre-1933 European gold coins at bullion-related prices
We offered a special last week of Australia minted British sovereign gold coins that sold out in less than three hours – a testament to the strength of this market. It doesn’t hurt that gold itself is bumping along lows, but when you add to thae appeal with difficult-to-obtain items at a low premium, the offer tends to sell out quickly. We now have a number of smaller lots available (including the French 40 franc lot posted below) that we can offer to those with an interest – pre-1933 European and South American gold coins at bullion-related prices. Call for details and to find out what we now have available.
Scarce French empire 40-franc set
If you missed our offer of French 40 franc Napoleon Bonaparte gold coins, this four-coin set offers a second chance at the tag-along grouping acquired with the Australian British sovereigns offered earlier in May. Some will think the set an even more desirable acquisition in that it represents the totality of the post-Revolution Empire coinage. It includes the Bonaparte coin and the three rulers who followed – Louis XVIII, Charles X & Louis Philippe. The dates go from the early 1800s (!) through the 1820s. This coinage is consistently a favorite here at USAGOLD. We only have two sets available and as always its first-come, first-served. Priced attractively. . . . .
An exclusive Premium Bulletin Board offer!
Shipping included. Available for immediate shipment.
“The [U.S. Future Inflation Gauge] turned down early last year, and by summertime it was clear that a fresh inflation cycle downturn was taking hold. That inflation cycle downturn wasn’t obvious to the Fed, which hiked rates in September and December. Despite being forced to pivot hard early this year, Fed Chairman Powell just this month called low inflation ‘transitory.’ Bond markets were also caught flat-footed, with the 10-year treasury yield around 3¼% in October, and again in November, as inflation expectations remained high through last fall. This is the elephant in the room crushing bond yields. It’s really about the inflation cycle.”
USAGOLD note: Investors often ask why the gold price has been stuck at the $1300 level for so long with the amount of danger present in financial markets and the economy. Why didn’t gold rocket higher when trade negotiations between the United States and China broke down? Why didn’t gold react positively to the Fed’s transition from rate hikes to a rate pause? Why hasn’t gold responded to the upside with all the political turmoil in the nation’s capital? Etc. . .
The answer lies in a term rarely featured in gold market discussion – disinflation. At present, it is the elephant in the room, as ERCI describes it above. Just as it crushes bond yields, it sits on the price of gold – at least for now. But that could all change at a moment’s notice.
The problem with disinflation is that occasionally it slips the gate. General malaise gives way to a deeper crisis. Some of you who were clients during the 2008 financial crisis probably remember that gold was slow to react. In 2006-2007, it was bumping along in a narrow range on either side of the $650 mark in a disinflationary environment very similar to the one we are experiencing now. (Please see chart below.)
Then, in late 2007, the roof began to come down on financial institutions – Lehman Brothers, Bear Stearns, IndyMac, Washington Mutual, Fannie Mae, Merrill Lynch, just to name a few of the big-name casualties. Only then, as investors moved aggressively to gold for its safe haven and store of value attributes, did the price begin to move higher with some authority. In 2008 it reached $1000 per ounce. By late 2009, gold had kicked into overdrive. It began a rapid climb that culminated at a record high of over $1900 per ounce. The whole run – from $650 to over $1900 – occurred during a period when disinflation dominated the financial landscape.
During disinflationary periods like the one we are experiencing now, gold owners must practice patience keeping in mind the real reason for the investment – to act as a safe haven and store of value if the wheels come off elsewhere in the portfolio. Gold is wealth insurance first and a speculative investment second. As the old saying goes, you do not need gold until you need it, and then you might need it more than you thought.
Final note: Though disinflation dominates the markets today, that might not always be the case. With the announcement this past week of tariffs on Mexico, the Trump administration has now levied tariffs on America’s two largest importers accounting for almost one-third of U.S. imports. Some economists think that the tariffs could become a source of consumer price inflation in the months ahead (not to mention the potential for a myriad of other unforeseen and unintended consequences). In fact, several large retailers including Walgreens, the Dollar Store and Costco (among others) have already warned of higher prices in the not-too-distant future. Those warnings came before the recent announcement of tariffs on Mexican imports.
If the dominant economic paradigm shifts to inflation, gold will remain an important choice for prudent investors looking to hedge uncertainty. As I wrote many years ago in The ABCs of Gold Investing – How To Protect and Build Your Wealth With Gold, “Inflation, deflation, disinflation, stagflation, and hyperinflation—it matters not. Gold protects against any or all and no matter in which order they arrive. I is for the Inflation-Deflation debate—Buy gold and let others worry about what’s next for the world economy.”
–– Michael J. Kosares
Bridging the ‘Fourth Turning’ with Gold
It began in 2008. It is scheduled to end in 2028.
What happens between now and then?
“Howe designates 2008 as the start date for the current fourth turning. Since turnings typically last 20-23 years, it will end sometime between 2028 and 2031. That puts us about midway through the cycle. At the moment, if the politicians, Wall Street and press accounts on the status of the economy are to be believed, the good times have arrived. For many Americans, though, that arrival has some pretty dark clouds hanging over it – the deep political divisions, the escalating trade wars, the emerging nation debt and currency crisis, the overvalued stock market, the threat of rising interest rates – and that is just a sampling of fourth-turning strata that worries global investors. The nation despite the rosy outlook is a bit unnerved by it all. For his part, Howe, who saw it coming, believes things could get much worse before before they get better.”
–– Full Article ––
The inverted yield curve as a harbinger
of higher gold prices
(Grey vertical bars indicate recessions.)
During the course of the past several weeks, we have heard much about the inverted yield curve in three-month and ten-year Treasuries as a harbinger of recessions. Missed in the press reports is the fact that it has also been a harbinger of higher gold prices. In the chart above, please note the upward surges in the price of gold in the five-year periods following the two most recent yield inversions in 2000 and 2006. The first occurred with gold trading in the $300 range. It subsequently rose to the $600-650 level in 2006. The second occurred with gold priced in the $600-650 range. It subsequently rose to over $1900 per ounce in 2011 – its all-time high.
“Ominously,” writes Robin Wigglesworth and Joe Rennison in a recent Financial Times editorial, “the US yield curve has now inverted once again, with the 10-year Treasury yield on March 22 dipping below the three-month T-bill yield for the first time since 2007. Combined with the length of the post-crisis expansion — this summer it will become the longest growth spurt in US history — and deteriorating economic data, the inverted yield curve has stirred fears that the countdown to the next downturn has already begun.”
Peter Fisher, formerly head of fixed income at BlackRock and currently a professor at Tuck School of Business at Dartmouth, puts it succinctly in that same Financial Times editorial. “The mistake,” he says, “is to think it [an inverted yield curve] is a predictor of recessions. I think it causes recessions.” The rise in the price of gold following the two prior instances of yield inversion, it is now well understood, came in response to aggressive central bank monetary easing and the sudden emergence of credit-related systemic risks.
A Gold Classics Library Selection
A Layman’s Guide to Golden Guidelines
for Wise Money Management
Gresham’s Law, Say’s Law, Rule of 72, Marginal Utility, Diminishing Returns, Regression to the Mean, Unintended Consequences, Murphy’s Law, Occam’s Razor, Law of Attraction, Law of Polarity, and more
by R.E. McMaster, former editor of The Reaper newsletter
There is an old saying that not all that glitters is gold — as in the gold coins many of you have held in your hands. There is another kind of gold that inhabits the practical wisdom of the ages. In today’s “go-get-’em,” “read-it-and-forget-it” world of everyday web browsing, it can be a challenge to separate the run of the mill from the meaningful. It is with that thought in mind we offer this compendium of the rules and laws of finance and investment by long-time market analyst R.E. McMaster. Formerly the writer/editor of the widely-circulated The Reaper newsletter, McMaster is known for his occasional forays into the realm of economic philosophy and history. I think you will agree with me that these skillfully condensed descriptions are indeed meaningful — a wellspring of knowledge worth reading, re-reading and passing along to friends and family, especially the kids and grandkids.
(Illustrations by Ed Stein)
“In bear or bull markets, billionaires are constantly worried about one thing: protecting their wealth. This video shows how some billionaires protect themselves from downturns – including turning to uncorrelated assets such as gold.”
PBB note: Most billionaires do not take delivery of their gold because of the storage problem. That is not the case for the small private investor. A quarter of a million dollars or less in gold coins stores neatly in a modest-sized safe deposit box. Of course, if you would rather store your gold and/or silver at a depository, we can help with the arrangements. Safe storage includes insurance and the costs are not prohibitive. In fact the annual fees on storing are roughly comparable to what most ETFs charge with the added benefit of a delivery option on the coins or bullion stored. To learn more, we invite you to contact our Order Desk directly.
Gold in six easy lessons
1. Don’t buy it because you need to make money; buy it to protect the money you already made.
2. Don’t look at price as a barrier; look at it as an incentive.
3. Don’t buy the paper pretenders; buy the real thing in the form of coins and bullion.
4. Don’t fall prey to glitzy TV ads; do your due diligence instead.
5. Don’t allow naysayers to divert your interest; allow yourself the right to protect your interests as you see fit.
6. Don’t forget the golden rule: Those who own the gold make the rules!
This page catalogs price predictions on gold and silver prices from top pundits and prognosticators – a casting of the runes that begins in January and is updated regularly as new additions surface.
We invite your bookmark. We invite your return visit.
Those of you who participated in our general offer of Australia British sovereigns – which sold out in less than three hours (May 15th) – might take an interest in this French 40 franc offer. A small lot of 40 came as a tag-along to that acquisition and they turned out to be the much sought-after and scarce Napoleon I (Bonaparte) mintages from 1803-1812. Napoleon I coinage usually sells out in short order, so you might want to act quickly if you have an interest. Solid opportunity.
An exclusive Premium Bulletin Board offer!
Shipping included. Available for immediate shipment.
SOLD OUT – 5/24/2019
Map courtesy of the World Gold Council
“Central banks bought 145.5t of gold, the largest Q1 increase in global reserves since 2013. Diversification and a desire for safe, liquid assets were the main drivers of buying here. On a rolling four-quarter basis, gold buying reached a record high for our data series of 715.7t. Q1 jewellery demand up 1%, boosted by India. A lower rupee gold price in late February/early March coincided with the traditional gold-buying wedding season, lifting jewellery demand in India to 125.4t (+5% y-o-y) – the highest Q1 since 2015. ETFs and similar products added 40.3t in Q1. Funds listed in the US and Europe benefitted from inflows, although the former were relatively erratic, while the latter were underpinned by continued geopolitical instability. Bar and coin investment softened a touch – 1% down to 257.8t. China and Japan were the main contributors to the decline. Japan saw net disinvestment, driven by profit-taking as the local price surged in February.”
USAGOLD note: The World Gold Council reports U.S. bar and coin demand rose 38% over the past year (through the first quarter). Global central banks and financial institutions drove physical gold demand the past 12 months raising once again the question if professional investors know something that retail investors do not. As the chart above illustrates, the United States ranked at the top globally for growth in gold coin and bullion demand over the past year, while Asian demand fell back.
Repost from 5-3-2019
Britain’s Gold Sales ‘a Reckless Act’
(Sir Peter Tapsell’s speech before the House of Commons, June 16, 1999, on the partial sale of United Kingdom’s gold reserves)
We do not update our Gold Classics Library often, but when we do we try to choose items that have a timeless quality. This latest selection certainly meets that standard. It comes to us unexpectedly as a by-product of research for the recently published article, The Power of Gold Diversification, and with the kind permission of the United Kingdom Parliamentary Archives.
Many associate Britain’s sale of nearly 60% of its gold reserves in 1999 with the beginnings of gold’s secular bull market. The government’s rationale for the sale, as explained by then Economic Secretary to the Treasury Patricia Hewitt, was to “achieve a better balance” in its reserves by going to foreign currencies. Sir Peter Tapsell took the opposite tack. “The Chancellor [of the Exchequer] may think that he has discovered a new Labour version of the alchemist’s stone,” he argued, “but his dollars, yen and euros will not always glitter in a storm and they will never be mistaken for gold.”
History’s indisputable verdict is that Tapsell was correct and the British government wrong. The ensuing nearly two decades featured a global financial crisis, low-to-zero-percent interest rates, scrambling central banks, and the consistent depreciation of global currencies against gold. Currencies did not glitter in the storm, and they could not have been mistaken for gold which rose relentlessly from $287 per ounce at the time of his speech to the current price of over $1300 (at one point reaching almost $1900 per ounce in 2011). Though his speech before the House of Commons failed to stop the sales, it goes down as one of the most eloquent appeals ever made on the merits of gold ownership for nation states and individuals alike.
Historic British sovereigns minted in the late 19th and early 20th century are traded all over the world especially in nation states that used to be part of the old British empire – India, Hong Kong, Singapore, South Africa, Australia, Canada – even the United States.
A client of USAGOLD tells an interesting story. He has always had an interest in gold – even as a young man when he served in the military. When he was stationed in Viet Nam during the war, he recalls being astonished upon visiting villages far off the beaten track, that he would find merchants willing to trade for merchandise using the gold British sovereign in payment. Too, American pilots and special forces units were issued British sovereigns as part of their survival pack simply because they were accepted in payment in so many places around the world. Today, the British sovereign remains one of the most highly traded historic bullion gold coins in the world with buy-sell spreads posted daily wherever gold is traded.
Because of the strong global liquidity, British sovereigns have always tracked the gold price and sold at reasonable premiums over the gold price. For today’s pricing, we invite you to go here.
As historic gold coins with a provenance dating before 1933, British sovereigns fall within the category of items excluded from the U.S. government seizure of gold in 1933 and the subsequent ownership ban of gold bullion that extended to 1975. A large number of our clientele choose to purchase historic bullion items because they track the gold price, provide good liquidity and trade at relatively low premiums over the gold price. If you would like to learn more about privacy issues surrounding gold and how you might hedge the possibility of a future gold seizure, we invite you to visit this in-depth study titled Preparing for a Potential Gold Confiscation.
Preparing for a potential gold confiscation
by George R. Cooper, J.D.
We view confiscation as a possibility, rather than a probability, and see historic gold coins as an important hedge for those interested in addressing those concerns within their gold holdings. It should be emphasized that there is a whole genre of pre-1933 gold coins that can be acquired at moderate premiums over contemporary bullion coins and still fall within the category of items excluded from the U.S. government seizure of gold in 1933 and the subsequent ownership ban of gold bullion that extended to 1975.
(USAGOLD-May 1, 2019) – The U.S. Mint reports sales of American Eagle gold and silver bullion coins running well ahead of last year’s pace at the end of April. Gold Eagle sales were up 49.6% over the first four months of last year. Silver Eagle sales were up 35.2% over the same period. Month over month, Gold Eagle sales were nearly double the sales from April of last year. Silver Eagle sales were up 31% over March of last year. Many analysts consider bullion coin sales a bellwether for overall interest in the precious metals among investors. This year’s strong uptick over last year indicates increased activity among American investors interested in including gold and silver in their holdings as safe-haven hedges and an underpriced asset class.
The Nightmare German Inflation
The surprise is not only the length of time Scientific Market Analysis’ The Nightmare German Inflation has ranked among our most-visited essays, but that it has remained popular even now, when inflation seems a more distant concern. Inflation, though, is never far removed from the minds of many Americans particularly those who remember the inflationary-stagflationary 1970s decade and the dangers it imposed on financial markets and individual investment portfolios. The survivors of the German hyperinflationary debacle of the 1920s did so, as you are about to read, by purchasing gold early in the process. This comprehensive report not only describes how and why the hyperinflation occurred but how various investments performed under those trying circumstances. There is little doubt it will affect your thinking.
Here’s how it can happen and what you can do about it.
Allow us to make a personal observation and then we will send you on your way to Mr. Ganz’ important and timely analysis. Too many gold owners labor under the false presumption that high-end, high-premium numismatic gold coins are the only way you can protect your holdings against a potential seizure. Many of our prospective clients are pleasantly surprised when they discover that there is a whole genre of pre-1933 gold coins that can be acquired at modest premiums over the gold content and still meet the criteria for exemption Mr. Ganz outlines. As he points out, “rare and unusual” does not necessarily equate to “pricey” or “expensive.” To understand why the words “rare and unusual” are important, we invite you to proceed to the link.
Fiat Money Inflation in France
How It Came, What It Brought, and How It Ended
Andrew Dickson White ends his classic historical essay on hyperinflation, “Fiat Money Inflation in France,” with one of the more famous lines in economic literature: “There is a lesson in all this which it behooves every thinking man to ponder.” This lesson — that there is a connection between government over-issuance of paper money, inflation and the destruction of middle-class savings — has been so routinely ignored in the modern era that enlightened savers the world over wonder if public officials will ever learn it. In this essay Dickson White explores France’s hyperinflation at the end of the 18th century in exhaustive detail – its politics, its economics and the social consequences which led, in the end, to Napoleon’s rise as emperor.
CONTENT 14 px [LINK]
Who owns and controls the Federal Reserve
by Dr. Edward Flaherty
“Is the Federal Reserve System secretly owned and covertly controlled by powerful foreign banking interests? If so, how? These claims, made chiefly by authors Eustace Mullins (1983) and Gary Kah (1991) and repeated by many others, are quite serious because the Fed is the United States central bank and controls U.S. monetary policy. By changing the supply of money in circulation, the Fed influences interest rates, affecting the mortgage payments of millions of families, causing the financial markets to boom or collapse, and prompting the economy to expand or to stumble into recession. Such awesome power presumably would be used to benefit the U.S. economy. Mullins and Kah both argued that the Federal Reserve Bank of New York is owned by foreigners. Although the New York Fed is just one of twelve Federal Reserve banks, controlling it, they claimed, is tantamount to control of the entire System. Foreigners use their command of the New York Fed to manipulate U.S. monetary policy for their own and, as Kah asserted, to further their global political goals, namely the establishment of the sinister New World Order.” – From the author’s preface.