GOLD

[arco]

,

Only a small percentage of people will be able to get into, and take advantage of, precious metals due to their high cost.

Even they will not be able to pop down to the dairy for a bread loaf with their Krugerrand or bar of silver.

Its a difficult situation, and a cure will have to be found. Life cant survive without some form of bartering 'token'

.

[Aussie]

. . . Only a small percentage of people will be able to get into, and take advantage of, precious metals due to their high cost.

Agreed arco. Most people will not be able to buy gold, but the wealthy who can will TOTALLY swamp the market with buy orders and the price will react accordingly.

Silver has always been the metal for the masses, people who cannot afford gold WILL buy silver. The G/S ratio is currently very high at 70:1. This is why the potential for a silver price explosion is huge. $2,000 gold with a ratio of just 35:1 means $57 silver. That's a big increase over today's price.

I've never been a big buyer of either gold or silver bars, I have just a few of the nice Perth Mint bars. Personally I prefer recognized gold coins like Kiwi's, Krug's, Kangas, Philly's and Sovereigns etc and silver coins like American Eagles, Canadian Maple leafs are my favorites. There may be a bit of a premium, but there will always be a market for them.

[arco]

Aussie

I noticed someone trying to sell a 1oz Krug on Trademe yesterday for $2000. I watched it and it was not sold.

Kruger Rand 1oz Fine Gold
Closed: Fri 6 Feb 7:41 pm (#200781642)

No bids

The price yesterday in gold value was about $1850 (today it would be $1716)

Some 1/10 oz Gold Eagles sold Tuesday at $225/230 which at todays value is $171.60 or about a 30% premium.


1 x 1/10 oz Gold $5 Eagle 1997 (Auction 2)
Closed: Tue 3 Feb 8:57 pm (#199970050)

Top bid:$230


Its seems to be hard to pick up reasonable value at the moment.

[Aussie]

Aussie

I noticed someone trying to sell a 1oz Krug on Trademe yesterday for $2000. I watched it and it was not sold . . .

Yeah, I saw that too. I think it was a simple buy now price type sale wasn't it? He would have been better off to do an auction. I have seen some coins sell recently on TM for NZ$2,000.

Personally, I think it's naive to simply expect sellers to charge a NZD equivalent of the USD spot price. If you buy from a dealer you will be paying a 5% - 6% markup and then wait perhaps a few months for delivery.

Depending on who you are dealing with, during this time you can be financially exposed as your funds are "out there" in someone else's account until delivery. If it's with a solid, reputable dealer the chances of a problem are minimized but still there is an element of risk.

Since the middle of last year a two tiered market has developed. A COMEX "paper" market and the "real" physical metal market and the two markets have two different pricing structures.

What has emerged in the physical market is what I call an "availability premium". Meaning if you say . . . purchase on TM, you will have gold in your hand the next day. I think there is a very fair case in today's market for prices that are significantly over the spot price for those who want it and want it now.

[Aussie]

Interesting interview with an investing icon . . .

"I believe now that we’re going to see capital gains opportunities in gold for 2009 and into the foreseeable future. The market has all the fundamentals that one would want right now. There’s a declining supply, which will decline even further because those who normally look for gold, the junior resource stocks, have been so hammered that we’re not going to see a lot of new exploration for some time.

The few companies that will be going into production will be a premium. The excess supply that used to come into the market, particularly from central banks, has dried up. We’re also seeing tremendous physical demand; in fact, throughout 2008, it was very difficult for people to acquire physical gold. Coins and bars that used to be readily available were in such demand that there became a shortage. In fact, if you wanted to purchase physical bullion, you were paying 10% or more above the spot price. People say that should have caused a dramatic rise in the gold price. The paper market is still driven by the COMEX, where the futures trade. Unfortunately, some people claim, that market has been manipulated. I can simply say that the paper market has not mirrored the physical market. I believe the physical demand eventually will overrun what is not happening in the paper market. Once that occurs and once we’re above a $1,000 and stay there for more than a week or a month, I think we’re going to see a lot more money pour into gold. I don’t know about $2,000 an ounce for gold, but once that money starts to pour in I still think $1,200 gold and $1,400 gold— even $1,500—is a very variable, useful and likely target."

More . . .

http://www.kitco.com/ind/GoldReport/feb042009.html

[Aussie]

Let's hope and pray the Mr. Key and Mr. English don't follow Australia's lead and send New Zealand down the road of massive deficit spending that will put us back into the debt trap of the 1980's . . .


The Revolt Of The Masses?

Just over a week ago, the Australian government under Mr Kevin Rudd came out with a plan to literally "inject" nearly $A 1000 into the bank accounts of almost every adult Aussie. He also revealed plans to borrow and spend the tidy sum of $A 118 Billion over the next four years. Why? To "rescue" Australia from recession.

This is not a joke, it is being shouted fervently by politicians, central bankers, Treasurers and eminent financial and economic "experts" all over the world. Some if not many of them in all likelihood actually believe it. After all, they have spent their entire lives with the absolute conviction that the solution to all problems, political and/or economic, is to do one of two things. They either regulate it or throw money at it.

Credit, they say, is the "life blood" of the economy. Consider, for a moment, the thoughts on the subject of Henry Hazlitt, an eminent economist and journalist from the past:

"There is a strange idea abroad, held by all monetary cranks, that credit is something that a banker gives to a man. Credit, on the contrary, is something a man already has. He has it, perhaps, because he already has marketable assets of a greater cash value than the loan for which he is asking. Or he has it because his character and past record have earned it. He brings it into the bank with him. That is why the banker makes the loan."
Henry Hazlitt - Economics In One Lesson - 1946

Compare this "old fashioned" insight with the modern practice of almost literally throwing "money" at people with total abandon and with a complete lack of discrimination. For decades, very few thought to wonder about where all this "money" was coming from. It had been almost universally accepted that economic health was measured by the volume of borrowing and then spending the borrowed money. Economics was cut in half with production discarded and consumption embraced as the only economic "problem" left to solve.

The lifeblood of an economy is wealth and the ONLY means of bringing wealth into existence is to PRODUCE it. Money is NOT wealth, it is merely an indispensible medium by which the wealth which exists can be exchanged between those who have brought it into existence. Wealth cannot be created out of thin air. And all the "deficit spending" and/or easy credit schemes in the world cannot PRODUCE it either.

What Mr Rudd in Australia and all his counterparts in all the capital cities of the world are staring at in horror is the inevitable end result of their own meddling. They have created a monster, an economy which is imploding because the artificial demand created by borrowing can no longer be sustained. To prattle about "preventing" a recession or "rescuing" a nation from recession is laughable. The world is IN recession. Productive capacity has for decades geared itself up to meet an artificially induced "demand" which is no longer sustainable. The economies of the world are littered with malinvestments, productive capacity for which the demand which only ever existed on paper or on computer screens has now literally evaporated. The gargantuan deflations in world stock, real estate and commodity markets have already taken place.

For almost two years now, people all over the world have been watching their governments haul interest rates down by main force, pump huge amounts of "liquidity" into banks and pile "stimulus" package after "stimulus" package into a system already choked with obviously unrepayable debt. People have lost paper fortunes on investments of almost all descriptions. And with every new nostrum and every new dollop of borrowed "money", they have watched the situation get still worse.

They are starting to stir.

A poll taken by an Australian paper shortly after it was announced asked Australians if they "approved" of the "stimulus" package announced by their Prime Minister. Fifty-one percent of those responding said no. In the UK, the announcement by the Bank of England this week that they were cutting official rates another 0.50% - to 1.00% - was met by a STORM of protest! The Bank was accused of an assault on savers. Even President Obama's stimulus bill is being seen in a harsher light by Americans. US polls show that support amongst Americans for the bill is falling fast with only 37 percent of respondents "backing" the legislation.

Unlike their political leaders, most so-called "ordinary people" are well aware that their nation is IN recession and that the recession is worsening with frightening rapidity. They have watched all the bailouts and the handouts. They have watched as interest rates have been obliterated. They are beginning to look with increasing suspicion at a situation in which the "seed corn" so vital to underpin any REAL recovery is being mercilessly attacked with the assault on interest rates.

There is a point where even the "full faith and credit" which underpins the entire monetary and financial structure of the world today can no longer command allegience. We are not at that point yet, but every new bailout plan and "stimulus" package brings it closer.

Gold is simply waiting in the wings.

[AMR]

Beware Cash4Gold and other gold-buying ripoffs

Fri Feb 6, 2009 11:41AM EST
See Comments (753)
Buzz up!on Yahoo!
I don't watch much broadcast TV, and when I do I skip as many commercials as possible, but even I have seen the incessant televised advertisements for a company called Cash4Gold, and I'm sure most of you have, too (they even had a Super Bowl ad). The company is being heavily promoted online as well.
The sell sounds great on the surface: You pack up all your old jewelry that you'll never wear again into an envelope and send it, insured, to Cash4Gold. They melt it down and cut you a check for the value of the gold. End of process. It sounds better than going to a pawn shop -- the process is simple and requires no personal interaction with an appraiser -- so what could go wrong?
A little online sleuthing finds that I'm not the only one who figures that if Cash4Gold has this much money to spend on TV ads, someone's getting the short end of the stick, and it's probably the people sending in their family heirlooms to be melted into ingots. The folks at Cockeyed.com put Cash4Gold to the test, rounding up a bunch of old rings, necklaces, and earrings, and taking them to a regular pawn shop to be appraised. The offer: $198 for the lot. They then sent the items to Cash4Gold and waited for a check in the mail. It arrived within a few days as promised... in the amount of 60 bucks. (You don't have to accept the check; the deal isn't done until you cash it.)
That price alone is practically criminal, but that's where the truly slimy part of the operation begins. First, if you call Cash4Gold and ask for your stuff back, you abruptly get a better offer: In the case of the above experiment, the offer was a whopping $178. That's a better deal, but still not market rate, though the caller was told that Cash4Gold could "manipulate the numbers on their end" to make it appear that more product was sent than was in reality. Bizarre, but it's really the only way Cash4Gold can cover its behind to convince you the original offer wasn't a wholesale ripoff.
As bad as that is, it's far worse if you opted for the company's "Fast Cash" option. Here, that original offer ($60) is wired into your bank account within 24 hours of them receiving the booty. It sure is fast, but it's not much cash -- and you don't have the option of declining the offer at all. You're stuck with a pittance for your valuable gold items. (It's also worth noting that Cash4Gold has offered Cockeyed cash 4 removing its expose from the web...)
As a side note, another website offers an in-depth expose on how the system works, this time analyzed from the inside by a former employee. Here it's outlined how the company offers bonuses to phone operators who can convince you to accept a lower offer and how the company attempts to delay payments as long as possible. It's also worth a look if you're considering sending stuff to Cash4Gold anyway and haggling for a better deal.

---------------------------------

I wish they calculated how much that gold was worth on the spot market...

[srowe]

[QUOTE=Aussie;242849]

Depending on who you are dealing with, during this time you can be financially exposed as your funds are "out there" in someone else's account until delivery. If it's with a solid, reputable dealer the chances of a problem are minimized but still there is an element of risk.

Its interesting to note that I was told by New Zealand mint that once the gold was bought and waiting for delivery[4-6wks?] that you could still sell your gold if it rose which I suppose takes a little of the uncertainty out of the situation[its still sell at 1% below spot though]
i guess threre is still a big advantage to having it physically right away but ofcourse there is no guarantie you are getting the real thing and i would be very nervious putting $2000 into someones bank acc and then waiting for the supposeably gold coin.

[arco]

I picked this info up elsewhere - haven't had time to research the actual article yet.

Dr Petrov stated that that gold increased in value against a basket of commodities he called CRB, only twice in the 20th century 1906 & 1933. Interestingly at both times Gold had a fixed price and there was deflation. What is really interesting is that gold stayed exactly the same in comparative value to the CRB ( according to Dr Petrov) in the 1970's and early 80s.

[arco]

Trade Me auction today - Gold premium about 15%

Half Sovereign 1865 Sold at: $230.00

Actual Gold Content (Troy Ounces)0.1177

Est value $200 NZD of gold content.

http://www.trademe.co.nz/Browse/List...x?id=200550643

Compare a Krug closing soon currently at $1930 may go higher.

Gold value currently about $1720

http://www.trademe.co.nz/Browse/List...x?id=200952038