How to invest in copper as bullion

Sino Silver Sabotage

2012-01-29T04:56:00.000-08:00

China has long been accorded the status of a combatant in ongoing conflicts. At least so states Jim Rickards, who recently penned the excellently received tome Currency Wars. His book details the global back-room machinations of various Central Banks, as they exert their cumulative insidious influence upon their respective currencies in what has been deemed a worldwide race to depreciate all fiat currency. Whether or not that is part of a hidden agenda by TPTB, leading us towards a NWO, and steered by a shadowy cadre of uber rich who meet at the Bilderburg, is not the intent of this piece.

What I wish to consider is this. Our government, and our Defense Department, constantly confer within the Pentagon and other think tank locations, to game scenarios that might foresee ramifications of moves and countermoves placed into play in response to various gambits launched by "the other side." In a milieu, where the designation of the origin of nefarious acts that might imperil our United States borders constantly changes, the play remains the same, but the cast is constantly auditioning for new roles. When one antagonist falls ill, another swiftly takes his place. Witness North Korea. Pun intended.

We have enough problems with the likes of South America's capos Hugo Chavez, and Evo Morales, nationalizing oil and threatening mining interests within the borders of Venezuela and Bolivia. Any Arab state, as Libya and Iraq can attest to, that threatens to trade oil for gold, or in fiat currencies that would bypass the dollar, will swiftly find itself under attack and it's leaders replaced. All under the guise of offering stability and an opportunity for democracy.

There remain larger adversaries. Iran comes to mind. Ahmanidinejad appears, at times, a megalomaniac who is equally intent upon advancing Iran's purported nuclear enrichment program, wiping out the Jewish state, or threatening the oil supply by blocking the Straits of Hormuz. Since a large frontal assault might eventuate in the onset of WWIII, perhaps their leadership and command structure lend themselves as targets for covert forces and surgical strikes, like excising a particularly nasty tumor. Anyone know how to reach Mossad and Sayaret 13 to contract some wet work?

Another thorn in our side is Russia's Valeri Putin and his constant recommendations to replace the dollar with a basket of alternative currencies http://azizonomics.com/2012/01/27/the-shape-of-eurasia/ and the threat that poses for replacement of our fiat issue as the reserve currency of the world. Hyperinflationary repercussions would be felt at home as all of the suddenly useless American currency was repatriated. Our standard of living would plummet faster than the libido of a Viagra proponent who waited too long to take advantage of his uplifted spirit.

We are already at war, and have been for years. The opening salvos were launched stealthily, not at our borders, but at our hoarders. Someday this might be referred to as The War of the Precious Metals. China, unbeknownst to most, long ago launched Weapons of Math Destruction at our financial realm, aiming to sabotage our financial world. Coursing towards American borders are not nuclear submarines armed with cruise missiles, but massive subterfuge, whose deck flaunts weaponry intended to hurl deadly projectiles. Counterfeit silver, to be specific.

Who really knows how long China has been exporting fake silver bullion to the world? Did it begin as long ago as the Hunt Brothers induced silver spike of the late Seventy's/early Eighty's?
In any event, such an answer would be academic, but what is not moot is the acknowledgement that such fake bullion has flooded our shores. This cresting wave threatens to undermine the efforts of Americans who strive to take protective measures against dollar depreciation and the subsequent loss of purchasing power by amassing small caches of safe haven metals, silver and gold.

Although it has been discovered that fakes have been produced, again most likely originating in China, of Canadian Silver Maple Leafs, as well as American Silver Eagles, I wish today to address another niche of the silver bullion spectrum. No, not the fraction of cirulating Sunshine Mint rounds that have proven to be counterfeits, but the existence of faux Engelhard Silver Prospector one troy ounce rounds. The extent of this problem may be far more widespread than anyone realizes.

What could a foreign power such as China hope to gain by such a ploy? Well, for one, cheaper silver as these counterfeit bullion rounds and bars directly channel investment demand away from the fast diminishing supply of above ground silver stores, lowering the price as they do so by blunting demand. Meanwhile, they can nationalize the silver mined within the borders of their own country, prohibiting exportation while simultaneously increasing the tonnage of silver imports. The accuracy of the numbers reported by Chinese trade officials is debatable.

To funnel investment monies to such a desired effect would require pervasive, widespread fakery to an almost unimaginable extent. But who can reliably refute that condition doesn't already exist? Videos making a viral impact via youtube explain what to look for in order to verify suspect rounds. If they are correct, the visual clues useful for tentative preliminary identification of fakes may be present on as many as 76% of the listings available for purchase on auction site ebay. I've already discussed Type 2 Engelhard silver rounds in Ebay Prospects Poor For Silver.

If those alleging that the features of the Type 2 round are consistent only with fakes, then it is already too late to address the problem. The challenge then would become identifying which few Engelhard rounds were genuine. And see, that's a point that kind of sticks in my craw. Of all the reading that I've been doing since this issue was brought to my attention, every source quoted that Prospectors are prized as collectibles due to their scarcity. Do they seem scarce to you? My guess is that some Chinese criminal enterprize recognized an opportunity and took advantage of it. And, unfortunately, of us.

If what I've documented is true, the problem of Engelhard fakes is widespread and burgeoning. It is not a disaster which remains fixed in scope, but instead represents a pernicious danger to the financial well-being of anyone attempting to amass silver bullion as a hedge to economic Armageddon. The problem, despite acknowledgement of its existence, is not one that can be vanquished like the bite of a lethal viper with simple application of an anti-venom, but rather more akin to falling prey to a many-headed hydra with the power to petrify.

How many silver savers would continue to do so, should they discover that a significant portion of their accumulation turned out to be worthless? I imagine I could be exaggerating the extent of the problem, for how many Prospector collectors can there be, anyway? But more will develop in time, if the problem persists. Dilution of the pool of authentic Prospectors will only accelerate as more and more fakes inundate the market. http://www.ecrater.com/p/13740578/englehard-american-prospector-silver-clad Guys like this perpetuate the problem!

So what might be a pervasive problem today, if accurately assessed at 76%, will only become exacerbated as more and more fakes cascade into the markets to the point of ubiquity. You can rest assured that such toxic residue is poisoning the purity of our precious metals streams in a torrent, not a trickle.

Even the rounds available on the secondary market, from ostensibly secure online precious metals sites such as APMEX, are subject to the same hazards faced by others. The fakes are getting so good, they're fooling the experts! If I am not deceived by my failing vision, the picture below and the text that follows, from the APMEX site, pictures the "fake" Type 2 Prospector.
"Guaranteed .999-fine, these 1 oz rounds will be Engelhard only. Due to the extreme popularity of these rounds, when we come across an offering, we will set them aside so you can buy exactly this brand. With these rounds no longer being minted, they are difficult to locate in quantity. When we do have them, they typically sell out quickly. Don't wait too long as they may not be here next time you return!" http://www.apmex.com/Product/9712/1_oz_Engelhard_Prospector_Silver_Round_999_Fine.aspx

Provident Metals offers an image of the Type One Prospector, and upon close inspection the diffences are easy to see. http://www.providentmetals.com/1-oz-999-fine-silver-round-engelhard-prospector.html Note greater detail in water left of miner's pan.

When industry giants, whose expert status is nonpareil, can be gulled into listing Type 2 Prospectors that may prove to be counterfeits, can any source be trusted? Must the Engelhard Silver Prospector be relegated to the status of "yeah, it's a nice looking round, but I wouldn't touch one with a ten-foot pole, it's probably fake." I hope not, but the more that I delve into this cesspool, it seems the cistern has already been fatally contaminated. There's a turd in the silver pool, and it appears to be Chinese.

Buy Real Silver. Buy Real Gold. Save Copper. Start Now.

Ebay Prospects Poor For Silver

2012-01-28T20:48:00.000-08:00

Are you relying upon ebay as a source of small lots of silver, that you hope to win at a small premium to melt, or perhaps even below? I suspect that's the intent of several posters at two different precious metals forums I am a member of, realcent.org and bullionstacker.com. Not so much the members of the latter group, as they tend to buy, sell, and trade amongst each other, or participate in "group buys" so as to qualify for the minimum purchase requirements from online precious metals dealers, or private mints, that would otherwise present a formidable barrier to the small budget collector.

But members at realcent frequently brag of their "finds" on ebay, recounting how they were able to place a winning bid at such and such a percentage below melt, or combine any number of discounting mechanisms to realize a substantially reduced final cost. This rodomontage, more often than not, is boasting regarding silver rounds, in small lots. The American Silver Eagle is one of the most widely produced one troy ounce silver rounds, more ubiquitous than even its darling sister to the North, the Canadian Maple Leaf, and more often than not the threads are about one of these two coins.

But occasionally someone will post about a seemingly great deal they just scored on a silver round that is a bit more arcane in nature, the Engelhard Silver Prospector. Popular following the previous Hunt Brothers induced silver run-up, these rounds, produced by Engelhard from 1982 until 1987, are sought after collectibles, due to their scarcity and thus difficulty of acquisition. Did I say scarcity? Aren't there 219 individual listings on ebay right now, if you search for Engelhard Silver Prospector by each individual year of issue? And even more if you search with less stringent fields?

Did I previously mention a seemingly great deal? What you are buying on ebay might be a great deal, but for the seller, and not so the buyer. I'm not too sure about this Albert, and correct me if I'm wrong, but shouldn't silver-plated brass be a lot cheaper than silver, per troy ounce? Chances are good, no... make that very very bad, that the great deal on the Prospector you just won is only a piece of brass or copper with a 100 mill coating of silver, that looks alot like an authentic round. So much so, that it has fooled most of the people buying and selling on ebay.

If I'm right, and here I'm depending on the corroborative evidence describing these fake Prospectors, then the counterfeits appear to have less detail on them, suggesting that they were made from a mold. http://www.infobarrel.com/Beware_of_fake_silver_bullion The ripples in the water are less defined, there are fewer wrinkles in the upper right arm of the prospector, and fewer creases in the leg of his upright leather boot. One detail, which is telling in its absence, is the presence of four or five tiny horizontal ripples that descend in vertical fashion, and measure less than one millimeter, to the left of the miner's pan. According to the links posted, this detail is missing on the fakes.

So, bearing these parameters in mind, I set about to determine how many listings on ebay might be vending counterfeit Prospectors. It would be unfair to characterize these sellers as con men, as they very well might not realize they are selling suspect coins. Some of the biggest power sellers on ebay, some with positive feedback in excess of 15,000, are among the "guilty" parties. Rather than alleging that they are selling fakes, let us proceed to christen the "authentic" Prospector as Type 1, and the round with less details, described as fake by others, as Type 2.

After examination of all the images that were clear enough to differentiate Type 1 from Type 2, I was able to establish an incredibly high percentage of potential fakes being sold online. If this is true, than the Chinese criminal enterprises that are alleged to be fabricating these counterfeits have flooded the markets with them. Of the 219 listings I scrutinized, 167 are Type 2. If this is true, and this means of identification is valid to detect faux silver, then it means that greater than 76% of the Prospectors listed on ebay are fakes! You have less than a one in four chance of finding silver, if you're panning the Engelhard River on ebay!

I originally began to look into this after being alerted that fake 1984 Prospectors have been found. Videos on youtube depict individuals grinding down the silvery exterior layer on some of these suspect coins, only to find a core of brass-colored metal. But if what this reviewer found to be key to identifying the fakes (Type 2) is true http://reviews.ebay.com/Beware-of-Fake-Engelhard-Silver-Rounds-1?ugid=10000000100176930 then one can no longer trust the secondary market as a source for investment grade silver, if they be Prospectors.

Are the 1984 issues the only ones whose provenance is controversial? No. I looked at 105 listings for 1982, only four of them were authentic (Type 1). Of the 1983 listings, there was only one, and it was Type 2, even though it is wrapped in factory sealed plastic. http://www.ebay.com/itm/1982-Sealed-Eng ... 3a6fb26a8b Of the 1984 listings, there were only three Type 1 out of 37 listings. The 1985 listings revealed 35 Type 1, and 22 Type 2. 1986 showed twelve listings with the findings evenly divided, six each.

1987, the last year the silver Prospector was released by Engelhard, there were three Type 1, and four "fakes" Type 2. One of the Type 2's is in this cardboard-enclosed set disseminated by Whitman Coin Products.. Was their company duped as well, by fakes that were present even then, back in 1987? http://www.ebay.com/itm/1987-RED-BOOK-M ... 5ae10270cb Or, is there more to this story? Is it possible that there are two types of coin, both authentic?

I suspect this speculation might be true, that both types can be authentic, and that the cause of the blurred features on the Type 2 could possibly be due to tired dies late in production. I decided to conduct some experiments. I attempted to test the specific gravity of both types, following instructions on a youtube video, and my results were inconclusive. On the two coins I tested the result for both was 10.4667, pure silver should be 10.5. But this test was conducted on one of each type. Of the 21 coins that I personally had at hand all were nearly identical in wt at 31.1, or 31.2 grams. One weighed 31.3.

I conducted a ring test on these coins. Some of them, when balanced upon a fingertip and struck with another coin, produced a rich resonant timbre that endured more than a few seconds. Others produced only a short plink. Again, both types produced contradictory evidence. I don't wish to conduct destructive tests to reveal the interior of the rounds, nor do I wish to drip nitric acid upon them to see if a color change would indicate their purity. But tomorrow, I think I'll go pick up a rare earths magnet and conduct that test.

There's much more to this story than first meets the eye, and if indeed the Chinese counterfeits pervade our supply to the degree suggested by the physical description of the Type 2 round, then we are all in deep feces. How many dollars have been lost to the supply and demand equation, that would otherwise have lifted silver prices higher if demand wasn't being funneled away and being satisfied by fakes? How many small scale buyers, once discovering they were duped, will remain in the silver pits of ebay mining for more ore?

For now, until substantive examination can provide more concrete evidence, one would do well to exercise caution. Buy a different round for now, until these charges are proven invalid. Purchase directly from known, trusted online precious metals dealers. There are many reputable ones, just a few of which are APMEX, Tulving, Provident Metals, and Gainesville Coins. Make sure they offer a money-back guarantee. Follow these simple guidelines and you should be safe. For if you don't, sooner or later a true piece of junk silver will wind up in your hoard, and you will be hard pressed to get your money back. I guarantee it.

The Bearer of Bad News

2012-01-28T09:51:00.000-08:00

Recently, on BullionStacker.com, where I frequently buy, sell, and trade silver and gold with other members, it was brought to my attention that an item that I had sold might have been a counterfeit. http://reviews.ebay.com/Beware-of-Fake-Engelhard-Silver-Rounds-1?ugid=10000000100176930 I don't remember where I obtained these coins, but I deal through what I view as reputable sources. I have bought similar coins from several other members, as well as for years upon ebay, so in essence, establishing provenance is impossible. I offered a refund or an exchange, and the issue is still in discussion.

Several points arise from this. It is contingent upon you as the seller, to demonstrate integrity and offer compensation to the buyer if your reputation is important to you. I know, in my instance, I plan to continue as a member for years on the various internet venues I haunt, and I am not willing to tarnish my image and be known as a scam artist, merely for a few hundred dollars. Send back those twelve 1984 Engelhard Prospectors, I'd rather eat their cost then reap my just dessert if I didn't.

One issue that raises it's ugly head from this fiasco is this. Do I trust my buyer? How do I know he didn't get duped by someone else he has no recourse for recovery from, and is now telling me that the rounds were provided by me and me alone? On ebay, I could definitely see that being an issue, as a buyer might purchase a roll unsuspecting of their authenticity, and upon receipt merely open the lid and admire the top round without further disturbance, to avoid leaving fingerprints.

Months, or even years later, one's suspicion might become aroused when a flurry of news items regarding Chinese counterfeits hit the bullion stacking universe. You go to examine your hoard, thinking smugly "well, I know mine are all good." You weigh them, expecting the industry standard of 31.1 grams, or at worst a variance of no more than plus 0.1 gram in excess. To your horror, you realize that most if not all of your Prospectors weigh 30.9 grams or less, which could well be a tip-off they're fakes. http://www.infobarrel.com/Beware_of_fake_silver_bullion

How could this happen? Well, the counterfeits are getting that good! They're fooling dealers who don't test their silver content, or check their weight, because visually, they're nearly indistinguishable from the Real McCoy. Sure, you feel a sense of chagrin that you were duped, but even the so-called experts fall victim to the same scam, so find solace in that, if you can. But then, what does a defrauded buyer do? If he can't pinpoint who he bought them from, then will any scapegoat do? How could someone prove that you were the one who sold them the rounds?

I can foresee this becoming a problem on bidding venues like ebay. There are unscrupulous people in the world, and should someone find themselves holding the short end of the stick, how hard would it be for them to purchase a like article on ebay, then upon receipt return the counterfeits and demand a refund? As fakes become more ubiquitous, you can be sure this will occur. The seller, to maintain their feedback intact, will accept the return of the fakes and refund the money involved, never knowing, with certainty, if he is himself a subsequent victim of duplicity.

Thankfully, in this case, I have no doubt that the rounds were once mine, although I am unable myself to determine where in turn I got them from. In this instance, the buyer and I have conducted numerous transactions in good faith, and I had not the slightest inclination to doubt him when he expressed his doubts to me. Sure, I was dismayed, but there is no way a seller, wishing to maintain their integrity, can in any way challenge an honorable buyer in this situation. A resolution is in the works, one that we both consider satisfactory.

This situation raises ethical and philosophical issues. Two more points, then I will let the matter rest. You know what's ironic? These fake silver rounds are no different than Federal Reserve Notes. Backed, as they are, by no more than "the full faith and credit" of the United States Government, they circulate freely and have value. As long as you think they have worth, they do! It's only when you become disillusioned, that the individual (or the public) will scramble to abandon them.

Fakes are, beyond doubt, circulating widely without the knowledge of the public, and thus for all intents and purposes have the same value as real silver, until one is tested and determined to be counterfeit. And the same holds true with the value of our currency. It is being tested now, and found lacking in purity. Were it a coin, such debasement would be apparent to all, as since the founding of The Federal Reserve in 1913, our dollars have lost nearly 98% of their purchasing power.

If you want to enjoy a teaching opportunity with your children, search images for advertising circulars from the Twentie's and Thirtie's. You'll find hundreds of pictures of early century posters and placards, newsprint and magazine spreads that will tout the products of the day. Aside from laughing at the artwork, you can point out how inexpensive items once were. The kids will giggle and scoff, although I seriously doubt, after due consideration, that you'll feel the same. What The Fed has wrought is really no laughing matter, rather one more suited to induce nausea.

Finally, does the emergence of widespread counterfeiting offer an opportunity to some enterprising individual? Each of us is susceptible to being deceived by an authentic looking imposter. Why doesn't someone come up with a wallet-sized Identikit that could hold a gram scale and known fakes of such items as Kooks and Pandas, Koalas and Maple Leafs, Prospector's and American Silver Eagles? It would not even need to contain the actual fakes, but merely high quality images of them, side by side with real rounds, pointing out tell-tale signs of fraudulence.

I, for one, would endorse adoption of the use of such a tool, and would consider myself fortunate were I able to obtain one. The Fisch tool set http://www.fisch.co.za/home.htm renders detecting counterfeit gold coins more simple, we need someone with industry to step forward with an idea such as mine, or its derivative, so that the plethora of fakes that are circulating as silver bullion can be detected and destroyed, their fabricators identified and prosecuted for criminal acts. Too bad we couldn't as easily find someone more qualified to pilot our national helicopter, Ben.

Buy Silver. Buy Gold. Save Copper. Start Now.

Ten Silver Coins Priceless in the Eyes of Aficionados

2012-01-26T08:08:00.000-08:00

This morning I was reading a thread on BullionStacker entitled "Interesting Article." There, forum member mtforpar had posted a link to what I presumed was a submission by Adam Doolittle, published in Silver Monthly. That piece, entitled The Ten Worst Silver Coins For Investment, apparently raised the hackles of the BS pack, as mtforpar stated "I stumbled across this article tonight. I love it because I am making money by doing the exact opposite of the articles advice." I replied, taking the stance of devil's advocate, and some interesting points were raised.

Doolittle's offering, upon investigation, represents more than an author submitting an article to a online website that publishes it within an e-zine. It turns out Adam Doolittle himself is the host of Silver Monthly, which bills itself as a venue that attempts to promote intelligent investing in precious metals by connecting reader's with great writers. Their mission statement in part, states "intelligently analyzing the silver market, investments, and policies influencing these topics."

A bit of history: http://www.silvermonthly.com/about-us/ a paraphrased excerpt of which follows. In 2005, Adam Doolittle founded Silver Monthly. He felt that there were too many conspiracy theories being touted in the precious metals arena that were masquerading as professional journalism. So Silver Monthly was begun as an attempt to publish credible content regarding a variety of issues facing silver investors, such as market forces, overall economic conditions, and politics.

Doolittle's piece The 10 Worst Silver Coins for Investment
http://www.silvermonthly.com/the-10-worst-silver-coins-for-investment/ specifies ten different silver rounds, which most are familiar with. If you are an investor new to precious metals, he suggests that purchasing high-premium bullion rounds is a strategy ill-suited to increasing your net worth as rapidly as possible. He lauds the simple tactics of paying the least amount possible for your silver. Don't pay a premium, he recommends, because you'll wind up paying a high price.

The coins he nominates as candidates - primarily Perth Mint choices - are, ironically, among the favorites of collectors at Bullion Stacker. Historical price performance is available for high-grade Morgan Dollars. Similar comprehensive documentation for recently produced Government Mint issued bullion rounds is lacking. Anecdotal evidence as presented by purchase prices and completed sales on ebay could well prove inconclusive of trends due to the nature of the short time frame encompassed.

Therefore, I shall intentionally limit the focus of my rebuttal to his selection of the Morgan Dollar as one of the worst coins that investors could select by which to increase their net worth with its appreciation. The Morgan Dollar is second only to the Lincoln Cent amongst American collectors in popularity. Mr. Doolittle might as well disparage the Greek Gods. He would do well to be wary of lightning bolts in his area. They may well emanate from atop Mt. Olympus, hurled by an angry Zeus.

The Morgan dollar was designed by George T. Morgan, Assistant Chief Engraver under William Barber at that time. http://www.goldnewsletters.org/george-t-morgan/
It was produced by the United States Mint from 1878 until 1904 then, following a respite, again for one final year in 1921. The coin, with its large size and intricate designs, is considered by many numismatists as one of the finest ever placed into circulation.

Despite hundreds of millions being melted, many still exist in pristine condition, perhaps accounting for their popularity. Superior grade specimens, covering a range of years and an array of mint marks, may still be obtained at reasonable cost. Slabbed Morgan's performed reasonably well during the Hunt Brothers induced silver spike of 1979 to 1980. I've read that select key-dated coins in gem condition appreciated as much as 800%. http://www.us-coin-values-advisor.com/

This, however, was during a period when that increase was surpassed more than three-fold by the simple increase in the value of silver bullion itself. Thus, one might consider Morgan Dollars as a means of diversification within a precious metals portfolio, as opposed to their being the centerpiece and sole component of a bullion acquisition investment strategy. As silver rises in price, there will be profits to be captured at either end of the spectrum. And, in any event, those with the means to procure high dollar high dollars are by no means destitute.

Doolittle mentions expensive third party graded and slabbed Morgan dollars, contending that if a hefty premium is paid to purchase the coin, it may not do as well as simple bullion in a scenario of hyperinflation. He asserts "The problem with these coins as investments is that their numismatic premiums are unlikely to keep up with the rise in the price of silver. For example, if silver goes up 177% from $18 to $50, then a one-ounce numismatic collectible coin valued at $100 is likely to go up by only 32% to $132. The collectible coin will go up based on the silver it contains, but there’s no reason to think the numismatic premium will increase too."

Though Doolittle's reasoning appears plausible, it may in fact be specious. As long as a collector base exists, there will be an increasing demand for rare, key-date coins, in superior grade condition. This will cause their prices to increase. It's inevitable. When the hammer falls during the auction of a rare date high-grade Morgan there is often a stunned silence, before the charged atmosphere erupts spontaneously into appreciative cheers. http://www.swissamerica.com/article.php?=SID&art=04-2004/200404190935mn.txt#anchor8 Of course, should "the shit hit the fan," then all bets are off.

Mr. Doolittle, with his attack, has launched a weapon threatenening the very existence of a premium market for Morgan Dollars should too many newcomers with funds in hand, freshly induced into purchasing precious metals, take his tirade as gospel (Yahweh has spoken) and widespread adoption of His Commandment ensue. While collecting Morgan Dollars may not be the most lucrative journey one could embark upon, it represents a goal that is indeed a worthy challenge. The completion of a registry of third-party graded slabbed coins in MS65 or better condition, remains a dream few but the wealthy will realize.

The Morgan cartwheel is held sacrosanct by its many worshippers, and in choosing to target this King of the Coins, Adam, in the eyes of the congregation, has done little more than to compare unfavorably to a hungry Neanderthal, wrapped loosely in animal furs, tracking a gigantic lumbering Wooly Mammoth across snowy wastelands, poking at it with a sharpened pole, hoping to hasten its demise. CaveDude? Bro, unless you get very lucky, you're gonna starve.

Buy Silver. Buy Gold. Save Copper. Start Now.

Opportunity Lost?

2012-01-26T05:37:00.000-08:00

This Wednesday morning, January 25th, 2012, the same day that Helicopter Ben announced that The Fed will continue their accomodative ZIRP until 2014, I was watching intently on Netdania as the silver price streamed live. I like to watch a one minute refresh, as it gives me a quick indication of market direction, alerting me to the possibility of an entry point for stock trades that I've referred to, utilizing leveraged ETF's. Silver had finished Monday at $32.20, and then fifteen cents higher the following day.

I was hoping that, if a silver sell-off were to continue, as one might have inferred from overnight weakness, that spot would have drifted down to, say, $31.00. That would have provided enough incentive for me to book a trade, having retraced from a print above $32.50 in previous days. Failing that, I was watching the "witching hour" 10:00am EST, during which the New York trading desks frequently unleash the hounds of short selling, leading to a temporary rout in the silver market precipitating a swift plunge.

Had that occurred, even to the tune of just a near-vertical drop of sixty or seventy cents to $31.30, I would have been convinced that the time was ripe to implement a new position, and would have liquidated shares to pick up more of the Velocity Shares triple-leveraged silver ETF, USLV, thus to initiate another trade as detailed in Triple Dip, Double Run. I watched with mixed emotions as the unfolding tape unveiled a story that defied my expectations.

Instead of a downturn, silver took off. This was shortly after the FOMC made their announcement, and apparently traders found this further admission of accomodative policy implementation to be supportive of a weak dollar policy, and thus a favorable environment for precious metals investment. It turns out silver never hit my target, dropping only to an intraday low of $31.89 before it headed North with a vengeance. At today's bottom USLV could have been purchased at $39.68, had one's timing been perfect. More likely, one would have been fortunate to pick up shares at $39.80.

In anticipation, I had readied one portfolio for liquidation of a few positions. I had been prepared to sell some shares of a few various silver miners. These included my holdings of Pan American Silver (250 shares), a portion of my AGQ (327 shares), as well as my stakes in Fortuna Silver Mines (308 shares), Impact Silver (914 shares), another bloc of Silver Wheaton (319 shares), and my entire position in Tahoe Resources (114 shares). Liquidating these shares would have generated $38,236. Subtracting $56 in trading expenses I could have purchased 959 new shares of USLV at the aforementioned price.

I missed this opportunity because I asked too much of the market, and you don't always get what you want. Had I acknowledged that spot had retraced a respectable amount, and made those sales enabling that purchase, I would have shown a gain, by the end of trading that day, of almost $6,396. Silver went on to rise $1.20, and USLV demonstrated a commensurately healthy triple-leveraged return of 12.44%. But it's simplistic to just say I lost the chance to earn $6,396. We need to examine the performance of the equities I kept more closely.

These surged nicely as well, albeit not with the strength of USLV. At 10:00am EST, had I triggered the trades, AGQ shares were $53.43. They finished the day at $59.39, a gain of 8.23%. Liquidating those shares would have obtained $17471.61 for me. Holding them instead, their value increased to $19,420.53. FSM was $6.10 per share and increased to $6.54, a gain of 6.34%. Selling those would have realized $1878.80. Holding them resulted in a gain to $2,014.32

ISVLF shares would have netted $1.55. Instead, they rose to $1.68, a 5.12% gain. Their sale initially would have raised $1416.70. Their retention resulted in $1,535.32. PAAS shares were worth $21.18 in the morning, but by mid-afternoon they had climbed to $22.37, a gain of 2.38%. They grew in value from $5295.00 to $5592.50. SLW rose from $31.45 to $34.88, a 7.99% gain. Their value increased from $10032.55 to $11126.72. THOEF was the strongest of this handfull, rising from $18.79 per share to $21.01, a hardy gain of 11.57%. Their value rose from $2142.06 to $2395.14.

So what is the point of all this number crunching? Isn't it all just a waste of time? "No," I contend, because sometimes a review of the numbers will elucidate previously unconsidered attributes of the trade not exercised, which can help one to evaluate the potential of possible trade executions in the future. Let's look at what the numbers have to reveal. In a previous article, A Good Parking Place, I promoted the thesis that selecting cash as a place to wait for value buys can be a poor choice.

Some stock market gurus advise never to chase price, to let the stock come back to you, thus never to "buy at market." I would have sold those positions and had a balance of $38,236 with which to buy new shares. But had I followed the premise of never buy at market, and placed a limit buy order, say at $38.60 for 964 shares, the order never would have triggered as, for the remainder of the day, the entry point into USLV became increasingly more costly. Sitting in cash would have cost $6375.96 in opportunity lost.

But what actually did transpire? By retaining the original shares considered for sale, their value increased to $41,991.53, a gain of $3754.81, representative of a 9.61% increase. So the opportunity lost expense was reduced to $2621.15. Reviewing these numbers and analyzing their meaning imparts a message. Triple-leveraged returns on a nice silver up day, can be very robust. I'm talking huge, Jorge!

It's hard to argue with success. Triple Dip, Double Run has very real potential, particularly if you are alert to market movements and can employ the strategy at opportune moments. Today was not even ideal to play the strategy, and yet look at what unfolded. Imagine how much greater the returns can be on days when immense pressure is exerted upon the market to suppress prices, and serendipity allows you the good fortune to make timely trades. Why (pause for effect) you could make a good fortune!

Buy Silver. Buy Gold. Save Copper. Start Now.

Retarding Resource Depletion

2012-01-26T03:36:00.000-08:00

Recently, in another piece entitled Ten Silver Coins Priceless in the Eyes of Aficionados, I took the side of detractors of an article published in Silver Monthly, submitted by Adam Doolittle. That submission, entitled The Ten Worst Silver Coins For Investment http://www.silvermonthly.com/the-10-worst-silver-coins-for-investment/ seemed to raise the defensive nature of some forum members at an internet site I am proud to claim membership to as well, BullionStacker.com.

BullionStacker is comprised mostly of folks who are long-established in the cyberworld as advocates of investments in safe-haven metals, silver and gold, platinum and palladium, as a means of preserving their purchasing power. It is vital that one protect themselves in this fashion, as on a worldwide basis governments, each with their own rationale, race each other in depreciating their currencies, inflating the money supply with global simultaneity, firing the first shots in what Jim Rickards likes to term The Currency Wars.

Unfortunately, the victims are often their own citizenry, particularly the middle class. This socioeconomic group suffers constant attrition, it's numbers shorn as constituents are lost to unemployment and underemployment, savings are exhausted, or pensioners discover their fixed incomes insufficient to cover ever-expanding expenses. Too often, the best formulated plans of those who have just retired, or planned to soon do so, are disrupted by poor investment choices or dismal returns within their 401K's.

These individuals are then faced with alternatives, none of them pleasant. They can remain in the workforce, health permitting, should they enjoy the luxury of doing so at their place of employment. They can delay, sometimes interminably, their target deadline for full retirement. Or, they can attempt to return to the workplace in order to supplement their meager subsistence, perhaps as one of those cheerful blue-haired elderly greeters at Walmart who, were you able to look past their friendly mien, one might be painfully dismayed to discover their financial straits.

But, I digress. The point I want to make today is that there is a unforeseen consequence to individuals purchasing specialty silver coins from private and government mints, such as the Royal Canadian Mint, or the Perth Mint of Australia. What qualifies a coin, in my estimation, as specialty in nature? One that is produced in limited number to increase its allure due to novelty, one that is often classified as exotic, picturing an animal indigenous only to the region of the Mint fabricating it, and one, which for marketing reasons, carries a hefty premium above the melt value of the silver content of the coin.

I need not detail individual attributes of the coins of which Mr. Doolittle relates, as most are familiar with the perquisities of Kooks and Pandas, Koalas, Grizzlies, Wolves, and Cougars. The list could extend beyond, to encompass New Zealand Taku Turtles, Bolivian Andean Cats or Blue Macaws, as well as any number of limited item geographically related national park themed items produced by our own United States Mint. Any time there is a piece produced by a public or private mint, that carries an onerous premium to melt, there will be ramifications.

What might those ramifications be? Why only that one could spend their money more strategically, if their intent was to benefit from an ultimate rise in the price of silver increasing the value of their previously acquired physical hoard. You see, Gomer, there is only a limited amount of money chasing a diminishing above-ground supply of silver, whether fabricated in the form of small bars or coin to stimulate investor demand, or as one thousand ounce bars of .9999 purity to service the needs of industrial users.

What happens to the eventual resource depletion of silver, when people pay bloated premiums on one troy ounce silver rounds produced by mints? It retards the attenuation of supply. The off-take of silver from the market is slowed. This is counter-productive if one's hope is that a steady acquisition of small amounts of silver, by a burgeoning cadre of citizens that circumnavigate the globe, all coveting the lustruous noble element, will eventually deplete stocks and thereby cause a resultant price rise.

Spending extra money on premiums slows the eventual extinction of silver, and will prove deleterious to the individual attempting to get the most for their money. Silver has been estimated, by the GFMS, to have less than a decade's supply of metal retained in the Earth's crust at present rates of extraction. Why would you not want to pay as little premium as possible to obtain the wealth-safeguarding status that silver confers upon its holders?

It's really no different than the claims made by detractors of the various silver ETF's, such as the iShares Silver Trust SLV, or the ETFS Silver Fund SIVR. They claim that money funneled into those exchange-traded funds, which are intended to track the price performance of silver, with such emulation affording one the opportunity to realize paper profits in various venues, does nothing to promote the acceleration of price rise.

Instead, this inflow of funds is, in reality, siphoned away, diminishing demand rather than enhancing it. There are many, Jason Hommel and Ted Butler among them, who assert that the various ETF's do not even hold the silver they purport to stockpile as backing to the shares. This money would be better spent, as Max Keiser suggests, by people withdrawing their contributions to such entities and purchasing tangible physical silver that they then take possession of.

Some like to opine "if you don't hold it, you don't own it." If you were constrained, due to financial limitations, to purchasing only a few hundred dollars worth of silver each month, wouldn't you far prefer to obtain more ounces for your money? By amassing a store of wealth that increased considerably faster in size, measured by number of ounces, rather than an ostensible shadow worth variable denoted by collector's avarice, wherein liquidity might limit demand?

Due to the reasons listed, I think it's indisputable. It just makes more sense to get the most for your money, particularly for those new to accumulating silver ounces. Why don't we reverse and modify that maxim? Wouldn't it be more conducive to all of our goals if everyone were to realize that "if you don't own it (high-premium silver rounds), you hold more of it?" To borrow from Ultimate Cage Fighting, I know I'd much prefer to survive the melee for three rounds, rather than get beaten by a devastating first silver round knock-out.

Buy Silver. Buy Gold. Save Copper. Start Now.

You Always Hurt The Ones You Love

2012-01-25T04:34:00.000-08:00

County Limerick, in Ireland, draws no small bit of fame due to the consensus that a poetic form of jesting, the limerick, derives from there. Widely heralded as an example of bawdy rhymes, in which the first, second, and fifth line rhyme with one another, as well as the third and fourth, they are often dismissed as mere doggerel. But those who do so risk writing off a form that has its devotees, moreso in praise of the laughter evoked, rather than their sober intent and lofty musings.

Here then, in honor of that tradition, are some that were crafted recently to bring notice upon realcent.org forum members, who, in all likelihood, would have preferred to remain outside this particular circle of limelight. With the intent of providing a laugh for those who know them best, and recording for posterity these five-line jokes, then let us now expose to pillory some of these fine folks. If perusing these mockeries stimulates mirth, why not visit realcent.org and lurk or join for more fun yet?

Doc Chris Rodebaugh

There once was a Doc named Rodebaugh
Who prized Morgans more than cole slaw
But the long arm of the law
Reached forth with its claw
When Chris peddled a counterfeit flaw

There once was a Doc named Rodebaugh
Who preferred slabbed St. Gauden's over raw
But then he learned he'd been reamed
By a fake gold-colored coin scheme
Now third party grading sticks in his craw

There once was a Doc named Rodebaugh
Who wielded his craft with dental saw
They thought they were getting a filling
As their gold fillings he was stealing
Which left quite a hole in each patient's jaw

Once Doc found his woman with a Jamaican
In six feet of water covering Caribbean sand
It's a good thing that clown
Was already half-drowned
Or Rodie might have Aruba'd that man

Beauanderos

There once was an old geezer named Ray
Who was practically giving his silver away
It was really feedback he was after
Which accounts for all the laughter
As members wondered what's on sale today?

Txbullion

Txbullion's real name is Jack
And it's pennies that he loves to stack
In fact he's got so much copper
He may be richer than Cyndi Lauper
Is it any surprize he's lost track?

Corsair

Corsair's a student some say
Who in Calculus just got an A
An accomplishment to be proud of
Till you learn extra credit was allowed
I hope he didn't do that for the grade?

Market Harmony

Market Harmony is a fellow named Mike
Who enjoys it when precious metals spike
Women melt in his arms, too
Or at least their gold charms do
As he re-molds them into something he likes

Kidman232

Adam Rice is a fairly nice guy
I'm surprized you would have to ask why
With a name like the kidman
Even Jamaicans urge "Bid, Mon!"
So most auctions he loses, but he tries

Thogey

Eric (Thogey) has a business doing lawns
But it's not always foreign silver he pawns
Once he went in for some money
With a red package that was runny
The broker yelled "that's a toe! Sew it back on!"

68camaro

68camaro is a great guy named Rich
Rates the markets, better than Fitch
On the rise of metals I'm told
He favors silver over gold
If he's wrong, well "ain't life a bitch?"

Sheikh_yer_Bu'_Tay

Sheikh yer Bu Tay repairs roofs in the rain
Covering holes so that they will drain
It's actually quite frightening
He works faster than lightning
But when he doesn't, "Oh Lord, the pain!"

Jonflyfish

Jonflyfish loves to explain
With PM's up or down how he gains
Silver and gold will now either
Hold, advance, or retreat here
Ain't it nice to have them kinda brains?

twentybux

Scott was a consistent silver buyer
And each time it would seem to rise higher
Till the day that it dove as he wept
Taking his treasure trove to new depths
Proving dollar cost averaging is a lie here

ZOO

On realcent there's a guy with a handle of Z00
Often reader's would question his comments with "Who?"
"too much time on their hands," he chided the Boards
But with Markets closed we can't add to our hoards
So let's ease up, folks, remember... he's a Noob

Country

A Gentleman resides here named Country
Who Excels at accounting your hunts, free
For spare time he is lacking
After all of that tracking
"But for me," he explains "it is fun, see?"

Nickeless

Chad likes to prep for the day
When TSHTF as they say
"Could you can this, Mr. Nickelless?"
"I'm not sure, might be ticklish"
"But my herring are pickled fish, Oy Vey!"

Deal

Gun Nuts gotta love this Deal
No Eastern bloc rip-offs, they're real
If you're looking for a gun
His forum is the one
As thieves would say "it's a steal!"

rexmerdinus

There's a guy with a name of Rexmerdinus
Seems it rhymes, almost, with sex murderuh's
Whom the cattle on the trail
With a question will assail
"Is that Tex," moo moo, "a herdin' us?"

rastatodd

There's another fella named Rastatodd
Who, if he fished, could be called Castarod
But owning an Italian Deli would be best
As patrons, rubbing bellies, could then jest
"This is delicious, who made this pasta, God?"

uthminsta

Aaron is uthminsta in disguise
Heck, you want to rhyme that, you try
During auctions, instead of bidding
He asks questions, I'm not kidding
Instead of bid increments he'll post "Why?"

natsb88

Natsb88 is the one with the store
That sells copper bars, silver and more
An engineering student in school
He now follows the Golden Rule's
That should ensure business success, fer shore

slickeast

There once was a man named Peter
Took a taxi to his girlfriend's to meet her
In her bedroom Slickeast
Found her infected, with yeast
So he proceeded to bake, rather than eat her

Newton7

There once was a guy Newton7
Roamed the Forum as late as eleven
Posting "There is money, I think,
Mostly sorting Copper from Zinc,
It's like catching pennies from Heaven"

barrytrot

There's an ethical member, Barrytrot
Who promotes Biblical precepts and thought
Like morals, of wrong and right
Beliefs, the importance of polite
It would be cool if Eternity was not very hot

justj2k78

justj2k78 is jumbled up code for just Jay
A psych nurse who can't wait to get paid
This guy loves his work
For Kooks are his quirk
And for Silver Eagles he'll happily trade

NHsorter

Jason the New Hampshire sorter
Dwells not far from Poverty's border
Constantly increasing his hoard
Despite what he can afford
"I'll pay, somehow, for silver I order"

Surething

Joe knows a Surething when he sees one
The Fed's printing is nothing but treason
"By the time we hyperinflate
Fiat currency will deflate"
So he's buying silver now with good reason

tractorman

Trent is a man out standing in his field
Producing amazing crop yields
He's called Tractorman
It's a bigger factor than
The horse-driven plows Amish wield

theshoenlebens

Theshoenlebens is really named Chris
From frequent dealings I am positive of this
But it seems there's a crisis
He can't pay for his license
Though most Weekend Sale Silver he claims as his

CardsnCoins

There's an avid roll hunter named CardsnCoins
Searching for silver from New York to Des Moines
To boxes of dimes he's addicted
Seems he's OCD afflicted
Precious Metals Anonymous he'll soon need to join.

ScottyTX

ScottyTx is, you guessed it, named Scotty
Who likes to sell coins to us that he got free
Says he works on a rig
But that's not his main gig
"The big money is made on Craigslist below spot, see?"

JadeDragon

JadeDragon is too hard to rhyme
So I'll use Cameron, instead, this one time
If a problem is designed
A solution he will find
And publish an E-how for inquiring minds

Silver Addict

There's a Big Dog on this site sniffing our butts
Seems some show dogs prefer mixing with mutts
Silver Addict, you see,
Yearns, at times to run free
From BS duties, but don't worry David, you'll adjust

Highroller12345

Highroller is Adam, he's The Man
To store copper till he's rich, that's the plan
As the prices climb higher
A bigger warehouse he'll acquire
So his supply can then satisfy the demand

oakair

Andres goes by the name of Oakair
Moved because of all the old folk there
From Florida's sunny shores pretty
To Denver's Mile High City
Beats LA, with it's smog he'd have choked there

neilgin1

I wonder where Neilgin is?
Hope he's not wasted on too many gin fizz
I've enjoyed in the past
His posts, as long as they last,
Could be he's fishin and reeling in his

RichardPenny43

I don't even know this dude Richard Penny
But he's limericking along with the best of many
But anyone who likes NASCAR
Earns himself a gold star
As long I don't have to pay for that award, if any

blackrabbit

There's a guy in CA named blackrabbit
Who swaps MJ to support his crack habit
His parents failed, you see
To raise him religiously
But they blame all of that on a slack Abbot

NDFarmer

In the Dakota's there lives NDFarmer
And Ron, it seems is quite the charmer
Told the wife, "That copper ain't wert much
Just a few thousand boxes or such"
Because he didn't want to alarm her

Dumpster Diver

There's a salvage man here, Dumpster Diver
Who's as ingenious at scrounging as McGyver
But with "the touch" that he's got
He avoids much copper that is hot
It's just at parties that he's the live wire, sir

Copper Catcher

Copper Catcher holds this famed record thus far
For KSA Mystery Box's contents he's the star
Who could ever believe
That they would receive
A one hundred ounce Engelhard bar?!!!

Delaware Jack

"If you can read this then you are in range here"
And it's evident to me that sign spells danger
So with Delaware Jack
You just better keep track
Of the difference tween live friends and dead strangers

Aristobolus

An unorthodox cross-dressing priest; Aristobolus
Offered turkey dinners at Thanksgiving that cried "Gobble us"
He continued in this service
Till He actually grew nervous
That the spike heels he wore "might just hobble us"

Chief

Austin wasn't really a grump, thanks
It's just that an undeserved bump ranks
So when they told Chief "no more"
"I'll get even," he swore
"I'll turn them into one of my dump banks"

CUBaker

There was a stacker once named CU Baker
A fan, can you believe, of the Lakers?
When LA slid into the ocean
Due to seismic commotion
They then renamed the team The Quakers

PeacePeople

Mike's from Utah, he's known as Peace People
And he'd rather not support their fees steep, he'll
Avoid sites like ebay
And to paypal he'll say
"Keep your gifts, I ain't helpin' you fleece sheeple"

OneBiteAtATime

He's got a cartoon avatar, Woody Woodpecker
You'd imagine, too, that there'd be a Shrek here
Is this rhyme, or a crime?
For OneBiteAtATime
To me sounds just like Hannibal Lecter

agmoose

How far can the gold bull climb?
To unimaginable heights given time
But if you think it's too late
Board the agmoose that waits
Bet with Keith on silver troy ounces .999

dakota1955

Dakota1955
Was the number of Sioux braves in the tribe
Little Bighorn, General Custer
Battle's blood remains dust there
Guess they wanted them all dead, not alive

treetop

Treetop's a nice guy named Zac
Who moved, anticipating an urban attack
This once NM high plains drifter
Couldn't have uprooted much swifter
If he were pulling weeds in his garden out back

TheJonasCollegeFund

Notre Dame, Indiana, or Purdue
Rob Stapleton has big goals, that's no news
So he's investing now for his son
With TheJonasCollegeFund
Hoping one day all these school dreams come true

henrysmedford

Up North, in Oregon's forested Beaver State
There resides a family of cent sorters of late
Henrysmedford is their name
Theodore shares Franklin's tv fame
For saving two hundred thousand coppers to date

Roadrunner

The Roadrunner's a fleet-footed bird
At least that's what I've always heard
To outpace inflation
He invests in safe havens
Till they reach levels that today seem absurd

saabman

We've a member on the realcent forum named the saabman
Who, were he a baseball fan, could quote stats of Ty Cobb, and
His avatar "don't tread on me"
Promoted Colonial Liberty
And that snake? It's scarier than McQueen screaming "it's the Blob, man!"

Buy Silver. Buy Gold. Save Copper. Start Now.

A Good Parking Place

2012-01-20T10:54:00.000-08:00

Single women have a joke they like to share about men. "They're like parking spaces," they laugh, "the good ones are all taken, and the ones that are left over are all handicapped." While I'm not here today to bash on men, perhaps the distaff side has a point worth considering. What is a good parking space within one's portfolio? I'd like to explore the thesis that you might consider forgetting cash. There are better ways to park your assets that will put you closer to your destination.

What might that destination be? Why, what else than increasing the worth of your portfolio? And how might you go about that? By successfully obeying and performing the mantra of buy low, sell high. But when you sell, where do you go? Do you leave it in cash, waiting for the next opportunity in equities that catches your eye as a value buy? I'd like to suggest an alternative, that might have the potential for steadier, incremental growth, rather than waiting for a chance at larger gains that may not appear.

One problem with selling in an upward-trending market is that the equities you dispose of, taking profits in cash, may continue their uptrend, robbing you of further potential gains. As well, anything that you might hope to invest those profits in could, as well, become commensurately more expensive. That said, there is sage wisdom in the saying trader's like to bandy about, "pigs get fat, but hogs get slaughtered." Another one is "no one ever went broke taking a profit."

So is there a happy medium? Should you be satisfied with "settling" for a fairly hefty percentage gain, and not hoping to capture every point of the move? One of the greatest trader's in history, Jesse Livermore, did exactly that. He didn't try to time every market bottom, or top, with exactitude, but stated "I'm happy if I can capture eighty percent of the move. If I miss the bottom or the top by ten percent, that's okay."

This tells me it's prudent to take some profits off the table occasionally, and indeed, those times when I got gluttonous for more gains, and started "counting the paper profits" were those same instances when the market reverted to means and stole those gains back. So, I have learned it's better to hit for multiple singles, repeatedly, rather than hope for a home run. Today I put that tactic in to practice, and let me describe the results.

In another column, Triple Dip, Double Run, I explained my rationale for attempting to optimize my portfolio's performance using leveraged ETF's. As my many columns suggest, I am a confirmed hard money, silver and gold, advocate, and I am convicted that we are presently witnessing what will become one of the biggest all-time bull markets in history. When the precious metals run is done, values will be at many multiples of their present levels. And this race is a marathon, barely begun. We have not yet reached midpoint, and the sprint to the finish will be something incredible to view.

Alright, let's get to the point. Last week, five trading days ago to be precise, I purchased more of the triple-leveraged Velocity Shares Silver ETF USLV. But I decided to try something different this time. In the past month or so, I had successfully liquidated shares of ProShares double-leveraged Silver ETF AGQ, to provide cash for further shares of USLV, each time that there appeared to be a manipulated sell-off in silver that resulted in a quick, dramatic plunge in price.

My thinking was that, in this upward-trending market, the price would quickly revert to it's prior levels, and that from it's purchase price, USLV would outperform AGQ. This theory, so far in practice, has proven valid. In the past, when I would sell AGQ to purchase USLV, and then subsequently sell USLV to repurchase AGQ, each time I would have more AGQ shares than I had started with. This would "reload the gun" so to speak, for further iterations of the strategy.

This time, rather than sell more AGQ, I decided to sell some of my mining equities instead. My thinking was that the miner's, as a rule, are not so volatile as silver bullion, sometimes lagging by days any sizable gains or losses, and that very stability might represent an unexamined potential for further gains. I decided to explore that option. Within two accounts, on January 13, 2012, I sold shares of First Majestic, Alexco Resources, Hecla Mining, Silvercorp, Mag Silver Corp, Silver Wheaton, Endeavor Silver Corp, Great Panther Silver Limited, and Global X Silver Miners ETF.

I was able to utilize those funds, as well as those obtained by selling a further small block of AGQ, to purchase 2946 shares of USLV at an average cost of $33.09. So how did that little experiment perform? These trades are performed within two self-directed 401K accounts, and require three days to settle, or else you can be in danger of committing a "good faith" violation by selling equities that have not yet settled. Those trades all cleared on January 19, 2012.

I honestly expected the markets to plunge today, the 20th, as it is the option's expiry date for silver and gold futures, and usually da boyz will come in with a heavy hand and kill any attempt at a rally. I watched perhaps thirty minutes of them attempting to cap any rally beyond a spot price of $31.00, before they finally threw in the towel. And then the spot price was off to the races. USLV quickly climbed past $39.50, triggering my sell order before I could rescind it. As I write this, the high print for the day so far has been $41.63.

So, in hindsight, I could have captured a larger gain, but I am disinclined to get slaughtered for being a hog. Had I reset my sell orders to $40.50 as was my intention, then the price might have reached $40.49 and then sank back well below $39.50. In my book, a $6.41 per share gain in one week is good enough. I took those gains and repurchased the mining equities I had sold a week earlier. I bought in the same proportion as I had sold. And what were the results?

When I started, I had 890 shares of AG, I ended up with 1077. I sold 123 shares of AGQ and repurchased 130. I had 1628 shares of EXK, and wound up with 1924. I started with 1188 shares of HL and ended with 1369. I began with 688 shares of MVG and finished with 866. Originally I held 643 shares of SLW, I now hold 752. I had 1601 shares of SVM, I now have 1857. I started with 866 shares of AXU, I now have 1039. Began GPL with 2014, now have 2254. And finally, SIL. Began with 338, now 386.

I gave away some topside potential by selling early, still a profit in excess of $18,000 isn't bad for one week. I now have considerably more shares of each of the miners than when I began, and I believe they hold greater potential to show further gains than I could have realized by sitting in cash and hoping for a pullback. In any event, I believe an investment in currently undervalued mining share equities affords a much better parking space than does cash. I'm now positioned to repeat the maneuver, given that, sooner or later, da boyz will provide another opportunity.

I believe that "churning" one's account, in this fashion, provides the potential, with close monitoring, to optimize one's profits, certainly to a greater extent than merely employing a buy and hold philosophy, or by taking a more active role and selling high, becoming sidelined in cash, then praying for a pullback to re-enter your positions. Once silver gathers a head of steam this time, there's no telling how far the train could surge up the tracks, leaving those parked in cash stranded at the station. If you've already got physical, Elmo, it's time to buy the miners. Forget cash, unless you prefer parking in a handicapped spot.

Buy Silver. Buy Gold. Save Copper. Start Now.

Triple Dip, Double Run

2012-01-11T04:06:00.000-08:00

Did you ever see The Sting? This 1973 drama, starring Paul Newman, Robert Redford, and Robert Shaw is one of my all-time favorites. The script gives life to revenge-seeking con men who plot to redress a wrong by swindling a small fortune from a crooked bankster. The score, written by Marvin Hamlisch, helped popularize The Entertainer. The film won several Academy Awards, among them best picture, and it seemed as if nearly everyone was whistling Scott Joplin's classic 1902 piano ragtime tune.

In case you're not familiar with its plot elements, the two con men, Newman and Redford, devise a means to rig a poker game. After a series of hands, they entice Shaw to basically go "all in," as they say in the parlance, stealing a huge pot from him. I won't ruin the movie for you by revealing all the twists and turns, as it is well worth viewing this old classic if you've yet to have the pleasure. It was one of the movies, along with Butch Cassidy and the Sundance Kid, that helped bolster the young Robert Redford's incredible screen popularity at the time.

I'm opening with these movie memories to familiarize the unitiated to an idea. We're all attempting to win at a losing game. The game seems to be hosted by the players with the biggest bankrolls, who swiftly proceed to fleece the naive. When hands are dealt by the same players who hold all the cards, how can they lose? It doesn't take long to be driven out of the betting parlor when your stack of chips dwindles in size to the point where you can no longer be competitive.

When you attempt to play the silver futures market, the profits can be immense, but they're unlikely to be yours. As Ted Butler has long demonstrated, the COMEX appears to be rigged so that the fix favors bullion bank JPMorgan et al. Time after time silver, amount favorable public sentiment, gathers momentum and begins to run strongly in a seemingly unstoppable forward charge. Then the unthinkable happens and the advance is thwarted, often in dramatic fashion. Witness the carnage of the 30% waterfall plunge induced by four sequential CME margin hikes, after silver touched a nominal high in May, 2011.

So, if investing in silver futures appears to be a losing proposition, is there a bet you can place that has a higher likelihood of success? I think I've devised just such a wager. So far, implementing this strategy has resulted in three separate occasions duing which I've been able to scrape some of the winner's pot in my own direction. If the player's are going to cheat, you might as well look over their shoulder to glimpse their cards, helping you determine when to raise the stakes of your own bets.

How is it that I'm convinced that the silver, and gold, markets are fixed? I've long felt that there was market manipulation occuring in silver pricing, but lacked the definitive proof to corroborate that suspicion. It's not always easy to identify patterns utilizing only the three day spot pricing charts provided by Kitco. But thanks to an article published by Dimitri Speck, the link of which follows:
http://www.safehaven.com/article/23240/price-irregularities-in-the-silver-market I can elucidate the points I am about to present.

Study the following chart, which shows on a minute-to-minute basis, over an eleven-year period, the trading patterns that result in pricing changes of spot silver.

As you can see, there is a pattern that occurs on a repetitive basis. This observation is not to imply with certainty of accuracy that these movements will occur daily with the exact same magnitude, but that enough similarities have occurred repeatedly, in a consistent manner within these small windows of time, that it allows for a predictive capability. And that prediction is this; if the silver market is showing a strong rise from the open, at 10:00 am the New York trading desks will implement strategies that result in capping the price rise and suffocating the rally, frequently driving spot down dramatically.

This same pattern repeats, to a smaller degree, two hours later, which I won't delve into as Speck covers the phenomena in depth in his article. So how do we benefit from this advance knowledge? If one could wager with fair certainty that an event were about to occur, knowing that outcome in advance could prove profitable if one understood various means of implementing trades to capitalize on such movements. I'm certain that more advanced techniques exist, but here is a simple one which I've devised.

I have yet to develope the expertise to play options, so what I've done instead is to utilize leveraged ETF's. I use ProShares AGQ, which is structured to emulate double the performance of silver, and USLV, which is Velocity Shares entry into the field with triple exposure to silver pricing movements. There also exist double and triple inverse ETF's, but I get enough of an adrenalin rush by watching the horses race around the track, without feeling the need to jockey my own mount and reverse field at times, risking getting trampled in the process. I won't bet against silver by using inverse leverage.

What I will do is this. I call my strategy Triple Dip, Double Run, and no, that's not a flavor at Baskin Robbins. I am convicted that the long term trend of silver is upwards, given time that no one, if honest, can accurately predict the duration of, to levels many multiples of its present value. And so, I am confident that any drop in the price of silver will be temporary in nature, and presents an opportunity to further my gains. Were these not plays designed for paper profits within a self-directed 401k, in a physical sense they would be considered "buying the dip."

So what I do is this. At any given time, I am substantially invested in AGQ, poised to outperform silver on a two to one basis as the price climbs (runs). If, at one of the times that the charts illuminate as subject to manipulation, the price is forced down in dramatic fashion, then I liquidate shares of AGQ to purchase USLV. I do this as rapidly as possible, not hoping to further my gains by trying to outguess the direction of furthur pricing movements after my sale. If a significant movement has already occurred, that's sufficient for me.

So how does this work? If AGQ is trading at a certain value and the price plunges, then it's value drops as well, twice the distance of silver's loss. But USLV will drop three times the loss. So by acquiring USLV on troughs, I hope to regain the lost ground in faster fashion then merely remaining parked in AGQ the entire time. Yes, this strategy risks further downside losses if the market continues to bleed, that is why you use a tranche system of trading, only commiting a fraction of your capital at each trade.

When the market bottoms and starts once more to ascend, you can calculate how much USLV will need to regain in value in order to sell those shares and to repurchase your starting position of AGQ. But there would be no gain if you merely replaced the shares. What you do is wait until there is a strong upward movement, which can occur on short-covering days, and then sell your USLV to repurchase AGQ.

I have now done this three times, and each time has resulted in the acquisition of ten to twenty-five more shares of AGQ then the number with which I began. Since such movements, the drops and recoveries producing opportunities affording profitability, can occur within a period as short as three days or less, one can understand that simply repeating this process will lead to gradual accrual of many more shares of AGQ then one would have held through a long term buy and hold philosophy.

One could, if confident enough of silver's ultimate rise, just buy USLV and hold it for the long term, hoping to capitalize on the triple leverage in an upward-trending market. But for all that I feel assured of silver's destination, I know that the road will be long and uneven, filled with potholes. For that reason, I myself do not utilize USLV on a permanent basis to bet on optimism, I use it instead to bet against pessimism. Selling your USLV and repurchasing AGQ allows you the option of repeating the process, each time garnishing greater share count.

There is a danger to these tactics, and that is that silver will drop, and continue dropping, long enough that your triple exposure with inverse leverage could severely cripple the value of your accounts. As yet, this has not happened to me, although November 2011 was a rough ride requiring indomitable stoicism. I am offering this idea for consideration only, should you adopt it the risk is yours alone. It can be extremely harrowing betting on an ETF that will triple your losses in a down market. It is not for the faint of heart.

But I am confident that silver, if suppressed in price, can not remain so for long. The markets we are enduring are managed by the bullion banks to their advantage, but Eric Sprott for one feels there is just too much physical demand for silver for the banksters to do so in perpetuity. In time, physical depletion of silver will cause the pricing of silver to revert to basic supply and demand fundamentals, rather than the artificial prices resulting from the criminal banking cartel's artifice.

Playing at the table with the Big Boys can be fun if you've marked the cards. If JPMorgan and HSBC are going to cheat and continue to suppress pricing, with the apparent blessing of regulatory agencies such as the CFTC, then you might as well attempt to profit from their oft-times predictable raids. It could be years before they are booted as the dealers, so you might as well benefit from foreknowledge of their rules to play the silver game, but to your advantage.

The whole venture is akin to a rollercoaster ride, one that can thrill with its breath-taking course. Successfully employing Triple Dip, Double Run enables you to feel safely buckled in, secure that any market offers opportunities for profit. You'll enjoy the ride a lot more, knowing that the next plunge could well bring an "Oh Boy" grin to your face, rather than a "not again" grimace.

Buy Silver. Buy Gold. Save Copper. Start Now.

China Syndrome

2012-01-08T17:25:00.000-08:00

In 1979, during a previous cycle when silver was coincidentally undergoing similar dramatic pricing changes, The China Syndrome - starring Jack Lemmon, Michael Douglas, and Jane Fonda - hit the cinemas portraying a chain reaction of events that occur when a nuclear facility approaches meltdown. The movie was an absorbing dramatic suspense thriller made more so when, with chilling prescience, Three Mile Island underwent a similar episode only twelve days following the film's release.

What would happen today if, unrecognized by most, we were again a mere fortnight away from a similar holocaust? Not an imagined event, as this movie envisioned in such timely fashion. Nor a real nuclear catastrophe like the aftermath of the Japanese tsunami-induced Fukushima or Russia's Chernobyl. But, instead, an epic economic disaster of such immense proportion that it could permanently mar the financial landscapes on which it's effects were unleashed? How might the world of global fiat currencies appear if the dollar lost it's role as reserve currency?

Ahhh, you think. Another lecture on the dreaded consequences of the dollar no longer being the preeminent global fiat currency. What repercussions might be felt if people lost confidence in the power of the almighty buck? In hindsight, almost overnight it would seem, the purchasing power of individuals living in nations whose economies were based on the dollar would dwindle with ever-increasing rapidity. Such consequences have been debated ad nauseum, yet one might wonder, are there further ramifications that we might foresee, so as to avert the outcome?

What happens when populations lose faith in their currencies? For this topic extends far beyond the fate of the dollar to encompass the destiny of all global fiat currencies, none of which are currently backed by anything beyond an ironic pledge of "the full faith and credit" of their respective governments as to their worth. Maybe a more apt adjective would be a moronic pledge, if in our cumulative ignorance, amidst a global "race to the bottom" to depreciate, we continue to worship such fallen ideals.

Let's get to the point, for it is encumbent upon the individual who desires to preserve their purchasing power in this tableau of dollar attenuation to act with urgency. Again, I repeat the question. What happens when people lose faith in their currency? They spend it as fast as they can, securing items of real value, that they come suddenly to recognize will only continue to rise exponentially in cost, when denominated in the increasingly worthless paper notes carried in their wallets. At least those bills will be handy for ready use, as our money is flushed down the toilet.

So, aside from empty shelves in stores, endless lines at gas stations, and any other number of unforeseen scenarios, what might we expect? Well, Iggy, we've already seen what happens in other countries that undergo hyperinflation. What makes anyone think the sequence of events would be any different here? Upon discernment, the silent advance of the price of precious metals, the ultimate safe haven investment, over the past decade, heralds the truth. The smart money is buying silver and gold.

Since 2002 silver and gold have both shown a steady, if at times volatile and erratic, increase in value. As they ascend in price, what is really occuring is a concomitant decline in the worth of the currencies in which they are denominated. It is not a mirrored-image correlation, as other factors are involved, but for the most part when the dollar declines, metals advance, and vice versa. This reason alone incentivizes governments to manage the rise of precious metals, for doing so understates inflation and subliminally buttresses the status quo.

This last decade buyers have been stealthfully amassing silver and gold. History demonstrates that such measures often assist in preserving the holder's purchasing power, safeguarding their wealth. In a mileau where bank failures can deprive you of your savings, overnight devaluation of a currency can decimate its value, and even rehypothecation of funds, here citing MF Global, can criminally steal funds from their investors, what other avenue to protection does one have? The only asset class without counterparty risk is precious metals. And as they say, "if you don't hold it, you don't own it."

What began as a trickle of people prudently buying precious metals became hundreds, then thousands, then hundreds of thousands, and now millions on a worldwide basis flooding into this allocation. You might even pat yourself on the back as you watch your portfolio increase, and think smugly, "I'm set!" But what happens when, after the best of intentions of steadfastly converting your fiat currency, either with dollar-cost-averaging or just "buying the dips," you awaken one day, in a Rip Van Winklesque moment of self-revelation, to the fear that you might have been duped?

Thus, in convoluted fashion, we return to our start, the China Syndrome. Thanks for taking the short journey with me as it is salient to my message. This is going to sound farfetched, another conspiracy theory by a tinfoil hat wearer, as Jon Nadler likes to portray precious metals devotees. But what if there were a plan fomented by an economic nemesis, to unilaterally sabotage and subvert the wealth-preserving intent of a significant portion of these new converts by supplying them with counterfeit products?

China is the source of countless knock-off products, utilizing cheap labor and inferior materials to create a pirate industry of faux goods afflicting several industries. Is it too much of a leap to contend their own government must covertly support such actions, as otherwise, would it really be that hard to police and quash such enterprise? So how does this China-based criminal enterprise affect precious metals? There is a considerable and growing fraction of auctions on ebay that now vend these actual fakes. You may own some already.

One can do their own due diligence and perform a search that will provide irrefutable evidence; counterfeiting, of Morgan and Peace silver dollars, of American Silver Eagles, of gold and silver bullion bars is a real problem, one that continues to grow in magnitude. It used to be that such knock-offs, in the precious metals arena, were mandated to be marked as "copies," but that stricture has long since been circumvented. Sellers blatantly proclaim in listings some iteration of "imagine how much you could make selling this item as authentic."

Counterfeiting of scarce and highly-prized numismatic rarities has always been a problem, but the situation is escalating to the point that now even everyman "Joe Sixpack" is affected. You need to visit youtube.com or google counterfeit coins, and become educated regarding this situation. Learn to recognize fakes and their sellers, and report them. The quality of these items is now so deceptive that even reputable sellers are being hoodwinked into placing them into inventory.

So it might be wisest to purchase only factory direct from the largest online dealers or private mints. Stay away from ebay sellers who are based overseas. They might be legitimate, but you have little recourse if they aren't. Certainly, only consider entering bids on ebay listings from sellers with impeccable feedback ratings that offer a money back guarantee if your coins or bars prove fraudulent and need to be returned. Otherwise, a criminal twist on Gresham's Law could prove a portent that good money will flow East, bad money West.

The market is being flooded with counterfeits as the criminal sharks circle, sensing the savory scent of quick profits to be made in the blood of the recent influx of precious metals bathers dipping their toes in the water. Be wary, display caution when considering large purchases, and get a quick education, fast, lest you get eaten alive. Be very careful, friend... because you don't want to become chum, Chum.

Buy real silver, buy real gold, save copper, start today.

Don't Lose Your Grip Now

2011-08-02T19:33:00.000-07:00

The title of this piece refers to maintaining a long term stance regarding the life-changing potential, and immense eventual profitabitability, of precious metals. Eventual, you ask? Heck, I can make some good bucks now. I bought silver eagles at $30, and now they're selling for $45! I'll take a quick fifty percent profit anytime. I can just buy more on the next dip and repeat the process, over and over again. What... do I look stupid, or something?

Well Bucko, if that's your game plan... then my answer is "Yes." Does that stigmata on your forehead spell idiot? I know, I know... it looks like toidi when you gaze in the mirror, but believe me, if you sell your silver at this point, you'll be calling yourself much worse than idiot in a few months, as silver scales unimaginable heights as it's true scarcity is revealed by a massed market of desperate participants scrambling to convert increasingly worthless slips of colorized paper fiat for real money.

Name calling? How about imbecile, moron, or even ignoramus? I'm sorry if I'm offending any Nadlerphiles, but when you miss the boat, you don't just get soaked... eventually you drown. Alright, let me come down off my platform, put away the bullhorn. I've said my piece. But I am here today to admonish you. If, for all the right reasons, you initially began to protect against accelerating dollar depreciation, preserving your purchasing power, literally saving your money in the form of real money - silver and gold - then don't change your position now, merely because temptation is enticing you.

If you are a hardcore, hard money, metals advocates, you might be interested in browsing the following site. Realcent.org is an internet forum of individuals with like interests in promoting the preservation of valuable numismatic coins, salvage of still-present pre-1971 silver coinage from circulation, sorting of pre-1983 copper cents in the same fashion, and even reclaiming base metal - to hold for their intrinsic worth, greater than their face value in the form of coins - until melt laws are modified.

Long-time readers and posters on that site are pretty much of like mind. What they share in common is a spirit of rugged individualism, perhaps characterized by a Libertarian bent in some instances, of self-reliance in preparation for the day when the dollar, once the almighty reserve currency of the world, is no more than a memory, a once-proud standard-bearer of fiscal invincibility become no more than another failed Third World fiat currency.

Readers of this piece, and members of that site, ought to have in common the shared knowledge that holding silver and gold, historically, have acted as "safe havens" to usher them through trying times of economic instability. Those of us who have had the foresight and means to begin accumulation of a small cache of life preserving real money over the years, whether we began at a precious metals "bottom" or more recently, have - by now - had the opportunity to amass a small hoard.

Whether you have been investing in pre-1965 junk silver, or buying gold in any form - in the shape of pre-1933 American coinage - or as bullion rounds produced by the United States Mint or other global entities, silver and gold have acted as an insurance policy to protect you from the storm of dollar depreciation that is ongoing and intensifying. Such an umbrella, however, has not merely kept you dry, I am confident a warm glow has exuded from your heart as you consider that these precious metals have far exceeded inflation in this past decade.

So, if I could pose a question, why would you consider jettisoning your life raft, merely because the illusion of an alluring tropical atoll is in sight? That, my friend, is merely a mirage. Just because you can score a quick profit in dollars from the metals you were wise enough to acquire in the past weeks, months, even years... does not mean you should do so. What if, rather than a subsequent dip providing you an opportunity to replace the coins you had sold, the market instead never looks back?

Selling even a portion of your real money savings fund could expose you to the dread eventuality of being unable to restore it to its previous size, due to the inability to source reasonably priced alternatives. You could be sidelined in dollars that are being rapidly eviscerated. "Oh, the humanity." You have heard, over the years, pundits describing silver nuts and gold bugs as "strong hands" in chronicaling the movement of commodities from timid parties to those who are bold. The years have proven the bold to be sage.

Many is the time I've read threads on realcent that lamented "Darn, I should have bought more at $_____" (fill in the blank) as the price of silver, or gold, at times lunges upward in surprizing surges. Don't let this remorse metamorph into "Oh, I wish I hadn't sold silver at $50, or gold at $1700." The price of these oh so precious metals, denominated in increasingly worthless dollars, has no limit. Ultimately, prices - years from now- will be many multiples of their present troy ounce cost.

And so, I urge you, now is not the time to gamble with your hard-won worth. Despite the resolution of the debt ceiling, hyperinflation is baked into the cake. We're each going to have to choke on a huge serving of that distasteful concoction, so even though you might feel queasy, fight off that nausea and maintain your rationale for holding safe haven metals in the first place. Remember, the fiat currency of ANY nation-state is not really a viable alternative.

In closing, an apt description of someone displaying a confident manner might be one who offers a winning smile and a firm handshake upon introduction. I could go further and describe said handshake as powerful, though not bone-crushing, leaving a lasting impression of strength. In other words... strong hands. Remember the advice of test-takers, "don't change your answer, you're first impulse was likely correct." Please eschew attempting to trade for quick profits. Hang on tightly to your silver and gold. Don't let weakness of character make you lose your grip now.

Buy Silver. Buy Gold. Save Copper. Start Now.

Penny-Wise, But Pound-Foolish

2010-03-07T06:37:00.000-08:00

Oft in use by our forefathers, but seldom heard anymore, what a nifty sound this old-fashioned phrase has. It's meaning, in broad strokes, paints someone who misses the big picture, because they are focusing on small details. An example might be someone who is penurious to the nth degree, saving every cent they can by clipping coupons, minimizing usage of their utilities by bearing with colder ambient temperatures during the winter and refusing to air condition their abodes during summertime, all to save money.

And yet these same individuals will turn around and gamble heedlessly, or fail to dicker on large ticket items, like cars, travel, and home purchases. A twist on this portrayal might produce the individual who certainly appears wealthy, as they model the latest in designer labels, watches, flashy shoes and purses, jewelry and cars. And yet, one suspects, this same individual is buried in debt supporting this false facade. Do the truly wealthy flaunt their riches? Or do they turn them to more productive usage, by investing, so that earnings evoke returns, hard-won paychecks beget what with time develops into considerable worth?

I still use the phrase at work occasionally, and though I get seeming nods of understanding in ostensible agreement, I wonder if the listener really gets the point? James Rogers, in The Dictionary of Cliches, explains it like this: “Overcareful about trivial things and undercareful about important ones. The literal image is of the person who fusses over small amounts of money to such an extent that he misses opportunities to save or make large amounts." The provenance of the saying is credited to Robert Burton, 1577-1640.

Burton, whose primary fame is due to his authorship of a tome entitled The Anatomy of Melancholy, was an English scholar at Brasenose College, Oxford University. In light of the era and environs during which he penned his work, it accounts for the usage of the terms penny and pound, familiar descriptors of the money of that time, but less so today. Maybe that's why I get the sometimes quizzical glances when I use the phrase. Perhaps the listener is merely attempting to portray accord, yet is inwardly puzzling "what the heck is he talking about?"

It would be simple to use this title as a springboard into why saving pennies, those pre-1982 95% copper ones, worth more than twice face value according to Coinflation.com, is a crafty means for those of little income to gradually accumulate a small fortune, in terms relative to their own budgets. But I would prefer to bend the heading a bit, and use it instead to raise a related issue. Let's talk about silver. How would being penny-wise but pound-foolish have any context in regard to that precious metal?

I belong to a forum that discusses issues like this, and many others regarding coin collecting, precious and base metals, economic policies and financial investment strategies. Realcent is one stop shopping if you're looking for answers to related questions. I'm seeing more and more threads relating to the issue I'd like to raise, and since our individualized actions and intent are merely a microcosm of the actions of the greater masses, I feel their expression can be used as a gauge as to what we might be able to expect in the markets when the time comes.

Specifically, there's currently a thread that contains a poll which asks the question of "what will silver do in the near term?" The choices could have been more comprehensive, and the respondent is limited to selections of: over $20, sideways, or back below $16. There is no time frame mentioned, which would have been useful, but as the contributor of the poll later posts, the piece was submitted in order to generate thoughtful discussion of the topic amongst members.

What concerns me is the responses of members who are replying to the post. I am seeing more and more posts to the effect that "next time silver hits $19, or $20, I think I'll sell a little." "That'll be the time to take some profit." "I think it would be wise to take some off the table." Comments of that ilk. Why would I be bothered by such innocent sentiments, posted by members who would seemingly be among the better educated regarding the value of holding real money in place of worthless Federal Reserve Note currency?

Because this rationale, trying to time the markets for quick profits - selling their precious bullion reserves for a relatively higher price then for which they purchased it - and then waiting for a dip to buy back in and thereby accruing a bit more in terms of total ounces, might just be a prime example of being penny-wise, but pound-foolish. What if you exit the silver market with your timely profit, and then silver explodes to the upside? And you're left sidelined, holding a fistful of increasingly worthless FRN's, as precious metals embark on their long-awaited race to unheard of heights?

I feel that we are in the process of being programmed by the entities that manipulate the silver futures market via COMEX, to behave precisely in this fashion. We're all aware that precious metals prices fluctuate. Scott Wright and Adam Hamilton, at Zealllc.com, have long described the seasonality of silver, demonstrating on a year over year basis how such factors as the harvest and marriage season in India, and New Year's in China, can exert an influence on the volatility of gold and silver prices. As well, Chinese government authorities are now encouraging their populace to stock up on small ingots of gold and larger bars of silver.

We have witnessed, over the past decade, countless occurrences of price manipulation within the silver and gold markets, as documented by Ted Butler, David Morgan, John Embry, GATA, and others. It is well evident, to any student of technical analysis, that every time silver rises rapidly, and overshoots its channels to the topside by a wide degree, that a swift price-capping effort, and often subsequent plunge in value, is near-certain to swiftly ensue. Whether if be nefarious manipulation by JPMorgan, Goldman Sachs, and cohorts, or ordinary profit-taking by hedge funds that induce the decline, the effect is the same. Silver plummets and takes considerable time to recover.

So then, what would be the harm in anticipating these market moves and "riding the coattails of the big boys?" It seems evident that a profit stands to be made by getting out a bit ahead of the downside motion, and recovering your ounces at lower cost, then repeating the process ad infinitum. Doesn't it? But what if, as in musical chairs, the music ends, and you have nowhere left to position yourself? You'd like to park your butt back into a silver position, but there are none left?

According to anecdotal data from various sources, there is only a nine year supply of silver left in the Earth's crust if it continues to be consumed at present rates. You've heard of Peak Oil? Well, Peak Silver isn't far behind. The easy-to-locate sources of silver had their veins worked and depleted long ago. Newer discoveries can take years to develop, and the costs can be prohibitive. The silver that remains in existing productive mines is sometimes located in third world countries whose governing regimes could easily decide to nationalize those mines, or punish their operators with exorbitant windfall profits taxes.

How much silver is left above ground anyway? Dr. Jeffrey Lewis, a medical practitioner who also edits Silver-Coin-Investor.com and Hard-Money-Newsletter-Review.Com, believes - along with others like Jason Hommel - that the remaining trove of above-ground silver is swiftly depleting after years of deficits, and may be less than sufficient to replenish the needs of industry for more than a few more years. There could be less than 300 million ounces remaining of above-ground silver available; certainly there is less ready silver than there is gold.

So, my premise is this. If manipulation is taken for granted, why not go one step further and concede that we might just be in the process of being brainwashed as well? Propaganda served the Politburo will in the days of Soviet supremacy, it may just as likely be well-suited to the aims of the entities that manipulate the silver market. For consider this. Where will the continued supply of silver be obtained from in the near future, if mine supply is tailing off? It will only be available from the holders of silver reserves. And China is now banning the export of silver.

Who do you think has the best insight into the inner workings of the silver market in all its aspects? Joe Investor? With his ten ounce silver bars, or $100 face bags of 90% silver coins? Or omniscient, omnipotent powers like the bullion banks, who risk hundreds of millions, even billions of dollars of capital routinely with their shorting strategies? What happens to you, if you take your profits - in comparitive pennies - only to get pounded as the Commercials reverse field and cover not only their shorts, but decide to go long because the time is finally right?

That day will come. And when it does, Jasper, the silver price will erupt, not merely by dollars, but by multiples of its current price. The disparity of pricing between gold and silver will revert to it's historical norms, and likely overshoot them. A commodity five times scarcer than another should not be priced sixty-five times cheaper. Warren Buffett appeared prescient when he had Berkshire Hathaway purchase 129.7 million ounces of silver in 1998, but even he admits he sold to soon. Don't let the same thing happen to you. Don't be penny-wise, but pound-foolish.

Buy Silver. Buy Gold. Save Copper. Start Now.

Preserving The Past

2010-03-02T14:35:00.001-08:00

Although I have in the past chided coin statisticians, half-mockingly because I feel their time could be more productively spent, the data they provide can occasionally prove useful to conjecture. In order to speculate on the scarcity of the oldest Lincoln cents, which will be today's topic, it's necessary to refer to the meticulous record-keeping of individuals who take the time to painstakingly assemble such numbers. So today I doff my hat, and offer my thanks. I couldn't fashion the following guesstimates without your assistance.

On Realcent, the coin collecting/gathering/hoarding forum on which I participate, member Uthminsta has established a thread in which members post their most recent findings in their search for pre-1940's cents from their penny sorting. They often provide the percentages of copper cents - those pre-1982 pennies that were 95% copper - encountered amidst the mix of copper and zinc cents, as well as further specifying how many "wheaties" they discovered. The wheaties designation refers to the Lincoln cents that were produced up until 1958. In 1959 the reverse of the coin was changed to feature the Lincoln Memorial.

If you've ever dropped by my blogsite, you'll notice I haven't been writing as much lately as I once did. Why? Because I've been sorting more cents myself. While enjoyable, it can prove a very time-consuming activity. I decided, after writing a number of columns touting the value of sorting and saving the copper Lincoln cents - for their more than double face value metal content of the copper from which they are comprised - to jump on the bandwagon and practice what I was preaching. I don't want to get up from my keyboard someday only to discover they're all gone.

So I've been doing a lot of sorting myself. I utilize a Ryedale coin sorting machine, which allows me to at least triple the speed at which I could hand sort. The machine processes the pennies for you, separating the zincs from the copper cents. What it cannot do, is to keep all the copper cents from falling into the wrong pile. Prior to 1945, there was a very small percentage of tin in the Lincoln cents, and the Ryedale does not differentiate these from zinc cents. Consequently, the 1944 and earlier cents wind up in the zinc pile. If you don't search your zincs, these older cents will inadvertently get returned to the bank.

From some earlier calculations, I deemed that - for simplification - only about one percent of the pennies you find will be wheaties. And of those, I calculated, four out of five will be from the Forties and Fifties. It turns out that I was too generous in assuming a that twenty percent likelihood would represent the percentage of pre-1940's wheaties that you would discover. After examining a number of wheaties that I had accumulated in my handsorting days, prior to my purchase of a Ryedale, I determined I had made an error.

The likelihood of one finding a pre-1940 wheatie differs from the result you would expect if you merely analyze the original mintage figures. Those numbers would suggest that since about twenty three percent all wheaties had been minted prior to 1940, one could surmise that roughly the same percentage would be encountered in searches. But I forgot to factor in extinction. A simple definition of extinction would be that, regardless of original mintage, cents do not survive, for one reason or another.

Given any particular starting point, the following year only 99% or those cents might remain. The next year only 99% of that remainder would survive. And so on. I can't provide a reliable extinction rate for any given year, only strongly postulate that the principle undoubtedly holds true. Spend enough time with a calculator and you might be able to hypothesize what the extinction rate would need to be in order to arrive at these numbers. My sample size was not huge, yet I feel it was large enough to form the basis for this premise.

When I counted the wheaties I had sorted, I found that of 505 total, only 34 were pre-1940's. So my likelihood of finding one had not matched my expectations, but had fallen far short. The reality was that only 6.7%, not 23%, were of older dates which preceded 1940. An extinction theory could account for the attrition that would minimize their presence in circulation. A Realcent member whom is a great statistician, cwgii, posted that in the past year of searching he had found nearly 30 (29.95) wheaties per 10,000 cents searched.

If you combined his findings with mine, it forms the basis of an equation whose solution would imply that your chances of finding a pre-1940 wheatie is only one in 5,000. For every $50 face value you search, you could expect to find only one. Learning this, as I've been sorting, lately I've been wondering,"what are the odds that I'll find any pre-1920's cents in the zinc pile?" If the extinction premise holds true here as well, then one cannot assume, again, that merely reviewing mintage figures would provide an accurate clue.

In order to determine the likelihood of encountering a cent from the teens (including the issues of 1909) you would need to know both the original mintages and an extinction rate. During the Teen's there were 2,125,713,683 cents minted. The Twenties produced 1,664,218,000. And the Thirties added the count of 2,214,324,143 to their number. So 6,004,255,826 pennies were produced in total. If we proceeded simply on that basis, then you might expect to find that 35.4% were Teen's, 27.7% Twenties, and 36.9% Thirties. But this doesn't account for extinction.

Extinction will cause the oldest decades to produce fewer cents remaining in circulation due to their greater exposure to years of whatever factors contributed to their attrition. Thus there would be a commensurate distribution of cents found to mintages produced that was skewed towards the most recent years. You will, therefore, find fewer of the earliest decade Lincoln cents, despite their original mintages, simply because they've had a greater opportunity to disappear from our change.

It's impossible with sure accuracy to predict what the odds would be of encountering - in boxes of rolled pennies obtained from banks - any particular cent minted during the first decade of their production. Only a guess can be derived from analysis of data, but an idea of what odds you have is better than none at all. So here's my guess. From my own purposeless and demented scrutiny of these numbers, I would venture to say that of the pre-1940 cents that you'll discover, only about ten to fifteen percent will be 1919 and older.

Perhaps only fifteen to twenty-five percent will be from the Twenties. And the remainder, the bulk of them, will be common date Thirties pennies. When my initial musings led me to believe I might find one pre-1940 per 5000, I wasn't factoring in extinction. My expectations were that about 76-77% of the wheaties would be of more recent vintage. But it turns out, based on my own experience, that greater than 90% of the wheaties will be Forties and Fifties. If you do find a wheatie reverse laying in your zinc pile, chances are it will be from the Thirties, or one of those tin-bearing early Forties coins.

The chance of finding a first decade cent is much less than what is suggested by simple scrutiny of mintages, when extinction is factored in. You might have to search 100,000 or even 150,000 cents to find a single pre-1920 cent. I'm writing this to offer consolation, and to prepare you for what to expect, after I learned myself by sorting nearly a million cents. Finding a scarce key date coin, particularly one in good condition, is next to impossible. Certainly you could buy one, but if you're in the search for the thrill of the hunt be aware that, in most cases, the fox will vanish, outrunning the hounds. Remember, though, it's not always the capture as much as the quest, that provides the adventure of the chase. So as Realcent member PreservingThePast would remind: enjoy your coin searches, everyone.

Buy Silver. Buy Gold. Save Copper. Start Now.

What Are The Odds?

2010-01-31T10:45:00.000-08:00

Warning: This article has hardly any substance. It will be of little worth for the purposes of education. It has small merit as an investment piece. The author is fatigued, and is taking a break from sorting copper cents from rolls obtained in $25 boxes from the nearby bank. Why would he even do that? Because he believes that the copper cents - those made by the United States Mint, prior to 1982 - which were comprised of an alloy of 95% copper with 5% zinc, will gain in value. If not immediately, than in the future. He believes that inflation will lead to price rises across the board.

Since he believes that the onset of hyperinflation is inevitable, he feels that one way to preserve your purchasing power is by accruing tangible silver, and gold coins ingots or bars to be held in your physical possession. No, he doesn't mean to imply that you carry them around in your pocket, but that you store them in a secure location, perhaps within a well-hidden safe, that you have easy access to. The author would recommend a safe-deposit box, were it not for some frightening stories that you can find by googling, concerning the criminal abuses that officials are sometimes conducting to confiscate their contents.

Revisiting the earlier premise of holding some silver and gold, the author considers these items real money. As opposed to the worthless toilet paper fiat currency with presidential images imprinted on them which carry a mandate of legal tender but are in actuality no better than scrip. If you want to carry pictures of the inhabitants of the oval office, and imagine that they have purchasing power, than you would be much better off accumulating the monetary version in coinage by saving Presidents Kennedy, Roosevelt, and Washington, in pre-1965 metallic form.
And don't forget Abe and Tom. Lincoln and Jefferson. They're affordable for anyone to hold, even those who can't afford an ounce of silver. Save your nickels and your copper cents. You can visit Coinflation.com to learn that, at times, the intrinsic value of the content of the cupronickel alloy present in nickels exceeds its face value. This, of course, varies with the price of those base metal commodities. The value of the penny, the copper ones, is well in excess of double face value. If and when the present melt ban is lifted on these two coins, it is a certainty that they will swiftly vanish from circulation as people melt them for their base metal content.

That's it for today's concise version of real-money-acts-as-a-store-of-wealth lesson. Nothing new. Just rehashed the same content from a different slant. Enough for now. It's time to play. Whimsy, here we come. You can stop reading now, if what you're looking for is sage offerings of investment advice. We're going to directly contradict the theme I offered in an earlier piece, that being related to optimizing your time to attain your goals. If you want to reach a goal, it is best if you direct your efforts in single-minded focus to accomplish your desires. Any tangent from your target will just lengthen the time necessary to achieve your aims.

In an article entitled Counter Productivity, I lambasted those who proclaim to be intent on sorting and saving copper cents, but drift away from that goal by investing an inordinate amount of time to documenting their every discovery. If their true goal is to save as much copper as possible, then they are wasting their time by all of their minute recordings, followed by posting and responding to similar threads on the penny forums in which they participate. However, looked at from a different aspect, the search for copper can be rewarding, if you develop the attitude of a collector.

Collectors probably look at hoarders as more than slightly crazed fanatics. "You're missing all the fun," they might say. "There's a thrill of discovery when you search," they might add, "and are able to find a scarce date penny, a key date in good condition, or an Indian Head penny that is still in circulation after more than one hundred years." So, today, taking a break from amassing yet more pennies in my growing hoard of copper cents, I am going to indulge exploring a thought that occurred to me while inspecting a box of wheaties that was filling up.

As I sort copper, I don't specifically look for wheaties, but when I find one, I toss them into a separate box, date unexamined. The box was starting to get a goodly number, perhaps five hundred, inside. So I decided I better separate them into two piles, one before 1940, one after. I intend, someday, to go through and see how many slots in a penny album I can fill. Maybe next time that I need a break from sorting. So I was quickly examing the dates on the wheaties to determine into which pile to place them. As I was doing so, I ran across an anomaly which made me wonder what the likelihood of such a chance occurrence might be.

What happened was that I found, in order, a 1955-D, then a 1955, then a 1955-S. What are the odds of that happening? Before we venture into the actual computations, let me go on and state that there were a total of about five 1955-D in the entire lot, but only one each of the two others. So, even before I get out the calculator to number crunch, I'm thinking the odds have to be fairly astronomical for this to occur. Of course, this is all entirely meaningless, but it just appeals to the mathematical side of my brain, and I'm curious to see what the answer will be. I feel like Nicholas Cage in National Treasure.

In order to determine the odds of three items appearing sequentially, you have to determine the odds of each occurring individually, then multiply the three to obtain your answer. For instance, if you have three items that have a statistical probability of appearing one out of four times, one out of five times, and one out of six times, then your result would be obtained by multiplying 1/4 x 1/5 x 1/6 to reach an answer of 1/120. The exact sequence you had experienced would only occur one time in one hundred and twenty, less than a one percent likelihood. I know in advance my answer will be far smaller, probably infinitesimal in comparison.

There were 28,650,477,747 wheaties produced between their inception in 1909, until their discontinuation in 1959, at which time the pattern was changed from the familiar design to one featuring the Lincoln Memorial. According to Coins Magazine, in 1955 the Mint produced the following numbers of cents: Denver - 563,257,500, Philadelphia - 330,958,000, and San Francisco - 44,610,000. If I were to try and multiply these numerators and denominators I'm sure it would frazzle the innards of my little handheld calculator, so let's simplify these fractions before we proceed.

Denver = 563,257,500/28,650,477,747 = 1/50.86, or a little less than a two percent chance of finding a 1955-D among a lot of wheaties. Philadelphia = 330,958,000/28,650,477,747 = 1/86.57, or a little better than a one percent chance of finding a 1955 date. And finally San Francisco = 44,610,000/28,650,477,747 = 1/642.24 chance of running across a 1955-S from the same lot of wheat pennies. So what are our odds of finding all three dates and mint marks in consecutive order? What do you get when you multiply 1/50.86 x 1/86.57 x 1/642.24?
The odds of my finding those three cents in that exact order were one in 2,827,750.

That's like saying pick a day between now and the year 7737 BC and getting it right. Wow! Not as hard as winning the California Lottery, or Powerball, but impressive nonetheless. Maybe I should head out and buy a lottery ticket? I could gather a pocketfull of useless zincs and head out to play the penny slots at the nearest Indian Casino, but I think my odds of striking it rich are much better saving copper cents, instead of spending zinc. I already feel like a winner, watching that steady stream of copper cents spit out by my Ryedale. Want to line up three cherries? Or a giant red 777? Care to scream "Jackpot?" Then play copper to jump in price, and you could hit the big payoff. There's a pretty good chance that will happen, any day now. The odds are in your favor.

Buy Silver. Buy Gold. Save Copper. Start Now.

Counter Productivity

2010-01-28T19:23:00.000-08:00

How many times during the Summer Olympics of 2008 did you watch Michael Phelps compete in his quest to accomplish the historic goal of winning eight gold medals? Were you able to watch most of his races? Did you marvel at his durability, strength, and technique? As he won race after race, some by wide margins, did you begin to feel like you were witnessing one of the most incredible athletic performances in sports history? His accomplishments rank alongside Mark Spitz's, as spectacles of the natatorium sufficient to stun Neptune or Poseidon, and astonish the remainder of the Gods.

Did you figure out how Phelps was able to win? Sportscasters slowed the tapes down, giving way on the microphones to swimming experts who analyzed the strokes in minute detail. They praised the instructional insights which had allowed observant coaches to parse every element of Phelp's motion and impart racing tips to optimize his speed, such that his resultant technique maximized his every advantage. His form was non pareil while he focused on winning. He was, in real life, a veritable swimming automaton, as heroic as an Aquaman comic book character vanquishing dispirited foes.

You can give credit to morale, to coaching, to indomitable spirit, a never-say-die attitude, to physical indefatigability for his accomplishments. There are any number of factors which contributed to his success, but if you were to attribute his results to those causes, you would miss the most important element of his wins. Michael Phelps won those races, because his competitors all lost them. They lost because, for one reason or another, in the final analysis, they lacked some aspect of the constitution of physical, mental, and spiritual resolve that is required of championship athletes.

This is not to say that they didn't expend countless hours rigorously training as well. Nor to imply that their coaching was suspect. I'm only suggesting that incredible physical performances in athletic history, whether they be incidents that are one time events - like the victory of the underdog Fresno State Baseball team in the 2008 NCAA Finals, when they became the lowest seeded team to ever win the championship - or accomplishments that are cumulative, occurring over a season or a lifetime, so far surpass the deeds of competitors that they are best judged by different standards.

An athlete seeking excellence will eat, think, train, and sleep, dreaming of attaining his or her goals. They are single-minded in their focus, and they will let nothing deter them from this pursuit. By definition, they will never let anything thwart their desire, or else they will never ascend the pinnacle of achievement necessary to become a champion and win a gold medal. Maybe they'd win a silver, or a bronze. They might be pretty damned good at what they do, perhaps the most talented in their country. But they wouldn't be the best in the world, whether it be swimming, or golf, most home runs in history, or the fastest man alive in the 100 meter dash.

So how am I going to tie all this sports babble into the world of investing? In prior columns I have advocated that you take advantage of this moment in history in which you find yourself, and set about to accomplish a goal which, in a few years, will become impossible. As if you had discovered a spatial discontinuity, a rift in the fabric of time, you have the opportunity now - and perhaps for as long as another eighteen months - to reap the same benefits as if you had been present in the America of 1965. What do I mean by this?

Remember that year? 1965 was the year in which the United States Mint changed the alloy of circulating coinage of the dime and the quarter from one with ninety percent silver content to one made of cupronickel. Real money underwent debasement. Silver halves went from ninety percent to forty percent silver, and that for only four more years, until they too were fabricated from the same cupronickel alloy. The public inherently understood that the older coins were somehow of greater value than their replacements, and Gresham's Law ensured they rapidly removed them from circulation.

Those ninety percent silver coins were, for all intents and purposes, gone from circulation by 1968. Sure, you could still search for them, and encounter a few from time to time. People still do that, spending countless hours to glean a lone sparkling argent gem from the rolls they obtain and assiduously examine. So how does the disappearance of real money from circulation after 1965 have any bearing on you today? The same thing is now occurring, but this time it's not an event which impacts dimes, quarters, or half dollars. This time the lowly Lincoln cent is being affected.

Pennies are disappearing, unnoticed by the public. Collapsing Cents Census Syndrome (CCCS) is not something you will see in the media, nor is it discussed by scientists concerned by its impact on commerce. But the copper in your change is steadily diminishing, and being replaced by zinc. You see, prior to 1982, Lincoln cents were made from 95% copper and 5% zinc. Subsequent to that, the alloy retained the same components, but in a different ratio. The zinc became predominant in the penny, with a core of zinc covered by a thin layer of copper. All but 2.5% of the copper was removed from the penny. Real money was becoming debased.

Now, behind the scenes, there are those who gather pennies from banks and scour them for their copper content, sorting through rolls by the thousands, sifting the copper from their ranks, and saving them. Why in the world would they do that? Because the cent isn't worth a cent. It's worth at least twice that much. Check Coinflation.com if you don't believe me. The prices vary according to the scrap price of number two copper posted daily on Kitco, but recently an individual penny was worth approximately 2.2 cents. Not much when considered on an individual basis, but what's that worth when multiplied hundreds of thousands of times?

The only reason we still have copper circulating in our change is because there is currently a law forbidding melting of the cent and the nickel to deter loss of these coins to parties that would melt them for their base metal content. That law was passed in late 2006 and went into effect in the early months of 2007. If it weren't for that mandate - acting as a partial deterrent to those individuals intent upon hoarding these valuable cents for resale upon their eventual revaluation - these pre-1982 copper pennies, like the silver coins of yesteryear, would already have vanished.

So, here's the window of opportunity that I mentioned. Silver and gold act as safe havens in a time of currency depreciation which we have been experiencing since the FED was created. Ninety-six percent loss of purchasing power since 1913, not bad for ruination of a fiat currency. Award them a gold (a barbarous relic) medal, and let's just hope they aren't entered in eight races. Real money maintains your purchasing power, and may gain value prodigiously during hyperinflation. Since not everyone can afford silver or gold, my past columns have explained that, on a smaller basis, base metals coinage nickel and copper afford the same advantages as do precious metals.

So, then, how do we become champions of copper cent sorting and saving? We do it by single- minded focus, setting a goal, and then letting nothing act as an obstacle to attainment of that target. Anything else would be counterproductive. Did you see any of the other swimming competitors staring despairingly at Phelp's heels easily outdistancing them? Notice them admiring his Speedo's? No. They were bent to their tasks, giving it their all. It just wasn't quite good enough to win. Why would anyone, with a goal in mind, do anything other than their utmost to accomplish their dreams?

Why would someone who saves copper cents, record in minute detail their findings in each roll they encounter and in each box that they sort? Wouldn't that be detrimentally time-consuming? To list in voluminous findings, for instance "out of 1000 cents sorted, 298 were copper for a percentage of 29.8%, there were eleven wheaties, three Canadians, one Norwegian, one from the Bahamas, and the rest were zinc." Isn't this just a little bit obsessive? Like a deranged baseball statistician on steroids, these sorters are compulsively recording every detail of their searches, then sharing them with like-minded others on penny forums. Isn't all this "counter productivity" counterproductive?

Do collectors who persist in this misguided allocation of their time derive more pleasure from the hunt, than the capture? So that their quest is guided not so much by acquisition as it is by a sense of discovery? If so, I applaud the pleasure they derive from their hobby. But let's redefine them merely as hobbyists, because the single-minded work ethic necessary to become focused champions of this enterprise is missing from these copper enthusiasts.

You don't see the big hitters of this new industry, who comprehend the nature of its time-limited opportunity, expending the time it takes to describe in detail their every find. They can't afford to become distracted. They understand that to do that would obstruct them from their primary goal. Which - while the chance to do so exists - is to accrue the largest pile of copper cents they can preserve, as rapidly as it can be amassed. Because, ultimately, that's what champions do, better than anyone else. Count on it.

Buy Silver. Buy Gold. Save Copper. Start Now.

What's Behind Lincoln On The Cent?

2010-01-18T08:16:00.000-08:00

I usually write about how sorting and saving cents, the pre-1982 ones that were fabricated from 95% copper, represents an opportunity for small investors to ensure themselves against a loss of purchasing power by holding tangible real money. Similar to silver and gold in this regard, as the dollar continues its long descent down the depreciation slide, commodities priced in dollars will rise in price. Those individuals who recognize this trend and take action now to protect themselves, will position themselves to survive hyperinflation and perhaps benefit from it.

Hard money advocates - those who place their trust in precious and base metals coinage - will most certainly have a ready cache of recognizable money to barter with when no one any longer honors federal reserve notes and refuses to accept them for purchases. Should hyperinflation arrive, gold coins will be useful for our largest transactions, and silver - or the smallest fractional gold coins - for commerce too small for usage of one ounce gold to be practical. Everyday barter and the tiniest of purchases will still require nickels and pennies.

Each of these metals will increase in value with the tsunami of excess liquidity already set in motion by the FED. The trillion dollar trigger - representing a combination of the TARP bailout and quantitative easing in support of Treasury auctions - has already been pulled. Bumbling Ben still has more shots in his revolver, and he will continue to empty his gun into the corpse of the dollar until there is no hope of resuscitation. It would take a miracle to resurrect the dollar, and though our coinage states "In God We Trust," I doubt the sentiment is reciprocal.

So hyperinflation is coming down the pike. That's pretty much set in stone. It's just a question of when it will arrive. Enough said on gloom and doom for now. Today I'd like to talk about something unrelated to investing, but which can occur to you as an offshoot of your stance to build a position in copper bullion by saving cents. If, as happened to me, you begin to examine the pre-1982 cents you are sorting, your curiosity might take hold. Every so often you will encounter older pennies among the thousands you sort. You're going to run across wheaties.

Wheaties are one way in which collectors of the Lincoln cent refer to the reverse side of older American pennies. On pennies that were minted between 1909 and 1958, there are two ears of wheat adorning the back of the cent. In 1959, that design was changed to a depiction of the Lincoln Memorial. Subsequently, that was changed as well to honor the bicentennial of Lincoln's birth, as well as marking the one hundred year anniversary of the first issuance of the Lincoln cent. There are now four different commemorative reverses in circulation as of 2009.

"Birth and early childhood in Kentucky" portrays a log cabin - similar to the one where he was born, on February 12, 1809, - near Nolin Creek, three miles south of present-day Hodgenville in Larue County, Kentucky. "The Lincoln family lived on 30 acres of the 228-acre Knob Creek Farm near Hodgenville from the time Abraham was two-and-a-half until he was nearly eight years old. It was here that he grew big enough to carry water and gather firewood." End quote. http://www.usmint.gov/mint_programs/lincolnredesign/index.cfm?action=lincolnPenny&Aspect=1

"Formative years in Indiana" depicts a young Abraham sitting upon a log, reading as he takes a break from railsplitting. The family had moved in the fall of 1816, relocating from his birthplace in Kentucky to Spencer County, Indiana. As Lincoln grew he became toughened by the rigors of farm life, learning to plow and wield an axe. He also developed a love of reading, curried by his parent's interest in books. Abraham became an avid reader, and by the time he was eleven had assisted in his own education by completing such books as "Life of Washington," and "The Autobiography of Benjamin Franklin." http://www.usmint.gov/mint_programs/lincolnredesign/index.cfm?action=lincolnPenny&Aspect=2

"Professional Life in Illinois" presents him as a young professional standing in front of the state capitol building in Springfield. The family had moved to Illinois in 1830, whereupon Lincoln took advantage of his new environs to learn a variety of skills, including piloting a steamboat, before developing an interest in politics. 1834 saw him embark on this new career when he was elected to the Illinois General Assembly. He studied and received a law degree by 1836. Within a decade he had won a seat in the House of Representatives. The senatorial race of 1858, and the ensuing Lincoln-Douglas debates crowned him with national renown. The Republicans nominated him for President in 1860, and the rest is history. http://www.usmint.gov/mint_programs/lincolnredesign/index.cfm?action=lincolnPenny&Aspect=3

"Presidency in Washington, DC" depicts Lincoln's abbreviated tenure in office from 1861 to 1865. "The approved design for aspect four of Lincoln's life features the half-finished United States Capitol dome, symbolizing a Nation torn apart by civil war and the resolve Lincoln showed as he guided the country through its most grave crisis." End quote. http://www.usmint.gov/mint_programs/lincolnredesign/index.cfm?action=lincolnPenny&Aspect=4

Following the termination of the commemorative issues, the reverse will again change in 2010. The new design will feature a the emblem of a shield, with thirteen vertical stripes representing the states joined in one compact union. A scroll, with the inscription ONE CENT, is draped across the shield. Quote,"The new design is emblematic of President Abraham Lincoln's preservation of the United States as a single and united country." http://www.usmint.gov/mint_programs/lincolnredesign/?action=2010Penny

I kind of got sidetracked there. That's easy to do when discussing such a fascinating subject. Back to the wheaties. As you sort, you will discover one or two wheaties on occasion. Most likely, those you find will date back to the Fifties, and the Forties. Much less frequently, you might even encounter a wheatie dating back to the Thirties. You have to be sorting a high volume of coins to discover these last two decades, but on rare occasions you may even run across a penny minted in the Twenties, or the Teens. Finding a cent that old in circulation is cause for elation, pennies like that are a rare find.

Just how often might you encounter wheaties in circulation? I participate in a forum that discusses just this issue, among other coin collecting minutiae. Realcent.forumco.com is an Internet forum with about 1000 members who share similar interests which involve collecting, searching, sorting, saving, and recycling of base and precious metals coins and ancillary forms of those metals. The topic frequently arises as to how many wheaties one is finding in boxes of cents obtained from banks, or customer wrapped rolls from credit unions or banks.

The answers differ, and are dependent upon a number of variables. But a consensus - if I had to pick a number - seems to be a bit less than one percent of the copper cents you segregate will turn out to be wheaties. Those individuals who are busy building a large hoard of copper cents will likely find that they lack sufficient time to inspect their machine-sorted coins to further separate the pre-1959 wheaties from the other copper cents. It's not justified by their worth. Currently, each wheatie in fair condition will bring about four times face value if you can find a buyer.

Devoting the time and effort to further refine your copper stockpile is something more likely to occur if you are handsorting. In that instance, you will take notice of each wheatie as you add to your accumulation of cents, and its likely that your acquisitive nature will result in your desire to obtain an album and start a collection. Curiosity, at some point, will force this upon you. You'll find yourself asking "I wonder how many I have now? Would it be enough to make a good start at filling a penny folder?" This can develop into an entertaining aspect of the copper cents saving enterprise. So what are the odds of finding any good wheaties?

We've already determined that the percentages are less than one in a hundred from copper cents. We'll need to pick a precise number for the calculations to follow, so I'm arbitrarily going to assign this conservative basis (your results may vary) to assist that intent: you will find one wheatie among every 110 pre-1982 cents you search. Recalling that copper cents only represent about 20 to 25 percent of all cents in circulation, let's remain conservative and use the lower number. Your chances of finding a wheatie, then, in change would be about 1 in 550. Search a $25 box and you should find between four and five pre-1959's.

How about the individual decades? A little bit of arithmetic can provide a guesstimate. If you tally up the total mintage figures - provided in Coins magazine - of all the cents produced between 1909 and 1958, it will result in a sum of 28,650,477,747. Over 28 billion. Broken into decades - of which the Teen's includes 1909 - we get these results. Teens 2,125,713,683, Twenties 1,664,218.000, Thirties 2,214,324,143, Forties 13,385,520,242, and Fifties 9,260,701,408. Review of these findings yields some interesting anomalies.

I would have thought that the Mint would have marginally increased production on an annual basis, showing an incrementally larger number produced each year. But that isn't the case, not on an annual basis, nor even for periods of a decade. There were more cents produced in the Teens then there were in the Twenties, and nearly as many as there were in the Thirties. There were fewer cents produced in the Fifties then in the Forties. What does this mean? You're more likely to find older wheaties than newer ones, to some extent.

You have a 32.32% chance of finding a Fifties cent among your wheaties, but a 46.72% chance of discovering a Forties cent. Twenties might be the hardest to find with only a 5.81% likelihood, followed by Teens with a 7.42% chance. You would have a 7.73% chance of unearthing a Thirties cent. So about four out of five wheaties you find will be common dates in the Forties and Fifties. This determination is based solely upon original mintages and does not account for any unknown variables such as loss or hoarding of particular years, that might cause the results to vary.

Any wheatie you find in circulating change will bring a smile to the face of one who has developed a hunter's instinct to track down uncommon cents. A copper cent sorter and saver will discover a satisfying hobby should they acquire the interest to start a Lincoln cent collection. The occasional luck of finding a wheatie from the early decades can be a cause for delight. Should chance bless you and you strike a bonanza - a valuable scarce date - it's reason to celebrate with jubilation. Pocket change can be like a pirate's hidden chest. There's treasures of rare cents out there to be uncovered. Why not partake of the joy of the quest?

Buy Silver. Buy Gold. Save Copper. Start Now.

Copper, the Poor Man's Silver

2010-01-17T08:50:00.000-08:00

In past columns I have laid out the case - for establishing a position in metals commodities as a means of protecting yourself from the ongoing, and escalating, depreciation of the dollar - in the face of an unprecedented surge in money creation by the FED. Their misguided policy of quantitative easing - to buttress ill-supported Treasury bond offerings by facilitating their purchase - directly results in the diminution of the worth of each circulating scrap of fiat currency known as the federal reserve note. That dilution of value represents a 96% decrease in purchasing power, since the FED was first created in 1913.

Physically holding tangible forms - coins, rounds, bars, and ingots of silver and gold - have long been acknowledged by hard money advocates to represent a "safe haven," one that while not guaranteed to provide immediate appreciation in value, will generally at least keep pace with inflation. I expect that the future holds an ugly prospect for savers. The portent of potential hyperinflation promises to decimate the savings of the unwary, by devastating their purchasing power. Those who adopt a defensive posture now, by obtaining silver and gold, should avert that destructive outcome.

Financial planners advise that you make a five to ten percent allocation to precious metals when building a well-diversified portfolio, I'd like to recommend that, in addition, you include perhaps a one percent base metals allotment to copper. Copper's value will rise, when denominated in declining dollars, by the same pricing mechanism that affects the valuation of precious metals. In fact, copper outperformed silver and gold - during many periods within the last decade - by multiples of appreciation. 2009, in which copper was up 140%, was one such year. Large investors would do well to take a position in copper in order to benefit from a continuation of the anticipated rise in the worth of commodities in the face of imminent hyperinflation.

Smaller investors are presented with an opportunity as well, one that is ideal for the participant whose budget precludes the purchase of silver or gold. If silver has been called the "poor man's gold," then certainly copper must be the "poor man's silver." Copper allows the masses - who otherwise might have been excluded from accruing the increase in net worth normally accorded higher income earners - to save money that gains in value, in a "centsable" form. An ounce of gold costs 113,000 times what it takes to get started in copper. An ounce of silver requires 1850 times the ante.

Virtually anyone can save copper. It is affordable to everyone. Copper cents - those 95% copper, 5% zinc alloyed pennies minted up to 1982 - may not individually be worth much in and of themselves. But, when sorted from circulation and saved over time, their value multiplies as a function of the scale upon which they have been accumulated. Coinflation.com currently ascribes a worth of 2.21 cents apiece to the copper metal content intrinsic to the penny, based upon the most current - 1/15/2010 - price of $3.3397 per pound of scrap copper. That means, were there a buyer at this price, that $100 face value of copper would represent $221 of wealth on the secondary market.

There is such a market - as evidenced by the presence of copper cent retailers on ebay - for copper cents as bullion. But currently, the prices realized for these cents does not match their putative value. There are at least two reasons that could explain this shortcoming. There is presently a melt ban on pennies and nickels. Legislated in late 2006, it was mandated to attempt to ensure that these coins - whose face value at that time exceeded their nominal worth by a considerable margin - would remain in circulation and not disappear faster than vanishing bees experiencing Colony Collapse Disorder.

Thus, investors who amass cents now are speculating that the ban will be lifted in the future, and that the coins they accumulate will gain commensurately in value when that happens. Another reason that pennies don't fetch more is because they're essentially free at this point in time. You can obtain them at face value merely by socking away pocket change, or to accelerate the process, by requesting them from a bank in quantities of several rolls or a $25 box at a time. A broad group of small investors - who like the concept of sorting and saving copper cents, and can afford to do so - is represented by a gamut of socioeconomic tiers.

No different really, than the gap between the rich and the poor, the same situation exists lower on the earnings totem pole, simply with narrower parameters. Individuals - who have assumed the mantle of copper harvestor, and now mine for cents - may have little money to purchase a stockpile of pennies to examine, but have plenty of time to sort them. Those represent one division of incipient copper savers. At the other end of the spectrum, there are those who are employed - earning moderate wages, that allow them the discretionary income to invest - but who have scant time to sort. They form another cohort.

In between these two groups may lay the broadest echelon of copper enthusiasts, one that embraces a group which is actively engaged in sorting and saving a hoard, to those who are doing some sorting, and some purchasing of others cents due to time constraints, to those who must resort to paying for someone else's labor because, realistically, they don't have the time to do it themselves. It does take effort to obtain pennies from a source that will provide them to you. And it requires meticulous time-consuming attention to detail to sort them by hand.

Then you'll also experience the nuisance of having to return the post-1982 97.5% zinc pennies. You want to recycle them so you can reinvest the money you receive back into more unsorted cents with which to repeat the process. It's a slow process to build a significant cache of these cents, when only about twenty to twenty-five percent of the pennies you encounter will be copper. Hence, those who do sort pennies in this fashion may be loathe to part with their hoards to those who wish to purchase them - at prices presently offered - for the quick, but meager, profits the secondary market affords at this time.

Thus, these laboriously cultivated hoards of cents actually represent options on the increase in the value of copper, ones that will never decrease in value below their starting point at face value of the cent, but have the potential to rise by multiples. But you have to act quickly. It's a virtual certainty that hyperinflation is coming down the pike. And when that occurs copper will climb two, three, even five to ten times in value. When that happens the secondary market will reflect those increases, and copper savers can cash in their cache. But you must act now to avail yourself of this opportunity. We may only have a few months before prices start to jump, and by then everyone and their grandmother will be hoarding copper, the poor man's silver.

Buy Silver. Buy Gold. Save Copper. Start Now.

Worth Your Wait In Copper

2010-01-09T20:10:00.000-08:00

"Long Term Gain or Short Term Profit" addresses some of the same issues as this piece does. That article was becoming unwieldy because of its potential length. Size does matter. I decided to break it in half, in order to discuss different aspects of the same issue. I didn't want all my readers fleeing in mind-numbing terror, stumbling over one another in horrified panic as they attempted escape from The Article That Grew Too Big, like New Yorker's in Ghostbusters scrambling to evade being crushed by the tred of the gigantic Stay-Puft Marshmallow Man. But I digress.

A realcent forum member recently asked "is it worth it to sort pre-1982 copper pennies." He was referring to the fact that those pennies are 95% copper, 5% zinc, making them a good way to play copper as a commodity. Those members know that the massive wave of money creation, more than doubling the amount of currency, will inevitably result in the advent of hyperinflation. People have begun to recognize that the dollar has lost 96% of its purchasing power since the creation of the FED in 1913. So they've begun to take steps to defend themselves. Some are amassing copper.

These pre-1982 Lincoln cents are just one example of a coin with an intrinsic worth greater than their face value. A quick Internet trip to Coinflation.com will reveal that the latest "melt" value (caveat - there is a current melt ban in place, legislated in 2006) is about 2.25 times its face value. The magnitude of valuation fluctuations is correlated to the volatility experienced by copper. Such pricing movements are exacerbated by speculation; large hedge funds can affect market direction at times. In other words, prices rise and fall, based on short term supply and demand factors.

There are a growing number of individuals who recognize this trend, and are taking action. I, for one, don't consider buying silver and gold, and saving copper, as "investing." It does represent the potential for a healthy return on your money, but that isn't my primary motivation. I am saving my money, in the safest form possible. I don't trust the dollar to that task, ergo my reliance upon precious and base metals. And there's an easy way to do that, one that offers a distinct advantage under certain scenarios. Simply begin to accumulate coins minted by the United States Mint.

In the twentieth century, modern architecture and industrial design developed a principle that "form follows function." This concept suggests that the configuration of a structure should be based primarily upon its intended purpose. Let's flip that maxim 180 degrees. You'd like to ensure that your savings are secure, and are growing commensurate with inflation. So, doesn't it make sense to avail yourself of the means most ideally suited to do so? Function follows form. The Mint has already fabricated all the coins you'll ever require to perform these tasks. All you need to do is obtain them.

Some doom and gloom analysts are increasingly predicting that a financial "End of the World as we know it" meltdown is to be our outcome. If that were to happen, then coins produced by our own Mint facilities would offer the boon of instant recognition by our compatriots. If you needed to purchase items, rather than barter, it would be alot easier to conduct a transaction with coins of acknowledged provenance and trusted weights and measures. Wouldn't you rather accept a handful of copper pennies and a few nickels for a pouch of tobacco, instead of a length of copper tubing, or a minute flake of gold?

Although the calculated value of the intrinsic worth of the copper cent, as provided by Coinflation, exceeds face value by a considerable margin, that price does not reflect current secondary market purchasing prices. Due to the melt ban, there is a speculative element of risk engaged by those willing to purchase copper cents at this time. Are those prescient individuals emboldened to do so, because they know that 2 A.M. is swiftly drawing near? At which time they expect a drunken Fiat McDollar will stagger forth stupefied from The Lucky Shamrock Tavern, and promptly proceed to pitch face first into the gutter?

So perhaps the question would be better worded not as "is it worth it to save copper pennies?" But rephrased with similar intent, "is it worth your wait in copper?" To tolerantly endure until the eventual price rise makes your patience worthwhile? One day, such perserverance will be lucrative, but how long do you need to wait for that payoff? That requires us to crunch some numbers. To formulate an answer to that question involves consideration of a number of variables. What are cents worth now? How much trouble is it to obtain them? What is your time worth?

We've already covered the current worth of these cents. Let's move on and examine how much effort is expended in accumulating them. Presently, you will encounter a mixed ratio of copper to zinc cents that varies considerably dependent upon what part of the country you are sorting in. Understand that this is a subjective estimate, but from what is reported by forum members those numbers range from about eighteen percent to as high as thirty percent "good" pennies to "bad." Gresham's Law again. Keep the copper, put the zinc back into circulation.

Regional pockets might experience numbers outside these parameters, but they most likely would be anomalies. Within small communities with high unemployment, for instance, it might be the case that individuals afflicted by hardship would part with coin collections, or cash in their "rainy day" savings. The pennies that languished for years in large five gallon plastic water bottles, intended for the Disneyland trip that never materialized, might be returned to circulation and impel an artificially high percentage within that immediate environs.

Likewise, should an enterprising individual with dollar signs in his eyes set up shop to "corner the market" on copper cents by running a penny processing center replete with multiple Ryedale coin sorting machines, the percentages within his domain might plummet. If someone were to hoard copper by the ton, they might vacuum up all the cents in their bailiwick. Their own efficiency would work to their detriment, with the result that they would need to range further and further afield to acquire new source banks with richer copper deposits.

As far as percentages are concerned, where are we now, and where are we headed? The longer you wait to begin sorting, the harder it will become to accumulate a fixed number of cents. More players are entering the game, and the rules are changing with each year. What used to be a hobby for coin collectors is becoming the purview of quasi-farmers attempting to grow base metal profits. The quicker they can sort the wheat from the chaff, the greater their crop yields. God forbid that Case, John Deere, or Kubota should ever produce an industrial grade penny harvester. The percentages would fall like scythed fields of grain.

Approximately 171,000,000,000 Lincoln Memorial pennies were minted between 1959 to 1982. Let's assume that there are as many as one billion wheaties - minted between 1909 and 1958 - still circulating in the mix. That's a very generous assumption, the real number is probably far lower. So, initially there might have been as many as 172,000,000,000 copper pennies circulating as 1982 began. The United States Mint estimates that coins should last thirty years, on average, depending on the degree of their utilization. More frequent use will result in faster wear.

Although I have yet to see a penny that has eroded so badly that you would fail to recognize it, this undoubtedly occurs. As well, pennies are crushed, abraded by tires where the rubber meets the road, lost in landfills and at sea, and squashed by penny elongators. Corrosion can take its toll. So attenuation occurs, and the ranks of existing cents are constantly thinning. Only the fabrication of new zinc cents keeps the number stable. In 1982, therefore, the percentage of copper cents a sorter would have encountered would have been 100 percent. How rapidly is this changing?

In late October of 1982, the Mint changed the composition of the cent to reduce expenses. Since that time, not counting the proof cents issued by the San Francisco Mint, there have been (through 2006) approximately 254,000,000,000 newly-created zinc pennies. If we assume that, on average, about one fourth of our pocket change will be copper, then that leads in some interesting directions. If my math is correct, this leads me to conclude that as of early 2007, there were approximately 317,500,000,000 total pennies in circulation.

I don't have mintage figures available, so let's add the average of the zinc cents produced yearly to arrive at a current census. With the exception of 2009, when production of the new commemorative Lincoln cents was limited to roughly 1.3 billion coins, prior years averaged 5.3 billion. So add 2007 (5.3), 2008 (5.3), and 2009 (1.3) to the total for zinc cents. Now divide that number by four and multiply it by five, for an approximate current total as we begin 2010 of 329,375,000,000 pennies in circulation. Isn't it reasonable to conclude that alot of these older cents will disappear each year due to the aforementioned causes?

Let's arbitrarily assign an attrition rate of 2 billion and append another 3 billion for hoarding. This is conjecture, but let's play with it. This means that of the original 172,000,000,000 pennies circulating in 1982, only 66.475 billion now remain. About 61.13% of the copper cents circulating in 1982 have disappeared due to one cause or another! The existing pool of copper pennies is being diluted, more and more, with the passage of time. Add 5.3 billion zincs, subtract 5 billion coppers, annually. The percentages encountered are constrained to drop.

This will continue, year after year, so long as more zinc pennies join the fray. Even if no one is sorting and hoarding them, the percentages will fall. It's nice to make a grand entrance, but if you wait too long, this party will be over. So we start with 25 percent. Let me get out the abacus to double check my numbers. By 2011, 22.67 percent. By 2012, 20.42 percent. The numbers worsen the longer you procrastinate. As a burgeoning groundswell of copper harvestors toil over their crops, their yield would increase as well, accelerating the take-off of copper cents. Should that happen, it's possible the Mint would increase the production of zinc pennies to offset the loss. The numbers would drop ever faster. Scarcity will generate higher prices.

So, your opportunity of encountering a healthy percentage of coins to sort from circulation is diminishing each year that you wait. Each month. Each week. Each day that you delay. Perhaps only infinitesmally, but the longer you wait to start hoarding copper, the more it works to your disadvantage. That's only one component of the question. What happens with the price variable as you wait? Since the price of commodities -priced in dollars - moves up when the value of the dollar diminishes, then one need only approximate the velocity with which the dollar is depreciating to approximate the nominal increasing value of commodities in coming years.

John Williams at ShadowStats.com has tracked the original Consumer Price Index, the one which purported to accurately portray pricing increases on a basket of goods utilized by average households. He has kept track of the calculations since the Bureau of Labor began subverting their own numbers and figures that true inflation is at least 7 percent a year. With the tsunami of money created by the FED threatening to inundate us with hyperinflation, I think we will look back at the days when inflation was only seven percent as "the good ole days." At a minimum, your cents that are worth 2.25 today will be worth 2.4 next year, and 2.57 the following. But I think things will heat up much more rapidly.

If you decide then - to sort and save, hang on to your cache, and not cash in yet - would it be worth your wait in copper? Copper climbed 140 percent last year to crest the summit of Mount Profit, leaving his precious metals elders far behind, tiny specks wheezing up the trail blazed by their base metal cousin. With hyperinflation imminent, and a corresponding avalanche of cascading dollar depreciation a very real prospect, the percentage gains of real money will be much greater than a paltry 140 percent. Whether copper continues to outperform silver and gold or not, history guarantees that it will be worth your wait in copper.

Buy Silver. Buy Gold. Save Copper. Start Now.

Copper Millions

2010-01-04T04:04:00.000-08:00

Some of you are wondering why I cleverly named this blog Copper Millions? Perhaps, you might think, it's because I expect to become wealthy from encouraging others to invest in copper cents as a commodity, thereby driving up the value of my own investment? Nope. Close, but no cigar. Others might think that it relates to the scale of my holdings? That it's necessary to amass millions of pennies, to accrue significant worth in copper? Truth is, all the good names were taken. My search for a site name was therefore somewhat constricted due to availability.

I'm investing in copper as a commodity, as you should. But I'm using Lincoln cents, rather than futures or equities. One of my goals in using real tangible metal is to preserve my purchasing power in this era of rampant inflation. The diminishing dollar has now declined 96% since 1913, when the FED was created. The financial world had grown accustomed to using a figure of ninety-five percent. However, since September 2008 the monetary base has increased nearly 140%, exacerbating that number. Only the British Pound Sterling is in worse shape than the dollar. It's too late to go to the gym.

Ramifications of this sudden influx of new currency are impossible to quantify, but one sure consequence is massive inflation. This incredible surge in the tide of liquidity will have an insidious effect on the dollar. Glenn Beck makes reference to this economic debacle and, with tongue-not-so-firmly-in-cheek, offers a disparaging aside to Al Gore, when he refers to his line graph as An Inconvenient Debt. He displays a graph with a hockey stick formation that demonstrates a parabolic increase in the monetary base, and warns that the threat of hyperinflation is real.

You've heard this before, but this is a good time to repeat it. "By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens." That quote is attributed to John Maynard Keynes. The English economist lived from 1883 to 1946, but what he said is more relevant today than ever. Another economist, Milton Friedman, said "Inflation is the one form of taxation that can be imposed without legislation." Pithy aphorisms aside, our dollars don't buy what they used to.

Within the investment community, probably less than one half of one percent takes action to purchase precious metals. Call it our own small fractional reserve. Sure, they'll give it lip service, but just knowing that silver and gold serve as insurance against the loss of your purchasing power is not enough. Action is required. They can't act as a safe haven if you don't hold them in your hot little hands. Copper and nickel function as money now, and silver and gold will resume that role when fiat currency is recognized to have no more value than an expired coupon.

This is where my blog title could be construed as apropos. Sure, I'd like to think that someday I'll become a "high net worth" individual. Copper as an investment vehicle certainly has the horsepower to transport anyone to that destination, should they be able to put more gas in the tank than the amount of capital I can currently deploy to that task. My goals are more defined. I would like to be able to say that I've got millions of copper cents in my cache. $20,000 amassed in cents would accomplish that feat. That's a concrete target attainable by any number of investors.

That number might be mere pennies, comparitively, to investors who deal in dollar figures tens, hundreds, or even thousands of times as great. But, don't be dismissive of a goal this size. If you recall, I am recommending copper as a commodity play - for those who are already established via asset allocation into silver and gold - as a further means of diversification. And, the primary emphasis of these articles is to encourage participation for beginning investors. Any resolve one can articulate is respectable, as long as it stimulates the initiative to accomplish it. As well, a finite number is less nebulous - thereby providing focus for ambition - rather than one simply entertaining reveries of wealth.

Speaking of fantasies, wouldn't it be nice to imagine yourself The Man of Steel? Only, in this case, you could be The Man of Copper. You could daydream of sitting in your Fortress of Solitude; Superman surrounded by mounds of gleaming pre-1982 copper cents. Like an aurora borealis - shimmering copper-hued above virtual reddish-brown mountains ranged about you - the radiated candescence of their scintillating luster would reflect in flickering chiarascuro upon your chiseled-granite features. You could use one of your special abilities to examine each individual coin in a frenzied flurry of super speed.

When you discovered a MS69 brilliant uncirculated 1909-S VDB penny, along with other rarities, you could cackle with resounding 150 decibel glee. Last heard by homo sapiens at your unfortunate eardrum-shattering incident during the Fifth Annual Smallville, Kansas Hog Holler and Hootenanny while a teenager, the magnitude of your megaphonic laugh - reverberating across the frozen field like the colossal sonic boom of Glamorous Glennis, the X-1 aircraft - would fracture the ice causing the glacial cliffs to calve like catastrophic climate change gone berzerk. But I digress.

Let's do some number crunching. If less than half of one percent of the investing community actually buys precious metals, how many people is that actually equivalent to? I'm talking about holding actual silver and gold in your safekeeping, not investing in allocated pools like the Perth Mint program or Monex, or figurative paper ownership through ETF's like the ISHARES silver trust SLV, or the SPDR gold shares GLD. If seventy percent of households are simply ekeing out an existence, living paycheck to paycheck, I think it would be safe to exclude them from our equations.

More than at any time in the history of the United States, greater wealth is concentrated in fewer hands. The affluent top decile of earners control nearly 50% of all assets. http://www.savingtoinvest.com/2008/10/americas-income-and-wealth-inequality.html. The disparity is even greater if you examine only the top percentile. A recently updated paper, by University of California, Berkeley Professor Emmanuel Saez, Saez calculates that in 2007 the top .01 percent of American earners took home 6 percent of total U.S. wages, a figure that has nearly doubled since 2000. www.huffingtonpost.com/2009/08/14/income-inequality-is-at-a_n_259516.html.

What does this mean? In July 2008, census statisticians estimate there were 304,059,724 people living in the United States. Babies are being born at the rate of about four million a year, the relevance of which I will explain in a moment. Let's just say that, allowing for extrapolation, there are close to three hundred million Americans at least three years old. Of that three hundred million then, what number have actually purchased gold in one form or another? Half of one percent? I'm being generous if we use a figure that high. But that would be 1,500,000 precious metals investors.

It's unlikely that more than ten percent of that number actually take possession of physical bullion that they hold in close control. So let's say that 150,000 people in this country own tangible gold coins and bars. Most people have never even touched gold. They wouldn't know how or where to purchase it, even if they had the means. Show most people a $20 St. Gauden's Double Eagle and they'll likely express amazement at how much it seems to weigh. A look of wonder may cross their face, and their eyes might fill with a furtive gypsy glint as they scheme how to palm the gold and replace it with a foil-wrapped chocolate.

But very few people will ever touch gold. How about silver? Well silver was once much more accessible than it is now, since prior to 1965 all dimes, quarters, and half dollars minted in the USA were 90% silver. The Baby Boomers remember using this form of coinage when we were kids. It disappeared from circulation, thanks to Gresham's Law, shortly after 1965, when silver was removed from American coins, with the exception of the half dollar, where the content was reduced to 40 percent for four more years. Then that denomination, too, converted to an alloy of cupronickel referred to as "clad." So, many more people have held silver in their palm.

Riffle a stack of silver dollars in the presence of someone younger than thirty, and watch their face. Hand them the stack, and they'll repeat what you just demonstrated. They can't get over how different they sound compared to clad. The clarity of the timbre. The ring of real money. It's not necessary to delineate a number to buttress my theme, but let's assign a nominal value anyway. Let's say three million actually own silver coins or bullion. Perhaps fifty million have let them pass out of their possession and, when silver rises stratospheric, will rue that day. They'll become like a fisherman who bemoans the loss of a 1200 pound swordfish, "the one that got away."

So, a tiny percentage have touched an ounce of gold. A small minority have held an ounce of silver. How many have cupped an ounce of copper in their palms? A little more than nine copper cents? How about 300,000,000 people? Virtually everyone in this country, over the age of two, has at one time or another handled an ounce of copper. But they give not the least contemplation to the consideration that the lowly penny might someday have a higher value. Even now, as illustrated by a visit to Coinflation.com, the intrinsic worth of a pre-1982 copper penny is approximately 2.2 times its face value.

Someday soon, copper will increase in value by multiples, commensurate with hyperinflation. Now is the time to sort through your change and save the copper cents. If you wait, they'll disappear from circulation like the silver did. It's bad enough the dollar is pulling a disappearing act, don't let that happen to your purchasing power as well. One day millions who once touched copper will regret they didn't act on this opportunity. Why not instead be one who takes advantage of this opportune moment to accumulate your own copper millions?

Buy Silver. Buy Gold. Save Copper. Start Now.

Long Term Gain or Short Term Profit?

2009-12-31T08:48:00.000-08:00

I have written in past columns how it might be a wise idea for small investors to consider copper, for the same reasons they might want to buy silver and gold. Those who can't afford the safe haven status of silver and gold, in order to preserve their purchasing power, might want to consider fleeing to copper instead. I really think it makes little difference, except on the issue of scale, what form of real money you convert to from Uncle Ben's Baby Soft Bun Wipes. Just use that soon-to-be-good-for-nothing-else-but-toilet-paper fiat currency as quickly as you can, or you could be wiped out.

Christmas brought an opportunity, like merchandisers following the Holidays, to pick up some gifts at bargain prices. This may be because trading in metals commodities is traditionally lighter during this period. Whatever the cause, silver and gold have temporarily drifted downwards in price. Gold under $1100 and silver under $17.00 offer attractive entry points. Buy yourself a gift, before the shelves are stripped of overstock. Obtain some real money - silver and gold - that you physically hold. You don't have to buy the copper; you can save it from your change.

Most Americans - even if they don't understand Gresham's Law - that bad money drives good money out of circulation, had a chance to see that in action in 1965. Prior to that year, dimes, quarters, and half dollars were fabricated from a silver/copper alloy that was 90% silver. When, in 1965, the United States Mint began using a cupronickel "clad" alloy to make dimes and quarters, and reduced the silver content in halves to 40%, people inherently understood that the older coins made from noble metal had a greater worth than their base metal counterparts.

They began to pull those older silver coins out of circulation. In fact this action created such a vacuum of circulating coinage as people began to hoard the silver, that the Mint was forced to address the sudden shortage by vastly increasing their normal production of coins. In each of the three years subsequent to the changeover, the Mint exceeded the amount of dimes previously produced as late as 1963 by about a factor of three. In quarters, the amount produced in 1963 was less than twenty percent, on average, of what followed in 1965, 1966, and 1967.

People instinctively understood that the silver coins had an intrinsic value attributed to their precious metal content, that was in excess of their nominal value. That's why they pulled them from circulation and began to hoard them. This all started forty-five years ago, and now those same coins will fetch twelve to thirteen times face value. Their worth, priced in constantly diminishing dollars, is guaranteed to rise as our currency goes down in flames like the Hindenburg. I've heard people state "I wish I could have been alive then, to pull that silver out for face value!"

Well, Siegried, you've got that opportunity now with copper. The value of a copper penny - as can be determined by a visit to coinflation.com - is worth in excess of twice it's nominal value. Can't you just picture James Cagney? Muttering, "ya dirty two-faced copper, I oughta fill ya full of lead." Pre-1982 copper cents were composed of 95% copper and 5% zinc, making them an ideal form of bullion to begin accumulating in anticipation of the dollar depreciation that will accompany the onset of hyperinflation. My magic eight ball says we might have about six months left before that happens.

I like to participate on a forum - realcent.forumco.com - where our group gathers to share ideas, swap questions, provide answers, and sometimes tell tall tales, to one another. We started out as a copper forum but have branched out to now include nickel, silver, and gold as well. Our members range from newcomers with just about any question imaginable to veterans like HoardCopperByTheTon, a site administrator with legendary near-deity status. Who needs Wikipedia when you can just ask Hoard? Recently, one member questioned whether it was worth it to sort anymore, since the sellers market for copper cents is presently limited.

At present, there is a secondary market of buyers willing to purchase sorted copper cents, but the market has receded from previous highs. Coinflation shows the present value of the copper in a pre-1982 penny to be worth 2.196 cents apiece. Copper cents are commonly traded "in bulk" at levels of $100 face value. A very well reinforced carton to ship this amount will weigh in between 68 to 70 pounds, and is the limit the post office will accept. So wouldn't you think that you could sell that face amount for $220 plus shipping? Sadly, this isn't currently the case.

Currently is the salient word. The market for copper cents is presently under-developed. Those individuals willing to purchase today - at what seem to be lowball bid prices - are assuming the risk that the present melt ban may not be removed at any time soon in the future. Accordingly, while the current melt price of copper hovers rangebound, the prices offered for $100 face value of pure pre-1982 copper cents is currently near $150. Shipping cost is assumed by the seller, or accepted by the buyer, subject to negotiation. $100 face lots did sell for $225 on ebay in the past, those prices will resume eventually.

There is an additional reason that some buyers may be reluctant to purchase sorted cents, or to increase their bid above this going rate. There is not yet any scarcity of these copper cents in circulation. If you have the time, a little bit of cash, and the interest in doing so, you can sort and save these pennies yourself. Over 100% instant return, with no downside risk. Where else can you get that promise? Those who read these columns understand that copper is headed up, and these cents - like the pre-1965 90% silver coins - will someday disappear from circulation.

That is when the prices paid for individual pennies (sold in bulk) will jump. Either as a factor of scarcity due to Gresham's Law, or because the price of copper as a commodity increases, or because the melt ban is lifted, or because hyperinflation causes the utility of barter with coins to increase in attraction, the price will increase. You can already see the scarcity issue in play now, as pre-1959 Lincoln cents - called wheaties - fetch a price of four times face value on ebay when sold in bulk. Individual numismatically desirable pennies draw bids of several dollars.

The question raised on realcent seemed to focus on the potential for short-term profit, not on long-term appreciation. Holding copper for eventual gain is a good investment, but what this member was asking was "is it a good way to make money?" Sorting copper by hand is time-consuming and labor intensive. It can result in eye strain. There are costs incurred driving to the bank, both to get your unsorted pennies, then later to redeem your zincs (post-1982 pennies). If this isn't a hobby that you love, should you be involved merely for mercenary reasons?

The answer might be maybe not. Not at this point in time, anyway. Right now, selling the fruits of your labor for pennies on the dollar may be more trouble than its worth. For that's what you're doing actually. You're selling your time and effort and expenses expended to sort the copper and produce the final lot, not so much selling the copper itself. A few buyers are willing to pay the going rate to save themselves the effort and associated costs of sorting themselves, but a precarious balance is at play here. Charge too much, and they will go back to doing it for themselves.

Can you make money sorting and selling pennies at current prices? Yes, but it is not an easy road to riches. It is a slow process that allows you to gradually increase your capital. One hundred dollars invested becomes $150. Add in some time and $150 becomes $225. Devote some effort and $225 becomes $337. $337 becomes $506. One more sale and $506 grows to $759. $759 becomes $1139. An individual recognizing the merits of copper investment, but with limited resources, would still have only the initial $100 saved in copper cents.

But look what the entrepreneur with the "can-I-make-money-now?" outlook has accomplished. It may be a slow arduous process, but sorting and selling the initial hundred dollars has grown it to the point that could permit purchase of a penny-sorting machine to simplify and accelerate the entire assembly line process. Is selling pennies quick easy profit? No, but many realcent forum members can attest to having accrued large hoards of copper cents and labor-saving equipment from this same humble beginning. Confucius say "the longest journey starts with but the first step." Follow the copper brick road.

Buy Silver. Buy Gold. Save Copper. Start Now.

A Crowning Achievement

2009-12-25T11:03:00.000-08:00

Have you ever been to the race track to watch the horses run? You might experience a surge of adrenalin, an almost palpable sense of anticipation as - their jockeys in taut readiness - the horses bunch preparing to break. As the gates open, the mounts bolt to the fore. You wouldn't be human if a sensation like lightning didn't radiate down your spine as you witnessed this equine bolt. I've watched the Kentucky Derby on television, and as the thunder of hooves pummeling the turf rounded the course, my own legs were flexing with their every stride.

The Kentucky Derby is 1 1/4 miles in distance. It's held at Churchill Downs, in Lexington, Kentucky. It's the first of the Triple Crown races, held from May through early June. It's followed by the Preakness Stakes, a race of 1 3/16 miles, held at Pimlico Race Course in Baltimore, Maryland. The final gem in the crown is the Belmont Stakes, 1 1/2 miles in length, held at Belmont Park in Elmont, New York. A horse that wins all three races in one year has mounted the utmost pinnacle of thoroughbred horse racing in the United States, and is considered a Champion without rival.

Winning the Triple Crown is such a rare achievement that it has been accomplished only eleven times in history, and not since 1978. Only the most indefatigable steed - fleet without equal - can hope to cross the finish line first in all three races. And only a premier jockey would mount such a beast, presuming to be a contender for the crown. It requires the commingling of the strength of the horse and the skill of the rider to vanquish their foes. To succeed, they must develop a symbiosis, virtually becoming almost as one, as if through some marvelous transmogrification they had transformed into a centaur.

If a razor-thin, rodent-faced, grotesque gnarled gnome of apparent Middle Eastern heritage - cheeks pockmarked with more acne scars than the moon has craters, smoking a stogie and belching more fumes than a Chinese coal factory smokestack - had walked up to you in 1973 and snapped you on the forehead with a rolled up Daily Racing Form and then leaned in to confide sotto voce "Fast Eddie is bettin' on Secretariat to win the Derby," would you have listened? What if he was dressed like Aladdin's djinni of Arabian Nights fame?

What if he was wearing a bejeweled carmine turban, embroidered gold lame vest, billowy silk parachute pants, and pointy-toed slippers with curling tips? And he informed you in his seemingly incongruous nasal Jersey accent "someone rubbed me the wrong way this morning," as he glanced around furtively,"and youse is the first guy I saw, so's I gotta grant ya tree wishes. See, I'm a Genie." If you saw him again in 1977 and he told you, "Seattle Slew, bet it all," and followed this advice with "Affirmed, I ain't gonna tell ya agin," in 1978, would you pay attention?

If you knew - before the race had begun - which horse was going to win, would that influence your wager? You wouldn't need to rely on instinct - to place what would turn out to be a losing bet - for Alydar to win at Churchill Downs in 1978. Let's depart from these musings for a moment to indulge in metaphor. The race for the finish line could be likened to the various elements of metals commodities all vying for the greastest percentage gains. Which horse will win? Will it be Barbarous Relic? One Shining Moment? Or Big Red? Gold, silver, or copper?

Is it even fair to include copper in the conversation if you're talking about bullion? After all, it's not a precious metal. Isn't it a base metal? Its main uses are industrial, not a store of wealth. Why would you expect it to increase in value under the effect of the same stimuli that are giving impetus to price appreciation in silver and gold? Will the same leather crop applied to the flank work to spur different horses? What is causing them to run at their present speed, and which might win the race? All will do well, but in which order might they win, place, or show?

The fiscal policies of our government, aided by the loose monetary practices of the FED, have resulted in the creation of a massive amount of new money. As a consequence of TARP, but extending further than that futile attempt to rescue banks whose balance sheets were bloated with toxic subprime mortgages, the money supply doubled. This took place in a little more than four months. Price inflation generally lags money creation by eighteen to twenty-four months, but commodities - goaded by this catalyst - are sure to soar.

It's no different than if a contingent of Emirate sheiks crowded to the front of the pari-mutuel betting queue to place colossal wagers on their favorite Arabians. The effect of such a sudden injection of funds of this magnitude - expanding a circumscribed reservoir of money - would cause an incalculable impact. At the time of the influx, we would be unable to ascertain what ripple effects would eventually result. The recently infused wave of liquidity is sure to have ramifications we can't yet comprehend. Let me offer an idea of what those repercussions might be like.

You're going to witness an exponential increase in the price of everything. Prices for food, gasoline, medical expenses, insurance, and utilities are going to quickly become unaffordable; particularly injurious to those on fixed income. You're going to have to purchase precious or base metals commodities to preserve your purchasing power. If you can determine which commodity has the best odds of increasing in price as the inflationary tsunami approaches land, you stand to not only survive, but to thrive. Investors who - in recognition of this likelihood - took early action, have contributed to the unheralded precious metals bull market that began in 2002.

Silver and gold have both demonstrated laudable gains affording greater profits than like investments in stocks or bonds would have realized during the same time frame. They've both emerged to recent acclaim; one can no longer characterize their advance as stealthy. Gold captures the spotlight; it wasn't that long ago that the evening news was replete with new highs that it approached or breached. Often for several days in a row. Silver lags, but has the potential to surpass Gold's percentage increase by multiples. Yet, there have been periods when both of these "safe haven" metals were outperformed by copper.

"Sure," you'll say, "any given commodity might outperform others at any particular time." This is true, and the following example is illustrative. Within any given window of reference, performance is dependent on a number of variables. Copper underwent a deeper retrenchment than silver or gold, thus just getting back to par with its levels of early 2008 makes it seem all the more impressive. If you wait to buy on these deep pullbacks - that aren't justified by fundamentals - each metal will give you frequent entry points that can prove profitable. But you'll have to overcome your reluctance to "try and catch the falling knife."

Copper is like an unappreciated maiden attempting to compete with known winners. After the global scare of October 2008, metals commodities were reigned in hard, some halted in their tracks. Although they rebounded as a recovery of sorts took place, they took another hard stumble in the mud in February 2009. Since their lows of that month, Big Red has been breezing in morning workouts and racing handily. One Shining Moment and Barbarous Relic are still on lead from their grooms, circling in their paddock, slowly warming up to overcome stiffness.

There is such volatility in the precious metals market, it's almost like weighing kiwis and cantaloupes to attempt to compare copper with silver and gold. Yet from that low of February 9, 2009 gold has climbed from approximately $888 an ounce to $1104, for a gain of 24.3%. Silver has progressed from $13.00 to $17.50 an ounce for an advance of 34.6%. Copper outperformed both, climbing from about $1.40 to $3.21 a pound. That was an incredible 129% leap, reminiscent of Secretariat's 31 length going away win at the Belmont in '73. Sometimes it doesn't matter where you are in the pack, but rather how swiftly your horse is pacing at the moment.

Finally, a strategem that is sometimes given short shrift is relative volatility. Pay heed to Ted Butler and you'll awaken to the fact that there's massive naked short selling in silver futures on COMEX, by Goldman Sachs and JPMorgan. Bill Murphy of GATA, along with John Embry of Sprott Asset Management Group claim to have incontrovertible evidence demonstrating their allegation that gold prices systematically suffer severe suppression. They claim that various Central Banks, colluding with our own vaunted Plunge Protection Team, periodically conspire to smother the gold market by a combination of pervasive gold leasing compounded by profuse short selling.

Copper's primary utilization is by industry. It doesn't wield the significant repute of a monetary fortress with long-acknowledged prowess for defending purchasing power. Most analysts fail to consider it a harbinger of inflation if its price rises moderately, thus its increase in value is not viewed as a bellweather of dire depreciating dollar dysfunction. Base copper seemingly escapes the machinations that its noble cousins suffer, and therefore manifests a relatively stable mood. Gold and silver are like bipolar patients in One Flew Over the Cuckoo's Nest, who refuse to take the lithium dispensed by Nurse Ratched. Roaming the halls, free of pharmacological restraints, they are subject to either glee or despair, correlating to their highs and lows.

The point of this piece, then, is you don't really need to scurry around the grandstands trying to handicap the horses, attempting to predict which may prove the favorite. You aren't gambling - endeavoring to win the Trifecta - by picking the exact order of the top three finishers in correct sequence. They're all winners; proven Champions. It doesn't matter if one steed is galloping, while another is cantering or trotting. A third may even be motionless, temporarily hobbled by a painful hoof spur. It doesn't make any difference. Bet the whole program; all three will do well. Call it real money physical metals asset allocation. It's a bet you're sure to win.

Buy Silver. Buy Gold. Save Copper. Start Now.

Pennies From Heaven

2009-12-25T07:16:00.000-08:00

We've all heard the phrase "pennies from Heaven," but what does it mean? How did it originate?This idiom, if it qualifies as such, does not lend itself to easy interpretation. From the Oxford English Dictionary comes this definition: "e. pennies from heaven: money acquired without effort or risk; unexpected benefits, especially financial ones." This denotation would lend it a flavor synonymous to fortuitous, similarly defined as "happening by a fortunate accident or chance, lucky or fortunate.

Remember the game show To Tell The Truth? Hosted by Bud Collyer, it premiered in 1956 and ran through 1968, with various personnel changes along the way. The cast that I remember had panelists Tom Poston, Peggy Cass, Orson Bean, and Kitty Carlisle. They would question a contestant, all claiming to be the same character. At the end of the show, after their conclusions had been reached, the moderator would ask "Would the real Mr. Mystery please stand up?"

So, would the real Pennies from Heaven please stand up? Contestant Number One? Is it an American song popularized by Johnny Burke and Arthur Johnston? The lyrics of which were:

"Ev'ry time it rains, it rains pennies from heaven
Don'tcha know each cloud contains pennies from heaven?
You'll find your fortune fallin' all over town
Be sure that your umbrella is upside down

Trade them for a package of sunshine and flowers
If you want the things you love, you must have showers
So when you hear it thunder, don't run under a tree
There'll be pennies from heaven for you and me

Those lyrics were a hit in their time, and crooners like Billie Holliday, Bing Crosby, Frank Sinatra, as well as Louis Prima and his Dixieland Band all stepped up to the microphone to perform their own rendition.

Contestant Number Two? Pennies from Heaven was a 1936 film, introducing the song, which subsequently was nominated for an Academy Award for Best Song and Best Lyrics. Starring Bing Crosby and Madge Evans, this Depression Era story portrays the falsely accused Crosby as Larry Poole, a self-confessed "troubadour", who crosses paths in prison with a deathrow inmate. The prisoner, seeking redemption, wants to leave some property to the relatives of his victim. Larry promises to do what he can to assist. He seeks to help out by delivering the deed, but as is often the course, his plans go awry.

Contestant Number Three? Pennies from Heaven was a 1978 BBC television series, written by Dennis Potter, and starring Bob Hoskins in a role which gained him notoriety and propelled his career on a fast track in the United Kingdom. Wikipedia states Pennies won the British Academy Television Award for Most Original Programme. In a 2000 poll of industry professionals conducted by the British Film Institute to find the 100 Greatest British Television Programmes of the 20th century, Pennies from Heaven was placed at number 21.

Contestant Number Four? Pennies from Heaven was a 1981 musical, adapted from the 1978 British Broadcasting Company television series of the same title. The movie starred Steve Martin in his first dramatic role, one for which he practiced tap-dancing for six months. Also starring were Bernadette Peters, and Christopher Walken. It's lavish dream sequences provided a stark contrast to the Depression Era 1934 Chicago setting in which it ostensibly took place. Dennis Potter was nominated for the 1981 Academy Award for Writing Adapted Screenplay.

Whatever the source of this curious phrase, I'd like to use it as a springboard to discuss a philosophical consideration of philanthropy, this being the Christmas Season. From the time we were little, when our parents wanted us to share our toys, I can remember mine telling me "it's better to give than to receive. Because of the economy, times are tough for everyone. Charities around the country - from Toys for Tots, to The Salvation Army - are reporting a drop in donations.

The SPCA reports more owners are unable to provide adequate care for their pets, and are subsequently relinquishing them to humane society centers in increasing numbers. Chemung County reports that in 2008 they experienced an almost fifty percent increase in owner-surrenders over 2007. The burgeoning population of cats and dogs - that are neither neutered nor spayed - is leading to a proliferation of litters of kittens and puppies abandoned in the outskirts of communities. These animals will starve if not rescued, and there are not enough responsible owners willing to adopt those that do find their way to animal shelters.

And animals aren't the only ones going hungry. One in eleven Americans are now on food stamps. A survey of 180 food banks, conducted in late April and early May of 2008, found that nearly one hundred percent have seen an increase in the number of clients served within the last year. The increase is estimated at 15 percent to 20 percent, though many food banks reported increases as high as 40 percent. http://www.fundmymutualfund.com/2008/05/food-banks-suffering-in-us-children.html

Food banks represent the food source of last resort for the indigent, needy, and homeless. But there is a growing demand as well from clients one would not normally associate as needing such assistance. "We're getting calls all the time from people who want to know how to get here," said Kristine Gibson, community outreach manager at the Stockton food pantry. "And when I ask where they live, they give an address of a nice neighborhood, one where you or I would want to live."

Unfortunately, the economic downturn is having a disastrous effect on everyone. Seventy percent of households are struggling to make ends meet, living paycheck to paycheck. Financial contributions, as well as durable goods and perishable food items are languishing as well. Demand is up, but supplies are down, if not nonexistent. "The way it's going, we're going to have a food disaster pretty soon," said Phyllis Legg, interim executive director of the Merced Food Bank, which serves 43 food pantries throughout foreclosure-ravaged Merced County.

So, we should be in agreement that a need exists. How does this reconcile with my usual columns on how to get started investing with a limited budget? Just this. I have been promoting the cause of protecting yourself against the imminent depreciation of the dollar. The pernicious practices of our administration, the profligate porkbarrel spending of Congress, and the poverty-inducing plunge in purchasing power promulgated by the FED's hyperinflationary quantitative easing policies have cast us adrift in financial rapids that are swift approaching a precipice.

You will need to purchase precious metals to survive the economic maelstrom for which we are irretrievably destined. Gold. Silver. Platinum. Perhaps even palladium. And for those of you who can't afford even the $20 if might cost to visit the coin shop and purchase an ounce of silver, check your change. If you have, literally, even just two cents to rub together, check their dates. One might be a pre-1982 Lincoln cent, which had 95% copper content. Saving those cents gives you an affordable means of participating in a base metals price rise that could offer monetary insurance similar to that provided by the "safe haven" precious metals.

After sorting through mounds of pennies found at home or obtained via your bank or credit union, one annoyance to copper cent collectors is what to do with the pesky post-1982 97.5% zinc pennies that you wish to discard. They build up quicker than you'd like to admit, almost as if they were pestiferous cockroaches - Periplaneta americana, insects of the order Blattaria - oblivious to Raid, haughtily accumulating where they fall on the floor, boasting that if there's ever nuclear holocaust that they'd survive while you would not. But I digress.

If you are fortunate enough to shepherd your resources to build a profit and work towards accumulating a fortune, rather than the goal being merely attainment of a degree of wealth for yourself that you might live in unimaginable luxury, why not begin to make charitable contributions? If it works for Warren Buffett and The Bill and Melinda Gates Foundation, why not emulate their philanthropy, albeit on a much smaller scale? The Bible encourages us to tithe ten percent of our income. You need not attend church to bestow lagniappes.

But say you do attend church to hear your favorite preacher - bearing an astonishing resemblance to Max von Sydow - deliver a Yuletide sermon in Swiss-accented English? As music plays the offering plate is passed. Say the feeble Bible-toting arthritic septuagenarian spinster prayer warrior sitting next to you has to accept the red velvet lined oak collection plate from you. The one that you had just heaped with thirty-five pounds of zinc pennies. Can you imagine the delight that might play across her face as she smiled and hissed "God Bless you, Moron!"

And as the ushers returned to the dais to deposit their booty, wouldn't it make your heart lift in triumph to know that you had been integral to swelling the church coffers and helping the needy in their Outreach Program? Pastor von Sydow lifts his eyes heavenward and pauses for a moment in spiritual piety, then intones "Ve haf much to be tankful for tonight. Ve haf pennies. I haf never seen so many pennies for Heaven's Sake." Tears would fill his eyes, so that one could never doubt his sincerity. "Zincs alot, My Brethren. Ve haf Pennies from Heaven."

Buy Silver. Buy Gold. Save Copper. Start Now. Get rich. Give some away.

How To Become A Penny Pincher

2009-12-19T13:27:00.001-08:00

Today's column will address money, not investing. Investing might be construed as planting a garden. First, you must locate rich soil and consider adding nutrients such as fertilizer. Once they are sufficiently tilled into the loam you would plant your seeds, then protect the sprouts from predation. After patiently watering and weeding and watching for weeks, you might be rewarded with a bountiful crop. But how do you begin if you don't even have an area to plant, or lack seed money?

What if your problem stems, not from "what do I invest in, to get the safest return?" Or, "where might I achieve the quickest and highest gains?" Instead, your dilemma is debt? Well then, Gardener, we have a different problem to contend with. Although I doubt you would be haunting the cyber halls of financial investing sites - reading advisory pieces, looking for tips - if you lacked sufficient capital and discretionary income to begin investing in the first place, I can't make that assumption.

If your problem is debt - at a level at which it is burdensome, or even crushing - you shouldn't be here at all. Financial advisors always caution that you should never invest money you can't afford to lose. If you have credit card debt, with banks that charge exorbitant interest rates, you need to pay them off before considering speculative market trading. If you're straining your budget so tightly that you're living pay check to pay check, you need to make sure you're putting food on the table.

If your job is in jeopardy, you should first attempt to minimize unnecessary debt. Not only do you need to live frugally to save money, you ought to start building an emergency fund capable of sustaining you for three to six months without income. The most important thing you can do is to remain solvent, to continue making monthly payments on your home. If you fall behind on your payments, your delinquency could result in a default on your mortgage, and you could face foreclosure.

I hope I've impressed upon you the necessity of taking care of the basics first. Pay off your credit cards. Many banks now routinely charge 18 percent interest, and that rate is for their better customers. Some charge as much as thirty percent. This is usury in my opinion, but I don't make the laws. Consumer protection groups have lobbied Coach Congress to enact legislation limiting the banks from arbitrarily changing the rules mid-game, but the umpires won't be on the field until February 2010.

Have you calculated how much you would actually have to earn in returns to exceed the rate of interest charged on your cards? Let's consider the lower figure of eighteen percent. You are in a tax bracket which only deducts 25% of your gross wages. Your net wages from a $1000 pay check would thus be $750. In order merely to equal the 18 percent you are paying from after tax net income, you would need to earn a 22.5% return, compounded monthly. Not very likely.

So, in the real world, it's not going to happen. Before you consider investing, pay off the credit cards. Eliminate those which charge the highest interest rates first. There are debt calculators: http://www.bankrate.com/calculators/credit-cards/credit-card-payoff-calculator.aspx which inform you how long it will take to pay off a particular balance. You can console yourself about "missing out" on the stock market rebound when you realize how much you're sparing yourself in outlay on monthly interest charges.

Yes, it's tempting to consider stock market speculation, especially if your friends boast about how much money they've made in a short period. But look how much you would have to earn. Are they making those kind of returns? Also, money invested in the stock market is not always liquid; you could get into the "next sure thing" asset class, yet have to sell at the worst possible time and absorb a loss rather than attain a profit. Past performance does not guarantee future results.

Returning to our gardening analogy, I'd like to offer guidance as to how to obtain that first seed money. How do you start investing without extra income? The text that follows will be old hat for haberdashery habitués, but hopefully, hand out handy hints to hatch helpful habits. Having hard cash is not happenstance, it must be held, hidden, and hoarded from take home pay. Since the main purpose of my columns is to encourage readers to consider small entry positions into commodities, it requires the spare income to do so.

There are sites on the Internet today that can instruct you on how to budget, how to live cheaply, how to save on groceries, how to cut your expenses in just about any area. So I need not delve into those areas when they have already been addressed competently by those with more expertise than I can wield. Mary Hunt is one. From her Debt-Proof Living website, she offers free enrollment to her email subscription service called The Everyday Cheapskate, which offers tips from the author and her readers.

The mission statement of Debt-Proof Living is: "regardless of your financial situation, our mission at Debt-Proof Living is to provide hope, help and realistic solutions for those striving to be financially responsible." They propose to do this by helping you develop a plan that puts you in charge of your money, helping you design a way of life that allows you to live below your means, and teaching you a simple approach to saving, giving and paying off debt. http://www.debtproofliving.com/HowDPLWorks/WhatisDebtProofLiving/tabid/240/Default.aspx

But can modern counterparts say it any better than someone who was already spreading the gospel during the Roaring Twenties? George Clason was born in 1874, attended the University of Nebraska and served in the United States Army during the Spanish-American War. In 1926, he issued the first in a series of pamphlets on thrift and financial success, using ancient parables to make his points. His book, The Richest Man in Babylon, wove these accounts into a coherent story that carries authority as if it were a chapter of Biblical verse.

A five star review on Amazon provides this concise synopsis: 1) Start thy purse to fattening - save and invest. 2) Control thy expenditures - watch out for self serving brokers. 3) Make thy gold mutiply - use powerful investments. 4) Guard thy treasures from loss - watch out for brokers with their hot tips. 5) Make of thy dwelling a profitable investment - rental properties, your own home, but stay within your means. 6) Insure a future income - do work that you love to do. Become excellent at it. 7) Increase thy ability to earn - education never stops.
http://www.amazon.com/Richest-Man-Babylon-George-Clason/dp/0451205367/ref=sr_1_1?ie=UTF8&s=books&qid=1261259903&sr=8-1

There are other books as well - such as The Millionaire Next Door written by Dr. Thoman J. Stanley, and Dr. William D. Danko - that present similar wisdom in a modern setting. Published in 1998, this book represents a compilation of their findings gleaned from twenty years spent interviewing members of the elite millionaire club. One of their findings? Always live well below your means. As my Dad used to tell me growing up, "Son, always live well within your means, and always live well, within your means."

Another highly recommended book is Charles Givens 1995 work More Wealth Without Risk. From the back jacket cover come the following reviews: Booklist -"There is no way that an individual cannot benefit from at least several money-saving or -earning tips." Kirkus Reviews "Uncommonly sensible recommendations...Features a wealth of smart-money tips." And Self Magazine - "Finally, someone has turned investing into a simple-to-understand system."

Extraordinary steps are necessary to survive in our current environment. The vast ocean of liquidity that the FED's quantitative easing has resulted in has doubled our monetary base in a mere four months following the stock market meltdown of October 2008. Our government's fiscal policies are insane; its profligate spending obscene. It is incumbent upon each of us to save, turn that savings into investments, and wisely shepherd those resources.

You need to save and invest succesfully to stay ahead of inflation. But, as they might say in the vernacular, "you ain't seen nothin yet." If you wish to thrive - not merely survive - you need to do everything in your power to develop your education with the aim of increasing your earnings. I suggest you get started now. Because we will experience hyperinflation soon. Owning precious metals could become the only way to defend your purchasing power. That costs money. Can you read the blueprint I've supplied? It's up to you to develop your plans. Get to work.

Buy Silver. Buy Gold. Save Copper. Start Now.

Reinventing Your 401K

2009-12-17T06:57:00.000-08:00

We don't all drink identical cups of coffee. Some like theirs black, others add cream. Some embrace the jolt of caffeine, others prefer decaf. Some prefer café au lait, cappuchino, or cafe mocha. Some like their coffees brewed expresso style, others French Press, still others Moka Italian. Some even like Monkey Butt coffee. You think I'm kidding? Google Indonesian Kopi Luwak. I bring this up only to point out, that like coffee, there can be many differing forms of a 401K. You don't have to settle for what you're served. It's all a matter of taste.

The 401K is a Defined Contribution Plan, which came into being as a result of a change in how retirement contributions were being subsidized. Businesses, from giant corporations to smaller enterprises, traditionally used to provide Defined Benefits Plans. A DBA is a pension plan under which an employee receives a set monthly amount upon retirement, guaranteed for their life or the joint lives of the member and their spouse. This benefit may also include a cost-of-living increase each year during retirement. The monthly benefit amount is based upon the participant’s wages and length of service.

The Defined Contribution Plan is a retirement savings program under which an employer promises certain contributions to a participant’s account during employment, but with no guaranteed retirement benefit. The ultimate benefit is based exclusively upon the contributions to, and investment earnings of the plan. The benefit ceases when the account balance is depleted, regardless of the retiree’s age or circumstances.Examples of such plans are 457, 401(k), and 403(b) plans. http://www.urs.org/general/pdf/db_vs_dc.pdf

From Wikipedia we learn: "Defined contribution plans have become widespread all over the world in recent years, and are now the dominant form of plan in the private sector in many countries. For example, the number of defined benefit plans in the US has been steadily declining, as more and more employers see pension contributions as a large expense avoidable by disbanding the defined benefit plan and instead offering a defined contribution plan." http://en.wikipedia.org/wiki/Pension. The result? Employees, and not their employers, will have to safeguard their own ticket to a secure retirement.

But is that likely to happen? Many worksites have a 401K plan available, but participation may not be mandatory. Only about one in five employees "opt in" to take advantage of this plan when it is offered. Why so few? The expense of funding life's daily necessities is ever increasing. More workers than you might consider are barely making it - living from one paycheck to the next - and using too much plastic to tide them over. The last thing they feel they need is another drain on take home pay.

Many are already overwhelmed, just putting food on the table, paying for gasoline, shelter and utility costs, taking care of child care expenses, clothing their families, and paying doctor and dentist bills. They may be enrolled in college or trade school trying to better their earning prospects. But that, too, incurs high tuition costs and exorbitant textbook charges. Younger employees just have too much on the plate to worry about dessert. Retirement is too far away, and of too little import to worry about now. That will change as they near the end of their careers, but by then it will be too late. So how do we address this problem?

Costco recently began mandatory enrollment for their 68,000 employees. Paul Pulver is Costco's vice president of operations for the Northeast region. He says, "We were about 47 percent enrollment rate and since we switched to automatic enrollment, our enrollment rate among our new employees is over 90 percent. Part of the way we can show we care about them is making sure we have great benefits, and one of those benefits is the automatic enrollment program in the 401k." http://marketplace.publicradio.org/display/web/2006/05/26/mandatory_401k/. Other employers are doing the same, with close to a third making enrollment mandatory in the plans they offer.

Even so, there is room for improvement. On average, initial contribution rates assigned by employer's are limited to just 3% and then targeted to money market funds. While some employers match employee contributions, even this gradual accrual of 6%, if invested too conservatively, will fail to provide adequately in retirement. The outcome of DCA plans is that they provide only about half the benefits as did DBA plans. To make matters worse, according to the Center for Retirement Research the average 401K participant has only $60,000 saved as they approach retirement. They're not going to win the race like that.

Someone needs to fire a starting gun. Once that first hurdle of enrollment is overcome, the dash is not yet done. Employees are then faced with a confusing array of choices of where to invest. Most have no clue of what choice to make, nor even who to seek for assistance. Although the research tools are available on plan websites, few will take the option to review the funds available to determine their investment style. Are they large cap? Small? Growth? Value? International? What is their performance history, and how long has the current manager been at the helm? Are they load or no load? Are there redemption fees for switching funds too frequently?

So how does an employee decide? Do they look at the returns on the year and invest in the fund that has the best performance so far? Greed is a strong motivator and might be too hard to overcome to preclude this option. But those funds with the best year-to-date performance often have already experienced the surge that brought them to this point, leaving the newest investors with a flat or declining return for the remainder of the year. They could hedge their bets and invest in two or three of the best, or they could make small allotments to each.

Returning to the same source cited earlier, "As a group, employees are generally poor investors, engaging in such practices as market timing, taking too much or too little risk, neglecting or over-managing their account, or not allocating their assets among different asset classes. The frequent result of these factors is insufficient retirement savings. Efforts to educate workers regarding making better investment decisions often produced limited success because of their unwillingness to take the necessary time or effort." http://www.urs.org/general/pdf/db_vs_dc.pdf.

Even if you do become enrolled in a 401K plan, with the benefit of not having capital gains taxed until such time as you begin to make withdrawals, what choices do you have? Probably a dozen at most, with perhaps a bond fund or two, a money market fund, and maybe some target date funds that balance a blend of equities and bonds for you, decreasing the riskiness of your asset allocation as you near retirement age. Your plan will likely present an assortment that the plan administrator - not your company - has chosen. But beyond the limitation of restricted selections, there is a second problem inherent to mutual funds.

Mutual funds limit performance gains with hidden fees and fixed costs. Managed mutual funds usually lag the performance of unmanaged stock market indexes, such as those offered by Vanguard (VFINX) or Fidelity (FSMKX) because of higher costs associated with a managed fund. But few plans seem to offer the option of these two S & P 500 Index funds. Why, I don't know, but at my last three jobs neither were available at any worksite. Nor did they offer what I was most interested in, a precious metals mutual fund like American Century's Global Gold (BGEIX).

How can you avoid these hurdles and still finish the race? Step off the track. Race along the infield. Don't play by their rules, make your own. What I did controverts logic. If you did it you would have Bruce Williams and Suzie Orman rolling their eyes, shaking their heads in dismay, and pointing their fingers as if they were a leveling a gun at you. But I borrowed against my 401K. "Never, never, never borrow against a 401K, they will tell you." You are paying taxes twice on the same money, once when you pay back the loan with after tax dollars, and again when it is taxed on your withdrawals after age 59 1/2.

"You'd have to be a nutjob to do that," you're probably thinking,"did an earwig burrow into your skull - like some Stephen King novel - lay eggs and the squirming larvae ate your brain, ya dum college-educated imbecile?" You’ll probably view me like conspiracy theorist Charlie Frost, the motley, more-than-a-little-bit deranged character portrayed by Woody Harrelson in the movie 2012. This guy is crazy, but maybe he knows what he’s talking about. What did I have to lose? I didn't like the choices they offered. And anyway, the interest they charge on your loan? I would be paying it back to myself.

I didn't know at the time I took the out loans that both of my plans would later offer the option of a Self-Directed Brokerage Account. Had I known then about Fidelity's Brokerage Link, which allows you to invest in virtually any equity, mutual fund, or exchange traded fund in the investment universe, it would have obviated the loans. But hindsight is always 100 percent. What I accomplished by obtaining the monies from the two loans was to set up my own precious metals bullion depository. I bought physical silver and gold with the proceeds.

I was able to take $50,000 from one plan and $16,000 from another and purchase silver and gold when they were less costly. The first purchases in January of 2004 bought me $2,912 face value of 90% junk silver, which averaged out to $6.02 an ounce. I also bought $800 face of 40% silver halves at an average of $6.13 an ounce, for a total average silver cost of $6.0345 an ounce. I bought a little gold, as well, even though I continue to expect silver to outperform gold. I purchased two $50 American Eagle one ounce bullion for $421 each, two $25 American Eagle half ounces for $214 each, and three BU $5 Indian Head gold pieces for $210 each.

The $50,000 loan was obtained in November of 2006. Naturally, prices had climbed since 2004. At that time, I wasn't fully aware of the seasonality of silver and gold; had I waited until the usual summer doldrums I could have bought them at a slight discount to what I paid, but I was still able to purchase items which would represent a bargain at today's prices. I continued to buy in the same proportions as always, overweighting silver about 4:1 to gold, and bought more junk silver for $11.87 an ounce. I also bought a BU 1924 St. Gauden's Double Eagle for $678.

I bought some gold fractionals at the time as well, in the form of foreign coins, for which I happen to have a fondness. Gold was selling for around $615 a troy ounce back then. I remember whining to myself at the premium I had to pay. I bought a roll of 40 AU 1910-A 20 Mark German gold pieces, 9.216 ounces in total, and they wound up costing $151.28 apiece, an average gold price of $656 per ounce. I repeated my faux paus once again - when I was enticed to buy more from the same dealer - ten 5 Peso Uruguay gold pieces with a cumulative gold content of 2.501ounces at a gold price of $684. But I'm happy now that I bought them.

How did I do, in retrospect? The prices of silver and gold are extremely volatile as I write this, in a state of constant flux, and unpredictable in their short term direction. But if we arbitrarily assign a value per troy ounce of $1100 for gold and $17.00, it will provide a basis for calculation. Using those numbers, then, silver has appreciated from my first purchase date 181%, and from my second purchase 43%. Gold has climbed 161% from my earlier purchases, and - disregarding the premiums paid - 78% from the later purchase. Much better, I feel, than I would have made leaving the 401K untouched, even with the eventual consequence of the added tax burden.

But it gets better than this. What happened to the stock market in the interim period that this money was removed? In January 2004, when I took out the first loan, the Dow was trading in the 10,500 range. By November 2006, it had climbed to the 12,100 range. It continued to soar until on On October 9, 2007 the Dow Jones industrial average reached an all time high of 14,164. And then what happened? One year later on October 10, 2008, the Dow closed at 7,882.51 – not quite a 50% loss. The mutual fund choices available to 401K participants plunged, on average, in excess of 40 percent. I was able to avoid that downturn with the funds that had been borrowed.

The remainder of my portfolio - both inside of the self directed brokerage account I had by this time set up within my 401K - and outside in my personal online trading accounts, was heavily invested in precious metals mining stocks, with about the same 4:1 representation of my bullion holdings. When silver plunged to $8.92 an ounce on November 20, 2008 it took my portfolio down approximately 60%. Due to margin calls I was forced to liquidate some positions. Those same mining equities have since recovered, showing some of the most marked resilience of any in the broader market. But it's been a long road to Tipperary.

I'm happy with the moves I made. I was able to add to the bullion hoard which has subsequently demonstrated nice gains. I am paying myself interest of 9.25 percent on one account, and 10.25 percent on the other. I am making affordable payments to repay the loans, and these have the same effect as dollar cost averaging into a market that is now about the same point where it was when I took my first loan. I avoided a rollercoaster ride with the funds removed, and have done demonstrably better with my investments than had I not taken this route. But this course is not for everyone.

I do not recommend that you follow my actions. After all, Bruce and Suzie have a point, and at this stage of the game you would likely be unable to replicate my success. Stocks have dropped, making that investment a bit more attractive, while precious metals continue to climb. Chasing performance - as witnessed by the recent dramatic $110 pullback in gold and $2.00 retracement in silver prices - can be risky. As well, studies have documented that the five percent of 401K participants who opt to set up a self directed brokerage account tend to lag benchmarks.

Self-directed accounts offer the advantage of a broader array of investment options, especially when such choices would otherwise be limited to a plain vanilla handful of mutual funds with perhaps the option of investing in the company stock as well. But they offer the temptation - to undisciplined investors - to trade with increasing frequency, trying to time the equity markets. In doing so, they are attempting to outguess the most sophisticated traders in the world. Studies confirm they do poorly in this regard. Furthermore, there are administration fees and other ancillary costs to SDBA's.

In closing, let me reiterate, drawing a loan from your 401K goes against the grain of traditional advice. Applying for and administering your own virtual portfolio within a self-directed brokerage account is beyond the skills set of most. Might as well just choose poorly and lose money among the mutual funds that are offered within your 401K than to exacerbate the confusion and accelerate your chance of churning your account to rubble. But I wanted more control over my future, so I took matters into my own hands. It's not for everyone, but if you find yourself in the same shoes I wore, then you could look into these options.

I already had some precious metals stockpiled to ward against the plummeting purchasing power of the rapidly depreciating dollar. But I wanted more. The problem with any type of dollar denominated assets such as equities is, under the hyperinflationary environment which we shall soon likely experience, the nominal value of stocks - priced in fiat currencies - will skyrocket, but their true value will simultaneously erode. Then, when you start to withdraw your money several years down the road, you learn your equity values have hyperinflated as well. There goes your tax bracket. I'd rather face hyperinflation with real money - silver and gold - jingling in my pockets.

And besides, who wants to be in the stock market anyway? By the time we retire, Robert Kiyosaki - in his 2002 book Rich Dad's Prophecy, Why the Biggest Stock Market Crash in History is Still Coming... and How You Can Prepare Yourself and Profit from It! - is predicting that the whole shift to defined contribution plans will cause the largest stock market decline in American history. As 76,000,000 Baby Boomers begin mandatory withdrawals from their 401K's, they will have to sell their stocks. It is inevitable, says Kiyosaki, that the market will go into a freefall when this happens.

There just won't be enough buyers to offset the selling, with the result that Wall Street might as well relocate to Niagara Falls in preparation for the plunge. All that water going over the precipice provides an awe-inspiring view for tourists. But it may become true that Kiyosaki is prescient. If that's the case, then all this verbiage could be more than just a metaphor predicting calamity. You might witness the horrifying descent of your entire portfolio in downward cascade. These events could come to pass, courtesy of hyperinflation. What you need, Partner, is a life preserver, and the best one for roiling waters like these is tangible silver and gold. Take your future into your own hands.

Buy Silver. Buy Gold. Save Copper. Start Now.

Crossing The Rubicon

2009-12-16T00:57:00.001-08:00

A few days ago I presented a case for why you might want to avoid the purchase of foreign gold coins. Today, I will present the counterpoint. Rather than produce one article that argued both sides of the coin, so to speak, I chose not to debate with myself. You've most likely already taken a position on this issue anyway, so points I make to dissuade you will not do so. And tacks that I take to convince you would only provide consensus if you felt the same way in advance. I've already presented a modicum of negativity in Don't Travel to Europe, today let's experience a blush of positivism.

Why would you want to buy gold coins? Let alone foreign gold coins? All currencies of the world are fiat, meaning unbacked by precious metals. That fact allows their respective central banks to join the party hosted by the FED. They're all present at the fete, in black tie and tails, elegant evening gowns and beribboned military dress uniforms festooned with medals of valor for meritorious service. The guest of honor is Zimbabwe, whose Reserve Bank governor Dr. Gideon Gono is being awarded the first annual Man of the Year statuette, the Golden Gimme, for unprecedented hyperinflation of a currency.

Heads of the Central Banks of several European nations are vying for his attention, but they're having trouble getting past Tim Geithner, who is running interference for his boss, brown-nosing bearded Ben Bernanke. Oh, look at that tackle. Tim has just body slammed Andrea Merkel to the floor. Now Ben has his arm around Gono and is whispering in his ear. They both laugh in unadulterated appreciation of Ben's bon mot, as just a teensy bit of Ben's comment "depression, I think not... TARP seven will solve that," drift our way. Gono's confident, broad smile reveals his pleasure that Zimbabwe supports their own strong dollar policy.

All the Central Banks of the World are currently competitively devaluing their currencies, racing to see which one can depreciate most rapidly. Which currency will go up in flames the fastest? If printing unlimited currency to fund insane monetary policies were a game, no one would have a monopoly. The nations of the world have finally found one thing to agree on. Fiat is worthless, and, frankly, they're having a field day fomenting fiduciary fealty in their fiefdoms. Facing fiscal failure they foreswear fretting and fearlessly follow functions fit to fashion a fatal flooding fiasco. Too bad it isn't foolproof.

All they have to do is convince the citizens of the world that their respective currencies have worth. They need only have faith that the dollar and franc, the yen and yuan, the pound sterling and ruble have value and all will be fine. They will all continue to merrily spend away, consuming their way via debt to a life of indentured servitude in the service of enhancing their national GDP's, and nary a concern shall be expressed regarding the plunging purchasing power of their currencies compared to a basket of other worthless currencies. If all fiat depreciates at the same time, then "Voila," all the bills get paid simultaneously and none's the wiser.

None except the poor public. Poorer by the day. Is the National Debt of other nations as daunting as our own? http://dollardaze.org/. Twelve trillion and forging further, with numbers whirling faster than a thirteen year old baton twirler on crystal meth? In order to preserve our purchasing power, our global citizenry must unite as well, and invest en masse in silver and gold as the Chinese public are being encouraged to do. Gold is increasingly, in all currencies, climbing in nominal value when measured in the depreciating fiat of any given country. You need gold to stay abreast of a hyperinflation that threatens the entire planet.

Roman law prohibited the Roman Army legion from crossing the Rubicon, a river in Italy, as a measure to ensure the Republic would not suffer the threat of internal military conflict. In 49 BC, when Julius Caesar - accompanied by Legio XIII, his force of legionaries reinforced by veterans from several units - violated this mandate he, in essence, "passed a point of no return." According to historian Suetonius, he then uttered the words "alea iacta est" ("the die is cast"). We have reached the point of no return, at which we must abandon faith in our fiat. But you won't be rolling dice to determine your fate, as long as you are secure holding tangible physical gold to ensure your purchasing power.

Why then buy foreign gold and not American Gold Eagles? After all, the United States Mint has been producing internationally recognised 31.1 gram troy ounces of .900 (ninety percent gold, ten percent copper for durability) gold purity since 1986. There are also Krugerrands, Maple Leafs, Philharmonics, Pandas, and Kangaroos to which investors could turn. Why would anyone be interested in actual foreign gold coins that once circulated, or are restrikes of coinage which once did? Availability of a reliable supply in a demand-created shortage. Historical allure provides an additional enticement.

All of the aforementioned troy ounces are produced by their respective national mints, which also provide a supply of fractional sizes. Unfortunately, with fractionals, the supply invariably falls short of demand, which causes an outsized premium to develop to obtain them. Frankly, you can often purchase a similar size of a formerly circulating foreign coin for less than it's modern bullion counterpart. Fractionals are generally available in sizes ranging from 1/2 to 1/20 troy ounce, with midrange bullion available in 1/4 and 1/10 increments. Foreign coins can be found to approximate most of the fractionals.

The Austrian 100 Corona and Hungarian 100 Korona issues are both composed of a 900 fine alloy of gold and copper. Both contain 0.98 troy ounce of gold, and are identical in weight and purity, the difference being the design of the coins. Austrian gold bullion coins bear a profile of Franz Joseph I, the Hungarian 100 Koronas show him standing, holding a sphere and a scepter. The 100 Korona gold bullion coin reverse has the Hungarian Coat of Arms, a large shield held by winged angels. http://www.cmi-gold-silver.com/hungarian-koronas-gold-bullion-coin.html

The Austrian 4 Ducats bears .4430 troy ounce of gold. 40 Franc French Napoleans weigh in at .3734 troy ounce. There are few gold coins in this weight range unless you want to incur payment of a premium for older coins of greater numismatic value from the early seventeenth century. It's probably better just to double up on the more commonly available quarter ounce near equivalents which are described in the following paragraph. If you're stubborn, you could accomplish the task to near exactitude by purchasing two Uruguay 5 Peso .2501 troy ounce gold content coins.

The most popular European foreign coins commonly available consist of the British Sovereign, at .2354 troy ounce, and the 20 franc French Rooster or Angel, at .1867 troy ounce. The Swiss 20 Franc Helvetia coin shares similar gold content as the French. German 20 Mark gold coins come onto the market occasionally, these handsome coins bearing the image of Wilhelm II, bear gold content of .2304. The Danish Mermaid, a 20 Kroner coin minted from 1873 to 1900, bears gold content of .2592 troy ounce. The Swedish 20 Kronor is nearly identical in weight at .2593. The Netherlands 10 Guilder carry .1947, and the Russian 10 Rouble, minted 1898 to 1911, bear the same.

All of the former nations of Europe at one time issued gold coins, and once having accumulated a stock of these more common coins, a collector might choose to acquire an array that would include representation from other nations as well. The Italian 20 Lire, a coin produced from 1861 to 1923, is another that bears the familiar content of .1867 troy ounce. The Spanish 20 Peseta, adorned by the likeness of Alphonso XII, and the Belgian 20 Franc Leopolds weigh the same. The Hungarian 20 Korona, minted 1892 to 1915, as well as the Austrian 20 Corona, were .1960 troy ounce.

For those desiring a smaller sized coin in the 1/10oz range, the most commonly available is the Austrian One Ducat. All the ducats dated 1915 are restrikes, and were produced between 1920 and 1936. There is no numismatic premium for this coin as One ducat coins dated 1915 are still being produced by the Austrian Mint as official restrikes. The gold content of Austrian Ducats is .1106 troy ounce. The Netherlands One Ducat - the obverse of the coin showing a knight holding a bundle of arrows - weighs the same. The British Half Sovereign is .1177 troy oz. The Mexican 5 Peso bears .1205 troy ounce.

Sizes as small as 1/20 of a troy ounce will require figuratively traveling to Mexico to acquire the 2 Peso .0482 or 2 1/2 Peso .0602 troy ounce coins. The 2 Peso is a tiny coin that is commonly used in rings and earrings. The 2 1/2 Peso is slightly smaller than an American dime, and the 5 Peso is about the size of a Lincoln cent. Sizes this small are clumsy to handle. I recommend that the investor worried about barter in the smaller amounts these increments represent salt away a stock of 90% silver content Morgan and Peace dollars, and perhaps a few hundred Walking Liberty, Franklin, or Kennedy half dollars.

There are some investors who fear a repeat of the confiscation of gold bullion that Americans were made to suffer in 1933 with the passage of Roosevelt's Executive Order 6102. To assuage those concerns, I was able to locate the following piece "Legal Precedent Favors Pre-1933 Gold Coins as a Protection Against Confiscation," which addresses the issue. http://www.usagold.com/gold/special/current.html

" In 1954, the Treasury Department recognized at last that the time had come to legitimize the numismatic gold market. Consequently, an amendment was made to the Gold regulations, to the effect that all gold coins minted prior to 1933 would subsequently be presumed to be rare and of recognized special value to collectors, without the necessity of further specific determinations by the Treasury."

"Coins minted after 1933 were still subject to specific Treasury Department rulings, which were to be base on the advice of the Curator of Numismatics of the United States National Museum. All U.S. gold coins and the vast majority of foreign gold coins were thus freed from the overhanging threat of confiscation, and a new era for American numismatics appeared to begin." This quote was excerpted from a detailed account by Donald Hoppe written in 1970. In any event, your concern would be better placed in fearing the pernicious destructive loss of your wealth as the dollar insidiously declines in value, rather than a repeat of gold confiscation.

In closing, foreign gold coins provide investors worldwide a means of protecting the purchasing power of their prospective currencies. While a greater demand stemming from collectors with historical interest will reside in each country of origin of these pieces, investor demand for gold is burgeoning. Coins not now promoted are available, essentially at mark down prices, purchased solely as bullion because they are not now well known by the public. At times the premium paid for smaller foreign coins will be less than for similarly sized fractionals. As gold replaces fiat as trusted money, I am confident these coins will gain familiarity and be easily liquidated.

Buy Silver. Buy Gold. Save Copper. Start Now.

Don't Wait For A Better Buy, Better Buy Now

2009-12-13T09:05:00.000-08:00

I participate on a forum, realcentforumco.com. We discuss scrap metal salvage, and the buying, selling, collecting, search for, and hoarding of United States coins. Essential to this discussion is that metallic forms of circulating - and retired - money have intrinsic value, often in excess of face value. Saving these cents and nickels, and searching for or buying 90% silver content coins no longer in circulation, provides a means of protecting your purchasing power as the dollar depreciates in value. Coins are commodities, only on a smaller scale.

I've mentioned before how copper presents a compelling opportunity to participate in the anticipated commodities boom. The smallest of investors - I'm talking about both those with little capital, as well as those who are just little - can afford to save cents. If you're going to save an emergency stash, why not fund it with copper pennies? Teach your children the value of money at the same time as you deposit copper pennies into their piggy banks. Pre-1982 Lincoln cents are 95% copper; they're worth more than double face value now. Hold onto them.

The dollar serves as the reserve currency of the world. It's in danger of losing that privileged international status. It's prestige is diminishing. As the dollar declines, commodities priced in dollars tend to increase. This traditional inverse relationship has bestowed upon precious metals the asset class of safe haven. Copper and nickel, by all rights, should be afforded that same status as well. But they are beneath the radar of most who target larger profit, positioned aboard the silver and gold rocket which is aiming for the moon.

We're not here today to hear about the benefits of starting your own copper cent hoard. Let's talk instead of market timing. Or, rather, trying to time the market. Many say it can't be done with any accuracy, that there are just too many variables which impact the direction of the market. Based on this consensus, the sages of Wall Street counsel us to "buy and hold." They caution that missing just the forty best (or should that be frothy) days in the S&P 500 Index during the time frame of 1987 to 2007 would have sliced nearly eight percent from your return.

Portfolio manager David Templeton - who blogs at Disciplined Investing - provide figures to support that claim. http://seekingalpha.com/article/99747-the-dangers-of-timing-the-market. Your actual return, had you followed that pattern, would have been only 3.98%, compared to the 11.82% realized by those who remained fully invested. Had you missed only the 20 best up days of the same index - of a shorter 1997 to 2006 duration - you would have lost a bit of money, rather than have matched the annualized return of 8.4%.

Maintaining discipline is not always easy, as Templeton admits. But it must remain paramount -trumping conviction - as an investor strategy. He advises his clients to do just that, remain invested for the long term. Sure, you'll have to endure an occasional wintry blast, the kind of downdrafts that often precede an ominous stormfront. But season's - like the economic climate -change. Summer will ensue, providing rising thermals that can carry both stocks and gliders aloft. And the payoff is, no one can predict just how high they'll soar.

Market timers try to anticipate events that would enhance performance or preserve capital. They want the best of both worlds. Hence, they might try to "take profits" and go to cash if they feel the markets are overbought. They hope to benefit by waiting for a correction, and then use that retracement to jump back into the markets. Buy low, sell high. Again and again. Market timers are just like big kids on a teeter-totter. They want to be on the side of the ride that's having the most fun. We've been talking about stocks. But what about precious metals?

In its recent run, gold seemed to be reaching for new highs nearly every day. When it hit the $1225 level, I heard realcent contributors bemoaning the fact that they hadn't bought at this level or that. "I should have bought at $1100," says one. "Why didn't I buy more at $1000?" says another, "I'm kicking myself!" Others spoke of silver in a similar vein. You would think that the subsequent 9.1 percent $110 pullback in gold, and approximate 11.5% percent $2.25 fall in silver would present the opportunity they await. But does it?

Human nature tends to cause us to dread loss more than we value gain. We also tend to demonstrate selective memory when we attribute short-term performance as being representative of longer-term trends. A few days after prices have made a big move in either direction, we have already adjusted. We make fallacious decisions based on this new baseline, which may in fact prove to be only a temporary level. Prices that seemed cheap may be within reach, and a correction to levels left months ago may appear possible.

So we're faced with the question, do I buy gold now that it is at $1115? Silver now that it is at $17.00? I can hear them thinking. "A week ago I was telling myself that I should have. But now that we're here, I don't know. Gosh, the prices have been dropping every day for two weeks. What if they drop some more? Shouldn't I wait?" We have become accustomed to the current price levels due to representativeness, which causes us to give too much weight to recent evidence. http://news.morningstar.com/classroom2/course.asp?docId=145104&page=3&CN=COM

The price of silver and gold may drop further, but betting on that happening is a risk I wouldn't want to take. If you were waiting for a better buy, than you better buy now. Investors were already loading up on precious metals, and could return in force at any moment. Silver is a volatile market, moreso than gold. It is subject to sharp sell-offs that many feel are due to naked paper shorts at COMEX. Ted Butler has contended this for years. His musings on this topic may be viewed at this site: http://silverbearcafe.com/private/silveraccident.html.

While plunges in the price of silver can be sudden and disheartening, in retrospect they prove temporary. We are in the midst of a long term bull market for silver. While no one can tell you how long current prices will last, I can assure they won't. It may be a matter of days, or weeks, but the buyers will be back. This retracement will some day be viewed only as a respite that allowed time for consolidation at these levels. After that, it will be back to the races. I hope you have your entry form filled out, and track shoes laced.

NASA built the space program, but you have to build your portfolio. Like an intrepid Apollo 11 astronaut on the eve of their lunar mission launch, you could accomplish the same achievement as did Neil Armstrong, Buzz Aldrin, and Michael Collins by boarding your own rocket bound for that same destination. They used a three-stage 363-foot rocket providing 7.5 million pounds of thrust to propel them into space and into history: http://www.nasa.gov/mission_pages/apollo/apollo11_40th.html.

Silver and gold are like that Saturn rocket; poised for launch. As the RP-1 rocket fuel and liquid oxygen oxidizer ignite, an enormous rumbling is heard. Fiery gouts of flame emerge from it's base. Huge plumes of steam billow forth forming furious fuming clouds with radiated heat like a pyroclastic wave. At a safe distance, a gigantic roar of approval reverberates from the admiring crowd. When silver and gold finally do take off, like the launch of 1969, it will be a moment history will never forget. Make sure you're on the same page.

Buy Silver. Buy Gold. Save Copper. Start Now.

A Bad Spell For Silver

2009-12-11T21:00:00.000-08:00

Have you ever accidentally mistyped a search field while browsing on ebay? And found to your astonishment just how badly some people spell? You'd be amazed at the number of variations they contrive. Don't these sellers proofread their listings? Don't people email them to write they're wrong? Okay, so I was a seventh grade spelling bee contestant. Call me picky, but this just rankles me. Maybe, I'll just take advantage of the fact that they're learning-disabled. Their ignorance can become your bliss.

Before we proceed, let me dispel the impression that I might be callous to those with handicaps. Mispelled words could be the result of dyslexia, a real malady which afflicts millions, much to their detriment. From Wikipedia we learn that dyslexia is a learning disorder that manifests itself as a difficulty with reading and spelling. It is estimated that dyslexia affects between 5% to 17% of the U.S. population. Dyslexia is thought to be the result of a neurological defect, and is diagnosed in people of all levels of intelligence.

My title "a bad spell of silver," refers to the fact that a few times, while hurrying, I have mispelled silver when typing in the search field, and entered sliver instead. To my surprize, I found entries listing sliver for sale. Sliver is remarkably similar to silver, as it is sold in face amounts of 90% sliver content coins, it's just spelled differently. And it doesn't cost as much, because bidders don't know it exists. Few people bid on these auctions, because they don't know they're there! They're there now.

Today there are fifty listings under United States coins for sliver, there are sixty-nine under the category Coins and Paper Money, and another fourteen under bullion. Under siver we have thirty four for the first category, sixty for the second, and eight under bullion. How creative can we get? I found three auctions for sivler coins, and five ebay stores carried those items. There were two listings for siler coins and four ebay stores carried similar items. And there was one listing for a selver coin.

There are even listings for silveer items, though only one is a coin. The others are jewelry. Finally, I found one item that was made of slilver. Gold doesn't seem to be as big a problem, for some reason. I guess there aren't too many ways to mess up a four letter word. Though I did find one listing for a gould coin, and twenty-five for gild. Perhaps that can be forgiven, since to gild is to decorate with gold leaf or liquid gold, and these coins are composites of silver with a thin veneer of gold adhered to them.

Do a little research on completed listings and you tell me you can't bargain hunt like this if you're willing to take the time. What I do like to do is type in the broadest search possible, that could in all likelihood encompass all of the tiny niches these weird listings would fall under. I typed in only the word silver and found 1,235,427 auctions. Most of these listings are not coins, the great majority are for jewelry and watches. You'll notice auctions - advertising clothing, shoes, and accessories, and antiques - as well.

But it pays to broaden your search like this. You can find items you would otherwise miss. Just disregard anything but coins, and scan as fast as you can. You'll have items expiring at the rate of thousands a minute. You should probably forget items with less than ten minutes remaining and give yourself a headstart. Otherwise, if your interest is captured by an item, it will take a minute just to confirm that it's something you'd like to bid upon, but in that instant the auction has expired.

If you're going to do this you have to know in advance how much you're going to bid, because you have to be The Flash, in order to read and bid this quickly. But, again, it's worth it. Why? Because - according to the search results produced when silver is entered - if you were to enter "silver coins" you would get 25,212 hits. But how many do you get when you enter silver as the broader category? Then you get 98,525 hits, under the same subcategory of Coins: U.S.

The same holds true for gold. Type in gold and you get 1,219,475 hits, of which 32,256 fall under bullion and 15,834 are classified Coins: U.S. But type in gold bullion and you only generate 7,970 hits. Type in gold coins and you'll only get 9164 hits under Coins: U.S. You're missing out on seventy-five percent of the precious metals auctions you could be bidding upon. And if you're missing out, so are most others. And if they're missing out, then likely the winning bids are lower. And you call yourself a Roman, Centurion?

I've gotten deals in the past where I was able to buy two troy ounces of gold for $100 each under the going rate, all because I took the time to look for mispelled forms of the word Krugerrand. I wound up as the only bidder on two Kruggerands that were listed by a seller in Arkansas. I won the bid at the opening price. A happy camper pitched his tent that day. Mispellings of this gold coin, in particular, are so acute that there is a website that maintains a list of errors: http://www.taxfreegold.co.uk/krugerspellings.html

I think I'll go look now and see if I can't repeat my luck. Looks like there are 282 Krugerrands listed, but only twenty-six Kruggerands. I'm surprized there aren't Freddy Kruegerands as well. Maybe during Halloween? I think I'll go check out listing 350288495224. "Krugerrand 1/4 Ounce gold 1982 kruggerand No Reserve." This guy lives in Texas, land of the chainsaw massacre. Do you think he would slash the price if I told him his listing was worse than a nightmare on elm street?

Buy Silver. Buy Gold. Save Copper. Start Now.

What's Really In Fort Knox?

2009-12-09T08:48:00.001-08:00

The Trading with the Enemy Act, enacted in 1917, gave the President the power by law to oversee or restrict any and all trade between the U.S. and her enemies in times of war. Franklin D. Roosevelt amended the act to extend its scope to the hoarding of all gold. As part of the New Deal, Congress approved legislative changes which removed gold from circulation as money. Private ownership of gold in the U.S. became illegal on April 5, 1933 with the passage of Executive Order 6102.

An exception was made allowing each individual to retain five troy ounces, or $100.00. Rare and unusual numismatic gold coins - having recognized special value to collectors - were exempted. But millions of gold pieces - $20 St. Gauden's and Liberty Head double eagles, $10 eagles, $5 half-eagles, and $2.50 half eagles, that had either been in circulation or hidden away in safety deposit boxes - funneled into the coffers of the Treasury Department. A facility was needed to house them all.

Thus began construction of The Gold Vault. Completed at a cost of $560,000, the doors were opened to accept bullion in December 1936. Wikipedia states: "the first gold shipments were made from January to July 1937. The majority of the United States gold reserves were gradually shipped to the site, including old bullion and more newly made bars made from melted gold coins. The transfer needed 500 rail cars and was sent by registered mail, protected by the U.S. Postal Inspection Service."

Fort Knox, more correctly named the United States Bullion Depository, is located within the confines of the real Fort Knox, a United States Army post in Kentucky. The 109,000 acre base is located south of Louisville, and sports a population of over 23,000 soldiers, family members and civilians. The U.S. Army Armor Center is based there, as well as the U.S. Army Armor School. Training - for both the Army and Marine Corps - is conducted there for crews on the M1 Abrams battle tank. Well guarded, wouldn't you say?

Doesn't Fort Knox evoke memories of Goldfinger, Ian Fleming's 1959 novel? In which Auric Goldfinger - planning Operation Grand Slam - is intent upon heisting the gold contained in that vault? James Bond thwarts this attempt. If you didn't read the novel you've seen the 1964 film. Gert Fröbe is "The Man With The Midas Touch" and Sean Connery his 007 nemesis. In that version, it's up to Bond to foil a plan by the villain to force open the 22 ton blast-proof doors and detonate a device that would irradiate the reserves.

If you really want to watch things blow up, we should write our Senators and implore them to support senate bill S604, Representative Ron Paul's "audit the Fed" manifesto. The companion bill - HR 1207 - already passed the House of Representatives Financial Services Committee. Can you imagine the explosion - of disbelief, consternation, and vengeful litigation that would ensue - if ever such a bill passed permitting inspection of the contents of Fort Knox, and we discovered that the vault was empty?

What would happen if a bipartisan regulatory committee were allowed to physically canvass the premises scouting for the 4,603 tons - 147.4 million troy ounces - that the U.S. Department of the Treasury claims is stockpiled there? If such an inspection revealed there were gold, but not in the specified amount? If an assay determined that the reserves safeguarded there were not what they appeared to be? That the cache of bullion bars deposited their were suspect in their purity?

China Tungsten Online, http://www.tungsten-alloy.com/en/alloy11.htm headlines Tungsten Alloy for Gold Substitution: "its density of 19.25g/cm3 is just about the same density as gold (19.3g/cm3), which bears the similar specific gravity. These advantages make tungsten... the best substitute for the costly metal of gold or platinum... a coin with a tungsten center and gold all around it could not be detected as counterfeit by density measurement alone. We are well accustomed to exploit more innovative applications of tungsten products. Gold-plated tungsten is one of our main products."

Could there be any truth to the talk of 400oz gold-plated tungsten bars seemingly proliferating in bullion depository vaults? Rob Kirby states that just such a thing could well be the case. He has been making some specious statements, but tempers their strength several times by the use of modifiers. In "Doing God's Work," his recent column of November 12, 2009 details in greater length http://www.financialsense.com/fsu/editorials/kirby/2009/1112.html the statements that follow.

Quote: "reports of 400 oz. 'good delivery' bricks of gold found gutted and filled with tungsten within the confines of LBMA approved vaults in Hong Kong... the amount of 'salted tungsten' gold bars in question was allegedly between 5,600 and 5,700 – 400 oz – good delivery bars.
This was apparently all highly orchestrated by an extremely well financed criminal operation. Within mere hours of this scam being identified – Chinese officials had many of the perpetrators in custody." He goes on to say: "And here’s what the Chinese allegedly uncovered."

"Roughly 15 years ago – during the Clinton Administration (think Robert Rubin, Sir Alan Greenspan and Lawrence Summers) – between 1.3 and 1.5 million 400 oz tungsten blanks were allegedly manufactured by a very high-end, sophisticated refiner in the USA (more than 16 thousand metric tonnes). Subsequently, 640,000 of these tungsten blanks received their gold plating and WERE shipped to Ft. Knox and remain there to this day."

"I know folks who have copies of the original shipping docs with dates and exact weights of 'tungsten' bars shipped to Ft. Knox. The balance of this 1.3 million – 1.5 million 400 oz tungsten cache was also plated and then allegedly 'sold' into the international market. Apparently, the global market is literally 'stuffed full of 400 oz salted bars.' ” And in a followup comment, relating to a story which first surfaced in 2004 he states:

"In light of what has occurred – regarding the Gold ETF, GLD – after reviewing their prospectus yet again, it becomes pretty clear that GLD was established to purposefully deflect investment dollars away from legitimate gold pursuits and to create a stealth, cesspool/catch-all, slush-fund and a likely destination for many of these 'salted tungsten bars' where they would never see the light of day – hidden behind... legalese 'shield' from the law." End quotes.

Trace Mayer sent me this link "Why Gold Bugs Are Nuts," written by Alex Stanczyk. http://www.rapidtrends.com/2009/11/14/why-gold-bugs-are-considered-nuts/ Stanczyk pens the ‘Rapid Trends Insider’ newsletter. He writes from the perspective of one who has been thoroughly vetted in all things bullion. Stanczyk, without identifying the author or resorting to an ad hominem attact, points out the weaknesses in Kirby's allegations. "This story is tainted," my words, not Stanczyk's, "taint nothing but bullion crap."

He writes that unsubstantiated Intranet rumors has set gold bugs to running around screaming "the sky is falling." On that premise, I would assume that Stanczyk feels such a tale to be fantastical. He contends the author's allegations are unfounded if proof cannot be produced corroborating such claims. "Reports?" Alex says,"reports by whom? These conclusions are based on what? Where is the evidence?" Like Clara Peller - of 1984 commercial fame - stated, "where's the beef?"

If there really are such faux bars taking up floor space in vaults around the world, there are tests that could determine their verity, without them being fubar. Tests to ascertain authenticity include actually drilling the core and assaying the sample or, less obstrusively, to non-invasively determine actual lattice structure of the metal electromagnetically. And why would these fakes have been substituted in the first place? A criminal undertaking of unprecedented scope? Or something even more nefarious?

Were these bullion bars - if now vanished - part of a sinister scheme to suppress gold prices? Chris Powell of GATA explains: "While central banks traditionally have said they lease gold to earn a little money on a supposedly dead asset, in 1998 Federal Reserve Chairman Alan Greenspan told Congress that this was not true. Central banks lease gold, Greenspan admitted, to suppress its price." http://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm

So many questions, so many lies. Our only hope to discovering the truth may rely upon the passage of Representative Paul's bill - backed by thirty Senate co-sponsors - being approved by Congress. Even then, it would be subject to Presidential veto. When it comes to the subject of gold and Presidents, the Oval Office doesn't display the best track record. So then, have we come full circle? Central banks leasing gold into the market, to suppress the price? Isn't that trading with the enemy?

Buy Silver. Buy Gold. Save Copper. Start Now.

Don't Travel To Europe

2009-12-09T06:06:00.000-08:00

When planning a vacation, there are all sorts of questions one must ask. Where would I like to go? How long do I want to stay there? Where will I stay? What will I do while I'm there? How do I plan my itinerary? Which airline is most reliable? How will I get about once there? Will I travel by taxi, bus, or walk? Will I be able to deal with any language barriers? Will anyone there speak English? Do I need to learn the basics of a foreign language first? How do I ensure I get the best prices?

The questions could go on and on which is why, I suppose, that some travelers opt for a tour package. The advantage of such a promotion is that all the worry of the aforementioned anxiety-producing questions has already been addressed, leaving you free of stress and better able to enjoy your trip. All you have to do is save your pennies and then fork over a humongous check, or put a ding in your credit card that the best auto body and fender shop would be hard pressed to repair.

The disadvantages of a tour package? Well, ten countries in eighteen days - like the one I went on - can quickly become a blur. You rapidly reach the point of saturation; sensory stimulation overload. Your computer simply doesn't have a large enough gigabyte hard drive to store and replay all of your pleasant memories. Best take a video camcorder or a good digital camera with you and prepare to use it constantly. Otherwise, you will forget a lot of your encounters.

Tours are preplanned so that groups can experience some of the highlights of each area, that the tour company owners feels vacationers would like to experience. Or are they? Did it ever occur to you that tour promoters are out to make money? And that the planned daytrips include junkets to destinations that merely allow them to make the greatest margins after negotiating "group-discounted" admission prices? This is evident in lodging, if you've ever spent a night in decrepit environs.

There's never enough time to properly enjoy one locale before you're whisked to the next. At the Eiffel Tower - after strenuous climbing - we reached the second platform. Try standing atop a thirty-seven story tall building. That's the height of this level, and it provides a spectacular panoramic vista of Paris. By then, only eight minutes remained of our alloted visitation time. We had to cram into an elevator then rush two hundred yards to the bus. By that time both Hanni the tour guide, and Marco the driver , were visibly upset, one clucking in German, the other muttering in Italian.

You can't say you've visited Paris unless you've attended the Louvre. It is filled with marvels. Paintings. Leonardo's Mona Lisa. Sculptures. Venus de Milo, and Nike of Samothrace. Our tour guide - just before leaving us to wonder, on our own - explained that to properly experience all that the Louvre has to offer, one would need to expend four and a half months. We had three hours and forty-five minutes. By now, you might be wondering yourself, "aren't these columns supposed to be about precious metals?" "Aren't we travelling a long ways to get there?"

I apologize for the side trip, but some of the same questions that arise regarding travel are pertinent to the buyer considering the purchase of foreign gold coins. First of all, why would anyone want to purchase gold, let alone foreign gold coins? In the United States, and worldwide, our respective governments are expanding the monetary base of all fiat currencies. While this debasement is a global phenomena, it is most egregious in America, leading to dollar depreciation that is rapidly eroding our purchasing power.

Tangible gold - and to a lesser degree, silver - held in one's own possession, have long been according the status of a safe haven. They provide sanctuary to the forlorn - fleeing foundering fiat - festering from foolish failing fiscal policies. Our once-great nation is about to become a banana republic, and it won't be because we will be planting acres of Musa sapientum in our southern states as global warming encroaches. It will be courtesy of approaching hyperinflation.

That said, why would anyone want to purchase foreign gold coins? For the same reason one might want to travel there. Curiosity. The mystique of exotic locales. The desire to experience something exraordinary. The reasons vary, but - just as one might be wary of a leprous peasant child purporting to be a docent guide - you need to be careful that you are not purchasing overpriced coins of purported numismatic value masquerading as nonconfiscateable gold bullion.

Unscrupulous dealers will sometimes import foreign gold coins and market them in this country, not because they offer compelling value to buyers, but because they can purchase them cheaply and then mark them up for greater profits. There is no such thing as any type of gold coin - not subject to confiscation - if government criminals decide they want to repeat the Roosevelt Grand Theft of 1933. They make the rules, we're just the fools. But, if that happened, it might be wise to keep a few hidden. Just for safekeeping.

One problem with foreign coins is that they don't come in easy-to-recognize fractional ounces as do more common bullion coins. If your buyer is a coin dealer - or an avid collector on ebay - you'll be fine. But, otherwise your resale market for coins with bullion content like .1867, .2304, or .2354 ounce could be limited. These coins do have a robust resale market, and premiums are paid for such gold coins, but that demand exists in their own countries, not here Stateside.

If you wish to purchase foreign gold coins, do it only to augment a foundation of several ounces of familiar American Eagles. Then, if you still want to tour the golden globe, there are several countries that produce gold bullion in an internationally recognized form, the one troy ounce round. Stick with any bullion product from Canada, South Africa, Australia, Austria, or China. You should be fine. See the sites of these nations. Just stay away from sidestreets and alleys. Otherwise the little guys could pick your pockets.

Buy Silver. Buy Gold. Save Copper. Start Now.

Buying Junk On Ebay

2009-12-06T21:44:00.000-08:00

In recent columns I have covered the issue of "getting your money's worth" when buying bullion. Recent price increases in precious metals valuations has increasingly focused public attention on silver and gold. Long viewed as a safe haven, holding these commodities is touted as a means of preserving your purchasing power as the dollar loses its status as the World's reserve currency. The dollar is depreciating fast and - like an impatient parent pushing a recalcitrant child off the end of a diving platform - its about to go over the edge and plummet.

One should always strive to get the most for their money when acquiring bullion. Regardless of the source, you want to drive a hard bargain and get the best deal you can. Right? One of the least expensive means of purchasing bullion - frequently with the lowest mark-ups in the form of premium paid above melt - is to buy old 90% silver content coins. Until 1964, these coins were in circulation, serving as our everyday change for commercial trade and personal transactions. Called junk silver, it is available from most online dealers in varying quantities, by roll or by bag.

As illustrated in another column, it is a given fact that, as silver circulates, wear accumulates on high points on the relief of the design, and along the rim. Some coins, like the early Standing Liberty quarters, were poorly designed. The date wore away too easily, in many cases obliterating the year. It is more common, nowadays, to find dateless Standing Liberty quarters than ones with the year yet legible. Coins that develop wear incrementally lose microscopic amounts of their silver bullion content, and over years the loss can become significant.

Your best bet to get the most for your money then, would be to buy bags of junk silver. As I implied, you can purchase them from any number of online bullion dealers. Or you can do like I've done in the past. Search ebay for silver, then hit U.S. coins, and you'll usually generate about 40,000 hits. You need to be fast, and know what you want ahead of time, and what you're willing to pay. Because if you take this route you'll discover that the listings fly by you, as many as fifty expiring per minute. Sometimes taking this shotgun approach can lead to good deals though.

It's probably better to take a more relaxed approach. Say you'd like to bid on $10 worth of junk silver. You could just type in $10 face silver, and you'll generate several hits. But you'd probably be better off entering silver half dollar rolls ($10) or silver quarter rolls ($10) or silver dime rolls ($5). Depending on whom your bidding against the prices can vary, but will usually reflect a small ten to fifteen percent premium to melt. Halves generally are bid higher. Don't forget to factor in shipping costs. And always check feedback for a high number with nearly 100% approval ratings.

My recommendation if you're just starting to accumulate junk silver as bullion is to pick up 1964 90% silver content Kennedy half dollars, as well as 1965 to 1969 40% silver content Kennedy halves. The 40% halves reflect the lowest downside risk, you can always spend them for their face value. But coinflation.com reveals their silver content is currently valued at nearly $2.73. The 90% are valued at $6.67. A bid at melt for $10 face would need to be $133.40. You can use advanced search features and check completed auctions for similar items to determine a fair bid.

One trick I employ is to bid on multiple listings from the same seller. They will often discount shipping and handling charges a considerable amount. You might want to underbid a bit to see if you can get the shipping essentially for free. If at first you don't succeed, don't become disheartened. There are people and sniping services that do this professionally. Just keep bidding and eventually you could win a listing. Don't make the mistake of chasing a competitor's bid if it exceeds your predetermined ceiling. There will always be another item similar to the big fish that just got away.

My second choices for junk silver would be a tie between 90% silver content pre-1964 Washington quarters and 90% silver content pre-1964 Roosevelt dimes. If the day ever comes when coins are valuable and currency worthless ("hey, that's now!") it will be useful to have all denominations for different levels of bartering. Washington quarters have been minted since 1932, you might get some earlier ones that are pretty heavily worn, with features obscured. In the parlance of coin collectors and bullion buyers these are known as "slicks."

Roosevelt dimes, in contrast, have been in circulation a far shorter period of time. Their production by the United States Mint began in 1946. They will show proportionately less wear than older dimes. Collectors are often drawn to the design of a coin, and are thus willing to pay a premium based on their desire to acquire them. This seems to be the case for the "Mercury" dime, actually originally referred to as the Winged Liberty Head design, the Walking Liberty half dollar, and the Standing Liberty quarter. If you bid on these, you'll be competing with numismatists.

I have to admit, Mercury dimes are "pert little thangs." Designed by Adolf Weinman in 1915 the former student of Augustus St. Gauden's was widely renowned as one of the nation’s best sculptors. Production of Winged Liberty Head began in 1916 and continued through 1945. This same artist designed one of the most elegant of American coins, the Walking Liberty half dollar. This coin circulated from 1916 to 1947. Herman MacNeil designed the Standing Liberty quarter. It circulated from 1916 to 1931, but its life was cut short by plans for a quarter honoring the bicentennial anniversary of George Washington's birth.

All of these coins are 90% silver bullion content, but if your goal is to get the most bullion you can afford, stay away from these puppies. While the first litter I mentioned might bump your leg and lick you affectionately, these little rascals will nip your ankles. And they have sharp teeth. The premium you'll have to pay for these coins is just too high for them to qualify as good deals for bullion. You could still place your regular bid amounts and you might get lucky. Who knows? Stranger things have happened. The revenants who haunt these roams have to sleep too, so you might have a ghost of a chance.

Finally, there's the Barber series. These coins will likely be worn smooth, even if you were to win them at a fair price. If you closely examine images depicting the coins you are bidding upon, you'll note perhaps one or two coins that might grade fair, many will be good, but most will be about good. This is not good. The features of the designs on these coins are barely visible, the date may only be visible if you turn the coins at an angle and squint, and these coins are often discolored, bent, scratched, holed, or otherwise basically obliterated. You'd be doing them a favor to bury them.

There is far too much to cover in one column to touch upon all the basics in bidding on ebay for silver bullion, but I hope I've covered the essentials. You may find it worth your time to enlist the support of a sniping service. This will free you from having to watch your auction as the clock ticks down, waiting for the last seconds to place your bid, then cursing if you're too late or if you became distracted and missed your chance. Sniping services take over this role for you. The one I use is PowerSnipe: http://powersnipe.com/. See you on ebay, where they never run out of bullion.

Buy Silver. Buy Gold. Save Copper. Start Now.

Caveat Emptor Aurum

2009-12-06T19:35:00.000-08:00

In some other recent colums, Sifting Silver, and Heavy Metal, I have been alluding to how important it is to employ an accurate system of weights and measures to ensure you get your money's worth when you buy bullion. I pointed out that precious metals are quoted with spot prices stated in troy ounces, but in America we're accustomed to using the Avordupois ounce. Troy ounces are heavier at 31.1 grams, than a corresponding Avordupois ounce at 28.35 grams.

As a result we are, at times, unwittingly paying a hidden premium to purchase coins based on this confusing duality. This can be averted if you are purchasing items minted in the same system (ie. paying troy price for troy ounce coins). For example, there is no problem - if buying American Eagles, either silver, gold, or platinum produced by the United States Mint - as they are all true one troy ounce .999 fine examples of pure bullion coins. However, their own website does not clarify the issue. Maybe they assume everyone knows precious metals are troy ounces.

Herewith, the exact wording from their own site, which may be confirmed by the link I provide. "Like its proof counterpart, the American Eagle Silver Uncirculated Coin is available in a one-ounce size, while the American Eagle Uncirculated Coins in both gold and platinum are available in one-tenth, one-quarter, one-half and one ounce sizes, as well as a complete four-coin set containing one coin of each size. The American Eagle Platinum Uncirculated Coins carry the same reverse design as the American Eagle Platinum Proof Coins."

http://www.usmint.gov/mint_programs/index.cfm?flash=yes&action=american_eagles This lack of precision could confuse a public not versed in precious metals. How many beginners would even think to question that the ounces might be different? What about investors who want to buy pre-1933 American gold coins? Those coins - partly as a result of numismatic demand - sell at a premium to spot. The current price of an "almost uncirculated or better" $20 Double Eagle St. Gauden's piece listed at APMEX is $1536.79. This with melt at $1153.50.

So there's already a 33.23% premium built into the price. Now, granted, few educated investors are going to be bidding - on the St. Gauden's series minted from 1907 to 1933 - for their gold bullion content. Nor will they bid upon the the Liberty Head Double Eagle series that preceded them, minted from 1850 to 1907. Few educated investors, I'm trying to imply. But greenhorns are entering the market. And all they've heard is that gold is going up. "Buy gold before it's too late."

There is a horde of these new buyers - fearing the dollar's demise - beginning to flood into the market, seeking bullion as a safe haven to guard against loss of their purchasing power. When - as is occasionally the case - demand exceeds supply, the Mint ceases to distribute Eagles in any form. This happened in August of 2008: http://www.gata.org/node/6489 and again this year around Thanksgiving: http://news.coinupdate.com/us-mint-suspends-sales-of-gold-and-silver-eagle-coins-0053/.

Most online dealers offer an array of gold and silver one troy ounce coins from other countries; for example the Canadian Maple Leaf, the South African Kruggerand, the Austrian Philharmonic, the Chinese Panda, or the Australian Kangaroo Nugget. There is also a Mexican gold piece - the 50 pesos Centanario - which is 1.2057 troy ounces. Large dealers also carry items such as the Austrian 100 Corona piece, or the Hungarian 100 Korona coin, both of which contain 0.9802 troy ounce of gold. The market for these two coins is limited compared to the others.

When supply dries up, buyers may turn to available bullion regardless of source. Online dealers are probably your safest bet to purchase one troy ounce 22 karat gold American Eagles, or their counterpart one troy ounce 24 karat gold American Buffaloes. If they're sold, out you might turn instead to one troy ounce foreign bullion gold coins. If even these are gone, you could consider fractionals. 1/20, 1/10, 1/4, or 1/2 troy ounce bullion will come in handy if gold ever functions as money again. However, the premiums you'll pay increase the smaller the size of the fractional.

At times of highest demand, even these bullion coins may be difficult to obtain. It will seem like you can't find gold anywhere. Dealers will request payment in full, but promise only to fill your order when coins come available, with waiting periods that could approach four months. For this reason - and from a misplaced fear of confiscation - many buyers will turn to pre-1933 gold coins. Not for their collectible value as numismatics, but because it's the only form of gold bullion they can find.

This is not the smartest thing to do. As mentioned earlier a high premium will be charged above the melt value of the bullion content of the gold. The St. Gauden's gold pieces are a bit more in demand than the Liberty Head series, and prices reflect that. At any given price, the St. Gauden's will command a price $15 to $20 above the Liberty Head. Right now Liberties are available at APMEX for $1524.11. How much gold do you get for this price? Less than you imagine. These coins don't contain an ounce of gold, as novices might assume.

Both Liberties and St. Gauden's gold pieces were minted to identical specifications. They weigh 33.346 grams and are composed of an alloy of 90% gold and 10% copper. This makes them .900 fine gold, in the parlance of the industry. As a result, even though heavier than an ounce, their content is only 0.9675 troy ounce. This ratio holds true for the smaller $10 eagle with 0.4837 troy ounce, the $5 half eagle with 0.2418 troy ounce, and the $2.50 quarter eagle with 0.1209 troy ounce of pure gold.

Thus, if you are buying old gold for its bullion content, you're paying dearly for the privilege, in this case another hidden 3.5% tacked on to the existing premium. Your "ounce" of gold, thanks to the vagaries of nomenclature, could cost you much more than you expect. Buy pre-1933 gold coins for their bullion content and you could be paying the equivalent of $1592 for a troy ounce, when melt is only at $1155. Not the smartest move in my book, Albert. Save your money. Wait. Bullion will be back. Buy it on dips and hold on for the ride of your life.

Buy Silver. Buy Gold. Save Copper. Start Now.

Worse For The Wear

2009-12-06T10:26:00.000-08:00

Machine parts need lubricant to reduce friction and the effects of wear. Coins are no different. They require protection to protect their surfaces from deterioration due to the constant sliding motion they experience in transfer from one hand to another, or to minimize the abrading action from continuous contact with other coins. If you really wanted your change to last longer, you could get out a bottle of WD-40 and spray a tiny amount on each surface of your coins. Then next time you pull into the drive-thru lane of a greasy food joint, you could give as good as you get.

The idiom "worse for the wear" is one which intimates that somethings is in poor physical condition due to long use. And it's what happens to coins when they become old - they begin to resemble the appearance of a beggar - having experienced a lifetime of handouts. They say too much contact with people can leave you feeling worn out, I expect coins feel much the same way. It's hard for me to envision the hard metallic surface of a coin becoming abraded by the soft cells of human tissue, but it happens.

Rock is harder than water, yet consider the smoothness of stones exposed to rushing water for great lengths of time. You've picked one up and felt how slick the surface was, all the high points worn away. So common sense and experience teach us that items - such as coins - become worn down over the course of time. One way to define "worn down" is to be spent. And being spent can cause a coin to become worn down. Kind of a Catch 22, isn't it? The more useful a coin is, the more useless it becomes?

Why would being worn down apply to bullion? Because we don't want to accumulate bullion in forms that provide us with less than the optimal amount we can afford for our money. Silver and gold coins provide a means of protecting our purchasing power. They have long been thought of as a safe haven in this regard. People are flocking to precious metals like a feathered funnel cloud of starlings settling on overhead high-power electrical transmission lines. They will be shocked by how thin their profit will be, if they don't take care to invest wisely.

In other columns I've suggested that one of the cheapest ways to invest in silver bullion is to pick up bags of 90% silver-content coins that were produced by the United States Mint prior to 1965. Anything 1964 and before. These bags are referred to as "junk" silver, implying that they are circulated and not of collectible quality. They are generally sold in "face" amounts, an example being "$100 face value pre-1964 junk silver bag, buy-it-now $1595 or best offer," a listing the type of which you might encounter on ebay.

But this cheap form of entry into the bullion market could prove dear - more expensive than warranted - if you buy the wrong type of junk silver. Put in the simplest of terms, you want new coins, not old. You need to buy Kennedy halves, Washington quarters, and Roosevelt dimes. Because the older coins demonstrate greater wear, you would be getting less bullion for the same amount of money, if those were the ones you bought. Don't believe me? Weigh them and you'll find out. That's what I did. I did some research, and here's what I learned.

I first googled "coin wear" and found - from the Online Library of Liberty - a copy of an old text that confirmed my suspicions. Entitled Money and the Mechanism of Exchange, it was written by William Stanley Jevons, in 1875. Chapter 13, topic three of his book addresses this issue. How much wear does a silver coin experience while in circulation? His findings are pertinent to present day considerations, and I'm quite curious to see if my results will replicate them.

He states "some attention must be given to the abrasion which coins suffer in use... the loss of metal thus occasioned is of importance and leads to a gradual depreciation of the currency. As coins pass frequently from hand to hand, the amount of metal abraded will be nearly the same as regards each coin of the same type, and each year of circulation. The loss will be proportional to length of wear." In other columns I will explore the gradual attenuation of modern day coins, today I'd like to look at the oldest series you're likely to encounter in junk bags.

The Barber series of halves, quarters, and dimes was designed by Charles E. Barber, sixth Chief Engraver of the United States Mint. Production of the coins began in time for their use to begin in 1892. The dime and the quarter ran through 1916, but the fifty cent piece was curtailed in 1915. Plans were in motion to create a half dollar from a new concept. Renowned sculptor Adolf Weinmann won a design competition and was the inspiration behind the genius of the pattern for the Walking Liberty half dollar that followed the Barber in 1916.

We expect that - if we buy a $100 face bag of junk silver - we'll get the 71 1/2 ounces of silver as advertised. Right? But what would we actually get if - paying no heed to factors of wear - we purchased a bag of Barbers? New coins straight from the mint in BU (brilliant uncirculated) condition are deemed to contain 72.3 ounces of pure silver, if it were extracted via smelting. At present, the practice is to assign a value of 71.5 ounces to bags of circulated coins to account for their loss of weight due to wear. But is this accurate? It may not make much difference now, but when silver goes way up, those tenths of ounces will weigh up.

I put my hands on as many Barbers as I could locate and here are my findings. One would surmise that smaller denominations would have the greatest wear. Let's see if this holds true. A freshly minted dime of any design will weigh 2.5 grams. I had 126 Barber dimes and divided them thusly. Three were slicks, with no legible date; features were nearly obscured. I chose to subdivide the remainder into pre-1900, into which category eight fell, and post-1900, which accounted for the remaining 115 coins. As expected, the oldest dimes manifested the greatest wear and, accordingly, represent the greatest amount of silver lost.

The dimes that fell into the 1900 to 1916 range of dates weighed an average of 2.2435 grams. Those dimes dated 1892 to 1899 weighed an average of 2.2 grams. The slicks -for which no date can be determined - weighed an average of 2.13 grams. Cumulatively, these dimes demonstrate a wear factor in excess of ten percent. In toto, they average 2.2381 grams apiece. That means the group as a whole had lost 10.48% of their weight to wear, resulting in a diminution of 7.52 ounces from the date of original minting. We're supposed to get 71.5 oz? We got 64.72!

I followed the same methodology with the quarters. A freshly minted quarter of any design will weight 6.25 grams. 43 quarters dated 1892 to 1899 weighed an average of 5.5256 grams apiece. Nine slicks averaged 5.2889 grams. 152 quarters dated 1900 to 1916 weighed an average of 5.6961. Cumulatively, these quarters demonstrate a wear factor of 9.72%. In toto, the 204 quarters average weight is 5.6422, resulting in a loss of 7.03 ounces from the date of their original minting. We're supposed to get 71.5 oz? We got 65.27!

Finally the halves. A freshly minted half of any design will weigh 12.5 grams. There was only one slick in this bunch, it weighed 11.1 grams. 20 halves dated 1892 to 1899, weighed an average of 11.53 grams. 250 halves dated 1900 to 1915 weighed an average of 11.6544 grams. Cumulatively, these halves demonstrate a wear factor of 6.85%. In toto, the 271 halves average weight is 11.6432 grams, resulting in a loss of 4.95 ounces from the date of their original minting. We're supposed to get 71.5oz? We got 67.35!

I think it's fair to assume these coins represent a fairly reliable approximation of what you would find in a junk bag of circulated Barber coins. No two bags will have the precise numbers as mine, but they should be close. The larger the sample you test, the greater the chance of accuracy. So what were the end results? If we had purchased a $100 face bag of junk Barbers, had they been dimes we would have instantly lost $136.63, quarters $128.58, and halves $90.61. This is a considerable amount of money now, just wait til the silver price increases by multiples.

Why pay this premium? It's 11.7% for dimes, 10.77% for quarters, and 7.35% for halves. When coupled with a hidden tax - the fact that you could be buying Avordupois ounces but paying for troy ounce quoted melt prices - you can wind up paying nearly 20% extra for these coins. You'd have to make a 25% return just to break even. If you're a collector, that's one thing. But it just doesn't make good sense to buy these as bullion. You don't want to hear co-workers whispering behind your back "that fool's got more money than common sense" do you?

The Barbers had a dignified design. The various denominations served the nation well during their use as circulating coinage. I'm not disparaging them in any sense, as can be attested to by my column I Need A Good Barber. But despite their beauty, they are not a worthy vehicle to transport you along the road to riches, if what you seek is a safe haven in silver bullion which can preserve your purchasing power while providing the potential to profit. Don't buy Barbers for their 90% silver bullion content because, if you do, you'll feel worse for the wear.

Buy Silver. Buy Gold. Save Copper. Start Now.

Heavy Metal

2009-12-06T10:23:00.001-08:00

"So get on your bad motor scooter and ride," wails Keith St. John, preening across the stage, "ah ride ah ride ah ride." The final note hangs in the air - fading - until it disappears. The audience is on their feet, shouting their adulation of Montrose, and their applause is deafening. This has been the longest set yet. Following on the heels of "Rock the Nation" and "Space Station #5," "Bad Motor Scooter" has stirred the crowd to a frenzy. The band pauses, taking a well-deserved break.

We are like diatoms living amidst the inner whorls of a Giant Conch, unaware of the outer world. Around me, it's impossible to hear anything above the noise. We're all hoarse from cheering anyway, so why even attempt conversation? Pulsing colors catch my attention. Laser beams like Jedi lightsabers rend the darkness, overarching serried ranks of tiny butane-fueled waving lights. It's like they're a horde of candle-bearing penitents - an approaching army - intent on worshipping en masse.

I'd like to continue and tell you about the rest of the concert, but I was just using my imagination. We are going to talk about heavy metal today, but not the rock band variety. I could have segued into this piece with an introductory paragraph about Heinrich Schliemann, the notorious archaeologist who discovered the ruins of Troy beneath a tell in Turkey, but that would have been too contrived. So heavy metal it is. Today's column is about knowledge, and an effect of ignorance.

In real estate you hear the mantra "location, location, location." You also hear "America, land of Opportunity." How often do you hear the truth? As in, "there's a sucker born every minute," misatributed to P.T. Barnum. The origin of the phrase provides an interesting footnote itself: http://www.historybuff.com/library/refbarnum.html. Barnum may take half credit - rightfully his due - for the merger of his circus with another to become the Barnum & Bailey Circus, "The Greatest Show On Earth."

Because of a curious quirk relating to where we live, we may be getting short-changed. If you went to the butcher's to buy a cut of meat - and witnessed him sneakily applying pressure to the scale with his fingertips - you would be affronted, likely outraged. You would demand an accurate measurement of the item you wished to purchase, or else you would take your business elsewhere. Why then do we tolerate such shenanigans when we purchase precious metals? Because we don't realize the system is out of balance.

In the United States there is a confusing hodgepodge of three different systems of weights and measures. We are comfortable using the Avoirdupois system of sixteen ounces to the pound. We're all familiar with it, so I need not describe it in great detail. Suffice it to say, it's a system we grew up with and when we hear of an item that weighs an ounce, we instinctively think of our own Avoirdupois ounce - the equivalent of 437.5 grains, or 28.35 grams - as what is being referred to. There used to be another system of weights and measures as well.

The Apothecary System was used in medicine and pharmacy in the United States until 1971, at which time we converted to the metric system. Apothecary is actually medieval nomenclature for a medical professional who formulates and dispenses pharmacological substances, a modern-day pharmacist. From Wikipedia we learn "the English version of the system is closely related with the English troy system of weights, the pound and grain being exactly the same in both. It divides a pound into 12 ounces."

Finally, we have the troy system of weights and measures. Thought to have originated in Troyes, France, this system is the one favored for weighing precious metals. Silver and gold spot prices are quoted in troy ounces, not Avordupois. Most people are unaware that there's a difference. Thus buyers can fall victim to the duplicity of unscrupulous vendors who might try and take advantage of this semantic confusion. Sellers might capitalize via an unintentional de facto form of arbitrage to increase their profit margins.

What am I talking about? Well, consider. The spot prices of gold and silver that we're always hearing about from the talking heads on CNBC? The listed real-time market quotes for the metals found on such sites as Kitco and Amark? The cost determinant basis for bullion sales prices at online dealers like APMEX, and BullionDirect? They all quote the spot price in a form of weight we aren't accustomed to thinking in. Precious metals use a troy oz, not Avordupois. Why does this make a difference?

A troy ounce weighs more than an Avordupois - 480 grains or 31.1 grams - to be precise. An Avordupois ounce weighs only 437.5 grains, or 28.35 grams. The prices quoted at these 24/7 websites are stating the values of a metal, that will be artificially high, unless we modify our thought process. For example; not too long ago silver was quoted in troy as being worth $18.50. Isn't that the same in Avordupois? An ounce is an ounce, right?" Unfortunately no. And this is where an opportunity arises for manipulation during a transaction, such as on ebay.

Because an Avordupois ounce is smaller, it would only be worth $16.86. Not $18.50. With a system like this, it could be subject to misabuse if the buyer didn't understand both forms of ounce measurements. Caveat emptor. Luckily, if one deals - in only United States Mint issued American Silver Eagles, or American Gold Eagles - this problem is obviated as both coins are .999% pure one troy ounce of metal. The government has taken the guesswork out of this for us. Hey, they did something right?

The problem arises again when we go to make purchases of coins that are not recognized bullion minted by the United States. Coin of the realm, 90% silver coins that circulated for their use as
money until 1964 are sold based on troy prices. Again, so? Well, Percival, if you buy an item that is worth $16.86, but is priced at $18.50, don't you think there's something wrong with this picture? If we purchase a $100 face bag of circulated junk silver online, no problem. You get what you paid for. But what if you're bidding on ten "ounces" of silver on ebay? What kind of ounces are they?

You might not even question the transaction. I'm not insinuating that the seller could be out to dupe you. But, accidentally or intentionally, this could easily occur. If you were to win on a bid of $185.00 for ten ounces, you'd be thinking "woohoo, I got it at melt!" Did you? What if the seller was referring to Avordupois ounces, as several current ebay ads do? If that's the case, you just bought 283.5 grams of 90% silver. Divide that by 31.1. You bought 9.1158 troy ounces of silver. You overpaid on what should have been a $168.64 bid. So, Rookie, could be you were just had.

Because you purchased an item priced in troy but in reality Avordupois, you unwittingly offered a 9.73% premium to the melt value. We're safe at present, as online bullion vendors trade in troy terms. But what if you attempt to sell in the future? Then it just became much harder to profit from your holdings. What do I mean by this? Let's say that you know $100 face value of junk silver contains 71.5 troy ounces. You see a listing on ebay which specifies 71.5 ounces of silver. You base your bid on troy - $1322.75 - not realizing the guy used a bathroom scale. He may be guileless, or a hustler.

Five years from now you walk into the coin shop - trying to make eye contact with the owner - who is poring over a greysheet. "Excuse me," you stammer, "I'd like to sell some silver bullion." "Sure," the dealer says, "no sweat. What ya got?" "I've got this bag of $100 face value of circulated silver," you offer. "Junk?" says the dealer, "not so sure I need more junk. Just bought a bunch yesterday and I haven't had anyone buying in awhile." He pauses to fix you with a penetrating gaze, as if to read your innermost thoughts.

"With silver at $70 an ounce, everyone and their brother wants to sell," he goes on, "I even had one old lady in here last week trying to peddle antique sterling silver flatware. Do I look like a smelter? I hadda tell her 'nah, can't help you,' the stuff was tarnished." "How much could you give me for it?" you ask. "Well, lessee," he weighs the bag and calculates, "melt's at $70... so that would make it... $4,564." He looks up with a smile, awaiting my response. "But I figured it out before I came in," you quaver, "shouldn't it be worth $5005?" "Ah hell, kid," he looks as if he's sorry for you, "you're thinking in troy."

"This here bag, Son," he pauses,"only weighs 2278 grams. $100 of face silver will weigh closer to 2500 grams. You never counted the face value, did you?" "Well, no," you argue," the ad said if was 71.5 ounces of silver, I just assumed that," your voice tails off as you realize what happened. "You mean, I got ripped off?" "Nah, Son," he replies, "they sold you a little over $91.10 in silver, because they didn't tell you the 71.5 ounces were in Avordupois." He continues,"you thought you were bidding on troy - $100 face - but they didn't tell you that, you assumed.

"Technically, they didn't lie. But they were preying on your ignorance. Pretty good scam while it lasted, but eventually - after a few people learned the hard way - they set out to educate the others. By 2011, ebay made em start listing silver in troy ounces only. You stand there, staring, unable to believe what you're hearing. "If you bought your silver in 2009 or earlier, you aren't alone. This happened to lots of folks," he continues,"for Gawdsakes, why didn't you people learn troy and Avordupois?"

A blush of embarassment blooms like a rose upon your cheeks. "Prices back then were pretty much set by what buyers on ebay were willing to bid. No one understood the difference between troy and Avordupois," you tail off, chagrined. "Well, Hellsfire Son, that ain't my fault is it?" the dealer fires back. "I'm sorry Son, but we did away with that old system back when silver and gold finally took off. Buying it like that added a premium you didn't know about." Unwilling to accept less than you expected, you turn to leave.

As you're walking out, you're struck by a sudden thought and turn back. He's flipping through his wholesaler's coin buying guide again."Yeah," he asks? "Uhhh, my wife's gonna wanna know
why I didn't sell the coins. Can you explain it to me in simple terms, so I can explain it to her?" A look of exasperation crosses his face, but then is gone. In its place seems to be a look of grudging admiration. "C'mere Kid," he says, as you approach the counter. "Look," he says, "you thought you knew the price of what you were paying for, but ya kinda got bamboozled."

"How so?" you answer. "Well, Son, a troy ounce is heavier than one of our ounces: 31.1 grams to 28.3 grams, okay?" He pauses then continues, "everyone knows we deal in Avordupois ounces in this country when we buy and sell stuff, but what they didn't understand was that precious metals melt prices were quoted in a different more expensive system of ounces." He shakes his head sadly, "you paid too much for that silver Son, because you didn't understand the difference in the systems." He seems almost ready to make an admission, then changes his mind. "I wish I could help you out Son, but looks like today you learned an expensive lesson."

Buy Silver. Buy Gold. Save Copper. Start Now.

Sifting Silver

2009-12-06T07:51:00.000-08:00

One definition of the term used is defined as timeworn, and that is pertinent to our discussion today. Use of an object causes it to wear down, to become worn - as in diminished - over the course of time. Use of a coin causes the surfaces to wear, losing infinitesmal particals to transfer as it is handled countless times, or abraded by even the most minimal repetitious contacts. Checking the contents of your pocket to determine if you have lost your money may provide an answer, but perhaps not the one your were expecting.

In fact, even just jangling the coins in your pocket could cause you to lose the money you were checking. You'll have change alright, but I'm talking about the kind of change that means deterioration. The simple act of constantly jangling the change in your pocket, or passing those coins from hand to hand, repeated thousands, even millions of times over years, will cause those coins to become timeworn. If these coins were alive, we would refer to their appearance as haggard. They are old and exhausted, and it is time for them to be retired.

I mention these points to raise the issue of our topic today. Remember that pile of junk silver you bought for Y2K? So that you would have coins to barter with when the onset of the new millenia caused all the computers to go fritzie, erasing all financial records? The silver which, on the morning of January 1, 2000 you realized was essentially useless? And that you had paid a premium for? You weren't about to sell it back to the coin shop at a loss, so you decided to hang onto it.

Silver rose from a trough of $4.23 on July 17, 1997 to a peak $7.80 on February 6, 1998. Warren Buffet had bought 129.7 million ounces of silver bullion earlier, during the previous summer for his holding company Berkshire Hathaway. But the investing public didn't catch wind of the transaction until December, and then it was off to the races. Silver climbed more than fifty percent over the next two months before selling off again, nearly as rapidly, to $4.95 an ounce by May 29, 1998.

If you were fortunate, you began accumulating your Y2K silver on dips during 1999, when you could have purchased it - during much of March and April, and parts of May and June - for under $5.10 an ounce. Had you followed the herd of lemmings as silver was hyped as a must have commodity for the dire outcome foreseen, you would have paid as much as $5.70. 1999 was a volatile year, with four distinct spikes demonstrated thoroughout.

But come the new millenia, when it was found that TSHTF had not come to pass, silver proceeded to gradually sell off. Silver had proven to be artificially resuscitated by Buffett's paddles the year before, and now its heartbeat was absent. There was no ventricular fibrillation pattern as displayed in 1999. Silver seemed dead in 2000. It ground sideways the entire year, drifting slowly downwards in asystole. Flatline. It would continue this pattern for 23 months until it hit bottom on November 27, 2001 at $4.07 an ounce.

But then commenced a rally - slowly at first, then gradually gaining momentum - that has seen silver climb five times that height in an ongoing bull market that has not yet reached its climax.
As the price of silver rose, so did the magnitude of its pendulum swings from temporary apex to short-lived nadir. Silver almost touched $21.00 in March 2008 but, within six months had dropped below $9.00 on the heels of the October 2008 global hysteria. It has recovered from that blow and is renewing its energy for another try at the March 2008 highs.

So, having forgotten all about that stash of junk silver, aren't you glad, Roland, that you meant to sell it but never did? Maybe there's some good to procrastination after all? So why has silver been rising again, after years of moving sideways? You can thank Alan Greenspan for that, initially. The former Chairman of the FED, Greenspan was responsible for flooding the economy with easy money following the NASDAQ debacle of 2001. It takes awhile for money to find an asset it wants to ask out, but silver is finally going to the Prom, after real estate decided to stay home.

So now you've decided there's too much money floating around, and before you know it we'll have hyperinflation. You decide to haul out your cache of junk silver and inspect your collection of pre-1965 90% silver coins, perhaps with the intent of adding to it. But wait, what's this? As you pour out your sack of silver, you notice that some of the coins are bent, a few others are blackened as if they had been through a fire. You pick those out and set them aside; they're a bad influence and you don't want the filthy little buggers rubbing off on the bright ones.

You continue to pick through your silver, not really examining dates for numismatic rarities, but just daydreaming and thinking to yourself "what if silver goes up to $30,000 an ounce" like Jason Hommel thinks it could do when his brain is wound up tighter than Jason Statham in Crank? And then you begin to giggle in uncontrollable glee, unable to restrain your mirth as you imagine all your coworkers who mocked your silver purchases in the first place having to eat crow and worship you, in hopes that you'll adopt them and lift them from their hyperinflation-induced state of abject poverty to one of immeasurable wealth, epicurean delights, and carnal contortions certain to cause Caligula covetousness. But I digress.

You're looking at your coins and you notice that some of the older dimes - they look like Mercury's - are really worn down, you can hardly see the date. There's some Standing Liberty quarters that you can't see a date. You test the heft of these, and it sure seems like they're a lot lighter than some of the newer coins. You decide to include the coins that are really worn down so that you can hardly see the features with the ugly bent ones. And while you're at it, you decide to add to the pile any with bad scratches or paint on them.

Congratulations, you've just been initiated into the world of silver sifting. Since I christened this practice, I get to make the rules. Sifting silver is going through your cache of junk and removing anything that is inferior in any fashion. Survival of the fittest. Gresham's Law. Keep the best, forget the rest. The day will come when you want to sell some of your silver or, Heaven forbid, use it for purchases following a catastrophic worldwide economic breakdown. If that comes to pass, use your ugly pile first.

Selling your most worn coins now, can actually have beneficial financial ramifications for you later. At present prices, it won't be noticeable, but if you had a bag of older worn coins - such as Barber dimes, quarters, or halves - that were ten percent lighter than more modern silver coins, the day will come when your resale value will fall by a commensurate ten percent. Right now, junk silver sells for an assumed 715 ounces per $1000 face bag, but trust me, it won't remain that way once silver goes up by multiples. Silver will one day be sold by weight, not by face value.

Build a core holding of precious metals. Try to accrue several $100 face value bags of junk silver, and a few ounces of gold. Keep them close. Never entrust them to a safe deposit box. Banks may be forced to shut their doors just when you need them most. If you decide to take some profits, then sell your ugly pile. When silver subsequently dips, then pick up some newer silver on ebay. It's there. Find it. Buy it. Shampoo, rinse, repeat the process. Get rid of those ugly coins, and the puny ones. Now. Otherwise, when you decide to sell, you could go home a little light in the wallet.

Buy Silver. Buy Gold. Save Copper. Start Now.

The Miracle Of Multiplicity

2009-12-05T12:20:00.000-08:00

Have you ever felt pressed by an impending deadline? Felt harried from overwork? Felt compelled to put in extra hours for which you weren't compensated? We're going to go way off topic of my usual subject matter today. I'm writing this column for a friend, in an effort to see if it could help him market his software product. In a sense, what we'll be discussing is time management, how to most efficiently benefit from labor-saving techniques, and the benefits afforded those who implement their use.

I think we've all experienced those feelings I alluded to in my opening. The worksite is becoming more stressful by the day. Americans - who labor free of mandates dictating a set number of hours - find they are routinely working fifty and sixty hour workweeks. Seventy is becoming the new forty. Including the commute, our workweeks are consuming an ever-increasing percentage of our waking hours. This has to be detrimental to our well-being, to say nothing of our relationships.

At least we could save money on our health club memberships. Why go to the effort of packing your gym bag, driving to the nearby Gold's Gym, or Bally's Family Fitness Center to lift weights, pedal bicycles, or perform pilates? Why torture yourself on the elliptical machine for half an hour to burn less calories than munching on one Butterfinger in a moment of starved self-flagellation could add? "A moment on the lips, a lifetime on the hips." We don't need a treadmill, we merely need to report for work.

America is one gigantic rat race, and we're the vermin. Haven't you ever felt like a caged hamster, forced to run a never-ending chase within a spinning wheel? Like Sisyphus performing an interminable task, we push ourselves ever harder and harder. And why? Because we continue to work harder, we haven't as yet learned how to work smarter. I don't know about you, Mythological Greek Figure, but I've had it. I want to get off the treadmill. Teach me how to work smarter.

In the 1996 movie Multiplicity, Michael Keaton stars in the role of Doug Kinney, a much-too-busy-for-his-own-good construction contractor. His relationships are strained. Burdened by overwork to the point of near collapse, he accepts the offer of a geneticist savant to clone him. At first the strategy of the scheme appeals to him, as he is able to accomplish several things simultaneously. But soon, the ability to be in several places at one time wears thin.

Unbeknownst to Doug, one of his clones climbs into the marital bed and proceeds to conduct connubial chores. This is not what Doug had in mind, in fact it makes him feel as if he's the one being screwed. I don't want to ruin the movie for you by revealing the entire plot, perhaps you'll rent this enjoyable comedy someday. So let's move on. The point of introducing cloning is two-fold. Have you ever needed to delegate responsibility? But felt like "I have to do it myself, that's the only way I can be sure it's done right?"

A wise manager knows he needs to breed confidence in subordinates, and accordingly will delegate tasks they can handle. But it's not always easy to let go the reigns of power. Additionally, you may well have been capable of doing the job more rapidly with a better end result. Perhaps you're in marketing. You can't do it all by yourself. I don't care if you're the most gifted salesman in the world - you could sell kittens to Michael Vick - the problem is your time. Or lack of it. You can only move as much product as your time and exposure to clients permits.

Enter the miracle of multiplicity. Or should I say multilevel marketing? Wikipedia defines MLM as a structure designed to create a marketing and sales force by compensating promoters of company products not only for sales they personally generate, but also for the sales of other promoters they introduce to the company, creating a downline of distributors and a hierarchy of multiple levels of compensation in the form of a pyramid. But you already know the benefits of MLM or you wouldn't be using it.

So how can my company - GreyStar Solutions - help yours? Since you've started up your enterprise, have you noticed a burgeoning amount of paperwork drudgery associated with tracking all your downline sales? Is your bookkeeper starting to look stressed? Does your accountant have tiny beads of perspiration dotting his brow and a half-crazed look of desperation in his eyes? Does your CPA resemble a giant rodent? Will Hollywood soon be soliciting John Travolta to play him in the next by-the-light-of-the-full-moon scare flick "The Return of The Hamsterman?"

If so, our software can help eliminate those problems. With today's technology, if you're not tracking your business in "real time," then you're already behind. Greystar gives you sales data, commissions, genealogies, uplines, downlines, reports, and dashboards all in real time! Our software is widely used by MLM companies in marketing their product lines without the headaches and hair-raising horrors. We also specialize in Search Engine Optimization, Ecommerce, Affiliate Tracking, and FDA Compliance.

We've helped others in your position to achieve greater success. "I would like to offer my highest recommendation for the services provided by Greystar Solutions and Barry Trottier," states Jim Coover, President and CEO of Isagenix International. "We could not have achieved the success we enjoyed were it not for the responsiveness and integrity of Barry and his team." He adds, "You will be well served."

Another testimonial: "I must say I am very happy with your company. You have delivered on everything asked quickly and cheerfully. The support staff that assisted me in building my infrastructure raves about you and they tell me that they are already recommending you to their new clients! Thanks for going above and beyond the call of duty and I look forward to a long relationship," says Ron Touchard, President and CEO, eWorldMedia, Inc.

I could offer more references, but I don't need to. You need to experience for yourself how easy we can make life. The rest is up to you. So take a deep breath and relax. Stop working so hard, and start working smarter instead. We're here to show you how. Call now. Our number is 404-431-1785. Friendly operators will be waiting to assist you during Eastern Standard business hours eight a.m. to five p.m. Or visit us here at our website: http://greystarsolutions.com/

Yours towards enhanced future profits; God Bless!

Barry Trottier

Bringing Change To America

2009-12-05T09:01:00.000-08:00

In the last few weeks I've been emphasizing copper as a commodity which will boom, along with silver and gold, in response to the enormous creation of excess liquidity we are now witnessing. The current administration is following a policy of easy money to attempt a cure for symptoms of a debt-bingeing malady. Aside from extending jobless benefits, one of the few measurable results attributable to this practice has been the levitation of an already over-inflated stock market.

I'll admit, this life preserver is keeping a few drowning banks alive for the moment. That will change as the toxic asset rooster comes back to the rapidly-diminishing-in-value hen house to crow. Many banks - now merely sick and injured - will join the endangered species list. The FDIC is out of funds, and when the Bank of Phoenix and First National Bank of Dodo's go under, their will be no entity available to prevent their demise. More financial institution dinosaurs added to the ever-mounting bone pile.

Silver and Gold are already responding to the increased money supply. Such effects of rising prices to the cause - inflation - often lag the surge in liquidity by as much as eighteen months. But they are now making up for lost time. With the exception of occasional sharp retracements, Gold is making nominal highs on a regular basis, and silver is outperforming on a percentage basis. Copper will drink some of the spiked punch as well, and will share in the inebriation.

At this party, the host would like to convince you that saving pre-1982 copper cents is a great idea. Particularly suited to small investors, sorting cents from your change offers the same opportunity that pulling pre-1965 90% silver coins from circulation did forty-four years ago. But some readers are reluctant to embark on such a venture, for a number of reasons. Opponents to change would argue that you have to obtain pennies, sort them, return zincs, and sell the copper in order to profit.

You can't sell the copper, can you? Currently, melting pennies for their 95% copper content is illegal. However, that will change in the future, particularly when parties lobbying for abolishing the cent have their way. Even so, a market for those pennies now exists. Farsighted buyers - visionary investors - recognize the potential of this Gemini Coin; copper is both a commodity and a form of money. Sales of cents from websites such as The Copper Cave and The Portland Mint bear witness to this market.

What if you wanted a quick route to riches, rather than holding this form of hard metal as a means of purchasing-power-preserving wealth? Well, you could brainstorm and come up with some strokes of entrepreneurial genius. If you'd like to implement this suggestion, perhaps adding a finishing touch I hadn't considered, be my guest. This idea is not copyrighted and if someone displays the initiative, creativity, and start up capital required to succeed, then "you go get 'em, Gung Ho Guy!"

How about if you took your piles of copper cents and began marketing them yourself? How would you do this? How about placing them for sale within vending machines? Remember those gumball machines that used to be ubiquitous? They were everywhere. You seldom see them now, so they're probably available at a discount from some liquidator's warehouse. You could obtain a number of them and negotiate a small share of the profits with sites that would display them.

Inside the glass container you would place plastic capsules with capacity sufficient to contain perhaps fifteen pennies. You could charge a quarter, thus providing a quick nominal 66% return. Of course, you would need to deduct your costs, including the price of the cents. Your margin would not be as great if you were to embellish the pot as I'm about to suggest. How would you entice an adult to purchase these items for a child? Appeal to their gambling instinct. Visually.

For the lowest cost, you could include a mixture of common cents direct from circulation, perhaps ensuring that there were at least fifty percent copper pennies mixed with the post-1982 zincs. In these capsules you could include scrip - like those in Chinese fortune cookies - which explained the composition of the cent, why the Mint changed that alloy when it did, and a short explanation of copper as a commodity, with properties similar to silver and gold in earlier times as circulating money. You could adapt this to teach children about money.

Presenting cents in this fashion, in encapsulated form, would lend emphasis to their worth. When you have to pay for something rather than have it handed to you, you value it more. Pennies would gain panache among the younger set. Parents would be able to introduce thier children to the fun hobby of copper cent coin sorting, and some would become interested in forming their own Lincoln cents collections. Children sharing their hobby at show and tell would gain a certain cachet.

You could color code each paper scrip; inside of clear plastic capsules this would lend each an individualistic air among the spectrum of variety. Children each have their own favorite colors. I could well imaging little Susie ,with her most winsome smile, entreating "No Daddy, I wanted the yellow one, buy me the yellow one," as she gazing imploringly. What father could resist? Even though he'd already spent all his quarters on the first three; he would most assuredly return to the checker for more.

You could have a color code key on the front of each Century of Cents coin dispenser. The code would reveal which particular hue of scrip would contain which era of wheaties, if they were included. This concept would work as well in existing Tractor Time Crane Toy and Candy Vending Machines. You would simply need to introduce your capsules into their enclosures. However, I do feel that there is an unfilled niche in the market for penny vending units that would be best served by a stand alone unit.

Children, and their parents, are human. Which makes them acquisitive. It's in our nature. Color coding the scrip - perhaps by age group with historical footnotes appropriate to various elementary school grade levels - would stimulate the avarice of these budding collectors. They would want the entire set. You need not be worried that sales might wane, as there are certainly many more than one important event to mark the passage of each year. When sales slowed, you could introduce Set 2 of The History of America scrip. The possibilities are mind-boggling.

You could also insert a wheat-backed penny to be included in each group of fifteen common date 1959 to 1981 cents. Lincoln cents minted from 1909 to 1958 are known as wheaties among collectors, and scarce specimens in good condition are prized by numismatists. You could "salt" a small percentage of capsules that would provide a sample of this range of dates. A little research on my part unearthed a large array of more common variety early and later date wheaties that would suffice.

You would first make use of all the wheaties you had discovered by sorting. But if you wished to supplement those cents, for under a dollar - many for less than fifty cents each - the following pennies could be purchased in "average circulated" condition: 1910, 1911, 1912, 1913, 1914, 1916, 1916-D, 1917, 1917-D, 1917-S, 1918, 1918-D, 1918-S, 1919, 1919-D, 1919-S, 1920, 1920-D, 1920-S, 1921, 1923, 1924, 1925, 1925-S, 1926, 1927, 1928, 1928-D, 1928-S, 1929, 1929-D, and 1929-S.

In fact, you'll find that you could obtain the remainder of the series up to 1958 for roughly ten cents - on average - with the only exceptions being the 1931-D, 1932, 1933, and the 1933-D. The letters following the year indicate the United States Mint branch at which they were made. D represents cents produced at Denver, and S represents cents produced at San Francisco. Those lacking a mint mark represent Philadelphia. You could include scarcer pennies, though I would not. You might even include an occasional silver dime to sweeten the pot.

Now let's dwell for a moment and think just how much fun it would be to include a short history lesson with the encapsulated coins? With nearly the entire gamut of years represented since the initiation of the Lincoln Cent into circulation, your field is fertile, limited only by your imagination. For example; 1919: this year is noted as the first to implement the constraints of prohibition - the banning of alcohol consumption - also referred to as The Noble Experiment. 1943: pennies were minted from steel as copper was preserved for shell casings during WWII.

Picture a family - having purchased a Century of Cents capsule from the penny dispenser after shopping - arriving home. Dad sets the groceries on the counter and unbags them. Mom puts out placemats, napkins, and silverware, then begins to prepare dinner. Four year old Johnny walks in and plops into a chair. He places his plastic container atop the table and rolls it around, eyeing the shifting contents covetously. He picks it up and jubilantly shakes the clacking sphere like a master martini mixer.

"Put the pennies down, Dear," Mom smiles affectionately at her son. "We'll look at those after dinner." "Awww, Ma," their little clone grumbles, "do I gotta?" Dad walks over and snatches the pennies away before the cacophony can trigger one of Mom's migraines. Dad surreptitiously sneaks a peek before Johnny has a chance to crack the egg. He is gratified to discover an old cent. The fortune-cookie-like tag reads 1927: Charles Lindbergh flew the Spirit of St. Louis across the Atlantic, the first solo non-stop flight.

Imagine - after dinner - the quality time that could ensue? "Look Son," Dad might say, "here's a 1976 Memorial cent. That's the year I was born." Johnny, entranced, would stare adoringly at his father, thinking "I wanna be just like him when I grow up." It is said that, nowadays, parents - of children aged 6 to 17 - spend only an average of 47 minutes a day talking with them. So why not reach them in their earlier formative years? Perhaps this could prove a catalyst for the rejuvenation of nuclear families. In fact, it might just bring change to America.

Buy Silver. Buy Gold. Save Copper. Start Now.

The True Cost Of Inflation

2009-12-05T08:46:00.000-08:00

In several columns I have been touting the advantages of beginning to save pre-1982 copper pennies, as a way to take advantage - on a small basis - of the expected across-the-board commodities price gains as high inflation increasingly manifests itself. Inflation is increasingly defined - as a result of misusage - as simply a rise in prices. Originally, inflation was defined as an increase in the money supply which in turn leads to higher nominal price levels.

Wikipedia states that the Austrian School of economic theory specifies that as units of currency (i.e. means of exchange) are increased, this effects rising prices of the cost of goods, as the real value of each monetary unit is eroded, loses purchasing power and thus buys fewer assets and goods and services. However, language evolves through usage - whether correct or imprecise - and in modern day parlance, inflation is defined as a general increase in price levels.

This emphasis of interpreting inflation thus has blunted its original meaning, and in the process obscures the cause of rising prices. The current administration is promulgating nearly limitless monetary expansion, as a devalued currency makes it easier to service the egregious national debt. The FED is readily assisting this misguided policy. This is an invisible form of taxation, as every fiat dollar held by consumers is diluted in value and is eroded in purchasing power.

Such a tsunami of currency creation will result in huge hikes in cost, of virtually everything we need for daily life. It will result in eventual hyperinflation, to the great detriment of all. But rather than point out the adverse consequences, politicos - like magicians - use what is essentially propaganda to misdirect constituents ire. Instead of admitting that they are the cause of rising prices by increasing the money supply, they will point at the price of a barrel of crude.

Since the creation of the FED in 1913, the dollar has lost 95% of it's purchasing power. This is based on the numbers the government provides, and may in fact be worse than that. The CPI -the Consumer Price Index - is a measure of the cost of goods purchased by an average household in the United States. Calculated by the U.S. government's Bureau of Labor Statistics, it is heralded as an accurate means to measure inflation (i.e rising prices).

But the CPI is replete with flaws which result in a product which intentionally understates true inflation. During the Clinton administration, the methodology used to examine inflation began to rapidly mutate, transforming into a system which bears small resemblance to the original. John Williams of ShadowStats.com states "the problem lies in biased and often-manipulated government reporting." He provides proof that annual inflation is understated by roughly 7%.

This understatement of inflation, which began during the late Carter and early Reagan administrations, works to the benefit of the government. Cost of living adjustments to government pensioners, and social security benefits to all who receive them, have been gutted. Like a Saracen wielding a scimitar against some hapless Crusader, payments have been cut in half from what they should be. GDP is artificially higher. Blame is dodged by those responsible for faulty fiscal policies.

So now we understand that inflation has been intentionally misconstrued over the last several dissembling administrations, but to what effect? It is all well and good to provide numbers, but we need a reference point to make them more real. Consider this. If you are among the older generation of Baby Boomers, you will recall that - in the Fifties and Sixties - Dad went to work and Mom stayed home. As a direct result of ever-increasing inflation that is no longer the norm.

In 2002, only 7 percent of all U.S. households consisted of married couples with children in which only the husband worked. That statistic is sure to have decreased in the ensuing years. Families no longer have the luxury of a spouse choosing to work to provide extra income, that additional subsidy is now required merely for survival. And two-income families are much more likely to face financial hardship; they become dependent on both incomes, but are twice as likely to lose one of the jobs.

Housing prices have risen seventy times faster than men's income. We are - after the effects of inflation have been calculated - worse off now than our parent's generation. As one who has been in the workforce throughout the duration can attest, our net pay - after being shoved into higher-withholding tax brackets - and discretionary income remaining is less now than it was in the Seventies, in spite of huge nominal increases of as much as triple our annual income.

You tripled your income and you're worse off? Yes, because inflation has outpaced your salary increases. We learn from a CPI adjusted Inflation Calculator (remember, true inflation could be 50% worse) at http://www.westegg.com/inflation/infl.cgi that in order to be the equivalent of a $25,000 annual income in 1970, that wage earner would now have to be bringing home $132,125.75! And this calculator does not include increases subsequent to 2007!

How many individuals do you know whose income has increased 428% in those intervening years? Very few, I would surmise. And even the two-income families are facing a daunting challenge trying to keep up with inflation. No wonder we all feel the impact of rising prices in the form of a declining standard of living. Consumers are forced to save. Spending falls. Businesses suffer. Layoffs occur. Spending drops. Businesses close. Joblessness ensues. Payments default. Foreclosures explode. Bankruptcies result.

This is the true cost of inflation, and it is directly caused by a gigantic fraud perpetrated by our government. Their immense Ponzi scheme is one that puts to shame the fifty billion dollar Bernie Madoff scandal that resulted in his incarceration. If how heinous a criminal act is deemed to be were based on the number of its victims, then inflation would be the Crime of the Century. An entire nation is at its mercy, and inflation is ruthless towards those on fixed incomes.

The Administration, Congress, and the FED are all complicit in this crime. Profligate spending dates back to the Johnson Administration and the funding of the War in VietNam, so in fairness the blame for the resultant fiscal carnage should rightfully be divided. Current politicians - and those who preceded them - and Fed Chairmen Bernanke and Greenspan, all share in culpability. Inflation will not end as long as we have a fiat currency unbacked by silver or gold, and that cannot happen unless we abolish the FED.

Buy Silver. Buy Gold. Save Copper. Start Now.

Worth Your Weight In Gold

2009-12-03T07:10:00.000-08:00

"I feel like a million." How many times have you heard someone say that? What do you think the human body is worth? Scientists in America and Japan spent extensive time and money determining this answer. They had to exhaust their grants, right? Not that I would have wanted to be there, peering over their shoulders as they pinched with their calipers, stirred their beakers, and analyzed their chromatographic spectrophotometry, but just how did they determine this?

The National Center for Health Statistics provides these figures: the average weight for an adult male in the United States is 189.8 pounds, the average woman weighs 162.8. So how do we approximate the value of a body? The U.S. Bureau of Chemistry and Soils calculated the chemical and mineral composition of the human body. Undoubtedly, they had an excellent rationale for conducting this study. But I find wasting taxpayer dollars hard to stomach.

So, what are those components? Researchers found our bodies contain: 65% Oxygen, 18% Carbon, 10% Hydrogen, 3% Nitrogen, 1.5% Calcium, 1% Phosphorous, 0.35% Potassium, 0.25% Sulfur, 0.15% Sodium, 0.15% Chlorine, 0.05% Magnesium, 0.0004% Iron, and 0.00004% Iodine. Also, trace quantities of fluorine, silicon, manganese, zinc, copper, aluminum, and arsenic. Can you tell me how they measured this stuff so precisely? Do they analyze the ashes of someone's urn?

All the above pretty valuable? Ready to go sell your posterior for posterity? Not so fast, Qbert. You'd be taking up aisle space in the 99 cents store. All of the above totals less than a dollar! If you were to place a value on your skin the same as cowhide, you could raise the ante to $4.50. So how are we going to up the pot to $1,000,000? Let's play with some numbers and see what develops. Our answers will vary depending upon which substances we utilize to base our comparisons.

If you were a tiny thirteen and a half inch tall midget - weighing eight and a half pounds - and your name happened to be Oscar, you would be worth $148,838. That is, if you were solid gold, and not just a thin veneer annealed to Britannium - an alloy of 93% tin, 5 % antimony, and 2% copper - at your core. If you were such a poseur you might hock for $500 at a pawn shop. So, in terms of gold a big guy, male variety would be worth $3,323,473. Women's worth? $2,850,693.

Thus, we really could say we "felt like a million," even if men were only constituted of 36.6% gold. Women would need to be 42.66% gold, due to their lighter weight. Numbers like these reveal a 16.58% disparity. Sadly, the real world gender gap reports an inequity of greater magnitude. Women earn only 75.5 cents to every dollar men earn, according to an analysis of recently released census data conducted by the Institute for Women’s Policy Research.

How about if we were having a really great day? How would platinum affect the picture? Closing spot price on platinum as of today was $1487 an ounce. In the United States people think in the Avoirdupois system. Sixteen ounces to the pound. Precious metals prices are denominated in troy ounces. Troy ounces actually weigh a little more than avoirdupois ounces. To determine values in troy ounces, you have to multiply avoirdupois ounces by .912 to derive a correct total.

So you're having an incredible solid platinum kind of day? You'd be worth $4,118,448. Don't infer that I'm chauvinistic, but for the sake of simplicity we'll limit further calculations of the weight of hypothetical constituents to the male body. What if you were having a stupendous day? Your first child was born, you won the lottery, or your divorce was final? You're have a solid rhodium kind of day? Then you'd be feeling like $7,200,970. That would be a quite a sum to repeat.

You say it wasn't the most memorable day? Just solid palladium? You'd feel like $1,066,170. And silver? Save this for a day you get up on the wrong side of the bed. Your self-worth would be only $53,507. So this is all well and good, we kind of figured as much. But what would you be worth in some unusual forms of comparison? What would your weight be worth priced in the world's most expensive caviar? Truffles? Perfume? Wine? Sports car? Which would be highest?

The Bugatti Veyron, at $1,700,000 is by far the most expensive street legal car available on the market today. It is the fastest accelerating car doing 0-60 in 2.6 seconds. Top speed 253 mph. If you were priced as car parts in this contest, you'd be junked. Your value as scrap would be only $77,692. The world's most expensive over the counter perfume seems to be Clive Christian No. 1, at just under $2,000.00 USD for a 1 oz. bottle. After some number crunching we arrive at $6,073,600.

Want to explore some epicurean delights? Then why not jet to London's Piccadilly? Head for the Caviar House & Prunier, and kindly inquire of the proprietor if they have any Almas on hand. Almas is a product of Iran, and this white Beluga caviar is very rare. This single establishment has exclusive marketing rights to this repast, and offers a kilo of the expensive Almas caviar in a 24-karat gold tin for £16,000, or about $25,000. This time a man tips the scale at $2,156,818.

The world's most expensive wine? A bottle of 1787 Chateau Lafitte sold at Christie's in London in December of 1985 for $160,000. For 18 years this was considered by The Guinness Book of World Records to hold the title. Purportedly from the cellar of Thomas Jefferson, it had the initials "Th.J" etched into its surface. Let's assign the standard volume of a wine bottle to this vessel. 750ml converts to four pounds. You'd be worth $7,592,000. But this wine's record reign is over.

The crown is now worn by 1907 Champagne from the Hiedsieck vineyard in France. In 1916, a cargo of 200 bottles - enroute to the Imperial Family of Russia - was lost at sea in a shipwreck off the coast of Finland. One of those bottles recently fetched $275,000. So if you're planning to party any time soon with any Slavic émigrés claiming to be the dethroned Anastasia Romanov's descendent, be aware. Imbibing this vintage would not only make you tipsy, but you would tip the scales at $13,049,129.

"And our last item up for bids today is," declares the auctioneer as he slams his gavel, glowering glaringly at the gaggle of garrulous gigolos, gastropod-gorging gourmands, giddily giggling sans- gravitas governors, glamourous gals garnished with glittering gems galore, generous genetically-gifted gentlemen, and golden-aged-yet-girlish grand dames. The group grows grave at his grimace as he gulps and gutterally groans "we'll start the bidding at thirty-three G's!"

Macau billionaire - casino owner Stanley Ho - recently bid a record amount at an auction to win a giant white Tuscany tuber. It was discovered by truffle hunter Cristiano Savini, his father Luciano and their "sniffing-like-crazy" dog, Rocco. Ho's winning bid for the highly prized 3.3 pound edible subterranean fungi of the genus Tuber was $330,000. Thus, your weight in tubers, Goober, would top them all at $18,980,000. The proceeds were to go to charity, which might help explain Stanley's largesse.

Now, how about a final bit of trivia? Let's crown the Olympic Champions of Weight Lifting. Is it conceivable any of the following three contenders would have a chance going "mano a mano" with the prior competitors? Our last contestants are - drum roll please - the World's most expensive coin, the World's most expensive stamp, and the World's most expensive baseball card. Who in the world will win? Can you predict the medalists in order? Judges are conferring now in hushed whispers.

The recent sales price of 2.8 million dollars for a very rare Honus Wagner T206 - in near mint condition - has established this sports card as the hobby's most valuable. The T206 set - inserted into cigarette packs - was originally produced from 1909 to 1911. Low initial production runs - it is thought that Wagner was opposed to endorsing the smoking of tobacco - contributed to its scarcity. There are thought to be fewer than 100 Honus Wagner cards remaining. Total $7,754,772,369.

The 1933 Gold Double Eagle, designed by Augustus Saint-Gaudens, auctioned off for the highest price in the world ever paid for a coin, $7,590,020, in 2002. This broke the previous record of $4,140,000 paid at an auction for an 1804 silver dollar. The owner of the $20 gold piece - who shall remain anonymous - chose to engage Sotheby's to conduct the auction as he felt ebay fees were too high. Total: $21,441,276,716. Rock beats scissors, paper beats rock, scissors beat paper.

"And the winner is, fanfare of trumpets please..."

The world's most expensive stamp is a one-of-a-kind 1855 Swedish three-skilling stamp - printed on yellowish-orange stock paper - instead of on green stock. It was purchased at auction in 1996, with a winning bid of $2,300,000. A stamp weighs about a gram, or only 0.0352739619 ounces. So maybe this is kind of like dropping down in weight class just to win a match, but regardless, the title of world's most expensive item per ounce goes to a stamp, with a winning total of $219,843,919,274.

If you ever happen to be in London searching for Almas, and a glistening Bentley limousine pulls up to the curb, disgorging an octegenarian dowager towed by four straining Welsh Corgis on leash who proceed to enter the shoppe with elegant disdain for mere mortals, you don't have to snap immediately to attention and bow formally or curtsy as protocol might demand, merely because you've been smartly jabbed in the ribs by a stunned Brit. It may not be the regnant Queen; they do employ body doubles as security precautions. The dogs are expendable.

If, however, there is a cadre of dark Saville Row-suited men whispering into their MI5 lapel mikes - with suspicious bulges beneath their coats resembling hidden shoulder-holstered Sig Sauer P228's - closely following her every move, she might be authentic. If she then proceeds to utter "Oh, I feel like a million," do not scrutinize her physique with frank appraisal. She isn't talking pounds, you wanker, it's just a euphemism. It all makes for a weighty subject, doesn't it?

Buy Silver. Buy Gold. Save Copper. Start Now. Don't throw away any old Swedish stamps.

Copper Irony

2009-12-01T15:47:00.000-08:00

The dollar is the World's reserve currency. That status will never be threatened. We have a strong dollar policy. Our conservative fiscal policies are well regarded by high officials in China. They hold over a trillion U.S. dollars in reserves. They are pleased with the prospect that the dollar will gain in value as a safe haven as other economies falter. Their students accord the utmost respect to speeches delivered by Tim Geithner.

Silver and Gold will plummet as investors realize that they are barbarous relics with no value. They earn no interest, unlike the hefty percentages captured by those who keep their money in savings. There is no fear of loss of those deposits. Banks are healthy. Toxic assets are just sound bites. Home values are crashing? Balderdash! That's just a rumor started by disreputable entrepreneurs who want to make profits from foreclosure business start-ups.

Joblessness is not accelerating. Former highly-paid executives can find jobs if they really wanted to. They just need to send their resumes to Walmart and McDonald's. College graduates can compete with downsized ex-employees. And the winner gets minimum wage! With my 2020 vision I can see home values climbing again. Consumer sentiment will leap. People can start withdrawing cash - like popping Prozac - from their home ATM's again.

The Producer's Price Index will levitate. Wages in China and Mexico are becoming exorbitant. Year-over-year increases of nearly three cents an hour will drive manufacturing back to America. Wages in the United States may see meager stagnation, but no more than $15 an hour across the board. Union leaders will gladly accept such conditions. Health benefits will not be reduced. Pension plans will not be eliminated. Our nation will soon thrive.

Why worry about the National Debt? It's only twelve trillion or so. Our unfunded liabilities only add another fifty-six. Big deal. It's just a bunch of zeroes. Helicopter Ben doesn't even need to run the printing presses. He can just push a button and the computer will fix everything. We don't really need to raise income taxes to 80% to cover projected deficits. President Obama has a realistic plan for cutting the deficit in half by 2013. On the Mayan calendar.

Oh, and copper cents? The advice I've been offering you to start saving old pre-1982 pennies for their 95% copper content? As a way to take advantage of a presumed increase in value of commodities as hyperinflation ensues? Forget it. It was a joke. The dollar is sound, remember? Your purchasing power is not washing down the gutter like a toy dhow during Monsoon. Next thing you know, they'll be saying the currency in Zimbabwe is unstable.

Copper cents are just too hard to accumulate anyway. Where would you find them? It's not like they're just laying around in pocket change. I suppose you're going to tell me that they're circulating coinage produced by the United States Mint, and that people spend them every day. Yeah, right. Next thing you know, you'll be trying to convince me that a 90% silver 1964 half dollar is worth more than fifty cents. Do I look stupid?

With copper cents you have four problems. You can't find them, you have to sort them, you have to return the zincs, and they're worthless without a buyer. These problems are insurmountable, so why bother saving pennies? You can't go to the bank and ask for a box of pennies, can you? You can't go to your credit union and ask for customer-wrapped rolls. You think it's as easy as just finding them laying around your house?

You'd have to sort them. That's impossible. What, you're supposed to be able to tell the good ones from the bad by the date or something? They all weigh the same and sound alike when you drop them, don't they? There are machines that do it for you? What fun would that be? That wouldn't be a challenge. That would be like Sir Edmund Hillary using oxygen to ascend Mount Everest, or using Sherpa guides to pack supplies to base camp.

You have to return the zincs. You think you can just roll them in coin wrappers and return them to the bank? Or put them in heavy-duty plastic bags and redeem them in bulk, depositing the amount to your account? Next thing I know you'll be telling me that they have machines everywhere that count your pennies for free, and then sell you coupons, or give you a cash voucher after deducting a nominal fee. Yeah, right.

Who would you sell them to? It's not like they are going to increase in value as the dollar depreciates. We have a strong dollar policy, remember? All the Secretary of the Treasury has do to is make an announcement. That worked for Hank Paulson, didn't it? Or bearded Ben Bernanke can wink and tell Congress "what difference does it make where the TARP funds went?" And everything will be peachy keen. We are still in Kansas, right Toto?

Nobody in their right mind would want to hold metal instead of currency. Next thing I know you'll tell me it has intrinsic value. Yeah, right. It's heavy, Jefferson, and it takes space to store it. And you can't use if for toilet paper. So why bother? This isn't a game for amateurs anyway. Leave it for us masochists at realcent.forumco.com to accumulate all those worthless pennies for you. Besides, we need a good laugh. All... the ... way... to... the... bank.

Buy Silver. Buy Gold. Save Copper. Start Now.

Betting On Hyperinflation

2009-12-01T06:02:00.001-08:00

Prices – of medical care and tuition, gasoline and groceries - have skyrocketed in recent years, but the government insists costs haven’t risen. What a laugh! They rely on the Consumer Price Index to justify that claim. Everyone with half a brain knows the CPI is massaged. Those numbers lay on the table, like a slab of pummeled meat, moaning for all to hear. They are skewed even more by the ludicrous practice of hedonics.

Are medical costs rising? Aren’t the premiums about the same? Maybe so - but better check your benefits - it’s likely they’ve been reduced. Homeowner’s insurance? Premiums haven’t risen? You’re current with your payments; your insurance is in force. You’re covered. Then disaster – flood, earthquake, tornado, or hurricane – strikes. Rest assured that your insurer will try their best to wriggle free from their obligations.

Tuition is rising; the cost of a good education has increased dramatically. And what do you get after four years? Your parents forked over enough to make a nice down payment on a Ferrari. But a degree no longer assures you of anything. Most grads won’t find work in their own field. While they were on campus cracking the books, Joe Highschool was learning in the school of hard knocks. You’re the employer. Who would you rather hire?

Last summer saw a spike in oil as crude approached $150. Prices of refinery products – kerosene, propane, gasoline and diesel - have since pulled back. That’s just temporary; we still have Peak Oil. Production has reached a plateau. Think of it as a mesa; once we’ve finished traversing the level part, the only path leads downward. Supply and demand issues – coupled with inflation - will exacerbate pricing. The outcome is daunting.

Are groceries growing more expensive? You say you’re buying the same goods for the same price? Have you checked the product sizes? You’re paying the same for a sack of sugar, but if the weight of the bag has shrunk - from five pounds to four - the price just rose twenty percent. Package size hasn’t changed? What about the contents? I’ll bet that box of cereal doesn’t contain as much as last year. Prices are disguised, but they’re still higher.

The evidence I’ve provided, combined with other anecdotal proofs? Don’t they raise your suspicion that prices have nowhere to go but up? We’re living in an era of high inflation; we could be on the verge of hyperinflation. The TARP bailout bloated an already fat M3 with an additional 700,000,000,000. That money is presently at sea, anchoring bank reserves. But when those deposits regain velocity, watch out. All bets are off.

Inflation is a direct result of an increase in the money supply. Right now our economy is flush with excess liquidity. That’s one good reason the dollar is going down the toilet. People think inflation means price increases. But rising prices is an effect of inflation, not its cause. Price inflation results from more money chasing fewer goods; the creation of that money indirectly causes those prices to rise. Any asset class can be so affected.

It all depends on the direction of the flow of funds. As the twentieth century drew to a close, Money flowed into stocks. Nasdaq was shooting further into space then NASA. Then in 2001 it all came crashing back to earth. After the “dot.com” bust Money took a good hard look at real estate. Eventually, it exceeded its reach once again. Money gorged at that feast, now it was time to purge. The subprime debacle decimated home values.

Money is now uncertain what it wants to do. Some of it sits sidelined, not wanting to dance. Some has gone into bonds, other into treasuries. Some has flowed back into the stock market, resulting in a hefty gain since March 2009 lows. And some has chosen my favorite target, silver and gold bullion. Those wishing to achieve leverage - to seek gains beyond the actual price movement of the precious metals - can purchase mining equities.

On Youtube I found a video promoting how to take advantage of inflation. This site characterizes the traditional saver, in light of our current “easy money” environment, as a chump who is exploited to the advantage of parties who stay in debt. It maintains - in the same sense that printing our way out of debt can work on a national level - an increased money supply makes it easier to pay down individual debt. With prudence, one can take advantage of inflation.

Such a strategy is optimal when accompanied by high inflation. Numerous analysts see that on the horizon. Peter Schiff implies massive dollar devaluation is overdue. Jim Willie reports a chief strategist at Japan's Sumitomo bank warns the dollar could fall to 50 yen this year, a 45% decline. Whatever the outcome, we can expect a breath-taking loss of purchasing power – that could surpass our worst nightmares - as the dollar is replaced as the World’s reserve currency.

To quote Ray Bradbury, “something wicked this way comes.” Twin demons bedevil us. While one stabs with a pitchfork of depreciation; another burns our currency to worthless ash by igniting hyperinflation. I’m so convinced this will happen that I’m making use of a speculative tool within my portfolio. Let’s be clear, I’m not encouraging you to follow my lead. What I’m doing requires high risk tolerance, and may not pay off as I expect.

I’m convicted that precious metals are the next big asset class to benefit from Money. We all need to physically hold tangible silver and gold bullion. There’s a reason that bullion is referred to as a safe haven; it has a proven track record of performing that role. Once you’ve built a solid base of precious metals, you can extend into stocks. There are several good mining equities that will perform well. We’ll explore those companies another time.

“Put your money where your mouth is,” the little voice whispers. “If you’re so sure that we’re facing an imminent collapse of the dollar, than bet on it.” So that’s what I did. I don’t need to specify the amount, but for the purposes of illustration, let’s work with $10,000. I purchased silver, on credit. I could have bought a smaller amount and paid cash. But instead, I’ve set aside the cash to ensure I can pay the minimum payments due.

Not paying off the balance is intentional. Why do that? I’m not a big institutional player who can borrow enormous sums and invest the proceeds. This is my own perverse form of the carry trade. In my case it cost 11.9% for use of the funds loaned. I bought silver with the expectations that it would increase in value, faster than the total of my interest charges. So far, I’ve been right. The silver I obtained in the middle of July - for $13 - is up 48% to date.

Take the money and run? Not so fast, Aloysius. I’m waiting for a double, and it’s not out of the question. Silver could easily climb to $26 in coming months. If that happens? What does that mean for this ploy in regards to performance? If silver is able to peak in Spring - as it usually does - and hits that target? Well that would mean scoring a $10,000 return for an outlay of about $1800. A 455% return in nine months; 738% annualized.

Now sell half the silver and pay your bill in full; you’ve made a nice profit using the system to your benefit. Don’t forget, you’ll have capital gains tax to pay the following year. I’m not letting that deter me from using this tactic to good advantage. If silver falls short of my goal, I’ll persevere; at times like this you need to stay vested in bullion. During hyperinflation, it’s much better to cash in on debt, than be debt-free in cash.

Buy Silver. Buy Gold. Save Copper. Start Now.

Screaming With Frustration

2009-11-29T09:34:00.000-08:00

I feel like I'm in the middle of an old fifties television sitcom. Desi Arnaz and Lucille Ball are playing their usual Cuban American bandleader and ditzy-wife roles. Desi is upset with something Lucy has done and comes home boiling mad, sputtering a string of invective in Spanish. After the laughter of the live studio audience dies down, he remarks "Looosie... you've got some 'splainin' to do!" Let's zip forward fifty-five years. I've got some explaining to do.

I've been a buyer on ebay since 2003. In that time I was a participant in several thousand transactions that went off, virtually, without a hitch. You can view my feedback rating and see, that at 1879 received it is one hundred percent positive. So when something does go wrong on ebay, I am disconcerted. Usually, it is just a package arriving late, but recently it was the wrong item. I had to exchange several emails and return the item. Let's say I was disgruntled.

The seller had sent my things to another buyer, and I had his item. After the other buyer had returned his item to the seller, and I returned mine, they were sent correctly to their respective bidders. A hassle that well might have been avoided if more care had been taken at the time of their original mailings. But mistakes can happen. Especially if you're elderly, new to ebay, and your short term memory is clouded by confusion. That's the essence of an email I received.

Another time I purchased an expensive Rado watch. I had just returned from a once-in-a-lifetime visit to Europe the previous summer. While there, I had spent a short while in the Inner Courtyard of the Doge's Palace http://www.italyguides.it/us/venice_italy/doge_s_palace/courtyard_doges_palace.htm
window-shopping in the many niches that are filled with vendors. I had spotted a black mirrored-finish watch I admired, but didn't want to pay the VAT. Sidenote to follow.

While there, Venice was encountering the worst stormfront in decades. We didn't get to go on a gondola ride. The Doge's Palace was closed to visitation due to pools of water beginning to puddle inside. And the courtyard? The one that was the scene, a few years ago, where a husband gives his wife a ring to commemorate their anniverary? And then she, with a flock of pigeons taking wing wistfully cries "I love you." That courtyard was awash in at least 8"of water.

Anyway, I returned from Italy with the memory of that watch egging me on. The little voice in my brain was insistent "I want it, I want it," and just would not be silenced. So when I saw that purportedly new $1500 watch on ebay with the bid currently at $600, I jumped in. I won it for something like $1050, but I was pleased by my bargain. Once I received it, though, my glee turned to dismay. The serial numbers had been buffed off. Not good. This posed a dilemma.

The watch had been stolen, it was obvious. Although with the serial number removed there was no way to prove it. The seller stated she got it back from the jeweler's that way after having it cleaned. Yeah, right. I tried to go into arbitration but the seller refused to cooperate. She didn't offer a refund, and I was afraid to ship it back. I would be totally empty-handed then. At least this way I had a watch with a colorful history. Ebay said there was nothing they could do, so I posted negative feedback and that was that.

While still in watch-collector mode I had another unfortunate episode. A seller in Australia listed an expensive watch that I was lucky enough to win at a significantly discounted price. After paying for it, for some reason I searched ebay. Maybe to compare prices with similar products to see how good a deal I had gotten? The same seller had the identical watch, with the same serial number, listed for sale again, with an auction expiration date of twenty-nine days!

I contacted other bidders whom I had bid against. Three of the seven confirmed that they had bid on a similar watch offered by the same seller in earlier listings. The guy was selling the same watch to bidder after bidder, and not delivering. What a scam. So I immediately began emailing, demanding a refund in full. No answer. I became threatening. No answer. I had several of the other people I had written to contact ebay, as did I. The guy got delisted.

Yet still no refund. I had to call the American Consulate in Sydney, Australia and send letters detailing what had happened to them and the police constabulatory in the town where he lived. After that, I did get a swift Paypal refund. Sometimes you have to turn up the heat to cook your goose. But likely, the guy just changed his identity on ebay and is still defrauding others. So I guess I could say,"I got mine Jack, but sorry Dude, you're on your own."

One final story as preamble. I once bought a Mexican 1.2057 ounce gold Centanario coin. Inspecting it while it was on ebay, I couldn't detect anything wrong. But once I got it into my covetous little mitts it was apparent it was a fake. The thing didn't even look like gold. It was the wrong color, too light, and it sounded different when dropped. The damned thing was brass. You think maybe I was pissed? You'd be right.

By this time I was getting good at squeezing juice out of the lemon, so I exerted pressure again. At first the seller didn't want to refund my money, but I threatened to contact the FBI, and their fraud division that deals with Internet Crime. I wasn't about to send the fake back to the seller until I got my money back. I emailed him and told him I wouldn't turn him in, and that he could sell the damned thing to some other idiot, I just wanted my money back. I got it.

So, this is the mindframe I was subconsciously nursing when my latest mishap befell me. As related in an earlier post which has been removed from this site, I received an empty box from a seller. It wasn't his fault, he had mailed the contents as promised, and the package was insured. The weight indicated on the sticker and his receipts show that he faithfully fulfilled any obligations as the seller. Yet, on the other hand, I hadn't received what I paid for.

In transit, the contents were lost. How did this happen? Who knows? Were they stolen by postal employees? His pending lawsuit may allege that. This seller, through no fault of his own, is out the price paid for the contents of that box. Because the USPS refuses to reimburse him more than $15 for contents that had a value of $363! He was gracious enough to cover the loss himself, and paid out-of-pocket a debt which rightfully belongs to the postal system.

Have you ever wanted to scream in frustration? Have you ever uttered words, in the heat of anger, that you later wished you could retract? This is an instance in which that occurred. By means of venting, I posted what I thought would remain personal, a diatribe on this site detailing what had transpired, and the coersive measures I was employing to get my money back. It would have been easy to imagine the worst, spurred to nightmares by my prior history.

I made the mistake of mentioning the seller's name in my rant. I did not intend to slander the individual, and was careful to mention only my displeasure with the system. But I did include contact information. Because I did so, even though I immediately modified the post when the seller refunded the money in full, a Google search engine was able to pull a cached version of the original post. My sentiments, which I thought I had posted in private, may have caused him public embarassment.

I never meant to impugn his reputation. But that's no excuse. If a speeding semi-truck overturns on a freeway, it's rear doors opening and spilling forth cartons of confetti which obscure the vision of motorists resulting in an accident, it doesn't matter if it was inadvertent or intentional. There are still casualties. So, Seller, you know who you are. Please accept this apology and feel free to offer this post in explanation if any doubt your sincerity. You are a man of honor and integrity, and in retrospect it has been a pleasure doing business with you.

Coppertunities

2009-11-28T19:06:00.000-08:00

Today let's discuss copper opportunities, from the other side of the coin. In past weeks I've touted the advantage gained by those first to explore a new investment niche. Specifically copper. Copper pennies, to be even more precise. Those pennies minted prior to 1982 are comprised of virtually pure elemental copper, if you want to overlook the mere 5% zinc component. Start saving those pennies. You'll achieve an inexpensive means of accumulating a form of bullion. Copper is bullion?

For those new to the subject, copper can be viewed as bullion. It is money, and circulates in an easily obtainable, instantly recognizable form. The United States Mint has gone so far as to produce billions of them for our use. It's a no-brainer to buy silver and gold, in order to preserve your purchasing power. After all, gold has long been recognized as a safe haven in times of economic disruption. Hmmm, that would be now, right? Uncle Ben will ensure that commodities go up in price.

All that money that was conjured up. It's not just a bunch of computer ones and zeroes. It has real impact but, at the moment, little effect. But just wait until the banks stop sitting on it, using it as "worst-case scenario fallback reserves." Right now, it has zero velocity. But once it is placed back into use via loans, which at some point is a certainty, through the magic of fractional reserve banking that $700,000,000,000 TARP fund will add another zero behind it. All that money will need a destination, and precious metals and copper are on that itinerary.

Hyperinflation, here we come. You best be sitting on silver and gold if you want to have any purchasing power left. It wouldn't be a bad idea to include a pile of copper pennies and a stack of nickels as well. All commodities will do well in a hyperinflationary event, but why overlook the forms of bullion that the Mint has already gift-wrapped for us, made especially for this purpose? When currency fails, only trusted and recognizable forms of barter will be accepted. In my book, that's copper and nickel. But, as should be obvious to the keen observer, I am a Copper Bug.

Perhaps I am overly biased in favor of this form of bullion? Well then, what do others say? The Copper Kangaroo http://www.copperkangaroo.com/invest.html has this to say, in part: "Bullion is a monetary metal... used to make coins and ingots for monetary or investment purposes. Gold, silver and copper are the three most common forms... Gold and silver have been hoarded as a way of preserving wealth, copper ... less. This is rapidly starting to change and there are now forum sites dedicated to hoarding copper, mostly in... cents."

The Portland Mint http://portlandmint.com/, a copper-cents-are-bullion site says: "a copper penny is worth considerably more than its face value. Because pennies are made by the U.S. mint, they are guaranteed to have the utmost quality and purity. This also makes them easily recognizable, which increases their demand and liquidity. Copper pennies are an inexpensive and safe method of copper investment. A single coin will never be worth less than face value, thus giving it a limited downside. Global demand for copper continues to rise..."

From thepennysorter http://cgi.ebay.com/10-Pounds-Copper-Bullion-Pennies-1959-1982_W0QQitemZ270492689935QQcmdZViewItemQQptZCoins_Bullion?hash=item3efa9ee60f this: "Copper’s healthy maintenance of markets and its promise to gain new ones, such as superconductivity applications, new marine uses such as ship hulls and sheathing of offshore platforms, electric vehicles, earth-coupled heat pumps, solar energy , fire sprinkler systems, and nuclear waste disposal canisters, to name a few, must be balanced against its prospects of future availability."

From PennyBullion http://cgi.ebay.com/2000-lbs-1Ton-U-S-95-Copper-Pennies-1959-1982_W0QQitemZ250407283091QQcmdZViewItemQQptZCoins_US_Individual?hash=item3a4d6fe993 this: "If Foreign Nations, including our biggest creditors, no longer want the Billions of paper Dollars that they hold, why would you want the Hundreds or Thousands that you own? Move into money that is backed by something that has held value for thousands of years; Protect Your Wealth with the most affordable "Precious" Metal, Copper Coins!"

From analyst Sol Palha http://news.goldseek.com/TacticalInvestor/1239107520.php this: "Taking a long term perspective copper is still a bargain; a day will come when its current all time high will look cheap, so one can imagine how the majority will feel in the years to come when instead of buying aggressively, they sat moping around waiting for the experts to guide them."

From GoldWhy.com http://www.goldwhy.com/why-buy-25-dollar-boxes-of-copper-pennies.html this: "Copper is on the rise and you should definitely consider placing part of your metals portfolio in copper bullion." "...you get an instant 100 plus percent gain by holding copper pennies for their raw metal value." "There are very few investments out there that guarantee an instant 100 percent appreciation with no risk." "...you should hoard all of your pre-1982 pennies." "...it may make sense to buy some copper pennies..."

From GoldWorld.com http://www.goldworld.com/articles/pinching-your-pennies/1 this: "... spot price of copper... record high on May 4, 2006 at about $3.50 a pound." " ...many analysts see copper... going much higher." "...with China and India going through their own industrial revolution, copper will see major pressure on the demand side..." "This gives copper a bullish platform." "...pre-1982 pennies could be traded for their intrinsic value, similar to old U.S. silver coins that trade back and forth for their silver content rather than their stated value."

And finally, from an article entitled Will Copper Outshine Silver and Gold?http://www.telegraph.co.uk/finance/personalfinance/investing/gold/5165209/Will-copper-outshine-gold-and-silver.html this: "BlackRock World Mining investment trust... remain overweight copper, which has some of the best fundamentals." "Metal commodities have become a staple part of many portfolios, as investors look for diversification and assets that are not correlated to the performance of shares."

I bring this to your attention to emphasize a point. Two copper opportunities are in this nest. The fledglings are spreading their wings and would like to fly, but they could use an assist. Copper, in this early stage, affords a chance to capitalize for both buyers and sellers. I've presented the case for buyers who wish to take a position in copper bullion. There are millions of these investors, and they will one day come to their senses.

But how many coin dealers and bullion vendors are there online? Hundreds? Thousands? I suspect it's a fairly large number. Do you offer copper cents in bulk? Why not? You don't even have to stock them, you need only advertise their availability. Why don't you contact one of the hundreds of members of realcent.forumco.com who have already saved you the time and expense of accumulating them? You can purchase directly from them and dropship. I'm sure, for the right price, they'd be willing to accomodate you.

If this were the sixties, we might be watching Bonanza as Hop Sing steps forth onto the front porch, grabs his wrought iron wand and vigorously bangs the dinner triangle as he hollers "Copper bullion, come and get it!" Copper is sizzling hot right now. Make sure you get your plateful, in fact why not two? The chef just placed this on the menu, and already it's becoming a crowd favorite. It's just starting to take off, and there's no telling how well it could do. Don't leave hungry.

Buy Silver. Buy Gold. Save Copper. Start Now.

Broken Words, Empty Promises

2009-11-27T18:45:00.000-08:00

We are all taught to be careful when bidding on items listed on ebay. Site guidelines caution you to review a seller's feedback ratings and to consider bidding only on those auctions which are offered by seller's who have a sterling reputation. Ebay can be a means for deceitful individuals to defraud innocent buyers, whether through malice with intent, or as a result of an accident. Thus exists the maxim caveat emptor, 'let the buyer beware.'

Ebay employs a feedback system as a means of attempting to ensure that transactions betwixt buyers and sellers proceed smoothly. Apparently, the fee structure attached to listings is more costly as one's ratings deteriorate, so an incentive to provide good "customer service" is there to motivate the seller. It is the obligation of the buyer to inspect the property received and post a fair and accurate assessment of their satisfaction with the transaction.

This process, for the most part, functions well and promotes a friendly, mercantile environment well-suited to the small entrepreneur for marketing their goods and obtaining the best possible sales price. Ebay exists at the pinnacle of exchange, it is America's garage sale, open not just on weekends, but 24/7. If you want to find just about anything, all you need do is type your request in the search field and "voila," you have instant access to all types of things you never knew you desired.

Ebay is promoted as a safe environment to conduct transactions, offering a vast array of goods obtainable at prices determined only by interested bidders. At times, items with few bidders can prove to be a bargain for the highest bidder, eliciting a gasp of delight as they gloat "Ha! I won it for that much?" At other times ego intrudes, emotions run high, and two or more bidders will bid items to lofty, unwarranted heights that can only result in wallet surgery.

But what happens when things go awry? Well, then there's always SquareTrade, an arbitration protocol for mediating disputes between parties and, as well, there's buyer protection offered through Paypal, the now-mandatory payment system. Even then, things can go wrong. I know, it happened to me.

I received a box from a seller that I noticed - while still at the post office - was suspiciously light. But I didn't inspect it closely as it was only one package amidst a dozen. I got home to discover later that the box was empty, re-bound with clear adhesive tape from the post office and a red message stamped on the exterior stating that it had been received in empty condition and been resealed.

There was no packing slip and no return address, so although the package was mailed from Coulton, Florida, I couldn't immediately determine what the contents had been. I had ordered perhaps three to four hundred packages in this time frame, so I was forced to laboriously inventory all of them before I could ascertain that the missing item was five bids of rolls of silver coins purchased from Coinsatheart on July 28, 2009. I had paid $297 for a cardboard box!

By now, maybe forty days had passed, and according to ebay rules you must post feedback within sixty days. When I would look down the column of items that I had not yet left feedback for, there those five items were, with a small note highlighted beneath warning not to miss the deadline to submit the case for arbitration if a problem existed.

There was no problem, yet, at least not as far as I was concerned. The box had been insured, so we merely had to file a claim with the USPS and all would be fine. So, after several emails with Hollis, the seller, the sixty-day period was drawing to a close. I called ebay and explained that I didn't want to post negative feedback on this seller, because to my knowledge he was acting with good intent in having filed the insurance claim; I was just awaiting a refund.

It was at this point I noticed the first waft of stench from the sewage factory had despoiled the beautiful Fall weather. Ebay informed me that I couldn't open up a case because it was too late. I asked them about Paypal's buyer protection plan and they stated you had to file within 45 days. "But what about the feedback deadline," I retorted, "why would you allow 60 days for one system but limit complaints to only 45 days with the other?"

"That's just the way it is," stated the voice on the phone, "it changed about two months ago." But you didn't notify ebay users of the change before it happened," I exclaimed, " how are we supposed to know there are time limits to filing a claim for arbitration?" The voice on the phone stated "we have no obligation to inform users, you need to read the terms of agreement, it's all covered in there."

So here's the situation as it now stands. Two days prior to the expiration of the sixty day period, Hollis had sent me an email stating that the insurance had been refused, and that he was so frustrated that he would just deal with the post office himself and promised to Paypal me the refund himself. I never heard from him again.

Two weeks later I sent him a scathing letter, not directly accusing him of cheating me but implying that I was prepared to "take all steps necessary to secure my refund." He finally replied with an abject tale of having lost his job, and that if he could just have a few more days he would Paypal me. Another two weeks, another excuse, and this time I really haven't heard back from him again.

"Well," you might be thinking, "tough break, you learned an expensive lesson." But I'm not going to let this drop so easily. There are a few things left that I can do, even though Hollis is in Coulton, Florida and I'm clear over here in Central California. He probably thinks he is free and clear, and why should he reimburse me when there's nothing I can do? This situation might seem absurd but, potentially, it could happen to you. So here's the steps I've taken and those I will initiate soon.

I filed a report with the Internet Fraud Division of the Federal Bureau of Investigation. Their site states they will forward the information gathered to the appropriate authorities for eventual prosecution. They needed to know Hollis's last name, for the forms I filled out, but I shall not reveal it here; I have to be careful here to avoid defamatory remarks but everything I've stated is true, I have copies of all his email remarks so I should be safe in that regard.

Next week I will be contacting the police department in his community and filing a loss report, and question them whether his actions constitute fraud. I also plan on contacting the Postmaster General of the USPS in that region to determine if a claim was ever actually filed. I plan on writing a well-detailed report and submitting it to both Paypal and ebay to inform them of events as they transpire.

I've even considered speaking with a representative of the news media, or contacting CNNFN.com and submitting a human interest story with an angle of "man sells prized possessions to put food on table, USPS reneges on promise." I mean, what a racket! All these years people have been buying insurance on the items they insure, only to be told by the post office if they make a claim "you're limited to fifteen dollars on that claim."

They say that every once in awhile, you just need to "reach out and touch someone." So, Hollis, consider this a not-so-gentle nudge in the ribs... I want my money back! To be fair, there's two sides to every story, so if you'd care to hear his you could contact him, but again, to provide contact information would be a breach of trust, and in a moment I'll explain why I don't feel comfortable doing that. But I am running this post because I wouldn't want to see another victimized. The present system has faults, your packages are not insured.

Postscript: It took another long month, and the exchange of, at times, acerbic emails, but I was eventually compensated in full. This text has been altered, "to protect the innocent." Hollis is a fictitious name, as are all other forms of identity which allude to the seller.

I Need A Good Barber

2009-11-26T16:09:00.000-08:00

This past week was a rough one for investors long silver and gold. Silver in particular underwent a severe pullback from recent highs above $19, falling through support levels to its current range of $15 plus or minus a quarter. If you're like me - in it for the long haul - and don't employ stop-loss strategies, the recent plunge been a time of soul-searching and gut-wrenching turmoil. So what's causing the correction? The fundamentals haven't changed. Manipulation by the shorts? Check out what Ted Butler has to say, and listen to the man. He knows what he's talking about.

If this is a case of the bullion banks, led by the usual cast of shady characters like JPMorgan, shorting the market massively again then, at some point, they'll have to fill their shorts and that should bouy the market back to its previous levels. Silver will recover, in time, to surpass its earlier highs. Of that I'm confident. But will it wallow in the short term? Possibly drifting even lower? It could, according to J.Derek Blain, who feels that silver is currently overvalued. http://www.kitco.com/ind/Blain/jan132010.html

I happen to disagree with him, but my rationale is tainted by my long positions in bullion and mining equities. I want silver to outperform, so my perceptions are colored by my bias, shoring up my own rationale. Although I feel that hyperinflation is imminent, and that silver will surge farther and faster than gold, a more cautious investor might prefer to sit in cash and wait to see if we might first enter a depressionary phase, with concomitant cheaper entry points in to precious metals. Robert Prechter is a leading proponent espousing this viewpoint.

Nearly anything can happen in the short term. Technical analysis can be misconstrued and that distortion misinterpreted to buttress arguments that are polar opposites. In the long run, our nations debt binge ensures that hyperinflation will eventuate, but that could be a few years off. I believe that precious metals will ultimately be the place to be to survive and thrive under that scenario, but in the interim anything could happen. The bull will try its best to buck market-timing opportunists.

Since predicting the direction of the markets at this point seems to be nothing more than crystal ball gazing, I'm going to depart a bit from my usual rants. About the merits of investing in copper bullion. That by accumulating copper pennies minted before 1982, one can begin to take a small position in copper bullion. Copper is quite likely to gradually appreciate in value, even in the absence of inflation. Most heads are turned by silver and gold, but someday tongues will wag about what copper has done. Nor am I going to go off on one of my raves.

About how the economy is sliding into an abyss, like how California slides into the Pacific Ocean in 2012. The movie, that is. I'm not quite sure that will literally be their fate. But figuratively speaking, if Arnold doesn't hurry up and do something quick, he'll be remembered for something else than his memorable line in Terminator. If things don't improve soon, Governor Schwartzennegger's "I'll be bach," will refer to his futile begging - for bailout funds for the state - at the steps of the Capitol.

No, today I'm going to use our time to share what can happen if you're not careful. If, despite your best intentions to purchase bullion for its content and its recognized role in wealth preservation, you become seduced by its secondary nature. The real purpose of buying silver and gold, and taking physical possession of it, is not to admire those baubles. It is to maintain your purchasing power. And silver and gold's track record indicates its excellence at that task. They have increased far more in worth, since this century began, than the toll inflicted by inflation.

Unfortunately, you don't see the glitter for the gold, nor the shimmer for the silver. I know, I know... it's supposed to be the forest for the trees, but give me a little license here, okay? Those who own bullion will soon learn what numismatists have known all along. Hold some of those little fellers in your hands, and if it doesn't stimulate the collector impulse in you, there's something wrong with your wiring. Once you get started, there's no turning back. You can easily empty your wallet on one coin. Here's where you can go outside. Make sure you're alone. Then scream "Aaaaaccckkk!"

As bullion investors, we're supposed to be getting the most for our money. That means buying used, worn, silver coins. Dimes, quarters, halves, dollars. Anything before 1965. Doesn't matter what denomination. Doesn't matter what design. Roosevelt, Mercury, or Barber dimes. Washington, Standing Liberty, or Barber Quarters. Kennedy, Franklin, Walking Liberty, or Barber halves. Lump 'em all into one category, and call them junk silver. Circulated coins. You buy junk silver for its usefulness in barter should their be a TSHTF meltdown. And its recognized value as bullion.

You want to get as much as can. Think Jack Lalanne as you make your buck stretch for all its worth. What you don't want to do is get suckered into paying exorbitant premiums for scarce high-grade, top quality, brilliant uncirculated coins. Do not, and I repeat do not fall in love with a gem, choice coin of any type. I don't care if it is without blemish. I don't care if it has an astounding luster. I don't care if it has scintillating fields, nor captivating reliefs. It doesn't matter if it's an MS67, and PCGS has only slabbed three. You're not listening, are you?

I know I didn't. I fell head over heels. After I began accumulating junk silver, I soon became enamored of certain designs. The majesty of the Walking Liberty half dollar. The grace of the Winged Liberty dime. The poise of the Standing Liberty quarter. And a personal favorite, the Grecian-sculpture-like dignity of the Barber series of dimes, quarters, and halves. Designed by Charles Barber - the sixth Chief Engraver of the United States Mint - they were placed into circulation in 1892 and produced until 1916.

In 1893, people used them to gain admission at the Chicago's World Fair - the Columbian Exposition - held to commemorate the 400th Anniversary of Christopher Columbus's arrival in the New World. People spent them - as Teddy Roosevelt and his Roughriders charged gallantly, on thundering steeds, up San Juan Hill in 1898 - during the Spanish-American War. They were still using them as change in 1917 when America abandoned isolationism and took arms to assist the Triple Entente, fighting The War To End All Wars.

They spent their Barbers. Not me, I'm hanging onto mine. They are a wonderful collectible, with a fascinating history. They may not be as popular as the Morgan Dollar among hobbyists, but they still represent a good investment. They are increasing in value as the years pass. And if hyperinflation does occur, if there's any buyers left after the repercussions, an exquisite collection of Barber coins ought to fetch a good deal. There have been periods of time over which investments in rare coins had returns that rivalled or exceeded most other asset classes.

And the title? I do need a good Barber. But not because I need a close shave. I'm as bald as a baby's butt. But I still have a few slots to fill in my album, and I'm always on the lookout for a good scarce date Barber dime in extra fine condition. Wanna make a buck? Keep an eye on your change, or go rifle through Gramma's coffee tin. If you find an 1894-S, or an 1895-O, or heck, even an 1893-S, and it looks real shiny, like no one has ever touched it? Send it to me and I'll zip a check off to you for ten dollars, right away. As long as it doesn't say copy on the back side, in Chinese.

Buy Silver. Buy Gold. Save Copper. Start Now.

Building A Solid Foundation To Your Portfolio

2009-11-26T10:25:00.000-08:00

In prior weeks I've been laying out the case for expansion of your holdings via diversification. The portfolio we're constructing is one that is intended to do well in the event of a plunge in the value of the dollar. We all sense that day is approaching. Those who fail to protect themselves, and their investments - from the ravages of adverse monetary retracements - will be subject to eventual decimation of the worth of their holdings.

Commodities act as a hedge to remedy the loss of your purchasing power. As dollar-denominated assets, silver and gold act as a protective balance. They tend to go up in value - it requires more daily-dwindling-in-purchasing-power dollars to obtain the same amount - as the dollar goes down. It's not a perfect solution; other factors - such as profit-taking and precious metals market suppression - enter in, but the correlation is close.

My recommendation is that you take advantage of any temporary drop in commodities prices to add to your position, or build an initial one. Daily pricing volatility can be frightening. But rather than being scared, why not view these occasional pullbacks as a purchasing opportunity? I tell my friends the following; if you want to protect yourself, this is what you need to do. Always start by purchasing bullion - tangible silver and gold - that you can physically hold in your hand.

I do not recommend programs which purport to store your bullion in unallocated pools. Stories abound of similar entities going bankrupt. That route is fraught with the potential for default. Tales could become rife of settlement in paper currencies. Paper currency - or should I say worthless money - is what you were attempting to avoid in the first place, and this outcome could neutralize your efforts. Jason Hommel has been writing of this danger for several years, and you might do well to heed his warnings.

I usually like to close with this sentiment, but it fits to include it here. Buy Silver. Buy Gold. Save Copper. Start Now. Build a sensible component of physical bullion into your portfolio. Five percent is just a starting figure. If security or storage is a problem, you could consider alternatives. CEF of Canada, SLV the ISHARES silver trust, and GLD - the SPDR gold trust - all provide bullion exposure without the aforementioned handicaps.

There are more - IAU and DBS are two - and others. Do your due diligence and determine which ETF might be best for you. These Funds also provide a vehicle for short-term trading which is just not feasible with physical bullion.Their shares are heavily traded. If you want to time the market, and trade for profit in precious metals, fine. Just never abandon your core position of physical bullion, always try to add to it when possible.

Do you prefer to live life in the fast lane? Some Funds provide double leverage, such as AGQ and DGP. But here a caveat is due. The following paraphrased text was borrowed, in part, from Fidelity Investments at http://personal.fidelity.com/accounts/pdf/designated-agreement.pdf, which warns "Such investments are only suitable for the experienced investor whose risk tolerance is high; and who can afford to lose some or all of their monies in this class of investment."

You'll never lose all your money if you hold physical bullion in your possession. Tangible silver, gold, even copper and nickel. Bars, ingots, rounds, coins. You can count your jewelry in this regard. You can keep all of it secret in a well-hidden safe. You could even store them in a safe deposit box at your bank, although that might not be as safe as you surmise. Every once in awhile take them out. Just to admire them. They're so pretty, they glow in the sun. And you too, can then bask in the realization, "I have some real money here, right in the palm of my hand."

Buy Silver. Buy Gold. Save Copper. Start Now.

Full disclosure. The author is long AGQ and DGP for the purpose of speculation. The author does not hold SLV or GLD as a bullion substitute, but might consider CEF. The author is long physical silver, gold, AND copper.

Putting ETF's To Work

2009-11-26T06:38:00.000-08:00

Joblessness is rampant and spiraling. Banks are failing, haunted by toxic assets. Housing values are crumbling as foreclosures continue to mount. The dollar is dropping. One might conclude that it was time to bet against the markets. The rationale being that a reduction of purchasing power would indirectly result in a loss of consumer confidence. In a GDP-measured economy that is 71% consumer driven, who will be left to buy products when the consumer slams shut his wallet?

Wouldn't equities markets be inclined to a modest pullback - or even a waterfall plunge - under this scenario? Market diagnosticians Marc Faber, Stephen Leeb and Martin Weiss are a few harbingers that are heralding this tune. But doom and gloom predictions have, as yet, proven imprecise. That prospect might play out, but to date such dire forecasts have not come to pass. Wall Street is currently a bouyed market. Awash in liquidity provided by FED largesse.

Some individuals who listened are cying "Foul," and they're smarting. They thought that such advice meant it was time to jump into the short-the-market cadre. But their actions were precipitous and their timing off. If it does come to that? What if it seems to you as if there is an irreversible market plunge underway? What actions could you take, at that time, to offset losses and perhaps realize gains?

It takes an investor with experience to utilize puts. It can require extensive time in the trenches - to obtain that expertise, and implement those strategies - without getting blown up. Many
investors don't fully understand how to short individual stocks. Similarly, not everyone knows how to write covered calls. Luckily, for those investors alive today, you no longer need to have the skills of a Jesse Livermore.

Do you wish asset protection in these uncertain times? Do you desire to profit? If so, Pilgrim, listen closely. There are exchange traded funds designed to do just that. They've taken the guesswork out of the equation. The teacher is doing your assignment for you. She's already filled out all the answers, and even gone so far as to award a big fat pencilled-in-red "A" atop your paper. "Where can I learn about these ETF's," you ask, "tell me more?"

There is a sizable, and growing, group of Fund Providers now on the market. They offer a wide variety of both bullish and bearish funds. They cover a proliferation of investment opportunity. They permit you to participate in market movements in any direction, rather than be sidelined in cash. The largest in descending order include Barclay's Global Investors, State Street Global Advisors, Vanguard, PowerShares, and World Gold Trust. And there's more.

BONY/Merrill Lynch, Rydex, ProShares, Wisdom Tree, and DB Commodity Services are a few more which round out the field. I'm not offering endorsement of any one particular provider nor recommending purchase of a specific ETF. I am merely listing them here for the convenience of the reader, and to emphasize just how many ETF's now exist. This has revolutionized investing, subsequently encouraging avid market participation from increasing numbers of newcomers.

Finally, there are Inverse ETF's that offer to double or even triple the pricing action in declining markets. For example, those offered by Direxion Funds - that aggressively pursue triple the daily pricing action. Stay away from them if you're not an experienced, sophisticated investor who can monitor them like a hawk. Such Funds should only be utilized for short term, intra-day trading. Hold them for no more than a day or two at most, to capitalize on market volatility.

During this upward market trend BGZ, TZA, and FAZ - the exchange traded funds from Direxion - have done poorly for those expecting a quick explosive downside move. Too early when they bought in, these investors wound up being proven wrong. They were betrayed by the capricious greed of others - who, goaded by the influence of excess liquidity - are driving stocks higher. Market direction is nothing more than a gigantic voting booth. Right now, the public is voicing its opinion that easy money will continue.

Perhaps those who stubbornly hold their position of an impending market decline are like an out-of-favor political party. Outnumbered and held in dismissive contempt by those holding the reigns of power. But still wishing to be heard. They obstinately refuse to shed their contrarian convictions, sure that a dire scenario will soon ensue. But from a profit perspective, this is a perfect example of "you have to know when to hold them, and know when to fold them."

Purchasing an ETF which focuses on your investment objectives may be a route you choose to take. I recommend that you don't take that road without this last bit of advice. Traveling down this current path of irreversible dollar devaluation is akin to embarking upon a journey with destination unknown. You wouldn't plan an itinerary without putting gas in the car. Fill up your tank first. Precious metals are the highest-octane fuel you can buy. Don't leave home without them.

Buy Silver. Buy Gold. Save Copper. Start Now.

In God We Trust

2009-11-24T19:45:00.000-08:00

I'm not here to preach today. Well, maybe I better take that back. I do want to persuade you of something. But we're not going to talk about religion. Unless you consider having faith in fiat a religion. I would call that having faith in False God's. If the dollar is your almighty god, than Pilgrim, I am here to convert you. Having faith in the dollar is not going to save you when hyperinflation hits.

You can pray all you want. Attend services every Sunday if you desire others to worship with. The dollar has already lost 96% of its purchasing power since the creation of The Fed in 1913. The purchasing power of that remaining 4% is rapidly eroding as well. Singing hymns of praise is not going to slow the decline. Brother Tim can lead the choir in all four verses of "In a Strong Dollar, I Believe" and it won't make any difference.

So put away your hymnals, and stow your blind faith. Pastor Ben has been telling you all a pack of lies. Harsh words, sure. I can tell by the way you're recoiling in the pews that you don't want to hear this sermon. But sometimes The Truth hurts. Our nation is bankrupt. Our money is worthless. When it will happen, I can't tell you. But soon, in the near future, we'll be lighting United States currency - instead of newsprint - to start a fire.

If the Federal Reserve Note were a religion, it would have to be considered a cult. One of the definitions for that word is: followers of an unorthodox, extremist, or false religion or sect who often live outside of conventional society under the direction of a charismatic leader. United States citizens a sect? Could be. Outside of conventional society? What's conventional about living amidst a morass of rampant crime, while sinking into a cesspool of moral decay? Under the direction of a charismatic leader? Last time I checked? Yeah.

You might scoff and insist "our money is safe." And, "we're not a Banana Republic." And some would add "but we could never have a total economic collapse! Not here, this is America." But I hope you do realize that your money is not safe. In fact, it's not even in the bank where you entrusted it to safekeeping. Due to the nature of fractional reserve banking, only a very small fraction of deposits must be kept as reserves. Less than half of one percent.

Let's think about what that actually means. We'll say that - hypothetically - a particular bank branch has one million dollars in reserves in their vaults. In practice, that number could well be too generous. So let's reduce it to $500,000. You're nervous because you've heard of the prospect of a Banking Holiday, where ATM withdrawals of cash would be halted. So you're in line to empty your account of its entire $10,000 balance.

First of all, were you to try that, it's likely the teller would have instructions to refer you to the Branch Manager. As far as I am aware, if you go into any branch of First National Just-Try-And-Get-Your-Money-Back Bank they will frown in supercilious indignation and frostily question your intentions if you try to withdraw $5,000 let alone $10,000. This is not conjecture, nor urban myth; try googling it on the Internet.

Then, if you do manage to gain approval, they may try to foist a potentially worthless-in-a-crisis bank draft on you. Another paper certificate gambit to keep their reserves intact. Finally, let's pretend they actually have the cash and will give it to you. As Maureen counts out your hundreds, she looks up nervously. The Branch Manager has just locked the front door and placed some kind of sign on the window. He's unlocking the door to let patrons out, but not admitting any new ones.

Developing the premise that everyone wants to withdraw the same amount, only the first fifty people will get their money this day. The thousand customers in the line outside are getting more irate by the moment. You can hear their muffled shouts of outrage through the thick glass of the doors. Maybe you're not in such a hurry after all. Try and walk through that milling throng and - quite likely - push will come to shove. You'll never make it to your car. The three police cruiser's that just screeched to a halt in the parking lot won't be enough to protect you.

So, the wonders of fractional reserve banking. Your money isn't there to begin with. And if you decide you want it back, look what could happen. An unlikely scenario? Just ask the people of Argentina what it was like when their currency collapsed. Ask anyone from any country that has encountered hyperinflation. This could happen. In the United States. The ultimate destiny of ALL fiat money is worthlessness. We're well on our way down that road; we can't turn back.

How do you prepare for the destruction of the dollar? First, try to eliminate your debts, so you can sleep free from anxiety. Keep only the amount of money in your bank that is necessary to cover pending bills. If you have any discretionary income you need to immediately convert your monopoly money - I mean your dollars - into a tangible form of worth that will preserve your purchasing power and be useful for barter. Precious metals are what I'm talking about. Can you say Amen, Brother?

Buy Silver. Buy Gold. Save Copper. Start Now.

Our economy is terminally ill. This time, an injection of trillions won't be enough to save us. We are on our deathbed. No life-saving elixir can rescue us from the ruinous debt that is killing our nation. The obituaries will soon mourn the passing of America. That day is fast approaching. A colossal financial collapse will occur. We will witness Wall Street carnage, and a catastrophic economic meltdown. And we will experience Hyperinflation. That devil has many names, but whatever you call him, we're going to have Hell to pay.

Let's Talk Metals

2009-11-24T09:25:00.000-08:00

What if Metals could talk? Pretend you're at a party. The Elements are milling about. Could you imagine the buzz? Tungsten points out that Gold has a flaw in his character, but tells him "If you'll cover for me, I won't admit I'm the heavy in all this." Metalloids love to drone on endlessly. But do we really want to listen to them, Boron?

Mercury is bashful; a warm blush and she'll melt. Sodium, Potassium, and Chloride are in a group, arguing over which sports drink tastes best. And Calcium, Zinc, and Iron just want to talk about health. Even the Lanthanides have a rare word to add. Uranium is boasting again, about his nuclear family.

Exploring this idea could lead in countless directions. Let's limit it between the discussion that copper might have with silver and gold. Look, they're over there by the podium. Let's grab some punch and cookies and see if we can't eavesdrop on their conversation.

As we nonchalantly sidle closer, we overhear, "I can be precious too." Copper flashes a boyish grin. "I don't think so," says Gold, frowning with haughty superiority. "Don't even go there," chimes in Silver, "you're way off base thinking like that."

"No, but really," Copper retorts, "I work for money too, not just you guys." "Maybe," Silver replies, "but you don't make as much per hour as we do." "Look who's talking," snorts Gold, "you guys are just labor, I'm management."

Copper isn't about to give up. "Look, you guys," he says getting miffed, "if you think about it, I'm still working but you guys are retired," Copper reminds. "Silver, you haven't had a job since 1964, even though you worked part-time through 1969 with a side gig now and then."

Copper continues. "And Gold, you've been drawing disability checks since 1933!" When was the last time you did an honest day's work?" Gold thinks for awhile before replying "well, I may not work on a daily basis anymore, but I still guard Fort Knox and the Federal Depository of New York."

Silver objects. "But I pull guard duty too! I still watch over the West Point Bullion Depository."
Gold turns to glare at Silver and says "Those are empty words," not even giving Copper a chance to speak, "that's for the birds, Silver, and you know it," Gold adds.

"Eagles you mean," adds Copper, "I know, I know... both you guys are involved in the Audubon Awareness 'Teaching Eagles to Fly' Program." Gold growls intimidatingly, "Don't mock us Sonny." He balls his fists, and Silver wonders if Copper is about to be knocked senseless.

"It's been a pretty successful program, in fact it's moving so fast we can't keep up. The Public is surprised at how we've taken off." Gold continues. "We just started in 1986, and already the Birdwatchers are flocking to coin shops asking 'have you seen any Silver or Gold Eagles lately?' "

Copper sniffs, humbled. "Well, they didn't even ask me if I wanted to take part. It's not fair!" "They begged Platinum to join," he murmurs, "Mr. Self Important." "Next thing you know," Copper grumbles, "the Mint is going to be asking Palladium and Rhodium for help."

Copper turns to look at his buddies, Nickel, Lead, and Aluminum. "But are they ever going to ask us?," he blurts, "I don't think so." Behind him his friends look at the ground, too embarassed to offer more than their quiet support. Copper is silent for a moment, before he continues.

"I'll tell you what I can do that you guys can't," Copper says. "I went to school and I learned lots of stuff, I can do all sorts of things." "Yeah? Like what?" Gold says edgily. Momentarily Gold is caught off guard. He senses what's coming next.

Gold was hoping that the topic of industrial applications wouldn't come up. Because Gold is a noble metal; primarily prized for guarding stores of wealth. He doesn't much like working in industry. And he has no interest in banking, either. Gold was spoiled early in life.

How many times his mother used to tell him "Oh Gold, you're so good looking, you'll never have to work. You're handsome enough that you could just hang around like an ornament." Mom's words ring, "people will probably pay you to sit around and do nothing," as he recalls her memory.

Gold stirs from his reverie. The other two are now talking about job openings; whether or not their applications would be considered. They talk conspiratorily, for a long time. In the end they're both smiling. It seems like Copper has convinced Silver that they have a lot in common.

They both have experience in electronics. All three of them can make jewelry, though Silver and Gold are more talented. All Copper knows how to do is craft bracelets and amulets. But Copper gets even, bringing up Architecture. "I'm more useful in large-scale applications," he says.

Copper knows how to fix automotive problems too, but he can't repair broken catalytic converters like Platinum can. Copper starts to monopolize the conversation, not allowing a peep from a glowering Gold. Silver is sputtering, trying to get a word in edgewise.

"I know about high conductivity, electrical energy efficiency, building wire, and power applications." Copper goes on, "and I know all about pipes, and fittings, and salt-water tolerance, and telecommunications," his rant tapers off as he becomes aware of the stern expression on Silver's face.

"Look," says Silver, "I can do alot of the same things, and many more that seem to have slipped your mind. But I don't feel the need to brag." Copper is chagrined. Silver continues, "see what you did? You embarassed Gold. Just because he doesn't like to work in very many industrial roles doesn't mean he's useless," Silver springs to Gold's defense.

"Gold is more ductile than any other element, meaning he can form the finest wire possible. He knows some stuff about computers and cell phones too. And Space. Ask NASA, Gold can take the heat if he has to," Silver finishes. "Let's not argue anymore," reasons Silver, "I'm not here to test your mettle." "I can see both viewpoints, Gold - and yours too - Copper," Silver concludes.

Silver feels almost like he has a split personality. Is he a serf or a nobleman? He is valuable to industry, and just as worthwhile to wealth preservation. Copper jokes that they ought to combine classifications just for him, and that Silver could be a "nose metal," but Silver feels this is nothing more than "bable."

It was getting late; it was time to depart. But I thought as I was leaving, "the party was meant as a mixer, had anyone alloyed?" Zinc had been winking at Copper all night, like she wanted to get together or something. What she wore was revealing, you should see the way she was clad. I wondered, how did the night close?

In the end Silver decided that he had almost more things in common with Copper, than with Gold. Although Silver had as many or more industrial applications as did Copper he decided he could do both jobs equally well, and didn't mind the overtime. Gold remained above it all; he would probably be deemed arrogant if the Public knew he considered Copper to be common.

Lastly, Copper. For a moment, Copper's self worth had been in question, but he had recovered. He was, basically, a good guy, willing to help out whenever needed. A jack of all trades. Not the king, not the queen, but jack isn't so bad, is it? And while not initially being included in the Eagle Program was a blow to Copper's self-esteem, he knew he would get over it in a year or so. Dr. Bernanke had assured him of it.

Buy Silver. Buy Gold. Save Copper. Start Now.

Copper is good in trade. Copper is good to trade in. Copper can preserve your purchasing power during the advent of Helicopter Ben's hellacious Hyperinflation. Coming soon to a theater near you, "The United States of Zimbabwe." Be sure to purchase tickets early, seating is limited.

The Copper Miner

2009-11-23T04:38:00.000-08:00

Bone tired, and bleary-eyed with lack of quality sleep. That's how I feel. But when the alarm goes off, I know I have to get up. I don't have the luxury of slapping clumsily at the button that will permit another nine minutes of peace. This isn't Sunday, when I can swipe at the infernal digital demon, fumbling to silence it without awakening. It's three in the morning, time to get up. I'm denied the sanctuary of the pleasant reverie of dreams.

Slowly I roll out of bed, pausing as I rise. Taking time to let my head clear. Allowing the narcotic effect of sleep to dissipate. So that when I stand, I don't stumble half-drugged. I test my weight gingerly on my ankles. Lately the gout has flared again, crippling my left foot with excruciating pain. It feels like Kathy Bates struck me, disabling my ankle with her small sledge hammer. But this isn't a Stephen King movie, it's my life. And it sure is misery.

I stagger into the bathroom and lean on the marble of the basin. I look into the mirror, afraid to focus my vision, to see what peers back. Reflected in that silvery plane the visage of a stranger stares at me. The face isn't mine, it isn't possible. Am I really as old as the impersonator would suggest? Whose image is composed of features weathered by time? Tanned, leathery skin? Crow's feet spreading from the corners of his eyes?

I brush my teeth, and at least my mouth feels fresh. I slap on foamy lather and draw a disposable razor across my stubble. I take a quick navy shower to conserve water. After the morning ablutions I am finally fully awake. I dress, donning durable jeans, a long-sleeved pendleton shirt over a cotton tee, and my steel-toed workboots. Those boots have a lot of miles on them, but they're necesary for the type of job I do.

This part of Utah, there isn't much work. I'm in the suburbs north of Salt Lake. I have to rise as early as I do because of the one hour commute to Kennecott. When I got hired there wasn't room in the dorms at offsite employee housing. But at least I'm on the waiting list. I grab my thermos of steaming coffee and head out to warm up the truck. I have a thirty-nine mile drive ahead of me. Some of it on twisting mountain road. Not all of it paved. I need to get going if I'm going to get to work on time.

My workday starts at the crack of dawn. This time of year that's about 4:45am. Each day it changes by a minute or so, but it's my responsibility to be onsite on time. Though you can barely see, as soon as the crepuscular dimness of fleeing night brings Dawn's light to day, you're expected to climb in, turn the key, and fire the beast to life. I drive a Terex Titan, and it's a monster. With a chassis sixty-six feet long, I have to scale a ladder mounted alongside the rig to enter the cab. I'm about eighteen feet off the ground when I'm seated.

My job is to ferry ore from the mine to the processing facility. The capacity of my hopper is immense. Yet I'm just one of many drivers, and today I'll make several round-trips. You see, I work at the Kennecott Utah Bingham Canyon Mine. It's the world's largest man-made excavation. The mine is 2 3/4-miles across and 3/4-mile deep. It is so big that it can be seen from outer space. Even though I just drive a big rig, I like to think of myself as a copper miner.

Thank God I don't have to go through that every morning. It was all pretend. But I imagine there are people who go through something very similar each day. I'm glad they have those jobs, and not me. I respect what they do, but I'm happy I don't have to go to all that trouble to fetch that ore to refine a load of copper. All I need to do is drive to the local bank and request a $25 box of pennies, then sort the copper ones out, leaving the zinc. You see, I consider myself a copper miner too.

Many are aware that our natural resources are rapidly depleting, copper among them. Each year, new discoveries of sizable ore deposits worldwide are shrinking. Even if exploration uncovers a viable site, it can take as many as seven years to construct a producing mine. Mine development involves a long and steady process of land-leasing, exploration, feasibility studies, environmental impact reports, and often convoluted legal maneuvering. It would be nice if one could avoid all that.

Well, Prospector, welcome to green mining. Let's protect the environment and enrich ourselves at the same time. The time to witness some nice percentage price gains is approaching. Precious metals silver and gold are climbing giddily, responding to the stimulus of an immense increase in our monetary base. Soon it will be base metals chance to share the limelight. Why not avail ourselves of a ready source of copper ore? It's already refined and just sitting in vaults conveniently located across the land.

What I'm talking about just makes cents. The United States Mint to be specific. Pennies minted prior to 1982, for the most part, were composed of 95% copper and 5% zinc. Starting in that same year, the components of the alloy used to fabricate the cent were changed. Commodity prices had risen, and it was cheaper for the Mint to produce cents that were 97.5% zinc, with only 2.5% copper. Copper coins are miniature metallic lottery tickets, and they're essentially free of cost. Collect them while you can.

Should one desire to participate in the transitional stage of a shift from soon-to-be worthless Federal Reserve Notes into purchasing-power-preserving precious and base metals, one need only start saving their old pennies. The dollar only buys about 5% of what it used to in 1913. I, for one, would like to put a stop to that. Ron Paul's bill to audit the Fed may fail to pass the Senate; it's looking like it may lack sufficient votes. But at least we can take measures to safeguard our own wallets.

Buy silver. Buy gold. Save copper. Start now.