GOLD AND SILVER WORLD NEWS, ECONOMIC PREDICTIONS
GOLDSAINT
Posts: 2,148 ✭
Rather than having a thread where we make our Gold, Silver, and economic predictions perhaps we can start a thread where we post related world announcements, price moves, and make comments on these moves as well as the predictions of others.
Gold is at $455 today and Silver is back to $8.
Here is the first news of the day,
December 2, 2004
"Some shorts were carried over to Asia (from the New York session)," said
Gordon Cheung, director of precious metals with Mitsui Bussan in Hong Kong.
When the euro began to firm after the Comex close Wednesday, eventually
touching an all-time high in Asia, gold slowly crept up and opened above US$454
a troy ounce early Thursday.
This, coupled with early buying by Tokyo Commodity Exchange players, forced
some dealers to reconsider their positions, Cheung and others said.
"The market was caught short," he said.
The ensuing buying lifted spot gold to an intraday high bid of US$456.60/oz.
At 0743 GMT, the yellow metal was quoted at US$456.35, up US$2.50 from its late
New York price, after traders reported "good offering" by dealers around
US$456.50, which helped cap the market.
Traders in Sydney, Singapore and Hong Kong pegged the next key resistance
level at US$458/oz, with a breach widely predicted to yield a quick jump to
US$460.
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Comments
(the 2nd one, that is.)
LONDON, Dec 2 (Reuters) - Gold notched up a new 16-1/2 year high of $456.75 an ounce on Thursday morning in Europe, with fund buyers seizing on a sinking dollar to invest in the yellow metal.
The price tracked back in morning trade but dealers said the metal, which has risen consistently since September in a quickening of the overall bull-cycle since 2001, could see fresh gains up to $460.
Silver also burst into the limelight, moving up sharply to its highest since April amid concentrated heavy fund shopping, dealers said.
"For the moment U.S. dollar weakness seems to be a one way bet -- the reality is that in the absence of any significant intervention, the euro and gold will continue to test higher," Barclays Capital analyst Kamal Naqvi said.
Spot gold (XAU=: Quote, Profile, Research) stood at $454.00/454.75 by 1114 GMT, compared with $453.30/454.05 quoted late in New York on Wednesday.
The dollar sank to a record low against the euro and to a near five-year low against the yen, with downward momentum amplified by concerns about U.S. ability to attract investment flows to fund its current account deficit.
The euro (EUR=: Quote, Profile, Research) peaked at $1.3383 before settling back to around $1.3323.
Bullion is now up more than 80 percent from a near 20-year low in 2001 around $250, when prices slumped under the weight of forward selling from producers and central banks liquidating their gold reserves.
Gold dealers said that while $460 now looked reachable in the short term, there was a chance that prices could struggle at current levels with some funds wanting to take profits.
"Gold is looking fairly strong but there will be a need at some point for a correction lower so that the overall rally can carry on," one dealer said.
Silver (XAG=: Quote, Profile, Research) prices were firm after moving to their highest since April when the metal broke above resistance at $8.00.
Dealers noted heavy buying from a small band of funds on Wednesday, which triggered buy stops.
"Silver could well have a look at the highs from April ($8.43) but there is always a risk for a sharp fall," the dealer said.
Platinum (XPT=: Quote, Profile, Research) was steady at $874.00/878.00, while palladium stood at $209.00/213.00 from $208.00/214.00 previously.
reuters
Sorry I did not see it. I get loads of weird newsletters and articles on Gold and most just have no credibility, so they go in the trash, but it starts to make me a little nervous when the Wall Street crowd starts making these predictions.
A couple of days ago in a discussion with a dealer he made the comment to me that I should be happy that the coin market was going so crazy. I have a nice overall collection, and his comment was directed to the fact that most of the coins I owned have doubled in price the last few years. I told him the problem with this is that I was not done collecting. Many of the coins I am looking for, are now getting price prohibitive. From my point of view the only people that should be happy about this market are the guys ready to sell.
My local Taxman thinks the same way. Every time he revalues my house, and the taxes go, up he thinks I should be elated, I am not! I am not a seller, and it just costs more each year to live her.
Here's another one I found:
===============================
Falling dollar, rising gold affecting the world
Knight Ridder - Wednesday, December 01, 2004
Chicago Tribune
By Robert Manor
CHICAGO _ After two decades as a wretched investment, gold is on a tear, hitting a 16-year high Wednesday in the most glittering example of how the falling value of the dollar is reshaping global commerce.
For consumers, gold at a whopping $456 an ounce _ the February contract closed at $455.90, up $2.70 _ means paying a tiny bit more for jewelry and dental work. Beyond that minor immediate impact, however, the rising price of the precious metal reflects far-reaching economic forces that affect everybody.
The weaker dollar is helping to propel the U.S. economy by making American-made goods cheaper overseas and discouraging imports. The benefits of that phenomenon come largely at the expense of America's trading partners.
On the downside, a weaker currency tends to make dollar-denominated stocks and bonds less attractive to foreigners. As the dollar has fallen precipitously in recent months, hitting a 12-year low of $1.9344 against the British pound and a new low of $1.3348 against the euro Wednesday, overseas investors have sought gold as a refuge.
That has prompted much bullish talk from some precious-metals analysts.
"I think gold is going to go higher," said Michael Fowler of Desjardins Securities. "There is about a 90 percent correlation between the U.S. dollar going down, and the gold price going up."
Other factors have played a role in gold's rise, too, including worries about inflation, the war in Iraq, higher demand and stagnant supply as a result of production logjams.
Not everyone believes gold will be going ever higher, because over the years it has proven to be such a bad investment.
At the close of trading on Jan. 21, 1980, gold reached its record of $850 an ounce. Anyone who bought that ounce would have seen their investment, after accounting for inflation, dwindle to about $197 today. In contrast, if the $850 had been invested in the Standard & Poor's 500 index of major companies, it now would be worth more than $7,100 after inflation.
Although its long-term record is remarkably poor, gold has had a solid run in the last few years. In 2001, when the dollar was strong, gold briefly sold below $260 an ounce. It has risen approximately 75 percent since then. Some economists say there is little reason to think the dollar has hit bottom.
BMO Nesbitt Burns, an investment and corporate banking adviser, has told investors that the dollar could remain soft through mid-2005, at least. "We look for dollar weakness to persist," the firm said.
America's trade deficit and national debt continue to grow, with no end in sight. That trend floods the world with dollar-denominated securities that many foreign investors believe will depreciate, and it also could set the stage for inflation, as imported goods become more costly.
Gold is a traditional hedge against inflation, and it was fear of rising prices that pushed gold to its record 24 years ago.
And industry analysts say the conflict in Iraq may be influencing the cost of gold. In periods of geopolitical uncertainty, many investors look for the security it provides.
But factors other than the dollar also are inflating gold prices.
The World Gold Council says demand for jewelry is rising faster than the production of gold. Consumer demand is expected to accelerate further in India, the world's largest buyer of gold, and China.
Larry Michals, owner of Michals-Kagan Jewelers in Chicago, said holiday shoppers in the United States won't have to worry about sticker shock.
"It does have an effect on an all-gold item," he said, "(but) if you're selling a diamond ring for $2,000, and it has $75 of gold in it, it's not a factor at all."
Because gold is only part of the cost of jewelry _ fabrication, marketing and many other costs play a role _ prices do not rise as fast as the price of the metal itself.
Nor is there likely to be a sudden surge of gold production anytime soon.
"Worldwide gold production has leveled off and may even be declining, while gold demand continues to grow at 2 percent to 3 percent a year," said Douglas Silver, president of Balfour Holdings Inc., a mineral economics firm.
Silver noted, however, that gold is a commodity that is rarely consumed. Most of the gold ever mined remains in human hands today.
"The concept that there is a shortage in supply is not entirely correct," he said.
Most gold is traded as bullion by governments or large institutions. Small investors typically buy coins, and sales have been strong, said John Kozicki, owner of Glenview Coin & Collectibles Inc.
"People look at it as something to diversify into," Kozicki said. "They don't put all their money into gold. Even I don't do that."
Small investors also can invest in mining companies, though that has proven to be risky this year. After a strong 2003, the Philadelphia Stock Exchange gold and silver index of mining companies is down nearly 2 percent in 2004.
But some observers say the metal itself hasn't lost its shine yet.
"The trend remains up with the market," said J.P. Morgan analyst Robin Wilkin, who predicted that gold could reach $500 an ounce next year.
link to story
"A strong euro makes exports from the 12-nation single currency area less competitive overseas, threatening to stifle the region's already weak export-led economic recovery.
The outcome of the council's deliberations on interest rates was widely expected to be an announcement to leave eurozone borrowing costs where they have been for the past 18 months -- at 2.0 percent.
Markets were on alert for any fresh clues on whether the eurozone central bank might soon intervene on the forex markets to clip the euro's wings. "
I think that has more chance of happening than an 'economic Armageddon.' I've always been optimistic. I think interest rates will rise, the dollar fall, America will continue to be the most productive country in the world and we will eventually pay our debts.
1 hour, 15 minutes ago Business - AP
By ANNE D'INNOCENZIO, AP Business Writer
NEW YORK - The nation's retailers had a disappointing start to the holiday season, reporting sluggish sales for November as a much hoped-for surge in Thanksgiving weekend business failed to materialize.
delayed 20 mins - disclaimer
Data provided by Reuters
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Sponsored by:
New Pro Platform
As merchants released their first solid results for the season on Thursday, the downbeat reports came from across the sector, including Wal-Mart Stores Inc., Limited Brands, Federated Department Stores Inc., and Bombay Co. Even upscale Nordstrom Inc., which had enjoyed a sales surge over the past year, had only modest gains.
Among the exceptions were J.C. Penney Co. and Sears, Roebuck and Co., which surpassed Wall Street forecasts. Business was boosted by strong sales over the Thanksgiving weekend, as these stores successfully wooed customers with bigger discounts and earlier store openings than a year ago.
But overall, the industry struggled through the month.
"This can't bode well for the holiday season," said Ken Perkins, an analyst at RetailMetrics Inc., a research firm based in Swampscott, Mass.
Consumers, particularly low- and middle-income Americans, have been forced to cut spending on clothing and other non-necessities as gasoline prices and grocery bills rise. They're also nervous about jobs — on Tuesday, the Conference Board (news - web sites) reported that doubts about the economy helped push consumer confidence down in November for a fourth consecutive month.
The International Council of Shopping Centers-UBS sales preliminary tally of 66 retailers increased 1.7 percent for November, lower than the reduced forecast of 2.5 percent to 3 percent range.
The tally is based on what the industry calls same-store sales, or sales at stores opened at least a year. They are considered the best indicator of a retailer's performance.
Based on the tepid results, Michael P. Niemira, chief economist at the shopping center group, said he was cutting his forecast for the November-December period to a 2.5 percent to 3 percent gain, from the original 2 percent to 4 percent projection.
Wal-Mart, the world's largest retailer, reported a meager 0.7 percent increase in sales at stores open at least a year, known as same-store sales. These sales are considered the best indicator of a retailer's health.
Wal-Mart's results met Wall Street's forecasts that were reduced earlier this week, after the discounter warned that its business the day after Thanksgiving was disappointing. The retailer acknowledged that its weekend sales suffered because it had not discounted as heavily as its competitors.
Its total sales increased 8.7 percent.
Costco Wholesale Corp. reported same-store sales rose 5 percent. Analysts surveyed by Thomson First Call expected 5.8 percent gain. Total sales rose 7 percent.
Limited Brands had a 5 percent decline in same-store sales, far worse than the 4.8 percent increase Wall Street expected. Total sales declined 2.9 percent.
Gap Inc. posted a same-stores decline of 4 percent, below the 1.4 percent decrease Wall Street forecast. Total sales were unchanged from a year ago.
Federated reported same-store sales fell 1.4 percent, far below the 1.2 percent gain Wall Street forecast. Total sales performance.
"While we were encouraged by sales over the Thanksgiving weekend, it was not enough to offset the weakness in sales that we experienced earlier in the month," he said.
May Department Stores Co. Inc. suffered a 7.7 percent decline, far worse than the 1.4 percent decrease that analysts had expected. Total sales were up 10 percent.
Nordstrom had a 3.1 percent gain in same-store sales in November, below the 5 percent forecast. Total sales rose 6.2 percent.
But Sears and Penney had results that pleased Wall Street.
Sears, which has been languishing in a sales slump and is merging with Kmart Holdings Corp., posted a 2.8 percent gain in its domestic business, much better than the 0.3 percent decline Wall Street expected.
Total sales increased 1.9 percent.
"We were pleased with our November sales results, especially our strong start to the holiday shopping season," said Alan J. Lacy, chairman and chief executive officer, in a statement. "Despite sluggishness early in the month, we enjoyed particularly strong customer response to our enhanced promotional event and had record sales the day after Thanksgiving."
Penney had a 12 percent increase in same-store sales for the month, slightly beating Wall Street projections for a 11 percent increase. Total sales increased 9.2 percent.
Pacific Sunwear of California Inc. posted a 2.7 gain in same-store sales, well below the 5 percent Wall Street expected. Total sales were up 13.4 percent.
Bombay, which sells home accessories and furniture, posted a 13 percent drop in same-store sales, worse than the 5.8 percent decline forecast. Total sales fell 7 percent.
"We were not as promotional as we needed to be during this increasingly promotional period, resulting in a decline in traffic and conversion over the weekend," James D. Carreker, chairman and chief executive officer, said in a statement.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Leonard Kaplan: "The gold market is almost entirely influenced be the US dollar, which continues its death spiral. Producer dehedging (the repurchase of previously sold forward positions) continued at very high levels. There are historic speculative positions in long gold. I remain bullish in the gold market but it should be noted that the gold price is only tracking the demise of the USD. Any rally in the USD will force gold prices lower."
When will the dollar strengthen against the Euro? How much will the gold price fall when that happens?
edit - Kaplan also noted that gold is considered a collectable by the IRS, not an investment, and taxed at a higher rate.
Bill
Having been an optimist my whole life it is hard for me to believe what poor financial shape Americans, and their governments are in, but I cant get past the numbers that continue to come out, and these are not just from the “Gold Bug sources”
I suppose I personal have been put in a category as one of the Gold bugs here, but in fact this is not true. I do own some Gold and Silver and have for many years, but as a percentage of my net worth my bullion ownership is about 2%, so I don’t think that qualifies as a Bug.
Like most of you, as I look around me everyone seems to be doing fine. I personally don’t know anyone going down the tubes. On the other hand personal finances are generally not talked about in my circle of friends.
Who knows what the holiday season will bring and if Americans will truly learn to cut back on this out of control holiday.
My comment to Laura the other day about the coin market not being sustainable in coins priced from $10,000 down seems more and more apparent as more info. comes to light.
It appears to me that the great American experiment in electronic bank and mortgage loans, as well as credit cards for every man, woman, and child in America is a total failure.
Below are a few more stats from a credit card consumer site that are pretty unbelievable.
It is estimated that, on average, 20% of Americans have “maxed out” their credit cards.
About 25% of adults in the United States have a history of credit problems.
Americans’ average credit card debt is $8400 per household.
Roughly 24% of personal expenditures in the United States are made using bank credit cards or retail cards.
In the first quarter of 2002, total credit debt was $660 billion.
Approximately 185 million American consumers have at least one credit card.
Of those 185 million consumers with credit cards, 1.3 million credit card holders declared bankruptcy each year.
Americans pay, on average, an 18.9% interest rate on credit cards.
The average household pays $132.25 in credit card interest per month.
On average, the typical credit card purchase is 112% higher than if using cash.
More than 40% of American families spend more than they earn. (Federal Reserve).
As of 1995, 92% of American family disposable income is spent on paying debts, up from 65% in 1975. (Federal
Reserve)
An $8,000 debt, at a rate of 18% interest, will take over 25 years to pay off and cost more than $24,000 in the
long run.
According to all the stats you are exactly right.
I guess that numismatists are just a very different group, and in general we must have our act together better than joe six pack, and most other Americans.
I have noticed that when ever Orville talks about paying off debt including mortgages no one comments, so I will assume that most here are not having any of these problems.
Even on the open forum no one seems to comment about financial problems, or affording the next coin.
In fact there are tens of thousands of dollars worth of purchases just from the few hundred that comment here each week, so as a group I guess we are in good shape.
Most on the Forum have fixed rate mortgages at the lower end of the spectrum.
Most of Forum members have hard assets such as rare coins, silver or gold.
Most Forume members have guns and lots of ammunition.
I am confidant that we as a people and a Nation, will survive economic disasters, wars,
governmental incompetence, inflation. deflation, recession, depression and anything else that life
will deem suitable to throw at us. We are a hardy and God fearing people and we will not only endure,
we will prevail.
Camelot
A cool half a million! Here's one way to finally become a millionaire....only in reverse.
roadrunner
Heck, I am going to use it to pay down my mortgage by the same $9000 plus add the usual $1000 monthly principal payment and the monthly interest. The interest rate on my mortgage is 5%.
I would advise checking with your various credit cards to see if they have any special offers.
Believe it or not , they aee still around. Just make sure that any card you do balance transfers on that there are no balances on it and that you must not use it for purchases after the balance transfer until paid in full.
By Dr. Richard S. Appel
December 2, 2004
One of the cornerstones of President Bush’s earlier and much debated tax cuts, was the substantial tax reduction on long term capital gains. These were reduced to a maximum of 15% from their 20% level in recent years, which in turn replaced the 28% rate that had long been a mainstay of our tax code.
In general, everything owned for personal or investment purposes is considered a capital asset. Capital gains profits or losses accrue from the sale of items within these categories. They can be in real estate, in art, in stocks and bonds, in collectibles or in a myriad of other asset classes. Most nations treat capital gains in a more favorable fashion than they do ordinary income. This is income that is derived from employment or the participation in some enterprise. The primary reason why many governments bestow lowered tax burdens upon capital items is because investments in a number of these segments can directly and positively influence a country’s economic health."
This is interesting this morning !
Does this mean that the long term capital gains Tax on coins, gold and silver is now 15%?
GS - I agree with this statement wholeheartedly.
Bear -
<< <i>Members of this Forum tend to be fiscally conservative.
Most on the Forum have fixed rate mortgages at the lower end of the spectrum.
Most of Forum members have hard assets such as rare coins, silver or gold.
Most Forume members have guns and lots of ammunition.
I am confidant that we as a people and a Nation, will survive economic disasters, wars,
governmental incompetence, inflation. deflation, recession, depression and anything else that life
will deem suitable to throw at us. We are a hardy and God fearing people and we will not only endure,
we will prevail. >>
Well stated Bear.
******
I can remember several years ago when the European countries bragged that someday the Euro would be valued on par with the American dollar. Well I guess they more than got their wish.
One way to force Americans to buy American products, without passing tariffs, is to make foreign products so expensive we won’t buy them.
World Leaders are Concerned
While the U.S. dollar has dropped to an all time low against the euro, the Bush administration indicated they would not take any action to prevent the slide. Over the past two years the dollar has dropped 40% against the euro which has Euroland policy makers sounding alarm bells as the U.S. trade and budget deficits are expanding.
At stake here is a rather fragile European export market which is likely to get hammered as the dollar continues it's decent. The European Union's two biggest economies are France and Germany whose growth has slumped to just 0.1% in the third quarter. "Everyone is worried when they think about the euro/dollar rate and what effect this has on exports," the German chancellor, Gerhard Schröder, said.
European Central Bank head Jean-Vlaude Trichet described the euro's soaring value against the dollar as "brutal" and unwelcome after a meeting of central bankers from the Group of 10 industrialized powers.
French Finance Minister Niclolas Sarkozy pressed the U.S. to cut its trade deficit, reminding Washington it had signed a Group of Seven statement in Florida in February saying excess exchange rate volatility was undesirable. Sarkozy stated "The euro has hit a record against the dollar and that shows that the markets are concerned by the size of the U.S. balance of payments deficit."
There was no talk of intervention by European countries to buy dollars and try to prevent the U.S. currency falling any further, however. With the Fed's apparent agenda to devalue the dollar further, the Europeans are staying on the sidelines no doubt waiting for some sign the U.S. is prepared to reverse the downfall.
So far, the dollar's slide hasn't sparked an outright panic though some analysts say a run on the dollar is possible. "There's a lot of speculation," says Michael Schubert, an economist at Commerzbank in Frankfurt. He sees some signs that a potential "herd instinct" could create a cavalcade of selling.
Federal Reserve Chairman Alan Greenspan seems to be quiet aware of this reluctance from the European Union to take action and doesn't seem concerned. Greenspan stated when he was in Germany recently that foreign investors would eventually resist sending more money to the US. He admitted this could lead to a further decline in the dollar, and possibly higher interest rates in the US.
What this means to you
The ability of the Federal Reserve to create money out of thin air and then charge interest on this fiat money is the bane of society and is the root cause of our eroding wealth yet most Americans are oblivious to the situation.
Trillions of dollars are owed to the privately held Federal Reserve Bank which the taxpayers are on the hook for. At some point there won't be enough paper money in the world to pay the debt. What happens then?
In October the USA Today printed some facts and figures on the national debt which they stated totaled $7.2 trillion. Personal debt representing credit cards and mortgages was another $9.5 trillion. However there are also other U.S. Government debt obligations which we never hear about much. There's the little matter over social security, medicare and government pensions which is owed now and amounts to another $53 trillion.
As more paper is printed to meet these debts, your labor is also devaluing. As the fiat money you earn becomes worth less - it then buys less. In other words you will have to work longer to earn the same purchasing power.
The USA Today reports that personnel debt owed per household amounts to $84, 454 however with the $53 trillion for government obligations factored in this adds another $473,456 of debt per household. Then there's the mortgage and credit card debt.
This means every household is in the hole by well over half a million dollars! At some point this figure will be so obscenely large, it will be than obvious this debt will never be paid back - that is presuming you think it can be now.
Evidence from world leaders and bankers would seem to suggest we are much closer to that reality today and if the brakes aren't applied rather quickly the demise of the dollar could have brutal repercussions for everyone.
One is reminded of the prophetic words of Thomas Jefferson who said "If the American people ever allow the banks to control issuance of their currency, first by inflation and then by deflation, the banks and corporations that grow up around then will deprive the people of all property until their children will wake up homeless on the continent their fathers occupied."
For the savvy investor who can read the writing on the wall this also means that the asset based inflation we have seen with gold, copper, oil, and other resources will continue to go up regardless of upward pressure on interest rates or the slumping dollar. The devaluation of the dollar will not make these commodities worth less. The price of these commodities must go up in US dollar terms to reflect their true value on a global basis.
<< <i>
edit - Kaplan also noted that gold is considered a collectable by the IRS, not an investment, and taxed at a higher rate.
Bill >>
Uh, no. That's not entirely correct. Modern gold bullion(as in modern St. Gaudens) is not considered a collectable just as silver bullion is not either.
I have spent a fair amount of time and money with a very good tax lawyer over the last few months and I am certain about this.
Older gold coins with numismatic value, slabbed Saints, etc. are considered collectables and are taxed at a 25% rate provided they are held for more than one calendar year. Less than a year and the capitol gain is taxed at your current income level rates. For someone on SS with a low fixed income the rate would be next to nothing if we are only talking about a few thousand dollars.
There is still some legal debate regarding gold coins and bullion minted after Nixon devalued the dollar and freed up gold to seek it's own level. An interesting part of that legislation/law stated that American citizens were not required to report the ownership of such gold.
There is a fair chance that if the President gets his way that very shortly, there will be no capitol gains taxes at all. There never should have been in the first place, but that's just my opinion.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
I will expand on Kaplan's 11/24/04 quote, "Please understand that gold is considered a "collectible" by the IRS, and as such, all profits are taxed at a different rate than other investment vehicles." From the prospectus of a new exchange traded fund for gold, "Shareholders generally will be treated, for US federal income tax purposes, as if they owned a pro rata share of the underlying assets held by the trust. Under current law, gains recognized by the individuals from the sale of "collectibles", including gold bullion, held for more than one year are taxed at a maximum rate of 28%, rather than the 15% applicable to most other long term capital gains."
I am not a tax expert, perhaps someone who is can chime in and set us straight on the capital gains taxation for bullion.
Bill
Orvile
Thanks for the reminder, I need more bullets! Nice post and probably pretty accurate.
He said buy Gold, a gun, and move to the country, but he also said that you most likely won’t have to shot to many people because they will all starve within two weeks in the big cites.
I do agree that as a country we will survive any financial melt down, and I don't think there will be riots in the streets. I also think, as I have posted several times, this is an excellent time to keep a low profile, pull in your horns, and do the best you can for yourself and your family.
Americans seem to always be looking for the next gamble to make that one big hit. I think this is a very bad time to look in that direction. Staying diversified in cash, paid for high-grade assets, some Gold and Silver, and paying down debt is what most families should be concentrating on.
Instead, the economy will continue to complete the cycle, and everything will be all right.
I am very confident about this.
Liberty: Parent of Science & Industry
******
Of course, SOME (smoe?) folks do better, and others do worse. That, too, will never change. It's called "evolution"
Good Luck!
Liberty: Parent of Science & Industry
1. The euro is about to tank along with the EU because they are starting to get into trade balance problems in addition to having a depressed manufacturing/employment situation. Additionally, the US isn't going to be buying much of their stuff because it's too expensive in dollars for US consumers.
2. Independent of the EU situation, the dollar has tanked but this is good because we most of our debt is in 1.00 Euros/dollar to the dollar and now there is 1.33 euros to the dollar so they suck up a 33% hickey on US debt so we get a 30% discount up front. This is maybe a good thing, is Bush a wiley coyote?
3. China is a raging bull and they are on the brink of dominating world economics, manufacturing, consumption, ad infitium...they are going to the moon. But...China's Yuan is linked to the dollar so the Yuan can not float and find it's true international value so no body is buying any Yuans. When/if the Yuan gets unlinked then the game is on!
4. Gold is more expensive for two reasons, consumption and low exchange rates for the dollar. Also, the forum expects rabid speculation or at least increased speculation for the metals.
5. So far no one has talked about entitlements...the give aways that we offer the disenfranchised to keep them from marching in the streets and burning down things. At some point we must take this bitter pill and with the Social Security situation up for discussion now in the capitol, me thinks this may be the first hint of how the entitlements winds will blow in the near future. Regardless, I do think there is some kind of link between entitlements and coins but on the other hand, most coin people probably don't benefit much from entitlements unless maybe there is some medicare/aid or social security filtering in. I'm talking about housing assistance/day care vouchers/education subsidies...etc.
6. The coin industry is healthy and it is not so much from speculation as it is from generally increased interest. The upper end speculative pressure is starting to appear but for most of the regular guys, not really getting squeezed by speculation.
For my opinion I see the $ bouncing off 80 and a quick drop to 405-415oz for gold but I see this as a short pull back. The big gains will occur when we go back to test the 80 support on the $ and break through it.
This combined with Oil will see 35-40 a barrel and then we should see it break through 50 a barrel.
From Madison, Wis., to Bucks County, Pa., the local tax assessor is dipping deeper into homeowners' pockets as real estate prices rise and states share less of their tax revenue with local governments.
With people starting to receive their 2005 tax bills, the levies are squeezing the middle class and senior citizens - leaving them less to spend on everything from restaurants to roof repair. There is also concern the taxes could particularly hurt the home-buying chances of the young or civil servants such as firefighters. States such as New Jersey now have grass-roots efforts - verging on revolts - for reform.
(such as MS62-65 saints) is that they qualify for a like-kind exchange with other numismatic property such as MS64 type coins or gem early lincolns or even silver proof sets. You can swap back and forth between the two to take advantage of either market. Of course there are a number of requirements to satisfy a "trade" but it is not difficult. At some point in time I would not bet that common date circulated $20 gold pieces or even AU/BU saints would qualify as "collectibles."
I have to take the "Chicken Little, the sky is falling" contrarian view about what the future holds for us. No country is recorded history that has debased its currency like we have has escaped the noose. And I'm not talking just an itty bitty recession for all our devalued greenbacks. Whatever is coming will be totally unexpected by 95% of us and very few will be prepared for it.
The real cause of what we have today is the creation of the federal reserve in 1913. We've handed over the wealth of our country to people who have no stake in it. The FED is an independent corporation supported by both foreign and US entitities (i.e. old money, especially from Europe). Inflation at 3% per year since 1913 takes a major toll. Today our dollar is worth about 5% of its original value. We went through the first 120 years of our country with essentially no inflation, and now we've debased our dollar by 95%.
Our govt has brainwashed us to accept this constant erosion of value and transference of wealth to the bankers over 91 years.
Included in this is the transference of our manufacturing base and soon to also go, technology base. The only thing we still produce is financial services and money laundering/changing. The ONLY reason we have not self-destructed before this is because we got to own the world's reserve currency in 1944. It's the only thing keeping us afloat at this time. The ONLY thing. And it was the ONLY reason we could pull the wool over the world's eye's for 60 years and make them finance our ever-more costly life-styles and our "great society" programs. This game of deceit will not go on forever. Some other "currency" will eventually become the reserve currency of the world. The game now for foreign investors is to find ways to buy things with our rapidly falling dollars before they lose more value. Anything tangible is high on the list. The last man holding the greenbacks is the loser of the game.
Look over recorded history by world powers that debauched their currency. The end result was always the same. We will not be the first and only country to break the trend....just because we've had a good run the past 50-60 years. We had that good 60 year run just because we did debauch the currency at the expense of everything else. That's the lesson. Nothing that we've done over the past 20 years earns us another "free pass" for the next 20-50 years. Not unless we overhaul the system immediately and start over. And that is never going to happen.
roadrunner
<< <i>Deadhorse,
I will expand on Kaplan's 11/24/04 quote, "Please understand that gold is considered a "collectible" by the IRS, and as such, all profits are taxed at a different rate than other investment vehicles." From the prospectus of a new exchange traded fund for gold, "Shareholders generally will be treated, for US federal income tax purposes, as if they owned a pro rata share of the underlying assets held by the trust. Under current law, gains recognized by the individuals from the sale of "collectibles", including gold bullion, held for more than one year are taxed at a maximum rate of 28%, rather than the 15% applicable to most other long term capital gains."
I am not a tax expert, perhaps someone who is can chime in and set us straight on the capital gains taxation for bullion.
Bill >>
From recent personal experience I can assure you that modern gold bullion, Saints, Rands, bars, etc. are not considered collectables.
Antiques, pre 1933 gold coins are collectables and are taxed at 25%, not 28%, if held for more than one year. Silver bullion bars are NEVER considered a collectable, regardless of age. If an agent tries to overtax you, and they almost always will, challenge them and they will lose, the law is clear in this area. Been there and done that recently.
By Kaplan's reasoning, a wedding ring is a collectable, I have a set of new cufflinks that are collectables?? Hell even the electrical connections in your airbag are collectables? Come on.
Truth is, even the IRS isn't even sure if you are required to report ownership of modern gold bullion. They don't even know, but each agent sure has his own interpretation. That's what the taxpayer advocate's office is for. It's also what good tax lawyers are for.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Darkhorse, from this quote I assume by saints you mean modern
$50 US gold eagles? There is no doubt in my mind that Pre-1933 saints in many or even most cases are collectible coins and not bullion. But wouldn't a proof US $50 eagle from the mint be considered a "collectible" and not bullion. That would be a close call imo.
roadrunner
Absolute BS. America produces a wealth of goods and services. I don't know where the hell you live or what your job is, but everyone I know works hard and produces important products, right here in the USA.
Liberty: Parent of Science & Industry
Schedule D, line 20 instructions (which is essentially the 28% Long term Rate Gains on Collectibles) state the following:
Collectibles include works of art, rugs, antuiques, metals (such as gold, silver, and platinum bullion), gems, stamps, coins, alcoholic bevarages and certain other tangible property.
<< <i>Per the Internal Revenue Service:
Schedule D, line 20 instructions (which is essentially the 28% Long term Rate Gains on Collectibles) state the following:
Collectibles include works of art, rugs, antuiques, metals (such as gold, silver, and platinum bullion), gems, stamps, coins, alcoholic bevarages and certain other tangible property. >>
Works of art, antiques.......gems, stamp, coins. See the pattern here?
Unique and collectable. A 2002 $50 St. Gauden is not a unique piece, it has no intrinsic value numismatically. It IS NOT a collectable. Since every single US bill has a unique serial number, is it a collectable?
Believe me or don't, I'm growing weary over this. I just spent the better part of this year in a pitched battle with the IRS, I hired one of the better tax lawyers in the Houston area. A former agent for 12 years himself. We won the arguement and it really wasn't much of a battle. I listed the mintage of said modern coins and it didn't take long for them to get off the "collectable" concept. Get real.
I read their interpretation and I asked the agent face to face about the gold connectors in a car's airbag. I asked if he considered those to be collectable? I asked how many agents were assigned to auto resales? We moved on to other areas quickly. Same arguement on silver bulion. I reported and paid 15% capitol gains on a sizable gross profit and that was it.
If they want to get confiscatory, they will finds less and less compliance with our voluntary tax system and they know it. People are fed up.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>From recent personal experience I can assure you that modern gold bullion, Saints, Rands, bars, etc. are not considered collectables
Darkhorse, from this quote I assume by saints you mean modern
$50 US gold eagles? There is no doubt in my mind that Pre-1933 saints in many or even most cases are collectible coins and not bullion. But wouldn't a proof US $50 eagle from the mint be considered a "collectible" and not bullion. That would be a close call imo.
roadrunner >>
RR, I honestly don't know about that. Yes, I am talking abut modern $50 Eagles here. I don't own any proof gold nor do I intend to. It's premium is too great and if gold takes off like many think it will, that proof strike will mean virtually nothing. As metal value goes up, numismatic value means less and less.
I would tend to think modern gold proofs would not be considerred collectables, but I don't know for sure. It's packaging indicates it to be a collectable, so that's an arguement that might hold water. Since regular strikes are packaged and shipped in rolls, they have the same dynamics of business strike minted coins.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
This is what we have been discussing for months. What happens when there are no countries willing to buy our debt or take our paper. I think this articule left out one important fact. Who wants American Dollars at any price if they consistently drop in value? Even if you received 10% interest, if the Dollar drops in relation to other currencies by 10% that year, you make 0.
This seems like a real catch 22, we print more, we raise rates, and all of that makes our economy and the Dollar weaker.
I hope the guys in Washington have a handle on what to do next.
Posted by Avalde this morning
Wednesday December 08, 2004 7:12 AM (NEW!)
OPEC Nations Seen Cutting Worldwide Deposits in DollarsPublished: December 6, 2004ONDON, Dec. 5 - Member nations of the Organization of the Petroleum Exporting Countries have cut the proportion of their deposits denominated in dollars by more than 13 percentage points in the past three years, mainly to the advantage of the euro, the Bank for International Settlements said Sunday.In its latest quarterly report, the Bank for International Settlements - a forum for world central banks - attributed the trend partly to United States interest rates having fallen below euro-zone levels.The report said dollar-denominated deposits fell to 61.5 percent of total deposits by members OPEC in the second quarter of 2004, from 75 percent in the third quarter of 2001.
The share of euro-denominated deposits rose to 20 percent from 12 percent over the same period.The bank, based in Basel, Switzerland, noted that less oil revenues seem to have gone into the international banking system recently but said there had been a "subtle but noticeable" shift in the composition of deposits in the past three years."Since the third quarter of 2001, oil revenue seems to have been channeled increasingly into euro and other currency deposits," the bank said.
"This shift out of U.S. dollars probably reflected to some extent the relative change in interest rates in the United States and the euro area since 1998."The bank said United States short-term interest rates were an average 2.1 percentage points higher than their euro counterparts for two years before March 2001, but averaged 1.3 percentage points lower from then to June 2004. In the 2004 second quarter, B.I.S. reporting banks' net liabilities to OPEC members stood at $142 billion.Oil prices rose 70 percent at one point this year from early January due to fast growth in demand and concerns over supply.
The United States crude oil price advanced to $55.67 in October but has since fallen back to around $42.50. Speculation that Middle Eastern central banks and investors had been shifting funds out of the dollar into the euro contributed to the dollar's decline in the past three years. The dollar hit a record low on Thursday, when one euro was worth $1.34.OPEC nations are Saudi Arabia, Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, United Arab Emirates and Venezuela. The B.I.S. excluded Indonesia from its study because it became a net oil importer this year.
I am a little confused with all the Gold Bugs out in force, and the prices moving on MS Gold $20 why are the markets in both Gold and Silver retreating again?
With all of this continuing bad news on the dollar, how desperate will the big money get to buy rare coins?
From the Gold Bug Doug Casey
Is he wrong?
I think the next four years stand to be among the most profitable of a lifetime for a minority of properly positioned investors and speculators.
I'm not talking about the average American. Having sown the wind, Boobus americanus is going to reap the whirlwind. As PATRIOT 2 becomes law, what little is left of civil liberties and the Bill of Rights is going to disappear. The gigantic deficits the government will run to fund both the war and domestic programs (don't forget that Bush is the only president since the 1820's who never vetoed a bill), will take interest rates to levels we haven't seen for a generation.
That will crush the current mania in real estate, and likely cause the stock market collapse that began in March 2000 to resume. Unemployment will rise. The dollar will accelerate its collapse, as foreigners, from Central Banks to the man in the street, unload their dollars, causing the price of imports to skyrocket. The American standard of living will nosedive. I expect we're looking at what will amount to a much more severe version of the 70's. And that's only if the current adventure in Iraq doesn't mutate into World War 3.
As I said earlier, I prefer to look at the bright side. Higher levels of inflation won't only drive capital from the dollar and conventional investments; it will drive capital into gold. It bears repeating that gold is the only financial asset that's not simultaneously someone else's liability. And that's why, as fear and uncertainty increasingly stalk the world, the world will increasingly turn to gold. Bush believes that it doesn't matter what foreigners think about the U.S. He'll find that once countries start holding their reserves in Euros and gold, the dollar will become a hot potato.
The way I see it, the dollar is on the way to reaching its intrinsic value. Which is to say an I.O.U. nothing on the part of a bankrupt government. This is a catastrophe for the average American. But boon for those who follow the trend. I fully expect to see gold trading well over $1000 well before Bush's term is over.
Let's see, there were some reports that the EU was not happy with the game the US was playing with it's currency. The US is not trying to keep the dollar up but are trying to push the Euro higher. If the dollar is lower, it will help their exports because they will become cheaper and imports to the US will become more expensive. The EU states if the US does not make an effort to raise the dollar, they will raise it by buying it themselves. although not really related but worth a mention; the price of oil is down as well due to a mild winter. there are many issues with the economy but none so bad as to expect gold to be a safe haven, a hedge.. yes but the economy is not going to colapse anytime soon, my humble opinion. you guys kill me though when you make postings referring to articles from gold bugs who are predicting doom and gloom.
CSC I agree, the economy won't collapse, but how much of it will Americans own when the printing press finally stops?
Again China uses it dollars to buy American companies while we buy their junk at Wal-Mart
IBM PC sale to Lenovo now official.
By BRUCE MEYERSON / Associated Press
12/08/2004
NEW YORK -- International Business Machines Corp. is selling a majority stake in its desktop and laptop computer business to China's biggest computer maker, a deal that shifts IBM to a peripheral role in a corner of the technology industry it pioneered.
The deal with Beijing-based Lenovo Group Ltd. creates a joint venture that would own the IBM-brand personal computer business, which had sales of nearly $13 billion over the 12 months ended in September.
With speculation about the impending deal mounting, IBM's stock fell $1.57 per share to $96.10 in Tuesday's trading on the New York Stock Exchange.
Globally, IBM sold 6.8 million PCs in the first nine months of 2004 for a 5 percent market share, Gartner said. That compares with 16.4 percent for Dell Inc. and 13.9 percent for Hewlett-Packard Inc.
goldsaint, when i mentioned that the us was keeping the dollar low on purpose, that should basically answer your comment on the printing press question, think about it.
Gold will sell off, it will go back up, it will come back down, everytime it goes up there will be a rush of hype from the newsletters and from people on this very board. If gold is such a great commodity/investment, why all the hype?