In 2003, the federal Office of the Comptroller of the Currency, part of the Treasury Department, issued guidance requiring banks to have their monthly minimum payment cover interest, any fees and paying down principal.
very interesting, and that is where the Chinese might head. As I said a few weeks back look for China, and perhaps even Japan to make an offer on some large gold mining companies. I think that would be the signal!
Hummm, I read the forbes article here and I'm going to go back and read it again, nice find. Ah, a valuable tip from the forum members...watch the big gold mining companies (maybe the second tier too?) for the big signal. That is a very nice clue, goldsaint!
I have no idea how to see who buys what so maybe someone that understands this type of tracking could keept track of who's buying what and report back or maybe leave a link or a clue?
Yumm, this is really beginning to get interesting and it seems this group seems well poised for what ever should come of this china/gold thing because we've been studying up.
So, what would the characteristics of gold movement look like in this scenario...would it dip artificially if some mine buying begins and people start getting out of old companies/stock so it is available and a little depressed or would it shoot right up from speculation or from chinese "management". Would it take a while for the movement to make the papers? Would people hold their interests in mining and watch from the background or run out and gobble it up, or dump it like a load of dirt? Could this be the lynchpin to the oft discussed $800 gold? Looks like a play may be looming at least this theory should be something fun to watch play out.
China could be buying up shares in Gold Mines right now and we wouldn't know it. I don't think they have any SEC disclosure requirements at this time and caould easily take a small piece of each company without triggering much signal. Particularly if its done through some smaller "investment" companies. Obviously if they grabbed some major interest then light would bo on but they could have a nice position by then. Gold would be a major alternative to more treasuries. Imagine, just 100 billion, 10% of thier dollar holdings would be a huge amount of the available supply.
As time moves along in this thread it is easy to watch and report the happenings in China, but while we watch the Chinese suck up lots of the Worlds manufacturing capabilities there is another World player sucking up the Worlds service capabilities, INDIA.
As many here have discussed there must come a time when the long term buyers and holders of Gold will destroy the Worldwide game of the central bankers to control gold.
With each and every year we come closer to that time. In addition it is also only a matter of time before the populations of the World see the fiat money printing presses of the World for what they are, little pieces of paper backed by nothing.
It may not be happing here, but in China and more specifically in INDIA people want less and less to do with PAPER currencies. As worldwide wealth in manufacturing, and services, is transferred to these two new power houses, where will their populations be investing their money, in paper assets, stocks, bonds, and notes? I don’t think so!
Below are some paragraphs and quotes taken from various international news reports over the last few weeks, enjoy!
A very interesting point made in some of the material is look at how much Gold China purchase in 2004, 235.1 tonnes, and they are fourth. Russia who is one of the Worlds largest producers is estimated to produce only 160 tonnes this year! WOW
“NEW DELHI: The value of gold held by Indian households is more than double the market value of the equity stock they own. At the beginning of this fiscal, that totaled an eye-popping $200bn, which is almost a third of India’s GDP.
Gold holdings among Indian households at current market value is about 2.5 times the current equity stock holding of $80bn.
India's share of global gold demand is about one and a half times that of the US, though its GDP is only 1/20th that of the US. "With its high rate of gold consumption, India accounts for 18% of the annual global gold demand, while its share of global GDP on nominal dollar GDP is only 1.6%.
As per World Gold Council (WGC) estimates, Indian households own about 15,000 tonnes of gold, accounting for about 10% of the world-wide stock. At current market values, gold accounts for 10-15% of the Indian household balance sheet. After rising by 63% in '04, India's gold consumption (EXCLUDING gold used for jewelry exports) rose by 57% in FY05. In fact, during the quarter ended March '05, gold consumption shot up 88%.
Whilst China has become a leader in manufacturing, India has developed its human resources, which are family orientated, making these India's main strength (India will overtake China's population by 2020).
The Knowledge and Service Economy has lent India an upper hand in the community of nations. Our workforce in the knowledge and service economy is highly skilled, efficient, productive, largely disciplined and enormously hardworking, capable of putting in long hours of work, both day or night and it can do this in English, French, and German. This renders India a class apart as a knowledge and service economy.
India has resisted the cultural swamping by companies such as Lever, P&G, Coco-cola, Pepsi, McDonalds, which, although they have established a huge presence, have succeeded only in penetrating the surface of India amongst a very small sector of the population, despite years of campaigning. Even in consumer items, Indians largely prefer home made items, verses branded items and this after years of advertising to change them. The Indian people are difficult to manipulate as well as to govern. They look to no State sponsored incentives, or Finance or other government support for its development."
There is a major difference between Indians and Chinese. It is why I believe the Indian gold market to be the most mature in the world. You think for yourselves, you are family orientated and refuse to accept the yoke of government or banking. This makes your people individually valuable. The Chinese bow to the State, even to the extent of limiting their offspring to one child, so they can get State support for the child.
Russian gold production in the first half of this year fell 3.5 percent compared to the same period last year, Interfax reported Thursday. The nation's Gold Producers Union said its members extracted 59.66 tons of gold in the first six months of 2005. China was the fourth largest consumer of Gold in 2004 with acquisitions of 235.1 tonnes in that year.
I received this in part of an email from my friend in Shanghai today. His comments FYI,
“As I read what information I can in the World press, and from the notes you send me, I think that Americans are way to optimistic about China's future economy, too many factories are being established both in the costal areas and inland areas, there will be a great waste of productivity in the coming years because only 30% of the people currently have limited consumption ability, while other 70% people are very very poorly off, this is why I think China has not a healthy economy, and may not be for a very long time.
I agree with your friend from Shanghai that some Americans are overestimating the Chinese economy. It is a bit like when the Japanese economy was booming in the late 80s and some Americans extrapolated their growth and predicted they would own the world. They wanted to restrict Japanese buying.
I think China and India will continue to grow at a good clip so will continue to consume more materials. But I do expect that growth to be bumpy.
I worked with many Indian software engineers in my previous career. They have a long tradition of owning metals. Many families are too poor to own gold. So they lust after silver and wear silver jewelry when possible. My friend married an Indian. Her mom was very amused that my friend and I collected silver coins. She didn't get the huge values we placed on them, to her they were all nice but were little more than lumps of silver.
China is figuring out that Americans will not just roll over while they buy up all of our companies, but here is another sign that they might move more into Gold.
“Strength in both China's economy and currency and heightened investor interest should support Asian gold demand over the next year. And with rivers of energy dollars flowing into the Middle East, demand there shouldn't be too shabby either," NM Rothschild & Sons (Australia) Ltd said that China's currency revaluation is expected to boost domestic demand for gold and help provide a base for gold prices.
"Without a doubt, revaluation is going to underpin metal prices, particularly gold, by making them more affordable from a Chinese standpoint," said Darren Heathcote, head of trading at N M Rothschild & Sons (Australia) Ltd. Interestingly Rothchild's noted that India imports some 700 tonnes of gold per annum while China imported only 230 tonnes last year which was up 13% on the previous year.
"I could see demand (growth) rising toward 20% this year from about 13% last year and it's only a matter of years before we see (China) up there with India in terms of overall quantity," Heathcote said. In addition others are buying up Gold:
Gold imports into Turkey for July were reported by The Istanbul Gold Exchange. It was a record month for gold imports with 34.625 tonnes imported. The Istanbul Gold Exchange started recording data eleven years ago and this figure has never been surpassed. It was a significant 50.3% higher than June and 1.8% above the level of July last year, the previous record. So far this year imports are 21.2% above last year's imports which were themselves a record.
The Istanbul Gold Exchange is where many buyers in the Middle East acquire bullion. Geopolitical uncertainty, terrorism, the threat of a war with Iran and the 'war on terror' are undoubtedly underpinning strong demand from the region. Also record oil prices are filling the coffers of oil producing countries in the region and some of these petrodollars are being recycled into gold.
A Golden Solution To The China Syndrome? - Forbes Gold Price Target: $500 by year end - Turk, CBS Market Watch TV
Gold is back over 440 per oz...are prices going to head up again? If I could just stop the foolish purchases, I would enjoy the coin game a lot more...still, I am OK...hope you all are too...
simple barn aka offthehorse
you can check out of coins anytime you like...but can you really leave?
Gold is not quite at $440 yet but has rebounded about $15 off its recent lows in a relatively short period. The strength of the Euro has knocked the US dollar a bit....now under 88 for the first time in weeks. As usual, the more bullion related gold ($20's and $10's) will get a boost from this. Typically every $1 rise in the gold bullion price results in a $2-3 rise in generic $20 Saints in the MS64-65 grades.
Even gold stocks responded well and took a major leap today.
Even gold stocks responded well and took a major leap today.
Not just gold stocks. Silver stocks--CDE and PAAS had fantastic days. But the real winner was palladium. The stock here is PAL. Up over 20% in last 2 days. CHA-CHING!!!
Actually all metals stocks have been doing well. Copper---PD, PCU, FCX, Nickel--N and other basic materials stocks have been huge wimmers over the past month. Many steel stocks are up 30-50%. Part of this is correcting from oversold levels but mostly because of economic conditions.
I think precious metals are saying that the dollar is under attack and there is inflation in the works. Copper and base metals are saying that the economy will improve and shortages of these will exist on this basis and that costs of production are rising and likely to soar.
Fantastic link, Topstuf! As usual, you're right on top of things. I keep telling people, but I guess the masses are unteachable. Sad.
.....GOD
"Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you." -Luke 11:9
"Hear, O Israel: The LORD our God is one LORD: And thou shalt love the LORD thy God with all thine heart, and with all thy soul, and with all thy might." -Deut. 6:4-5
"For the LORD is our judge, the LORD is our lawgiver, the LORD is our king; He will save us." -Isaiah 33:22
Yes, Top, be careful! Be sure to roll up your sleaves nice and polite-like so they can give you the tatoo.
People think this is a joke, but it isn't.
.....GOD
"Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you." -Luke 11:9
"Hear, O Israel: The LORD our God is one LORD: And thou shalt love the LORD thy God with all thine heart, and with all thy soul, and with all thy might." -Deut. 6:4-5
"For the LORD is our judge, the LORD is our lawgiver, the LORD is our king; He will save us." -Isaiah 33:22
<< Typically every $1 rise in the gold bullion price results in a $2-3 rise in generic $20 Saints in the MS64-65 grades. >>
Oh goody! A dollar gold rise takes a thousand dollar coin with a $100 spread up 2 or 3 bucks.
US gold is NOT a bullion coin.
Boy, Topstuff you didn't think very long before responding or you may have gotten the POINT. The last 2 major gold moves were $50 an ounce or more. MS65 Saints went from about $1000 to $1350 on the last move. That's a 35% gain in only a few months for only a $50 change in the price of gold. That ratio of "2-3X" can be as high as 6-8X too! During the first move of gold 2 years back, the annual gain on MS64-65 saints was 50-57%. Again, not bad considering. If you can find any buyers of these coins who are buying them to make $3 on a $1 move in gold, my hats off to you. 99% of them are holding out for the $300 gain on a $1000 coin that comes very quick....and can go away just as quickly.
With a premium of around 50% over melt, I'd have to say that MS63 or 64 saints are awful darn close to being bullion, only with 3-6X the leverage. I'll leave the $1 gains to you and stick with 3-6X that.
I'm more than happy to say "oh-goody" everytime I flip MS65 saints for a $300 profit in 2-3 months. "oh goody!" "oh goody!"
Gold is international and can hold or increase value even when the US recession starts to hit. But when the rates go up and the equity line payments start to rise I would expect to see a lot of sales of coin product. I just don't see the Indians or Europeans lining up to buy one ounce MS65 Saints at 1400 each but you can bet the Americans will be dumping them.
So the "numismatic' market may be great for now but I wouldn't expect it to hold the big premiums when the recession comes rolling in. Saints will be back to 700 even when gold is still holding 400.
Topstuff, I've been in the coin market heavily for 30 years and seen the important changes and their effects...starting with the retirement of the gold standard. The next market plays will be somewhat based on prior experiences but not entirely. We are heading into uncharted territority due to the credit mania of the past several years as well as huge amount of derivatives (bets) riding out there. The final outcome will not be as most expect.
Here is a nice short article on the BDI index which forecasts future economic activity based on the global shipping of raw materials. One thing for sure, it sure isn't pretty and would tend to imply severe implications 6-12 months down the road.
“I just don't see the Indians or Europeans lining up to buy one ounce MS65 Saints at 1400 each but you can bet the Americans will be dumping them.”
Coynclecter
I agree with this! I also think that we may have seen the top of the U.S. market in a majority of issues. The very rare high-end items may still trade at outrageous prices, but the folks in this market just have too much money to burn.
I see no reason that we should get any further stimulus from over seas investors on very high priced U.S. coins as compared to World issues. In fact the only reason I see them buying U.S. material is because of the number of coins slabbed. There is now, and has always been a large amount of fakes in the world market in particular pre 1,000 A.D. material. In addition many world collectors have loads of damaged, cleaned, bent, etc. coins in their collections. Collecting these items might be great for the hobbyist, but as prices go up many of these coins will just not make the grade when it comes to re-sales at auctions etc.
Question on Gold as an investment for the "here" predicted economic collapse. Since currency is no longer based on gold is gold not considered a luxury commidity? Wouldn't investing in a usable commodity such as oil be more prudent when facing economic collapse? Gold has few actual uses. If a major recession sets in who will be buying gold? Since we are now a worldwide economy more then ever if the U.S. stalls it will be felt world wide and people will be buying essential commidities instead of luxury ones. Gold has long been a symbol of real wealth but why? Just because it is accepted as one?
I do own some gold and I will continue to buy but I'm trying to decide at what level, so I would just like some answers to these questions that I'm sure the goldbugs can provide. thanks
I mean it is not possible as an option anymore simply because factories run on money and food is now created in factories. Not only does most food come from factories but the farms themselves are more factory than farm.
In the event of a collapse or panic gold will be worthless.
Gold does still has value as protection against economic swings and inflation.
If gold becomes worthless, then you can bet the farm that EVERY currency, including the US dollar would have preceded it to that point. Gold and oil have been money for centuries. They have a fairly well established link during the past 30-50 years. And right now oil is far ahead of gold based on past history (i.e. gold is underpriced compared to oil in historical terms). How they will end up in 10 more years is anyone's guess.
As far as MS65 saints go, my comments apply to the here and now only.....and possibly the short term (6-12 months). It is only common sense that the premium applied to higher grade saints will evaporate as gold rises further. It's a no brainer that at say $800 gold that MS64 saints will NOT still carry a 70% premium to melt. And as that time approaches, moving into lower grade Saints and all bullion will be the final play. That has been my plan from day one. Just remember that bullion was once confiscated by our govt and that could certainly happen again. Even if it doesn't the possibility to be taxed on gold to the max becomes very realistic. MS64 Saints do not qualify as bullion today and likely never will. For now, the higher grade saints have leverage, much the same as gold futures. For now it works. 2 years from now it may not. Similarly gold shares may outperform bullion at some point by a factor of 10-100x. But they certainly have more risk. If you want safety, stick with the bullion (and preferably silver) but your upside is limited strictly to the gold price change. If gold for instance doubles to $900, you can expect high grade US 19th century coins to at least double also. They also have more risk than bullion imo so if you want safety stick with gold bullion. Green backs offer some safety for now too. They should at least hold 50% of their value over the next few years.
In a state of total chaos Gold would be worthless. That is when food, guns, knives, knowledge about which plants, roots, bugs, worms are good to eat, would be very valuable. A remote cabin in the mountains would be priceless. Those survivalists might not be so crazy after all.
In a state of total chaos Gold would be worthless. That is when food, guns, knives, knowledge about which plants, roots, bugs, worms are good to eat, would be very valuable. A remote cabin in the mountains would be priceless. Those survivalists might not be so crazy after all.
If anyone is expecting this outcome then why in heck are you wasting your time now with coins? Better get to working on your exit strategy and panic rooms. From what I've read in the forum, total chaos and anarchy in the US is a near impossibility. Therefore the likely outcome as most seem to support here is just muddling through another recession, a depression, or something similar. In all but "WW3 in America" gold will do fine. And for that matter, gold did ok too in centuries past when all heck broke loose. Didn't the plunderers always go for the gold?
I am in the heart of California and I work in the Mortgage business. After 31 years in Real Estate I can tell whats happeneing fairly well. It looks like the rate hikes and the huge price increase are finally taking thier toll. I can see changes happening and I would expect that we are at the beginning of the end of this round. Properties are not selling like they were and with so much in investors hands and rates rising I'd bet that the next six months will show a pronounced leveling and an obvious downturn. Within 12 months there will be more sellers than buyers and prices will begin to slide. Builders will still be building out all the lots they have in the permit stage and around here thats a heck of a lot. In 18 months the blood will begin to flow big time.
I'd guess that a drop in stock values will happen also. Bonds will fall with increased rates. Federal deficits will rise with interest rates and the dollar will fall overseas. Bankruptcies will increase and banks and builders will get hurt. (US) Collectables will fall as disposable income does but gold/silver will rise with the falling dollar.
Here is a little something for all coin collectors, but World coin collectors in particular, to consider.
I just purchased all the new Krause books from 1600 to 2005 in total they include about 8,000 pages of coins, how many total coins I don’t know, but loads.
Current estimates from the numismatic community is that China alone will add 13 million new collectors in the next decade, India may approach the same, add an additional 2 million worldwide, and you could estimate something approaching 28 million new collectors.
Unlike U.S. collectors who have never seen a collapse in their paper currencies, many other countries have seen their paper money go to nothing multiple times, so they keep their money hidden away in coins and precious metals. In India 80% of savings is put into some type of precious metal savings, and only 20% goes into their stock market.
My friends in China are already telling me that as the price of coins worldwide increase in value the forgers are coming out in force, and many Chinese will only buy certified coins or coins in original sealed plastic issue packages.
One Chinese coin collector in the U.S. has even developed a website listing all of the Chinese Ebay sellers that are selling fakes, that list already includes 33 dealers, more on that later.
It is hard enough to become an expert in just one series area of U.S. coins but it is nearly impossible in longer older world coin series.
In the case of hammered coins, or molded coins, making fakes is an easy proposition for not only the Chinese but other forgers around the World.
During the last 5 years we have already seen certified coins exceed their raw counterparts in price by sometimes as much as 40%, and very little of the U.S. market contains actual fakes.
During the last 3 years we have seen the World market take off in price where many high grade coins now meet or exceed their Krause values, and this is particular the case in certified coins.
So here is my prediction. Within the next five years certified world coin prices will exceed raw coin prices by at least 50%, and many raw coins that go to market will be looked at as potential fakes, and reflect that in the prices. In fact it may come to pass that after being burned a few times with not only fakes, but damaged coins, many of the millions of “NEW” World collectors will only buy certified coins.
<< <i>That's $975,000 with a PAID OFF HOUSE by age 65 or yer .....screwed. >>
Screwed? I disagree especially if you are talking about the generation that is retiring or getting ready to retire. Sure that figure is optiminal but you would be far from screwed if you do not have this. Revenue generating annuities, reverse mortgages, and social security can provide enough income to live a comfortable retirement.
<< <i>There will be MILLIONS who will suddenly discover that saving some money might have been better than a vacation home, >>
True but there will also be MILLIONS who did save money and now will be looking to spend it. Many are retiiring with pensions, social security still pays to go along with the other wealth that has been accumulated.
They way I understand it, if I get into a 10 year at say 4% today and the fed raises rates as expected and the rate goes to 5%, doesn't the value of my bond fall?? Wouldn't I be better to stay in 1 year or less maturities in a rising rates market. Also , what if its a hi yield corporate bond, (like GM) and the company can't pay??
<< <i>CardsFan..... If millions are saving, someone better tell somebody. >>
As the article states the savings rate is a confusing number because it doesn't take into account capital gains, home equity, etc. And like I said this is partially a result of those millions who did save. The baby boomers who socked away in their 401k's and pension plans currently don't have the need to save a bundle.
It is 30 -40 year old generation now that needs to be saving and based on my sample population of friends co-workers most are preparing for retirement, although you are correct in that many are not preparing adequately enough. I don't think they'll be screwed they just may not have the retirement that I want to have, and they may be ok with that.
I would not consider America on the skids interest rates are rising economy has been solid. Sure there are warning signs but there always are if you look hard enough.
Ok, I'm not too sure how to pose this question so you financial wizards will have to grant me a bit of room here.
ARM's are going to trigger the housing decline, I think that has been pretty well agreed on here. People are leaning out pretty far financially by buying extra houses, speculating a bit. Most of them are on ARM's though some are on the "Interest Only" (adjustable, no less) plan and of course the IO guys will just pretty much just turn into toast when things start to get weird so we don't have to consider them too much. So, here's the question...
If the Fed continues to use interest rates to check inflation and if inflation is pretty pervasive (oil, all metals including copper , steel, and aluminum, new construction, etc...) then at what interest rate would we predict that the ARM's become burdensome to their owners? Is it 10%, 8%...? I'm guessing they are probably averaging 7% or so now.
Follow-up question...At what fed interest rate do people start walking thier ARM's?
I know this is a very hard to define number but is it at a prime of 5%, 8%, 12% for the fed rate?
Another follow up question...If the fed rate is, say 6% for overnight money then what does that do to the typical ARM...does it go to prime + something like 4% to make a 10% interest rate or what?
What ye thinkin?
" When the going gets weird, the weird turn pro" H. Thompson
Comments
They did get 2 years warning.
In 2003, the federal Office of the Comptroller of the Currency, part of the Treasury Department, issued guidance requiring banks to have their monthly minimum payment cover interest, any fees and paying down principal.
Forbes
very interesting, and that is where the Chinese might head. As I said a few weeks back look for China, and perhaps even Japan to make an offer on some large gold mining companies. I think that would be the signal!
I have no idea how to see who buys what so maybe someone that understands this type of tracking could keept track of who's buying what and report back or maybe leave a link or a clue?
Here's a companion forbes article: http://www.forbes.com/markets/commodities/newswire/2003/12/11/rtr1178227.html
here? http://www.goldreview.com/
or here? http://www.goldcolony.com/home-new-2005.asp
Yumm, this is really beginning to get interesting and it seems this group seems well poised for what ever should come of this china/gold thing because we've been studying up.
So, what would the characteristics of gold movement look like in this scenario...would it dip artificially if some mine buying begins and people start getting out of old companies/stock so it is available and a little depressed or would it shoot right up from speculation or from chinese "management". Would it take a while for the movement to make the papers? Would people hold their interests in mining and watch from the background or run out and gobble it up, or dump it like a load of dirt? Could this be the lynchpin to the oft discussed $800 gold? Looks like a play may be looming at least this theory should be something fun to watch play out.
Enjoy
As many here have discussed there must come a time when the long term buyers and holders of Gold will destroy the Worldwide game of the central bankers to control gold.
With each and every year we come closer to that time. In addition it is also only a matter of time before the populations of the World see the fiat money printing presses of the World for what they are, little pieces of paper backed by nothing.
It may not be happing here, but in China and more specifically in INDIA people want less and less to do with PAPER currencies. As worldwide wealth in manufacturing, and services, is transferred to these two new power houses, where will their populations be investing their money, in paper assets, stocks, bonds, and notes? I don’t think so!
Below are some paragraphs and quotes taken from various international news reports over the last few weeks, enjoy!
A very interesting point made in some of the material is look at how much Gold China purchase in 2004, 235.1 tonnes, and they are fourth. Russia who is one of the Worlds largest producers is estimated to produce only 160 tonnes this year! WOW
“NEW DELHI: The value of gold held by Indian households is more than double the market value of the equity stock they own. At the beginning of this fiscal, that totaled an eye-popping $200bn, which is almost a third of India’s GDP.
Gold holdings among Indian households at current market value is about 2.5 times the current equity stock holding of $80bn.
India's share of global gold demand is about one and a half times that of the US, though its GDP is only 1/20th that of the US. "With its high rate of gold consumption, India accounts for 18% of the annual global gold demand, while its share of global GDP on nominal dollar GDP is only 1.6%.
As per World Gold Council (WGC) estimates, Indian households own about 15,000 tonnes of gold, accounting for about 10% of the world-wide stock. At current market values, gold accounts for 10-15% of the Indian household balance sheet. After rising by 63% in '04, India's gold consumption (EXCLUDING gold used for jewelry exports) rose by 57% in FY05. In fact, during the quarter ended March '05, gold consumption shot up 88%.
Whilst China has become a leader in manufacturing, India has developed its human resources, which are family orientated, making these India's main strength (India will overtake China's population by 2020).
The Knowledge and Service Economy has lent India an upper hand in the community of nations. Our workforce in the knowledge and service economy is highly skilled, efficient, productive, largely disciplined and enormously hardworking, capable of putting in long hours of work, both day or night and it can do this in English, French, and German. This renders India a class apart as a knowledge and service economy.
India has resisted the cultural swamping by companies such as Lever, P&G, Coco-cola, Pepsi, McDonalds, which, although they have established a huge presence, have succeeded only in penetrating the surface of India amongst a very small sector of the population, despite years of campaigning. Even in consumer items, Indians largely prefer home made items, verses branded items and this after years of advertising to change them. The Indian people are difficult to manipulate as well as to govern. They look to no State sponsored incentives, or Finance or other government support for its development."
There is a major difference between Indians and Chinese. It is why I believe the Indian gold market to be the most mature in the world. You think for yourselves, you are family orientated and refuse to accept the yoke of government or banking. This makes your people individually valuable. The Chinese bow to the State, even to the extent of limiting their offspring to one child, so they can get State support for the child.
Russian gold production in the first half of this year fell 3.5 percent compared to the same period last year, Interfax reported Thursday. The nation's Gold Producers Union said its members extracted 59.66 tons of gold in the first six months of 2005.
China was the fourth largest consumer of Gold in 2004 with acquisitions of 235.1 tonnes in that year.
Both countries believe that gold is real money!”
His comments FYI,
“As I read what information I can in the World press, and from the notes you send me, I think that Americans are way to optimistic about China's future economy, too many factories are being established both in the costal areas and inland areas, there will be a great waste of productivity in the coming years because only 30% of the people currently have limited consumption ability, while other 70% people are very very poorly off, this is why I think China has not a healthy economy, and may not be for a very long time.
I think China and India will continue to grow at a good clip so will continue to consume more materials. But I do expect that growth to be bumpy.
I worked with many Indian software engineers in my previous career. They have a long tradition of owning metals. Many families are too poor to own gold. So they lust after silver and wear silver jewelry when possible. My friend married an Indian. Her mom was very amused that my friend and I collected silver coins. She didn't get the huge values we placed on them, to her they were all nice but were little more than lumps of silver.
China is figuring out that Americans will not just roll over while they buy up all of our companies, but here is another sign that they might move more into Gold.
“Strength in both China's economy and currency and heightened investor interest should support Asian gold demand over the next year. And with rivers of energy dollars flowing into the Middle East, demand there shouldn't be too shabby either,"
NM Rothschild & Sons (Australia) Ltd said that China's currency revaluation is expected to boost domestic demand for gold and help provide a base for gold prices.
"Without a doubt, revaluation is going to underpin metal prices, particularly gold, by making them more affordable from a Chinese standpoint," said Darren Heathcote, head of trading at N M Rothschild & Sons (Australia) Ltd.
Interestingly Rothchild's noted that India imports some 700 tonnes of gold per annum while China imported only 230 tonnes last year which was up 13% on the previous year.
"I could see demand (growth) rising toward 20% this year from about 13% last year and it's only a matter of years before we see (China) up there with India in terms of overall quantity," Heathcote said.
In addition others are buying up Gold:
Gold imports into Turkey for July were reported by The Istanbul Gold Exchange. It was a record month for gold imports with 34.625 tonnes imported. The Istanbul Gold Exchange started recording data eleven years ago and this figure has never been surpassed. It was a significant 50.3% higher than June and 1.8% above the level of July last year, the previous record. So far this year imports are 21.2% above last year's imports which were themselves a record.
The Istanbul Gold Exchange is where many buyers in the Middle East acquire bullion. Geopolitical uncertainty, terrorism, the threat of a war with Iran and the 'war on terror' are undoubtedly underpinning strong demand from the region. Also record oil prices are filling the coffers of oil producing countries in the region and some of these petrodollars are being recycled into gold.
A Golden Solution To The China Syndrome? - Forbes
Gold Price Target: $500 by year end - Turk, CBS Market Watch TV
simple barn aka offthehorse
Even gold stocks responded well and took a major leap today.
roadrunner
Not just gold stocks. Silver stocks--CDE and PAAS had fantastic days. But the real winner was palladium. The stock here is PAL. Up over 20% in last 2 days. CHA-CHING!!!
Actually all metals stocks have been doing well. Copper---PD, PCU, FCX, Nickel--N and other basic materials stocks have been huge wimmers over the past month. Many steel stocks are up 30-50%. Part of this is correcting from oversold levels but mostly because of economic conditions.
Knowledge is the enemy of fear
and base metals are saying that the economy will improve and shortages of these will exist on this basis and
that costs of production are rising and likely to soar.
"Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you." -Luke 11:9
"Hear, O Israel: The LORD our God is one LORD: And thou shalt love the LORD thy God with all thine heart, and with all thy soul, and with all thy might." -Deut. 6:4-5
"For the LORD is our judge, the LORD is our lawgiver, the LORD is our king; He will save us." -Isaiah 33:22
Yes, Top, be careful! Be sure to roll up your sleaves nice and polite-like so they can give you the tatoo.
People think this is a joke, but it isn't.
"Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you." -Luke 11:9
"Hear, O Israel: The LORD our God is one LORD: And thou shalt love the LORD thy God with all thine heart, and with all thy soul, and with all thy might." -Deut. 6:4-5
"For the LORD is our judge, the LORD is our lawgiver, the LORD is our king; He will save us." -Isaiah 33:22
Oh goody! A dollar gold rise takes a thousand dollar coin with a $100 spread up 2 or 3 bucks.
US gold is NOT a bullion coin.
Boy, Topstuff you didn't think very long before responding or you may have gotten the POINT. The last 2 major gold moves were
$50 an ounce or more. MS65 Saints went from about $1000 to $1350 on the last move. That's a 35% gain in only a few months
for only a $50 change in the price of gold. That ratio of "2-3X" can be as high as 6-8X too! During the first move of gold 2 years back, the annual gain on MS64-65 saints was 50-57%. Again, not bad considering. If you can find any buyers of these coins who are buying them to make $3 on a $1 move in gold, my hats off to you.
99% of them are holding out for the $300 gain on a $1000 coin that comes very quick....and can go away just as quickly.
With a premium of around 50% over melt, I'd have to say that MS63 or 64 saints are awful darn close to being bullion, only with 3-6X the leverage. I'll leave the $1 gains to you and stick with 3-6X that.
I'm more than happy to say "oh-goody" everytime I flip MS65 saints for a $300 profit in 2-3 months. "oh goody!" "oh goody!"
roadrunner
So the "numismatic' market may be great for now but I wouldn't expect it to hold the big premiums when the recession comes rolling in. Saints will be back to 700 even when gold is still holding 400.
Here is a nice short article on the BDI index which forecasts future economic activity based on the global shipping of raw materials.
One thing for sure, it sure isn't pretty and would tend to imply severe implications 6-12 months down the road.
BDI index charts
roadrunner
“I just don't see the Indians or Europeans lining up to buy one ounce MS65 Saints at 1400 each but you can bet the Americans will be dumping them.”
Coynclecter
I agree with this! I also think that we may have seen the top of the U.S. market in a majority of issues. The very rare high-end items may still trade at outrageous prices, but the folks in this market just have too much money to burn.
I see no reason that we should get any further stimulus from over seas investors on very high priced U.S. coins as compared to World issues. In fact the only reason I see them buying U.S. material is because of the number of coins slabbed. There is now, and has always been a large amount of fakes in the world market in particular pre 1,000 A.D. material. In addition many world collectors have loads of damaged, cleaned, bent, etc. coins in their collections. Collecting these items might be great for the hobbyist, but as prices go up many of these coins will just not make the grade when it comes to re-sales at auctions etc.
Since currency is no longer based on gold is gold not considered a luxury commidity? Wouldn't investing in a usable commodity such as oil be more prudent when facing economic collapse? Gold has few actual uses. If a major recession sets in who will be buying gold? Since we are now a worldwide economy more then ever if the U.S. stalls it will be felt world wide and people will be buying essential commidities instead of luxury ones. Gold has long been a symbol of real wealth but why? Just because it is accepted as one?
I do own some gold and I will continue to buy but I'm trying to decide at what level, so I would just like some answers to these questions that I'm sure the goldbugs can provide.
thanks
I mean it is not possible as an option anymore simply because factories run on money
and food is now created in factories. Not only does most food come from factories but
the farms themselves are more factory than farm.
In the event of a collapse or panic gold will be worthless.
Gold does still has value as protection against economic swings and inflation.
<< <i>In the event of a collapse or panic gold will be worthless. >>
One opinion I hadn't heard before
and retaining gold, silver, food and anything else that
may be needed.
Camelot
As far as MS65 saints go, my comments apply to the here and now only.....and possibly the short term (6-12 months). It is only common sense that the premium applied to higher grade saints will evaporate as gold rises further. It's a no brainer that at say $800 gold that MS64 saints will NOT still carry a 70% premium to melt.
And as that time approaches, moving into lower grade Saints and all bullion will be the final play. That has been my plan from day one. Just remember that bullion was once confiscated by our govt and that could certainly happen again. Even if it doesn't the possibility to be taxed on gold to the max becomes very realistic. MS64 Saints do not qualify as bullion today and likely never will. For now, the higher grade saints have leverage, much the same as gold futures.
For now it works. 2 years from now it may not. Similarly gold shares may outperform bullion at some point by a factor of 10-100x.
But they certainly have more risk. If you want safety, stick with the bullion (and preferably silver) but your upside is limited strictly to the gold price change. If gold for instance doubles to $900, you can expect high grade US 19th century coins to at least double also.
They also have more risk than bullion imo so if you want safety stick with gold bullion. Green backs offer some safety for now too. They should at least hold 50% of their value over the next few years.
roadrunner
If anyone is expecting this outcome then why in heck are you wasting your time now with coins? Better get to working on your exit strategy and panic rooms. From what I've read in the forum, total chaos and anarchy in the US is a near impossibility. Therefore the likely outcome as most seem to support here is just muddling through another recession, a depression, or something similar.
In all but "WW3 in America" gold will do fine. And for that matter,
gold did ok too in centuries past when all heck broke loose. Didn't the plunderers always go for the gold?
roadrunner
I'd guess that a drop in stock values will happen also. Bonds will fall with increased rates. Federal deficits will rise with interest rates and the dollar will fall overseas. Bankruptcies will increase and banks and builders will get hurt. (US) Collectables will fall as disposable income does but gold/silver will rise with the falling dollar.
Correct me if Im wrong.
Here is a little something for all coin collectors, but World coin collectors in particular, to consider.
I just purchased all the new Krause books from 1600 to 2005 in total they include about 8,000 pages of coins, how many total coins I don’t know, but loads.
Current estimates from the numismatic community is that China alone will add 13 million new collectors in the next decade, India may approach the same, add an additional 2 million worldwide, and you could estimate something approaching 28 million new collectors.
Unlike U.S. collectors who have never seen a collapse in their paper currencies, many other countries have seen their paper money go to nothing multiple times, so they keep their money hidden away in coins and precious metals. In India 80% of savings is put into some type of precious metal savings, and only 20% goes into their stock market.
My friends in China are already telling me that as the price of coins worldwide increase in value the forgers are coming out in force, and many Chinese will only buy certified coins or coins in original sealed plastic issue packages.
One Chinese coin collector in the U.S. has even developed a website listing all of the Chinese Ebay sellers that are selling fakes, that list already includes 33 dealers, more on that later.
It is hard enough to become an expert in just one series area of U.S. coins but it is nearly impossible in longer older world coin series.
In the case of hammered coins, or molded coins, making fakes is an easy proposition for not only the Chinese but other forgers around the World.
During the last 5 years we have already seen certified coins exceed their raw counterparts in price by sometimes as much as 40%, and very little of the U.S. market contains actual fakes.
During the last 3 years we have seen the World market take off in price where many high grade coins now meet or exceed their Krause values, and this is particular the case in certified coins.
So here is my prediction. Within the next five years certified world coin prices will exceed raw coin prices by at least 50%, and many raw coins that go to market will be looked at as potential fakes, and reflect that in the prices. In fact it may come to pass that after being burned a few times with not only fakes, but damaged coins, many of the millions of “NEW” World collectors will only buy certified coins.
GOT SLABS?
<< <i>That's $975,000 with a PAID OFF HOUSE by age 65 or yer .....screwed. >>
Screwed? I disagree especially if you are talking about the generation that is retiring or getting ready to retire. Sure that figure is optiminal but you would be far from screwed if you do not have this. Revenue generating annuities, reverse mortgages, and social security can provide enough income to live a comfortable retirement.
<< <i>There will be MILLIONS who will suddenly discover that saving some money might have been better than a vacation home, >>
True but there will also be MILLIONS who did save money and now will be looking to spend it. Many are retiiring with pensions, social security still pays to go along with the other wealth that has been accumulated.
<< <i>I'm a long-term bond bull. >>
They way I understand it, if I get into a 10 year at say 4% today and the fed raises rates as expected and the rate goes to 5%, doesn't the value of my bond fall?? Wouldn't I be better to stay in 1 year or less maturities in a rising rates market. Also , what if its a hi yield corporate bond, (like GM) and the company can't pay??
<< <i>CardsFan..... If millions are saving, someone better tell somebody. >>
As the article states the savings rate is a confusing number because it doesn't take into account capital gains, home equity, etc. And like I said this is partially a result of those millions who did save. The baby boomers who socked away in their 401k's and pension plans currently don't have the need to save a bundle.
It is 30 -40 year old generation now that needs to be saving and based on my sample population of friends co-workers most are preparing for retirement, although you are correct in that many are not preparing adequately enough. I don't think they'll be screwed they just may not have the retirement that I want to have, and they may be ok with that.
I would not consider America on the skids interest rates are rising economy has been solid. Sure there are warning signs but there always are if you look hard enough.
ARM's are going to trigger the housing decline, I think that has been pretty well agreed on here. People are leaning out pretty far financially by buying extra houses, speculating a bit. Most of them are on ARM's though some are on the "Interest Only" (adjustable, no less) plan and of course the IO guys will just pretty much just turn into toast when things start to get weird so we don't have to consider them too much. So, here's the question...
If the Fed continues to use interest rates to check inflation and if inflation is pretty pervasive (oil, all metals including copper , steel, and aluminum, new construction, etc...) then at what interest rate would we predict that the ARM's become burdensome to their owners? Is it 10%, 8%...? I'm guessing they are probably averaging 7% or so now.
Follow-up question...At what fed interest rate do people start walking thier ARM's?
I know this is a very hard to define number but is it at a prime of 5%, 8%, 12% for the fed rate?
Another follow up question...If the fed rate is, say 6% for overnight money then what does that do to the typical ARM...does it go to prime + something like 4% to make a 10% interest rate or what?
What ye thinkin?
" When the going gets weird, the weird turn pro" H. Thompson