For the gold bugs--an email that I got from Gold Rarities Gallery

Longacre

Here is an email announcment that I received from Gold Rarities Gallery. It provides some insight into why gold is increasing so much. What do you think?

Friday January 13th, 2006

First I would like to wish everyone a happy, healthy and prosperous new year!


A few weeks ago I stressed in these pages that any downturn in gold would be very short lived. Gold subsequently hit $510 and has since rallied back to yet another multi year high of $558 today.

Demand for gold is soaring and it has long been suspected that some of the central banks have been buyers as well as speculation that China would diversify it's reserves and buy more gold. Well, that speculation has now been confirmed as of this morning-

The latest run for bullion follows Friday’s news that the Central Bank of China wants to diversify part of its record $769bn in reserves away from the US Dollar. ANALYSTS BELIEVE GOLD IS AN OBVIOUS BENEFICIARY OF THIS CHANGED APPROACH.

Hu Xiaolian, director of China’s State Administration for Foreign Exchange, said in a statement on the bank’s website that she will be looking to "optimize the structure" of the holdings and is “actively explore ways of investing foreign exchange more effectively.

The statement from Ms Hu, who is also an Assistant Governor of the People’s Bank of China, follows suggestions in the country’s official news media that THE COUNTRY’S GOLD HOLDINGS ARE TOO LOW.

At just 1,1% of its reserves, China’s is well below the international average of 10%. According to the World Gold Council, Euroland countries have an average of 39% of their reserves invested in bullion. The US is at 26%. At the end of June last year, China’s gold reserves totaled a relatively modest 600 tons.

A CREDIT SUISSE FIRST BOSTON REPORT CALCULATES THAT RAISING BULLION’S PROPORTION TO 5% OF CHINA’S NATIONAL RESERVES WOULD GENERATE DEMAND FOR 2,340 TONS OF GOLD, EQUIVALENT TO AROUND TWO THIRDS OF THE WORLD’S ANNUAL PRODUCTION.

South African technical analyst Issy Bacher, who warned that the last big move was a temporary spike, believes bullion and gold shares have now “have broken through resistance.”

This is probably the biggest and most significant news to hit the market in many years .It's no secret that with the ever increasing U.S.. Deficits that the U.S. Dollar is not exactly the safest place to be and many leading experts expect it to fall by as much as 30%. If you are going to get into gold or rare coins do it now, otherwise you can expect to pay more later. The rare coin market is still red hot with supply continuing to be depressing to say the least.


Here is a short list of what we bought in the past week.

Please feel free to visit our web site at www.goldrarities.com to view a complete list of gold. We have just added a bunch of nice better date Saint Gaudens and some nice Morgan Dollars as well.

Here are some of the highlights, there are more listings at www.goldrarities.com or call us at 1-800-224-3160 to discuss items you may be looking for but don't see listed.

michael

gold ............................ GOLD!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

in other words gold......................bullion and modern NCLT and ga-ga graded stuff which in and of itself is not bad or good but it is what it is.................. fancy bullion just do not pay more than 15% over melt for it

GOLD!!!!!!!!!!!!!!!!!!!!!!!!!!! pre 1933 usa//// federal, territorial, and fractional gold coinage with great eye appeal!!!!!!!!!!!!!!!!!!!!! this is it BAM

JDelage

<< <i>A CREDIT SUISSE FIRST BOSTON REPORT CALCULATES THAT RAISING BULLION’S PROPORTION TO 5% OF CHINA’S NATIONAL RESERVES WOULD GENERATE DEMAND FOR 2,340 TONS OF GOLD, EQUIVALENT TO AROUND TWO THIRDS OF THE WORLD’S ANNUAL PRODUCTION. >>



Hmm.... If it's really 2/3 of PRODUCTION, then I'm not sure it's very material. Annual production only accounts for 2% of existing jewelry, coinage, and electronique gold, so I'm not sure this is a very material number.

topstuf

I remember Hu Xiaolian. Wasn't he David Carradine's teacher in "Kung Fu?"

Coinhusker1

I'm more concerned about the Europeans unloading their holdings -- might be awfully tempting for them to take advantage of the recent run-up!!

ILikeDimes

<< <i>I remember Hu Xiaolian. Wasn't he David Carradine's teacher in "Kung Fu?" >>



if "he" had a sex change............cuz Hu's a her now!......................

JDelage

<< <i>I'm more concerned about the Europeans unloading their holdings -- might be awfully tempting for them to take advantage of the recent run-up!! >>



Europeans who own gold are well aware of the fact that the Euro is at least as vulnerable as the dollar. See below:

Public debt:
- US: 64.7% of GDP
- France: 66.5%
- Germany: 65.8%

GDP growth rate:
- US: 3.5%
- France: 1.5%
- Germany: 1.5%

The UK has a much lower level of public debt but still a very low growth rate.

Inflation wise, Americans are still in a much better position than Europeans.

Stork

Don't hold back Michael, tell us how you really feel .

mrearlygold

In this months "Time Asia" the center story is GOLD FEVER, the soaring price of the yellow stuff isn't stopping Indians from indulging an old obsession. Plus: you can't wear stocks and bonds".

I'm hypothetically going to reprint it and put it on my website later in the week.

Tom

elwood

<< <i>Public debt:
- US: 64.7% of GDP
- France: 66.5%
- Germany: 65.8% >>



I didn't realize we had fallen this far in debt when compared to Europe. The fact that we are catching up to them tells me that we are basically living in a Socialistic State.
We're gradually killing off business in this country, just as they have. It would appear that it's only a matter of time before Stagflation sets in.
The only thing that gives me hope is, the American determination to correct and/or fix our mistakes. We managed to do it after the 70's when Japan was kicking our arse. And our economy was in the tank. We just have to be pushed to the edge before we do something about it.

JDelage

<< <i>I didn't realize we had fallen this far in debt when compared to Europe. The fact that we are catching up to them tells me that we are basically living in a Socialistic State. >>


Mixed economy, yes.



<< <i>We're gradually killing off business in this country, just as they have. It would appear that it's only a matter of time before Stagflation sets in. >>


Not quite:
1) the job market is still significantly free-er in this country than in Europe.
2) We don't have the same level of socialized "safety net" ("free" healthcare, etc).

For most other measures - including individual taxation - we're on par.

mrearlygold

<< <i>

<< <i>Public debt:
- US: 64.7% of GDP
- France: 66.5%
- Germany: 65.8% >>



I didn't realize we had fallen this far in debt when compared to Europe. The fact that we are catching up to them tells me that we are basically living in a Socialistic State.




Pretty much but if you were to see the comparables between China and here you'd be in shock.

DaveG

Hmm...

A guy who's selling gold is telling you to buy now because the price is going up, up, up!

Sounds like good, disinterested advice to me.

Oops, looks like he forgot to mention that hedge funds are reported to have been taking large positions in gold over the last couple of months (which happens to coincide with the recent large increases).

On second thought, never mind, because hedge funds are known to be active traders, so if prospective buyers were concerned that the hedge funds would be likely to take their profits (i.e., sell) in the near future, they might not be inclined to buy gold right now.