About Precious Metals
When it comes to capital preservation, few resources have been able to hold value like gold. Gold and silver have staged one of the best ten year runs in history. In the early part of this century gold prices remained quite stable, but the last decade may soon be written in history as what jumpstarted the revolution in personal finance; utilizing metals as an important hedge against economic fallout. The ability of precious metals to protect against inflation, as well as deflation, and everything in between truly shows how versatile and rewarding gold and silver are as investments.
The founding fathers of the United States designated gold and silver coins as the only "true money" in Article 1, Section 10 of the U.S. Constitution.
"It must be emphasized that gold was not selected arbitrarily by governments to be the monetary standard. Gold had developed for many centuries on the free market as the best money; as the commodity providing the most stable and desirable monetary medium. Above all, the supply and provision of gold was subject only to market forces, and not to the arbitrary printing press of the government." Murray N. Rothbard
However, in 1971 Richard Nixon fully demonetized gold, detaching Federal Reserve notes (US Dollars) from exchange at the predetermined price of gold.
Money today is created by a privately owned central banking cartel called the Federal Reserve System.
US citizens are forced to accept these paper notes as payment for all debts, public and private, as a result of current legal tender laws.
We cannot receive these notes unless someone is willing to take them on loan. They are created from nothing, yet we must labor to service the interest on this debt.
The supply of this commodity we call "Fed Notes" is very elastic and will blossom along with public and private debt.
If we do not pay this debt back, compounding interest will cause us to take on more debt, thereby forcing the Fed note supply to increase on an infinitely vertical incline.
Should we ever try to pay this debt back the money supply will decrease and we can look forward to a recession or depression!
In light of this you need gold in your portfolio for protection. (Note: More on this can be found here- "What has Government Done to Our Money" by Murray N. Rothbard)
Gold's History:
Gold's 5,000 year history can be traced back to the Egyptian's in 3,000 B.C., when this ancient civilization linked the power of gold to the sun God, Ra.
In 560 B.C., King Croesus of Lydia struck the first gold coin, making gold his kingdom's "coin of the realm" or "legal tender".
During the following 2,500 years in the evolution of the world trade and commerce, gold emerged as the preeminent global currency as thousands of gold coins were minted by many countries. Today, gold coins are still highly desirable by investors as a trusted store of value and recognized as a medium of exchange.
Gold's Value as an Investment:
Gold is rare. During all of history less than 100,000 tons of gold have been produced. If gold production decreased or if existing gold scrap supplies were seriously reduced, even today's demand for gold could not be met. The result would be a strong upward pressure on gold prices.
The romance and allure of gold is enhanced by it's unmatched versatility as an investment vehicle.
Many of the rarer gold coins are valued at substantial premiums above their bullion value. Additionally, gold bars are held by central banks to assure their ability to make international payments.
Gold's value is intrinsic. It is a precious metal that cannot be destroyed or altered. Gold is highly liquid, has few geographic boundaries, and can be bought, sold and stored in most parts of the free world with privacy. Because of it's global market, the price of gold cannot be manipulated by a single nation.
On the contrary, gold is widely thought of as the foundation of the world's monetary system.
In a world where other assets, such as currencies, are depreciated by high inflation or interest rates, gold acts as a superior hedge against inflation. Another reason for including gold in your investment portfolio is it's diversification qualities. In other words, the price of gold frequently moves in the opposite direction from equities and fixed income securities. In addition, in times of political and economic uncertainty, gold's value traditionally rises.
What kind of gold should you own?
The most private, liquid form possible. President Roosevelt has already proven that certain gold can become illegal over a weekend.
Don't take chances! The Fifth Amendment of The Constitution, particularly the Eminent Domain Clause, stands in the government's way of seizing collector coins. Only PRIVATE Gold Is As Good As Gold!
Numismatic Coins:
There are two types of gold coins, numismatic and bullion. The chief difference between numismatic coins and bullion coins lies in how they are valued. Unlike a bullion coin, which derives its value from it's gold content, the value of a numismatic coin is determined by a combination of variables including age, rarity and its condition.
Numismatic coins, such as pre-1933 United States gold coins, are highly sought after by astute collectors and investors for their beauty, historical value and investment potential.
Bullion Coins:
For investors who value the ease with which coins maybe bought, sold and converted to cash, bullion coins make an excellent choice. Guaranteed by the issuing nation, a gold bullion coin is usually a legal tender coin and may have a nominal face value.
Bullion coins are bought and sold at prices that include a small premium over their intrinsic gold value. The bullion coin usually has no collector value, with the exception of some early issue date coins, which are valued for both their bullion content and numismatic appeal.
