The wealthy provide a valuable product or service that everyone needs. Man has always needed food, water, clothing and shelter. The wise men who have figured out how to satisfy man’s basic needs have become very wealthy.
“Nothing is new under the sun.”
Billionaire Jim Rogers invests in assets that are about to appreciate in value once the rest of the world pays attention. Gold and silver coins are primed to increase in value dramatically in the very near future. All of the economic fundamentals point to these coins as great investments.
Gold is the Highest Standard
Historically, gold was for the wealthy. The middle class hoped to own silver. The poor had nothing. Purchasing a rare gold or silver coin is an investment to protect your wealth.
Olympic champions receive gold medals. The Midas touch was about gold. Gold is melted into bullion bars and stored in the most secure banks on earth.
Gold is the highest standard of metals because it is scarce, pliable and durable. Gold is used for coinage, dentistry, jewelry, electronics and industry.
Gold does not deteriorate very quickly. Some experts believe that all the gold that was ever mined is located somewhere on the earth. Rare gold coins are still found in shipwrecks at the bottom of the ocean. Gold outlasts all nations, empires and currencies.
The discovery of gold has been a monumental achievement throughout history. It has instantaneously made the founders wealthy.
The Spanish found Aztec gold in America. The United States, Canada and Australia each had their own gold rushes. Prospectors would devote all their time and energy to search for just a small nugget. A little gold has always been very valuable.
Silver Cleansing Power
Silver has played second fiddle to gold for many years. At times, both metals were used under a Bi-metallic money standard. The traditional value ratio of gold to silver was 12:1. In 2013, the ratio is about 50:1.
Silver has always been noted for its cleansing powers. Silver kills microorganisms. Some people would put a silver coin in a barrel of water to purify the liquid.
Silver is highly reflective and conductive. Silver is used for utensils, jewelry, electronics, medicine and industry.
What is Money?
Cattle, shells and stones have been used for money in different cultures. Gold and silver are recognized the world around for their value as money. Money is a medium of exchange and store of wealth. It must be mobile and pliable. Gold and silver are in high demand because they satisfy all these requirements.
The problem with most paper currencies is that they are really supposed to be used in only one country. They are easy to print and counterfeit. Over time, they lose value. You can’t do much else with paper. Gold and silver coins can be melted for value.
Precious Metals are Valuable During Wars
During wars, all prefer gold and silver to paper currencies. International commercial exchange requires precious metals.
American Nevada Senator Pittman said the following:
“Silver is a war metal. During every great war, the demand for silver, chiefly for the
purpose of paying soldiers, has increased and the price has risen.”
The Indians preferred silver to British paper money. Silver coins stand the test of time.
Central Banks Increase Gold Purchases
Bloomberg has reported on central banks increasing their gold purchases. During good times and bad times, gold is valuable. China and India are emerging as important net buyers of gold and silver. India uses these precious metals for weddings, festivals and religious ceremonies.
Venezuela started the recent redemption of gold with its request for the return of its bullion. Germany, Switzerland and other nations have followed suit. This has increased the value of these precious metals.
Recent History of Gold Price
The most powerful empires control the prices for gold and silver. Governments have prohibited citizens from owning these precious metals. Before World War II, England organized the Gold Standard. After World War II, the United States controlled the Gold Standard. In 1971, the United States left the Gold Standard.
Rare gold coins are especially appealing because they are very valuable. The most common variety is a one-ounce coin. It is easy to check the authenticity of rare gold coins. The artwork is beautiful on many of these coins.
“Gresham’s Law” states that bad money pushes out good money. People have placed their rare gold and silver coins in bank safe deposit boxes. They use paper currency in public. It is like wearing your best clothes for special events.
In 1834, the United States set the price at 20.67 United States dollars for one ounce of gold. In 1933, U.S. President Franklin Delano Roosevelt forbade citizens from owning gold. By 1934, the United States government increased the price for one ounce of gold to 35 United States dollars.
Gold and silver coins used to be used instead of paper currency. Paper currency is an IOU. Originally, you could redeem this for real gold or silver. A “Gold Certificate” entitled you to redemption in real gold. Not anymore.
A paper bill has a derived value. The treasury writes a “1” on one bill and a “100” on another. It has no real intrinsic value as paper. Gold and silver always have their intrinsic “melt value.”
In 2013, many governments are printing large amounts of paper currencies. This supply increase will lead to inflation. The purchasing power of paper fiat money is decreasing.
In February 2013, Venezuela devalued its currency by 46%. In one day, the wealth of people holding that currency was dropped in half.
Max Keiser and other financial experts believe that other nations will devalue their currencies too. Nations weaken their currencies to improve exports. The problem is
that this destroys the value of assets. Wise investors plan ahead by buying rare gold and silver coins.
Precious Metals Financial Instruments
Wise investors have been purchasing rare gold and silver coins to protect their assets. The Internet has increased the availability of indices tracking precious metals. It is easy to get an update on gold and silver prices 24/7/365. Investors can choose from coins, mining stocks or indices.
Coin collectors say “You don’t own it if you can’t touch it.” Governments have confiscated assets before. The wealthy make it difficult to find these assets in Swiss and offshore banking accounts.
It takes a lot of time and money to make a gold mine productive. Don Coxe of BMO stated in February 2013 that the gold milling return is less than 1 gram per ton of rock processed. It is very difficult to increase gold supply. This scarcity leads to higher rare gold coin prices.
According to J.S. Kim of SmartKnowledgeU, many stock indices during the last decade have been flat when adjusted for inflation. On the other hand, gold and silver have appreciated astronomically. Gold and silver have been in a bull market for more than a decade. All companies eventually go bankrupt. Gold and silver remain.
Some economists worry about hyperinflation due to fiat paper currency money printing. The hyperinflation in Germany after World War I destroyed the savings of many people. People had wheelbarrows of worthless paper money. Gold and silver protect against hyperinflation.
Gold and silver are commodities with relatively fixed rates of supply. It takes real work to extract more gold or silver. As the supply of paper currencies increases, more paper money is needed to buy these fixed precious metals assets. These precious metals appreciate in value.
Both Canada and the United States have seen exponential increases in demand for their rare gold and silver bullion coins. In fact, the United States Mint had to suspend production of silver Eagle coins in January 2013 because demand outstripped supply.
Perfect Time to Purchase Rare Gold Coins
Now is the perfect time to purchase rare gold or silver coins. All fiat paper currency systems fail after about 50 years or so. The United States Dollar system has been around since 1945. It is starting to collapse.
Mike Maloney has estimated that with so much paper money in circulation, the world will need to return to a gold standard for balance. This will increase the value of gold exponentially. He encourages people to purchase gold or silver coins. He talks about the value increasing so much that investors can use the rare coins to purchase a home.
The smart money is on rare gold and silver coins. The future outlook suggests that precious metals will continue to appreciate in value. Don’t be left behind.