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Posts Tagged ‘palladium’

USA PreparesHere a summary I prepared of my December 24, 2013 appearance on USA Prepares with Vincent Finelli:

4m – Gold coins have been used for 2600 years in a wide-spread way, since the Roman Republic
4m – 40% backing of the money supply by gold in the u.s. from 1914-1933, so for every $5, they had to have $2 worth of gold
5m – 1933 gold confiscation, where most didn’t comply, and that’s good, because it was under false pretenses
5m – 1974 – Americans able to own gold again, a big increase from them until 1980, then a 21-year period of decline until around $250 USD an ounce
6m – Gold and silver confiscation show how valuable they are
6m – Numismatic gold free from confiscation
6m – Platinum as the overlooked investment metal and currency
7m – Silver’s a tighter market than gold – 70% of silver comes from base metal mining, so even when economy’s not doing so well, silver can still have a great investment value, because of tighter supply
8m – With gold, the central banks own a lot of it, in total
8m – They may want to back up IMF SDRs or other currencies with gold at some point
9m – Gold being thrown away by not recycling gold in old computers
10m – The reason why gold and silver haven’t reached the true market value they deserve is because of the paper futures market, said to be around 100 times the amount of physical gold
18m – Physical gold and silver vs digits on a computer
20m – No substitute for having actual tangible value for exchange
30m – On cash – it’s recognizable and more likely to be exchanged for smaller items than gold, and gold would be better for appreciating in value to buy more later on
31m – Big risk with cash of hyperinflation, if govt doesn’t honour its debt commitments
32m – Silver at $20 an ounce looks like a good investment to me
35m – Bitcoins introduced in January 2009, theory underlying them goes back to at least 1996
35m – Nodes facilitating transactions and being rewarded with Bitcoins for doing so
36m – The pros — privately issued, decentralized, infinitesimally low transaction costs, high divisibility, international recognition
37m – The cons — if the internet goes down, your Bitcoins are useless, govts getting concerned over their hegemony to issue money
38m – Silk Road shutdown
38m – Public record of all Bitcoin transactions — could be tied into govt intelligence operation — a giveway would be if mass media starts really promoting Bitcoin
39m – China requiring all Bitcoin users to be registered
40m – Bitcoin providing a great educational opportunity, and a great way to make (or lose) a quick buck, as these currencies are reminiscent of the Dot Com Boom (and Bust)
47m – I think the name Bitcoin, with coin in the name, was deliberately used as a marketing tool, to connote more tangible value to them
49m – From Bitcoincharts.com, it was trading that day with around 30% volatility
50m – Major U.S. retailer, Overstock.com, plans to accept Bitcoin by the second half of 2014, but will continuously convert them into dollars, to limit volatility

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Crystaline Gold

As an example of what I regard as the inordinate fixation on gold that I continue to see, LewRockwell.com has on their home page at the close of 2010, the article:

The Economic Flop That Was 2010
Except for gold, it was flat and lifeless from the get-go. Obituary by Bill Bonner.

The article itself only makes a single reference to gold at the end of a long chain of bad news. “Gold investors end the year nearly 30% richer.

Why the inordinate fixation on gold? Especially this year, when silver is up 80% from a year ago today, from $16.99 USD an ounce to $30.63, and palladium is up 97%, from $402.00 USD an ounce to $791.00 on the London Fix.

You can scarcely find mention of platinum and palladium in the libertarian forums. For some reason, platinum remains the overlooked investment metal and currency, and palladium has outperformed gold and silver for the second year in a row.

The primary justification given for the mass ignorance of platinum and palladium is that they have never had a historical monetary use (which is false). Their monetary use, as evidenced by having international currency codes, has been less primarily because their extraction wasn’t feasible until modern times, not because they were never feasible as currencies.

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On July 17, I wrote about Scotiabank’s near-empty gold vault and gold certificates.

From their 2009 annual report, on page 123, they don’t list gold and silver bullion and certificates separately.

Under “11   Other liabilities” as of October 31, 2009, they list:

Gold and silver certificates and bullion

For 2009, they reported $3.856 billion, and for 2008, $5.619 billion.

From their annual report, there is no way of separately knowing the value of gold bullion, silver bullion, gold certificates and silver certificates held for their customers.

Also, despite them selling platinum and palladium products, they’re not listed on their annual report at all, despite palladium outperforming gold, silver and platinum in 2009, and platinum being the overlooked investment metal and currency.

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All traded on the NYSE:

Physical holding funds:
CEF – Central Fund of Canada (founded 1961)
GTU – Central Gold Trust (founded 2003)
PHYS – Sprott Gold (founded February 2010)

Exchanged Traded Funds (ETFs):
GLD – SPDR Gold ETF (founded 2004)
IAU – iShares Gold ETF (founded 2005)
SLV – iShares Silver ETF (founded 2006)
PPLT – ETFS Physical Platinum Shares ETF (founded January 2010)
PALL – ETFS Physical Palladium Shares ETF (founded January 2010)

Purchase company:
SLW – Silver Wheaton Corp. (founded 2005)

It should be noted that serious questions have been raised about the reliability of the GLD, IAU and SLV ETFs, and they may be big bubbles waiting to burst, unlike the physical holding funds, especially CEF, with its 49-year track record.

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There is growing talk about another confiscation of gold by the U.S. government as gold prices continue to set new all-time highs since 2008. I’ve heard at least three shows this week raise that possibility.

On May 22, 2010, Al Korelin, host of the Korelin Economics Report, had Louis James of the Casey Research Organization on in the last segment of the first hour.

Al Korelin: “One of them is the question of government confiscation, which is something I haven’t thought about, but more and more of my guests are bringing it up. I think that’s an interesting consideration. It has happened before.

Louis James: “It is something that has been done before, and not just by banana republics. The United States government confiscated privately held gold, during the Great Depression era, and yes, that could happen again. Our feeling has long been that that could happen, but the point at which that would happen, the point at which the government would even be willing to talk about gold being an issue, we would already see huge increases in the price of gold. It would become a public problem before the government were to take action. So there would: a) be warning and b) already huge increases for holders of gold and gold in dollar terms.

I agree with James that there would be warning, and a substantial increase over the current price of gold of around $1200 USD an ounce before the U.S. government is likely to confiscate gold again.

It is important to remember that if gold is confiscated again in a similar way to the 1933 precedent, there would be certain exceptions. At the time, they included:

“Gold coins having a recognized special value to collectors of rare and unusual coins,” and “gold coin and gold certificates in an amount not exceeding in the aggregate of $100 belonging to any one person.”

Gold then was worth $20.67 an ounce before the confiscation, and $35 an ounce from then until August 1971, which was equal to 2.8 to 4.8 ounces of gold during that time.

If a future gold confiscation is similar to the 1933 confiscation, it is likely that individuals will be able to keep a similar amount of non-collector gold. The way to keep all your gold in such a scenario would be to buy numismatic gold. That is, gold with a significant premium value over its metal content.

To really be on the safe side, you should consider diversifying into silver, and especially platinum and palladium. Find out why platinum is the overlooked investment metal and currency, and how palladium was the best performing precious metal currency of 2009.

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Gold closed at the end of 2009 at $1104.00 USD on the London Fix, while silver closed at $16.99, platinum at $1466.00 and palladium at $402.00.

Yesterday, gold closed at an all-time high of $1222.50, while silver closed at $18.42, platinum at $1689.00 and palladium at $521.00.

While gold was up 10.7%, silver was up 8.4%, platinum was up 15.2% and palladium was up 29.6%.

Why do platinum and palladium continue to be overlooked as investment metals among the four precious metals with an international currency code? Palladium was the best-performing metal of the four in 2009, and continues to be this year. Platinum outperformed gold in 2009 and continues to outperform gold this year.

Previously, I wrote why platinum is the overlooked investment metal and currency.

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Since 2009, I have heard two prominent financial analysts repeatedly make the claim on multiple programs, including two major ones with over a million weekly listeners, that gold and silver are all you can rely on. But what about platinum?

How much can you really rely on gold and silver, when gold was confiscated by the U.S. government in 1933 at the height of the Great Depression, and silver in 1934. And how can you specifically rely on gold when it’s the commodity most controlled by the international bankers, and a reserve currency for national and international banks?

Unlike gold and silver, a confiscation of platinum is unlikely for several reasons:
1) It’s not a reserve currency for national and international banks like gold is.
2) It isn’t as widely held as gold and silver.
3) Its historical investment and currency use is shorter than gold and silver.
4) Its decreased demand relative to gold and silver in a recession, due to its overwhelming industrial demand, leading to better performance during the subsequent recovery.

When I mention platinum as an investment comparable to gold and silver, I’ve been told that platinum has little to no historical use as a currency. As I wrote previously, platinum has an international currency code along with gold, silver and palladium. Since 1988, one ounce platinum coins from the Royal Canadian Mint have a legal tender value of $50. Since 1997, American Platinum Eagles from the United States Mint have a legal tender value of $100.

From 1967-1978, the first and only regularly minted gold coin available for the masses was the South African Krugerrand. However, due to trade sanctions imposed by many Western countries on South Africa for their policy of apartheid, the Krugerrand’s availability was severely limited from the 1970s until 1994.

It got some serious competition in 1979, when the Royal Canadian Mint began minting Canadian Gold Maple Leaf coins. Just nine years later, at the height of sanctions on the import of Krugerrands, one ounce platinum coins were minted by the Royal Canadian Mint between 1988, and continued to be minted until 2002, and were reintroduced in 2009.

Not only can you rely on platinum as a historically non-confiscatable metal, you can also rely on it historically trading at a substantial premium over gold. Over most of the past decade, platinum has traded at a 50 to 100% premium over gold. At a 38% premium over gold at the end of January 2010, it still has plenty of room to appreciate to its historical trading premium relative to gold.

Recently, platinum outperformed gold in 2009, and for the first month of 2010.

Now ask yourself why you’re being told that gold and silver, and not platinum, are the only things you can rely on, why gold and silver are being pushed so much, and not platinum, and why most of you haven’t heard these things about platinum before.

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