A Publication of Austin Rare Coins, Inc. June 2008
Buy Gold and Silver on Price Dips
March was a record-breaking month at Austin Rare Coins & Bullion! Our business has been overwhelming as new clients are hoarding away Gold and Silver in an all-out investor flight to safety. After Gold topped $1,011 and Silver hit $20.92, we were not surprised at all to see a correction in commodity prices. It was about time… the rush is killing our shipping department. We’ve done more sales on a single day this month than we did in some entire months in 2007! With the Gold rush and flight to safety, comes the profit taking by hedge funds and hence the recent price corrections. It’s a fact that the price of any investment can rise too much, too quickly. That’s exactly what happened to Gold and Silver in 2008. Thankfully prices have corrected, at least temporarily, offering you a rare second chance to buy well below recent highs. We urge you to buy Gold and Silver now, on the dips. Physical Gold and Silver ShortagesAs an agent for both the Canadian Mint and the U.S. Mint, Austin Rare Coins has inside information not available to the public. These facts are quite interesting and make us very optimistic that the current price corrections are very temporary.
• Already this year, the Royal Canadian Mint halted issuing 2008 Silver
Coins for weeks due to a shortage of silver planchets. Why Precious Metals Are Hot A flight to safety is clearly underway. We live in uncertain times. Money is leaving stocks and bonds in search of safety and security. • Stocks are being hit with a barrage of bad news every week. Since October’s highs, the DOW Industrials have lost 14% of their value. The S&P 500 Stock index is down 13% and the NASDAQ fell by 14%. Investors are selling stocks and fear a recession can only take most stocks lower.  •
The fall-out from the Sub-Prime Mortgage Crisis continues
to destroy investor confidence in stocks, bonds, the U.S.
Dollar, and home buying. Today’s Consumer Confidence Report
shows a surprisingly anemic reading. Meanwhile, the S&P
Case/Shiller 20-City composite index shows home prices fell
10.7% in January year-over-year, its steepest decline since
its inception in 1987. Las Vegas and Miami homes lost over
19% of their value.
• Safe havens are disappearing for savers. Home prices are falling. Interest rates have dropped in half in eight months. Two year interest rates have fallen to 1.8% while wholesale inflation rose to 7.4% over the past 12 months, the largest yearly gain since 1981. Stagflation has arrived to eat away buying power. The failing U.S. financial system, greedy inept bankers, weak consumer confidence, and continued high oil prices, virtually guarantee a recession or worse. That’s bad news for most investments, but great news for Gold and Silver. Precious Metals – True Measures of Wealth In the 22 years we’ve written about Gold and Silver, we’ve never seen a time when so many financial disasters have converged. One crisis has triggered the next. In the Federal Reserve’s panic to prevent a total collapse of the financial markets, they’ve used the few weapons they have left– flood the world with more paper U.S. Dollars and lower interest rates. In this approach, inflation is allowed to run free and the U.S. Dollar is at risk of a total collapse. Both are great for Gold and Silver!
Bull Market for Gold/Silver Continue Each recent financial crisis in itself could create a small Bull Market for precious metals and commodities by themselves. But when added together, we fear that the world may forever be changed by how we try to solve these massive financial problems. The Sub-Prime Mortgage Crisis and the ensuing credit crunch will not be fixed in a few weeks or months. It will take years and maybe decades, to correct the horrendous financial abuses and imbalances. America is in Serious Financial Trouble Sadly, Americans are just now waking up to the fiscal facts. The Dollar’s buying power is in an historic decline. The weight of our nation’s insatiable desire to borrow and spend is making it impossible for individuals, home owners, and the federal government to keep spending and keep borrowing at these levels. For example, one patch Congress is throwing at the recession is a stimulus package that dumps $168 Billion Dollars into the pockets of Americans and urge them to rush out and spend the money. It’s a great election year ploy, but makes no sense financially. First of all, every single dime of the $168 Billion Dollars has been borrowed from the Chinese, Arab Oil Sheiks, or foreigners and must be paid back someday with interest by our children and grandchildren. The second problem is quite telling: Americans don’t plan to spend the money. In fact, 30% said they need the checks to pay off debt, another 33% said they’ll pocket the windfall, and only 18% said they will spend their money on purchases. The stimulus package is a non-starter. Even if it could help, the IRS checks are still dribbling out and no one's spending them. Investors Fear the Worst So here we are staring a recession in the face, again. Last time, the government threw $36 Billion into rebates to slow the 2001 recession. This time, the U.S. economy must be in serious “Great Depression” style trouble. If it’s not, why is the government sending out four and a half times as much money as they did in 2001? Surely they believe that this recession will be bad, very bad. At the heart of the real problem today is this– no one knows what the next "ticking bomb" will be– from sub-prime mortgages to a credit meltdown to a recession to a derivatives explosion. In the face of the unknown, no one knows whether we're in a recession, if a depression is coming, or what. At the moment, the future value of all investments– securities, bonds, and the world's currencies are unknown. Even the value of some of America's fallen financial icons are totally unknown. In January, Bear Stearns was valued over $150 a share, a few weeks ago it was reportedly worth only $2 a share, and a now it trades around $10. Now, Lehman Brothers has to raise $6 Billion Dollars to stay alive. Investors Fear the Worst No one knows what losses lie ahead for the financials– and what domino will fall next. In the face of the Federal Reserve dropping interest rates in half in eight months (an extreme Depression style measure) and Congress flooding the economy with newly created money, the value of all our assets from our homes to our life savings are in doubt. Almost all assets are at risk. It’s no wonder the value of stocks, mutual funds, bonds, paper money, and hedge funds are falling. No one knows what ticking time bomb is still out there in Sub-Prime mortgages, hedge funds, derivatives, and all the “smoke and mirror” disasters bankers have been creating over the past decade. Thankfully, when things get bad, really bad, Gold and Silver values historically rise in every crisis environment. Gold and Silver can always be counted on as true measures of wealth and storehouses of value. Despite the government’s unceasing desire to destroy every paper currency ever printed, there are alternatives– Gold Coins, Silver Dollars, and Gold Bars – real, hard, tangible assets that cannot be created on printing presses or by the press of a computer key. Throughout history, Gold and Silver remain the money of last resort. Safety, Security, Hedge, Insurance We know of no safer hedge against inflation, no better insurance from currency depreciation, and no more proven way to diversify a stock portfolio than Gold and Silver. Here in the 21st Century, few investments have come close to achieving such remarkable levels of profits.
• Gold is up 246% since the 2001 low. Amazingly, even after the recent
correction, Gold is still up 35% in the past year. What To Do Next Many of you are in the process of moving money right now– maybe you are selling stocks and wondering where to park your money. Others are liquidating money market accounts and looking for a way to hoard away cash for a rainy day. I hope you are considering the unique advantages of owning physical Gold and Silver today. If you have questions, we have a staff of Gold and Silver Specialists on call from 9am till 9pm seven days a week to assist you. They can recommend the best private, non-reportable Gold and Silver for your particular situation. Please call 1-800-928-6468 and let us assist you. In the coming weeks, we highly recommend you watch your investments closely. Markets will be highly volatile as more bad news on the Sub-Prime Mortgage crisis continues to leak out. This is the time to be defensive and protective of your hard-earned life savings. |
||||||
Questions? Call a Gold Specialist at 1-800-928-6468
Austin Rare Coins, Inc. Serving Investors & Rare Coin Collectors since 1989 7200 North Mopac • Austin TX 78731
|
