A Golden Oportunity

March 31, 2009 Inflation, Physical Gold, Physical Silver, Politics No Comments

The financial crisis is not ending, it is just beginning and it brings with it a golden opportunity to buy gold coins. Now is the time to be buying gold coins, no matter what your budget. Don’t let this golden opportunity slip through your fingers.

The Dow is currently up 79 at 7,601, the NAS up 22 at 1,524, the dollar is down .15 (.20%) at 85.55 and gold is up slightly, $2.90 at $918.70. Gold is holding up well in this latest test of the $895, $900 level. While the general equities are not out of the woods yet, even after the trillions that have been earmarked to come to their rescue, gold appears to be unwilling to be pushed below $900 for long.

Mark O’Byrne, executive director at Gold and Silver Investments reports,

“Gold is supported by weakness in the dollar today and expected dollar weakness in the coming months as the Federal Reserve’s balance sheet deteriorates further and U.S. budget deficits and the national debt rise very significantly. This supports gold and keeps it from going too much lower.”

On Tuesday, Standard and Poor’s reported that home values in 20 major U.S. cities fell at the fastest rate on record in January and are now down a record 19% in the 12 months ended in January. This report is not very helpful for general equities and does not point to an end of this financial crisis any time soon. It is easy to forget, with all the bad news that pops up weekly, that this whole mess started with the collapse of the housing bubble.

The key to this whole situation is to see it as a big picture, long term event. The derivatives markets and the massive debt financed economy did not occur over night, even though one might think that a ton of debt has been created in the opening months of the Obama administration. This day of reckoning has been a long time in the making and it is going to take a long time for the dust to settle on the events that are required to sort it out.

It is unfortunate that we are saddled with a Socialist administration that is not interested in solving the problem, but rather interested in exploiting the problem in order to grow government and acquire more power. In the end we as a country have two major problems to solve. Number one is the financial crisis and the righting of our economic ship and number two is the reversal of the capitalist killing power grabs that have and will be laid on this nation in the future of the Obama presidency.

In the long run gold will not be held down by the central planning of the government. It is coiling right now in preparation for another move upwards and it will respond to the deteriorating situation of the dollar. With the big picture in hand it is only logical that we should move to protect ourselves from the results of the government’s meddling in the free enterprise system. This is a golden opportunity that has been laid at our feet. All we have to do is take action.

Every dip in the price of gold and silver for that matter, is an opportunity to buy and accumulate the physical coins. I like American Eagles and Maple Leafs because they are easily recognized and traded around the world. After the mark up you are looking at roughly $950 per 1 ounce coin based on the current spot price of gold. That’s a lot of money for people on a budget, but it need not be a deterrent to buying gold coins. You can also pick them up in 1/4 and 1/2 ounce coins.

The financial crisis will not be over in a matter of weeks, it will unfold over a matter of years. Use the time to buy gold coins of any weight and by the time that you really need them, you will be surprised at how many you have, if you are disciplined.

This regular purchase of coins should apply to silver as well because when gold moves up it will take silver with it. Silver may even have more of a dramatic upside once it drops the label of an industrial metal. Do a lot of research before you buy because the spreads vary substantially between dealers. When news pieces come out saying that gold and commodities are finished, it is usually a good time to buy as they are briefly pushed into the oversold area.

Gold and silver are survival assets and this will become more and more evident as we get deeper into this financial crisis. If you are new to investing in gold and silver, start buying gold and silver coins. The mining stocks are the next phase of your investment portfolio, but you should not be investing in the gold miners until you have put some gold and silver coins into a safe place that you can quickly reach in an emergency. Do not let this golden opportunity slip through your fingers.

Till next time, good luck and good trading!