Why you shouldn't listen to Ben Bernanke


If this account is accurate then it appears that the shortage isn't with Gold, but our ability to meet demand in a timely manner.

We have some damage control information from Forbes.com:

"Gold Coin Shortage
Heather Struck, 11.25.09, 12:15 PM EST
Don't worry, there's not a shortage of gold, just of equipment for coining it in the U.S.

The United States Mint has a gold problem. As demand for precious metal in the futures indexes and in physical gold bullion coins increases as the dollar weakens, there's been a run on the Mint. Don't worry, there's no shortage of gold. It's just that the Mint doesn't have the resources to make it into coins due to outsourcing and budget cuts decades ago.

The problem lies in manufacturing the blanks. The blank planchets are not made at the Mint, which hasn't had the production capacity for this stage of the minting process since the budget cuts of 1981. The Reagan administration began using private companies, which process and ship the blanks to the Mint's West Point, N.Y. site for stamping and engraving. Today there are three refineries that supply planchets to the Mint: VennerBeck Stern Leach in Rhode Island, Sunshine Minting in Idaho and Goldmark in Perth, Australia

Though some have taken the shortage of gold coins to mean a shortage of gold in general, folks in the industry say it's not a worry. The Gold Bullion Coin Act, which put the coin programs in place in 1985, stipulates that the gold must be mined in the U.S. Johnson Matthey ( JMPLY.PK - news - people ), the London-based company that refines most of the gold that is mined in the U.S., says, "there is no shortage of gold" coming out of the ground these days.

The Mint's Oct. 6 announcement that it would not produce any gold "proof" coins this year is testament to its diminished capabilities. Even 5,000 proofs for the 2009 edition of the American Eagle coin series would offer a limited number to collectors that would still be a particularly rare year for the coin. When questioned by Coin World, a collectors' trade publication, about what would be the first skipped year in two decades for the American Eagle gold coin series, the Mint responded that they were just following the law, which is "to produce bullion coins in quantities sufficient to meet public demand."

The demand for gold bullion being 860% higher than it was a year ago, the Mint has found itself filling that demand with all the gold blanks that it can get its hands on. It is difficult to say how many licensed coin dealers are telling their customers they don't have what they need, but earlier this year, Ute Wartenberg Kagen, executive director of the American Numismatic Society, said she was asked by an investor how one could buy 10,000 coins (they are sold in ounce quantities and three fractional versions below that, at a price that is slightly above market value).

Gold bullion coin prices are normally nothing near the rare coin trade, in which the right coin can sell for anywhere between $50,000 and $1 million, but this year Treasury's business coin program is already selling at the explosive rates. In 1986, nearly 1.8 million ounces of gold bullion were sold. The Mint reports having sold 1.1 million ounces by the third week of November this year."


Letter From APMEX:


The United States Mint has suspended sales of gold and silver yet again. 2009 has seen an unprecedented demand for the 2009 Gold American Eagles and 2009 Silver American Eagles as investors have clamored to secure their assets and protect their wealth against the rising tide of inflation.

This suspension in sales is temporary as the U.S. Mint continues to produce these highly sought after coins. At APMEX, we have a very limited supply of both 2009 Gold American Eagle and 2009 Silver American Eagle coins in stock and ready to ship. Buy your gold and silver bullion coins now while they are still available in the marketplace.

Mint shortages have traditionally caused a significant increase in premium – however, at APMEX, we still have these coins available at very reasonable prices. Buy your gold and silver coins today before market conditions change more and prices are driven up from excessive demand.

The news from the U.S. Mint comes on the heels of the recent news of gold's all-time highs. It seems like every day, gold reaches a new high! Already this morning, gold reached $1,186.30 per ounce as investors continue to react to major financial news about gold.

News like this will only drive demand and prices higher, and supplies lower. Get your 2009 Gold American Eagle and 2009 Silver American Eagle coins at APMEX while we still have a supply to meet our customer's needs.

Buy your gold and silver online today at www.APMEX.com!


David McCarty
Director of Marketing
American Precious Metals Exchange


The extent can't be estimated very well but there are reports rolling in that Gold Krugerrands are in short supply and wholesalers are waiting on the South African Mint to ship out more and the US Mint is either out of or having huge difficulties keeping up with demand of Silver American Eagles.

From the US Mint Webpage:
"Update: Due to the continued, sustained demand for American Eagle Silver Bullion Coins, 2009-dated American Eagle Silver Uncirculated Coins will not be produced." (link)

Krugerrand Sources:
Gold Krugerrands Run Out

We will keep you posted as more information comes in.

BullionStacker.Com - A Growing PM Trading Community

Many people are wondering how they can get into the precious metal market, many people want to know how they can sell their holdings of Gold, Silver, and Platinum; and others just have an interest and want to talk about it. This can all be done at one place, and I must say that it is outstanding.

BullionStacker.com is a fairly new community formed by a group of friends that got tired of how a lot of other forums were managed. It was started with the idea of having a place for people that are serious and passionate about precious metals and give them a no-hassle place to buy, sell, and trade their Gold, Silver, and Platinum. I became a member a few months after it was founded and I have completed many successful trades/sales and have not yet had a problem outside of the USPS being slow, and unresponsive.

What sets Bullionstacker.com apart from other forums? Their main rule is to use common sense; meaning that they don't have a rulebook thicker than your precious metal holdings, they don't charge you for buying, selling, and trading, they have a feedback system in place, and they have a very active membership base. The members will also keep you alerted to hot deals found on eBay, other websites, and in magazines which has provided great buying opportunities, some of which were under spot!

If you are looking for a great precious metal community to learn, to grow, to buy, to sell, to trade, to teach, or to just hang out be sure to check out the guys at BullionStacker.com.

Disclosure: I receive absolutely NO compensation in any way by writing this article, or endorsing the forum at all. I am just a member of the forum that wants to share the opportunity.

A Case For Stockpiling: Should Food Be In Your Portfolio?

I know, it sounds weird to think about but should you consider food in your portfolio? Not companies that produce food like Conagra and Kraft, but actual literal, bust open the can and heat it up food. I am being slightly facetious as I know it is not considered an investment by any orthodox standard, but think about it. It has all of the fundamentals stacked against it: Increasing wages, increasing transport cost, increasing population, scarcity, susceptible to natural disaster, inflation, and the slightest disruption in the supply chain and the price shoots up nearly over night!

Consider: very few cities are well equipped for food production. Nearly the entire population depends on large truckloads of food to be delivered to super markets on a daily basis! Consider all of the above examples such as scarcity, susceptibility, and it is a surprise that crises do not occur on a daily basis in the same places. What am I getting at? Well, in case you have been asleep at the wheel, America is not getting more stable.

Just yesterday the FDIC admitted to being in the red by 8.2 billion, droves of people watch FDIC.gov every Friday to see if they have won the "How many banks will fail tonight" bet, Eliot Spitzer just called the Fed a ponzi scheme, China is angry at our fiscal policy, senators are calling for Timothy Geithner to step down, California is basically printing their own currency, Iran and Israel are going at one another like Spy vs. Spy, Gold is at new highs, 14.1% of ALL US mortgages are either in foreclosure or delinquency, and half a million Americans lose their jobs each month. If you think that sounds stable then I will have a drink of what you're having.

So, by stocking up on non-perishable food, you could avoid inflation, the additional transportation cost (fewer grocery trips), panic buying during disaster, waiting for trucks to bring stuff in, and a few other things that make this proposition look mighty tempting. It is just an idea to consider.

FDIC: You're Money Is Insured, Really It Is!

The FDIC is officially broke (not much of a surprise) with -8.2 billion dollars. This just after Sheila Bair made this video assuring everyone that their money is safe and sound. To be fair, at the time of that video the FDIC had roughly 10.4 billion in their fund. So, let's assume that the fund rate of decline would continue at 50% of that amount over the next year. The fund would roughly have: -26,800,000,000. So, this should have you wondering: how is my money insured? Any rational person would surmise that they are backed by the full faith and credit of the US Government!

That doesn't sound like an unfair shake, and it's true too! So all is well right? Wrong. What is the full faith and credit of the US Government worth? Treasury Direct has that answer: -12,011,838,881,463.68. That is negative twelve trillion dollars. So if the FDIC is insuring your money but they are out of money, and the US Government is backing the FDIC, but they are out of money, then that begs the question AGAIN: how is MY money being insured? I can't answer that question for you, and I'm sure few others could provide a correct answer.

ICE Cancels "Impossible" DXY Trades

So ICE cancelled 4,000 contracts earlier this morning (11/20/2009) but they also cancelled similar contracts that occurred on 11/3/2009. Specifically they cancelled 8,000 on 11/3/2009. I find it ironic that two sets of "impossible" trades occurred this month. Could it be that the investors on 11/3/2009 got shut down so they tried to sneak in under the radar at half the number of shares?

Could this be a sneaky way for some traders to spread a broader message of what is going to happen in the future (I know, wishful thinking)? All I know is that the cancellations that occurred cost people money, and we should continue to watch this story as it develops because there could be a lot more meaning to this then is first apparent. Tread carefully my friends, there are some mighty big forces at play here.

Zero Hedge: ICE Cancels DXY Trades After "Impossible" Action Moves Index 9% Higher, $ Plunge Enforcement Team Arrives At Crime Scene

Gold Can Make You Poor! (This Guy Is Serious)

So this morning I had the pleasure of reading one of the worst articles written about how Gold can make you poor. He speaks of buying at the peak of the Gold price and being poor for the next 20 years. Earth to Ian McGugan: you lose money when you buy at tops, and especially at artificially created tops. You might want to research Nelson Bunker Hunt, and you might want to consider an artificially strong dollar tends to do that to commodities.

The problem with Ian McGugan's myopic post is that he approaches the subject like he is a Wall Street Investor, he prices everything in dollars. The problem is that most precious metal volatility is due to currency swings. Why is Gold setting records all the time? Because our currency continues falling in value! Gold isn't supposed to "make" you money in the long run, it can in the short run, but in the long run it is supposed to give you an inflation adjusted equivalent.

But Ian, you can have your paper. The chart below indicates that 77% of fiat currencies have failed in history, but Gold is still here. And the stock market that you champion so much is back to the same levels it was at in the late 1990's. So you'd still be waiting 10 years, or we can play your favorite game and say that if you bought at 14,000 you'd have lost a ton of money now!

Just remember Ian McGugan, many commodities follow a similar pricing pattern, and it is no secret that commodities have had it rough because of the Dollar's strength. If you can't see value priced beyond Dollars then I agree, you should stay as far away from commodities as possible because you will likely lose your butt. Here is a little something to think about, I bet all of the people who invested in Enron would have gladly taken half of their holdings in Gold, the same with Bear Stearns, Lehman's Brothers, Linens n Things, Circuit City, Bernard Maddoff, and hundreds of other companies that have failed in the last two years.

No one, in HISTORY has ever lost 100% of their money buying real, physical Gold. So, on that note I declare:



H1N1 Watch: N95 Masks Are In Short Supply

There are reports coming in from around the country suggesting that N95 masks, which are considered to be fairly effective at preventing the spread of H1N1 (Swine Flu) may be in short supply. Due to the continuing reports of increased infection throughout the world people and hospitals have begun to stock up in the event of a much larger outbreak. It looks like you may want to stock up while Wal-Mart, CVS, Walgreens, and various other stores still have them!


H1N1 Watch Articles:
Florida Forced Quarantine
President and NY Declare State of Emergency
Retired Chief Medical Officer Speaks Out About "Vaccine"
Over 50% of US Adults Say No To H1N1 Vaccine

H1N1 Watch: Over 50% of US Adults Say No!

According to CNN.com over 50% of US adults have said they don't want, nor will they take, the H1N1 vaccine, and with good reason: They are scared of side effects. Who wouldn't be worried when there's Mercury in them? I mean, we aren't even allowed to have thermometers with Mercury in it, let alone having it injected in us. Apparently Mercury is only no poisonous when CDC and WHO say that it is safe to be injected in you. Cheers to all who have awoken to the scam that is the H1N1 "vaccine." As far as we're concerned, this vaccine will protect you from one thing and one thing only: A longer life.

CNN Article: http://www.cnn.com/2009/HEALTH/11/18/poll.h1n1.vaccine/index.html

H1N1 Watch Articles:
Florida Forced Quarantine
President and NY Declare State of Emergency
Retired Chief Medical Officer Speaks Out About "Vaccine"
N95 Masks May Be In Short Supply

Fake Gold: China and Ethiopia. Could You Be Next?

Apparently, the latest fad hitting the Gold market is shipping fake bars. This has been encountered in two countries that we're aware of and, make no mistake, many other countries are most likely standing in their vaults right now looking. The first report was from Ethiopia last year and the second report is about London Good Delivery bars shipped from the United States to China (Cite). Ethiopia had shipped bars to South Africa, and received them back. South Africa claimed that these bars were Gold plated Steel (Cite)!

Ethiopia had located another stash of bars they have that are also Gold Plated steel and I'm sure many more may have been found throughout the world. I'm willing to bet that all of China is wondering about their "Good" Delivery Bars. One can only begin to speculate at the depth and breadth that this scam encompasses. And it probably makes most investors wonder: Is my Gold real?

We'd be quivering too if we were sitting on shares of the GLD ETF.

The Precious Metal Investor Paradox

I made this flowchart for any newbies that may not understand how purchasing precious metals works.

Cash4Gold And The Class Action Law Suit

A class action law suit was filed in California against Cash4Gold because their jewelry was either "lost in transit" and only insured for $100.00 or their checks were mailed too late for them to get their Gold back. This sounds awfully similar to the 10 Confessions of a Former Cash4Gold employee. Feel free to review an article we wrote previously exploring the question: "Is Cash 4 Gold a Scam?" We can't say whether it is or not. But like many Grandfathers once said "If it walks like a duck, and talks like a duck, then..."

More Info on the class action suit:

Does Your Mansion Cost You $74,000.00 a Month?

If your name is Mark Yaffe then the answer to that question is: yes! You might know Mark as the embattled President of National Gold Exchange (NGE) A rare Gold and Silver coin dealer, but his multi-million dollar mansion is embroiled in dispute by his bank. What is the monthly upkeep of this mansion? If you guessed $74,000.00 you're correct. The $25 million dollar mansion is 29,000 square feet and contains 13 bathrooms and 14 fireplaces, because that is exactly what you need in 85 degree year-round Florida - 14 fireplaces. For pictures and more information you can view the below link.

View Picture And Story Here

Healthcare Watch: House Passes Healthcare Bill H.R. 3962

With a vote of 220-215 the US House of Representatives passed the Healthcare bill. It's sad to see that more than half the house wants to further destroy our country. How do you pay for a healthcare program when you have no money? I hope this bill dies in the senate or God help us all. I can't imagine trying to pay for yet another beastly program when we're having to request debt ceiling raises! Not to mention that Pelosi wants to send you to jail for 5 years if you don't comply. What kind of socialist garbage is that? This is the land of the free, this is the country where you should be able to decide. But no longer my friends, no longer can you choose. You must stand in compliance to the socialist gun that Pelosi holds to your head.


A Break From All of The Bad News

This is a video to remind us of the simple things in life that make dealing with a lot of the garbage that we see everyday worth it.

H1N1 Watch: Retired Chief Medical Officer of Finland Says H1N1 is "Rubbish"

This is a very sobering video of Dr. Rauni Kilde stating that H1N1 is pure "rubbish," that it's being perpetuated by "big pharma," that it is meant for "depopulation," and that there appears to be a split in the Bilderberg group over the plan and not everyone agrees with Kissinger's opinion of the "useless eaters." You can watch the video below and you can also view the 1974 Kissinger report (NSSM 200) that talks about over population and the need for bringing it down. Without further adieu, here is the video of the Former Finnish Chief Medical Officer:

H1N1 Watch Articles:
Florida Forced Quarantine
President and NY Declare State of Emergency
Over 50% of US Adults Say No To H1N1 Vaccine
N95 Masks May Be In Short Supply

AIG profitable?

According to Money.CNN.Com, AIG is Profitable again! I'm glad to hear that happy days are here again, except... wasn't AIG "profitable" just before the credit default swap debacle? So this supposed "great news" lends me to wonder: What parlor tricks could they possibly be using to try and keep the very charitable, big raise giving, drunk on their too big to fail status, throw a party after the tax payers bailed them out AIG going?

From CNN.com (commentary added by us):

"The troubled insurer said it continues to benefit from stabilization in the housing (what housing stabilization?) and credit markets (you mean the ones that are so frozen that small and medium sized businesses still can't get loans?), but future quarters will continue to be volatile (at least a little truth)."

Obama Unemployment Would Not Exceed 8% With His Plan

The stimulus passed and where are we? 10.2% Unemployment! Any who believed in Obama's change I hope has woken up. He is just like all the other politicians. Just watch some of his videos like this one below. To save you the time just skip to 1:10 in it so you can hear him say that without his "stimulus" unemployment would reach double digits. Well the stimulus passed... WE'RE HERE!

We are without jobs, we are without a balanced budget, we've got banks falling left and right, we've got an insolvent FDIC, we've got record foreclosures, we've got the Fed monetizing our debt, we've people dumping the dollar (Most notable recently is Warren Buffett buying the railroad and China buying tons of Gold and Copper.), we can't raise the rates because of all of the ARMs that are resetting. America: WE ARE PAINTED INTO A CORNER.

If we don't raise interest rates we will have inflation, if we raise interest rates we'll have another housing crisis. If you aren't preparing for the worst then you will be sorely dissappointed in the future my friends, because we haven't seen anything yet!

A Metal Trading Primer For Gold and Silver

For all you young guys starting out, you may be wondering how you can get metal for as cheap as possible. I'll do the best I can to help you out here. These are some of the assumptions I'm making about you as I write this. If you don't fit these then you probably already know the information contained herein:

    ♦You probably don't have deep pockets
    ♦You're brand new to metal trading
    ♦You don't have a lot of experience doing many other types of trades

Part 1: Buying

The way you need to start out is the most obvious way: buying. The easiest way to get metal is to trade FRNs (Federal Reserve Notes, aka Paper Cash) for the Metal. This is also referred to as "buying" it. The cheapest way to obtain metal by this method is to, like everything else, buy it in quantity. This accomplishes two things:

    ♦Quantity Discounts offered by seller
    ♦Lower shipping and handling charges (yes, this must be included in your Dollar Cost Average (DCA))

This method is not wallet friendly but is about the only way that you can get started. Now, you can try buying locally, which I encourage to support small businesses, but you will most likely pay more. This will happen because of two reasons:

    ♦The seller doesn't know you, and you two haven't established a rapport
    ♦Small businesses don't have the same economies of scale as the large online sellers so they have to charge more. In addition, the store has the added overhead of rent, electricity, etc.

So, don't expect to walk into a coin shop "guns-a-blazin'" with the latest printout of today's spot price and demand it. You'll learn quite quickly that the dealer has probably run into a million people just like you and will just as soon tell you to walk out the door. Remember, this guy is sitting upon thousands, if not hundreds of thousands, of dollars worth of highly liquid assets, he doesn't need your business, he has other customers to serve.

Part 2: Trading Metal

Once you have some metal, you may want to increase that. There are a few ways to do this, but you need to understand your course of action. Smaller denominations (aka Fractionals, Fracs) like 1/2 oz, 1/4 oz, 1/10 oz, etc are considered more valuable to some because of their increased liquidity and higher price.

What does this mean? You could potentially buy 1/10 frac gold coins, and potentially trade 8 or 9 of them for a 1 oz gold coin. The reason I say 8 or 9 is that most times you have to make some type of cash offer along with your fracs to make it more fair. Few people will trade a 1 oz coin for just .8 oz in fractional. You will find more people willing to trade .9 oz worth of fracs for a 1 oz coin, but there probably won't be a line of customers so be patient. That sounds great, what's the drawback? Ahh yes, the drawback.

    ♦Fractional coins cost more per oz. You'll end up paying roughly spot + $100.00 (at the least, but more commonly +$200.00) for a fractional 1/10 gold coin. Meaning if spot is 1100 an oz, you'll probably be buying a 1/10 coin for $130.00 or $1,300 per oz.

Similar rules apply with silver as well, but due to silver's affordability, there isn't as much advantage trading silver fracs for silver 1 ozers.

Crossing Borders
Crossing the metal borders is where you can really gain some leverage trading. In order to do this you must become very comfortable with the concept of the Gold to Silver Ratio (GSR). The GSR is just that, the price of Gold (POG) divided by the price of silver (POS). What this ratio tells you is how many ounces of Silver you can get for each ounce of Gold. Historically the GSR has been on both sides of the spectrum.

During roman times, I believe, the GSR was 1:3 meaning one ounce of Gold could get you 3 ounces of Silver. The largest gap we've seen recently was about 1:85 and currently it is 1:60 meaning that one ounce of Gold will buy you 60 ounces of Silver.

So you're asking yourself: How can I play this ratio? By Trading your Silver and Gold on http://bullionstacker.com/ (BS) you can take advantage of this ratio. How you play it will depend on where you think Silver or Gold is going. Today you can get 1 oz of Gold with 60 oz of your silver, but if you believe that Silver will out perform Gold, meaning that the POS will increase faster than the POG, then you will want to wait, because if POS does increase faster then you'll see the GSR decrease. Lets say the GSR decreases to 52, Now you can get 1 oz of Gold for only 52 oz of silver, which means you've saved 8 oz of silver!

But What if I think Gold is going to outperform silver? Then you better buy Gold now, or trade for it now. When the POG outperforms the POS then the GSR goes up. So if you can get into Gold now then you can wait for the GSR to go up. So let's say you trade your 60 oz of silver for 1 oz of Gold. Then the GSR goes up to 72. You can now trade your 1 oz of Gold for 72 oz of Silver. You've now increased your Silver holdings by 12 ounces and you really didn't have to do anything! Or you can stay in Gold and be happy that it outperformed Silver.

This is just a Primer to help you learn the fundamentals. I did take liberties with my numbers and do not guarantee that anything in this Article will go as stated. In many scenarios I neglected the cost of shipping and handling, which should be considered. In nearly all instances, the person shipping the Silver will need to pay more and this should be considered in the calculations.

Using this Article: This article is the copyrighted work of Debris and is to not be republished anywhere without this notice and citation links to both http://bullionstacker.com/ and http://uselephant.blogspot.com/ . Thank you.

Your Safe Deposit Box, Not Safe

Snipped from ABC News, Link at the bottom of the article:

"The 50 U.S. states are holding more than $32 billion worth of unclaimed property that they're supposed to safeguard for their citizens. But a "Good Morning America" investigation found some states aggressively seize property that isn't really unclaimed and then use the money -- your money -- to balance their budgets. " (continued at link)