Big Funds Run to Gold

Big fund managers are beginning to Buy Gold, but it's still a tiny proportion of total investable wealth...

SO IT LOOKS AS THOUGH the big rush to Buy Gold is about to get started, reports the Mogambo Guru for The Daily Reckoning, as Julian D.W. Phillips of GoldForecaster.com writes that "The combined gold holdings of the major Gold Exchange Traded Funds and Barclays Gold Trust have grown to 1079.83 tonnes – growth of almost 70 tonnes in two weeks."

This is just part of the good news, too. Because "There are many other gold bullion-holding funds in the developed world from Canada to Switzerland that are not included in this total. If they were the total would be approaching 1,200+ tonnes. Clearly we are seeing a stampede of institutional fund management into gold at present!"

One such fund is the Central Fund of Canada, the top-performing trust in Canada (up 117% in 3 years; the Gold Price in Canadian Dollars is up 77%) and which holds only silver and Gold Bullion, is selling another giant swath of shares to get the money to, as I understand it, buy another big potload of precious metals, which is not that remarkable, I guess, except for where the underwriter, according to the press release, "Exercises Its Right To Purchase Additional Class A Shares", which made a big impression on me for some reason that I don't understand, but I sense that "somebody knows something."

To keep things in perspective, Mr. Philips reminds us to "Bear in mind that at $900 an ounce, one tonne of gold costs $29 million, so far." But even he admits that gold really hasn't gotten up a good head of steam yet. Because "With global pension fund assets estimated at $18.6 trillion by the end of 2005, only a tiny proportion of that amount has entered the Gold ETF market so far. So the 1,200 tonnes held in this manner, via a trust structure, represents only $34.8 billion or 0.19% of these pension funds assets (there are many other types of funds other than Pension Funds as well).

So "Quite a way to go before gold makes a dent on these portfolios."

And on the other side of the trade, "Gold Mine Production Down, But Costs Up 24% World-Wide" says a report at SilverMiners.com, which tells you everything you need to know about the future Gold Price, which assumes that you already know that the price of everything is determined by the intersection of supply and demand, and in the case of gold, supply was down by 88 tonnes last year and is still going down, while demand is going up, and under which there is a rising "floor" price since the costs of gold mining are mounting, and will continue to mount as long as the corrupt socialist morons running the world continue to increase deficit-spending by governments, and as long as the corrupt socialist morons running the central banks continue to create the money and credit to finance the damned deficit-spending, which causes higher prices!

And, of course, this is already old news to gold bugs around the world, as Nick Barisheff writes in his essay, "Making Money in Troubled Times with Gold" at SeekingAlpha.com that in the last year "Gold rose: 9% in Euros, 45% in British Pounds, 25% in Russian Rubles, and 38% in Brazilian Reals" which is not to mention that gold "increased by 31% in Canadian Dollars."

The reason for all of this is that, as he explains, "In 1971, when the US abandoned the gold standard, total M3 money supply stood at $800 billion. Since then, the Federal Reserve has increased the money supply well in excess of GDP growth. In 1987, Alan Greenspan took over as Federal Reserve chairman and opened the money supply floodgates. He expanded the US money supply by $6.5 trillion during his 19-year tenure to $10 trillion - more than all of the previous Fed chairmen combined. Ben Bernanke surpassed Alan Greenspan's record by adding another $4 trillion in just the last three years."

What does this have to do with Gold Investment and gold going up in value so high that I can quit my lousy job and get the hell away from my clinging family, all the time whining "Please stop Buying Gold and please just buy us some food, daddy!" and all the rest of their gimme gimme gimme?

Well, since you asked, the point is that "At the end of 2007, above-ground privately held gold bullion amounted to less than $650 billion, and the total amount of silver and platinum bullion was less than $5 billion. Put together, this is less than one-third of 1% of the estimated $187 trillion of global financial assets", which doesn't even start to address the implications that "China, Russia and the OPEC countries are considering substantial increases to their gold allocations in order to diversify their US Dollar risk", which means that "Any reallocation by these countries will drive prices much higher."

And it is already beginning, as "Last year investors experienced shortages of the smaller wafers and coins, with premiums running as high as 10-40% for gold and 30-100% for silver", which may have been what led Citibank to predict that gold could soar to "$2,000 an ounce sometime in 2009."

And in that regard, people keep asking me if the government is going to confiscate gold, and I tell them "Why don't you ask the government?" Hahaha! As if they would tell you the truth! Hahaha!

But not even mentioning that the Federal Reserve can print up all the money it wants, so they would not confiscate gold for the money, there's the fact that all the gold held at the Federal Reserve is chump change. Because if the Fed still has all of its reported 261 million ounces, then at even $1,000 an ounce, all the gold would only be worth a lousy $261 billion dollars. That's less than a quarter of the Federal budget deficit for this year alone! Hahaha!

And then the government has to store the gold someplace and start absorbing all of the expenses of guarding it, which doesn't even address that the "takings clause" of the Constitution which prevents the government from taking anything away from you, including gold, without paying full market value to you, the owner.

So will the government confiscate gold? Why in the hell would they want to do that? Hahaha!

And that means that YOU should be buying it! Or so I reckon. Ready to Buy Gold?

5-Figure Gold & Central Bank Sales

STOP PRESS! European bank breaks ranks, buys gold...

IT HAS BECOME CLEAR that central banks are Buying Gold for their reserves, writes Julian Phillips for the Gold Forecaster.

Here is a brief history leading to today – plus the present position of central banks as they turn to buying bullion for diversification, inflation-defense, and sovereign protection.

Massive Gold Sales
From the early 1980s and for the next 20 years, gold was under threat of massive sales from the world's central banks.

Many commentators reported that the overhang of gold above the 'open' market was so great that such sales would eventually lead to central bank reserves in the developed world holding no gold at all.

Central banks had further worsened the situation by loaning metal to Gold Mining companies, through the bullion banks, allowing them to sell their future output at current prices and thus finance gold production to a far greater extent than warranted by the price of gold during that time.

This acceleration in the production of gold allowed the Gold Price to be pressed down $850 to $275, the point at which Britain, at the instruction of today's prime minister, Gordon Brown, instructed the Bank of England to sell the greater portion of its gold reserves. From the turn of the millennium, however, this perspective changed dramatically.

Limiting Central-Bank Gold Sales
In 1999, and with gold sales making international headlines as the price fell, the major industrialized-world central banks met and established the Washington Agreement to restrict "dumping" and stem the plunge.

The 15 signatories announced to the world that it need not fear uncontrolled sales of gold reserves for the next 5 years, capping annual sales to 400 tonnes. While the US and Japan were not signatories, they gave tacit agreement to such a limitation. Since then, neither of them have sold gold on the open market.

Following the end of the 'Washington Agreement' in 2004, a second agreement – called simply the Central Bank Gold Agreement – extended the situation for another five years and with annual limits of 500 tonnes. This agreement now ends on 26 Sept this year.

Sales were limited to the sales previously announced by the signatories, with the exception of Belgium and Spain, who made no prior announcement to their sales. Under the second Agreement's 500-tonne a year limit, the ceiling has not been met. Sales are well below the limit so far.

Halting Central Bank Gold Sales
This slowing of gold sales from European banks in particular has been of great significance. They appear to have lost all appetite for gold sales in 2009.

Indeed, France now looks an unwilling seller, but under Presidential instruction it has been forced to do so. Italy has had no plans to sell any of its gold. Germany had the option to sell 600 tonnes under the CBGA, but it has not taken this option up. Switzerland took some of this German option, but it has ceased selling now.

It would be surprising if the signatories sold more than 150 tonnes of gold this year (Sept. to Sept.), let alone the ceiling amount of 500 tonnes. And next year, with or without a new agreement, we expect no such sales from central banks.

Central Banks Now Buying Reserve Gold
The potential IMF Gold Sales are not yet part of any central-bank gold selling policy. And just as the tide turned in 1999 it appears we are rapidly approaching another watershed in the history of gold in the monetary system.

Countries not seen as an important part of the global monetary system have, in the last few months, turned buyers of gold. Ecuador bought 28 tonnes, doubling its reserves. Venezuela bought another 7.5 tonnes, adding 5% to its hoard. These purchases are not deemed of great significance, however, compared with the big central-bank Gold Buying news.

Russia, at last – and after talking about it for over one year – has begun to Buy Gold aggressively. It was reported that Russia bought as much as 90 tonnes of gold for its reserves in the last 3 months. Previously it held 495.9 tonnes. So this is much more significant, as it is a large figure in the small 'open market' for Gold Bullion.

Prime minister (and former president) Putin is reported to have said that Russia wants to see gold forming 10% of Russia's reserve. Now the process of getting up to that level could have begun. Even so Russia has little influence on global central bank thinking, so such increases are not thought to directly influence the principles behind gold as a reserve asset.

That's not to minimize the impact of such purchases, however. If Russia were to keep up this pace of acquisition, it would be able to buy 360 tonnes a year and have a very significant impact on the Gold Price. But the principles behind gold as a reserve asset are affected far more by the following news.

During the second week of March, reports the European Central Bank (ECB), one signatory to the monetary union agreement actually purchased gold – the first time we have seen them do it. The purchase was not simply of Gold Coin (which has happened before, seemingly just for "housekeeping" reasons at the local mint), but rather of Gold Bullion.

In other words the ranks of central bank selling in Europe have been broken and one has turned buyer!

We feel more positive now in our belief that European central banks – the source of so much supply in the last 20 years – are now unhappy sellers. They look inclined to change their views to the buy side.

The very fact that one central bank in Europe has turned buyer confirms this. There is little doubt in our minds that there are conflicting views now amongst the heads of the leading European central banks on gold.

Middle Eastern Central-Bank Gold Policy
Meantime, according to the World Gold Council's new chief executive Aram Shishmanian, in the Middle East the new monetary union intend to have "gold play a prominent role in Gulf CC economies".

Gold "may play a role in that basket of currencies on which the GCC common currency will be pegged," he says.

Of course, the inclusion of gold in a basket of currencies would simply be for valuation purposes. It does not, of itself, imply that these central banks will Buy Gold for their reserves.

But "Gulf central banks, along with the central banks of Brazil, Russia, India and China, are expected to increase their gold reserves," Shishmanian went on, speaking to the region's Business 24/7. "Central banks with low reserves of gold are looking to increase their reserves. They are trying to analyze what the right balance should be. They are becoming aggressive. Currently the belief is that if more than 20% of a central bank's reserves are in gold, it is overweight, but this perception is changing.

"The metal is becoming an asset class in the region, and Gulf investors are looking at long-term investments in gold as a hedge against inflation."

We are certainly not in a position to contradict what the new WGC chief says. After all, he has the resources and contacts to be authoritative on the matter. And if the World Gold Council's CEO is correct, then he will have confirmed that 2009 and 2010 will be the year that heralds the return of gold to the global monetary system.

After nearly 30 years of opposition to gold by central banks and occasionally governments, it is a remarkable turnaround. This tells us that gold is returning to the monetary arena again. Yes, the world of Gold Investment had expected this for a long time. But now it feels a bit like seeing an oasis in the desert!

If right, we expect to see both Russian and Chinese gold production go straight into those countries reserves and not even reach the open market. That could account for nearly 600 tonnes of supply disappearing. Now add to that the halting of sales from European central banks, a perceived 500 tonnes a year. If this trend continues, then gold – as an investment – will be fully rehabilitated.

This is by no means the largest effect that the central banks' change of heart will bring about, however. The recognition by central banks that gold has a role in the monetary system will influence investors, both institutional and individual.

Should that happen – and let's say 5% of funds managed by pension and insurance groups moves into gold – then an amount of $920 billion, in the States alone, could head gold's way. Only a five-figure Gold Price could accommodate that volume of money in the gold market. Now add to that figure the same inclination in the rest of the world.

Any such rise in price will stunt the demand for sure, but be certain that gold is not simply in a bull market.

Gold vs. Mervyn King's "Queasing"

How to defend against central bankers defending against their worst nightmare...

A PROLONGED CLIMATE of deflation is a central banker's worst nightmare, writes Gary Dorsch in his Global Money Trends.

Deflation tends to deter consumers from spending until prices become even cheaper, and there is a risk that deflation could become so deeply embedded in consumer psychology, it thus leads to a prolonged period of falling prices and chronically weak company profits.

Deflation, or falling prices over a long period of time, increases the cost of servicing debt as cash inflows are squeezed. Matters are made worse by falling wages and job losses, which can led to widespread defaults on auto and credit card loans. And although the UK economy has been spared the trials of deflation since 1947, the Bank of England is worried that British households with high debts could fall prey to the "debt-deflation" trap this year.

Britain is a nation of borrowers rather than savers, and it was a combination of falling prices and soaring debt burdens that plagued the US economy in the 1930s. Britain's total personal debt – the amount owed on mortgages, loans and credit cards – stands at £1.46 trillion, up 165% since 1997. Each household now owes an average of about £60,000.

Thus the Bank of England's monetary policy going forward is expected to be geared towards combating the scourge of deflation. It will attempt an aggressive inflation to reverse it.

Alongside a half-point rate-cut to 0.50% on March 5th, the Bank of England also unveiled its nuclear arsenal, aiming to purchase £100 billion of British gilts, and £50 billion earmarked to buy corporate bonds and commercial paper. Some £75 billion will be disbursed over the next three months.

Bank of England chief Mervyn King commented, "Nothing in life is ever certain. These measures, we think, will work in the long run. I can't be sure how long it will take."

Put another way, "We are now towards the end of what is pretty clearly going to be a first quarter in which national output falls very sharply," said Bank of England member Kate Barker on March 13th. So "I strongly support the move to Quantitative Easing, and once it became necessary, it was important to act in a decisive manner.

"To gauge the effect of the purchases, I will be looking for a flatter gilt yield curve, narrower corporate bond spreads, and other positive effects on a range of assets. The bank may need to reverse these gilt purchases quickly, once they have their effect."

The Bank of England's shift to what the local papers are now calling "queasing" jolted the British gilt market, driving benchmark 10-year yields below the December lows of 3.0%, and into closer alignment with the slumping Dow Jones Commodity Index, which is hovering some 30% below its level of a year ago, measured in Sterling currency terms.

Although the UK government's official inflation rate remains elevated in positive territory, it's widely expected to turn negative in the months ahead, mirroring the sharp slide in the global commodities markets.

The lessons learned from the Great Depression, as well as from Japan's post-bubble economy in the 1990s, has moved several central bankers into shocking the system with Quantitative Easing, trying to arrest deflationary expectations and reduce the real burden of debt.

The Bank of England has moved boldly, aiming to resurrect the devil of inflation. And whereas the Japanese spent around 5% of their GDP on QE – otherwise known as printing money to buy government bonds – the BoE has already committed to spending just over 10% of GDP.

This comes at a time when the UK's broad M4 money supply is already expanding at a record 18.8% annualized clip. It could soon rival the growth rates seen in third world countries.

But with a record two million Britons signing on for unemployment benefit last month, the BoE has no interest in defending the principles of sound money.

"Most of us come from the generation that grew up believing that mass unemployment and world recession were things of the past, relevant to the history books but not the textbooks," declared Bank of England chief Mervyn King on March 17th.

"That assumption is under threat," he warned. Hence the ongoing surge in the quantity of Pounds in the world, and the attack on their value.

Japan Inflates, Gold Jumps

Why Buy Gold? The Bank of Japan is printing two in every ¥3 of Tokyo's new government debt...

THE JAPANESE BANKING CRISIS of the 1990s and early 2000s had roots similar to the American crisis today, writes Gary Dorsch of Global Money Trends.

A stock market and real estate bubble both burst, leaving banks holding $450 billion in loans that were virtually worthless. Japan's "lost decade" of growth followed, providing powerful evidence of the danger of allowing deflation to emerge and persist.

Under deflation, profits shrink, investment dries up, and consumers spend less in anticipation of even further cuts in prices. And deflation is very hard to remove.

Japanese wholesale prices in February 2009 were 1.1% lower than a year earlier, the first annualized decline in six years, putting Japan on course for its second bout of deflation since mid-2000s. Japan's economic output contracted at an annualized 12.1% rate in the fourth quarter, meantime, its fastest rate of decline since the 1974 oil shock, shrinking about twice as fast as the United States and the Eurozone due to its heavy reliance on exports – exports which sank by almost one-half last month, driven down by the sharp rise of the Japanese Yen.

After Japan's stunning 10% drop in industrial output in January, a similar GDP contraction in the January-March period is expected, as the global downturn intensifies. Fearing that a sliding stock market will erode the capital of the Japanese financial sector, the Bank of Japan has devised a dual scheme to buy ¥1 trillion of stocks directly from banks, and a separate plan to buy ¥1 trillion yen ($10 billion) of subordinated bank debt, in order to bolster their capital bases, and prevent a drought in lending to companies and households in need of cash.

On March 18th the Bank of Japan, the original pioneer of "Quantitative Easing", raised its nuclear threshold.

It signaled a plan to monetize a record ¥1.8 trillion ($18.3bn) of Japanese government bonds (JGBs) each and every month, up from ¥1.4trn previously. Effectively, across the fiscal year as a whole, the Bank of Japan will monetize two-thirds of Japan budget deficit – projected at ¥33 trillion – as the government prepares more spending to cushion the country's worst recession since World War II.

Not surprisingly, the Bank of Japan has held its overnight interest rates steady at 0.1%, squarely within the Fed's targeted range of zero to 0.25% for the fed-funds rate. And most importantly, throughout this decade, the Japanese central bank has displayed its virtual mastery over the world's second largest bond market, with $8.7 trillion-worth of JGB's outstanding, by locking the 10-year Japanese yield within a very tight range between 1.20% and 2.00%, much to the dismay of Japanese fixed income investors.

One of the biggest out-growths of the BoJ's fixation with the Hallucinogenic Quantitative Easing Drug and ultra-low interest rates, was the spawning of a $7 trillion "yen-carry" trade. It vastly inflated global stock markets worldwide, and – in the end – boomeranged on the Bank of Japan when the carry-trade unwound, propelling the Japanese Yen to 16-year highs against the dollar and driving the Nikkei-225 index to 26-year lows.

Another unintended consequence of the Bank of Japan's overdosing on the QE-drug, has been the multi-year bull market for Tokyo gold, which tripled in value in Yen terms. Repeating the same mistakes of the past, the Bank of Japan's 0.1% loan rate and newly-boosted JGB purchases have sent the Gold Price in Yen from below ¥2,000 per gram in October to above ¥3,000 in late Feb., compliments of the BoJ's money printing machine.

This rate of monetary debasement explains why the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, traded in New York, has seen its holdings rise to a record 1,114 tonnes, up more than 40% from the start of the year.

Because with increasing regularity worldwide, central bankers are engaged in the most extraordinary currency devaluations ever witnessed. The results of these interventions could be heightened currency volatility and stock market instability.

While the Fed can afford to open the monetary flood gates now, when the economy does recover, it puts a great deal of weight on hard-core inflationists knowing how to tighten again.

They were supposed to do something similar in 2003-05, but instead, former Fed chief "Easy" Al Greenspan kept interest rates submerged too low for too long. The Greenspan Fed's decision to open the monetary spigots inspired a global commodity boom unlike any since the 1970s. A massive housing bubble also developed, feeding the sub-prime mortgage debt bubble, which ultimately burst, and led to the worst financial crisis and economic contraction since the Great Depression.

Wall Street sees the Fed's re-inflation efforts as a quick-fix to ease debt burdens and perhaps stabilize housing values. Congress and the White House see a way to issue $2 trillion of debt without having to pay the penalty of sharply higher interest rates. But gold bugs are focused on the big picture, and are steady buyers of the yellow metal.

Peter Munk, chief of Barrick Gold, explained on March 18th, "I happen to be very optimistic right now about Gold Prices. I think they are going to be significantly higher than last year.

"As the world becomes less and less secure in terms of normal investments, and people lose faith and confidence in bonds, stocks, secured debt instruments, people turn to gold. It automatically attracts people in direct proportion to their fear, and that is fear of losing their money."

India's Latest Gold ETF

INDIA'S LARGEST PUBLIC-SECTOR BANK, State of Bank of India (SBI), today launched a new gold exchanged traded fund with an ambitious plan to collect at least 1.5 billion Rupees ($29.7 million) of investments in the first instance, reports Commodity Online from Mumbai.

The Gold ETF from the Mutual Fund division of SBI is the sixth exchange traded fund in the yellow metal to hit the Indian markets. Banks and financial institutions are getting ready to launch new gold-related schemes just as India – the largest retail market for Gold Bullion in the world – suffers a severe drop in consumer demand thanks to record-high prices and the ongoing economic problems.

Gold imports to India have fallen to zero each month in 2009 so far. SBI officials said on Monday that the Gold ETF will be open for subscription until April 28th.

The fund will be then listed on India's National Stock Exchange, and R.S.Srinivas Jain, senior vice president and chief marketing officer of SBI Mutual, said that the bank is bullish on the growth of Gold ETFs in India.

"We feel that India has a great potential for more Gold ETFs. We are planning to raise good money through the exchange traded fund in gold."

He said the fund house – a joint venture between State Bank of India and France's Societe Generale Asset Management – plans to market the scheme through the state-owned bank's branches.

The SBI Gold ETF will be benchmarked against the London AM Gold Fix, and the gold used to "back" the value of each share in the trust fund will be imported by Bank of Nova Scotia on behalf of SBI Mutual.

In line with the rise in Indian Rupee Gold Prices, returns on India's five existing Gold ETFs reached 6% during the month as the yellow metal touched a new high.

Launched in 2007, Gold ETFs in India are managed by five fund houses – Benchmark Asset Management, UTI Mutual Fund, Kotak Mahindra Mutual Fund, Reliance Capital Asset Management and Quantum Mutual Fund.

But although these ETFs are growing in size year on year, they remain negligible when compared to India's previous annual imports of around 700 tonnes.

In India Gold Prices rose roughly 40% over the past year. Going forward, returns for Gold ETF investors will depend not only how global gold prices fare, but also on the direction of the Rupee against the Dollar.

Saving & Spending

If the burden of keeping the whole world in work feels too great, just remember what John Maynard Keynes advised...

"Saving the savers is not the priority...This is surely the time to encourage people to spend, spend, spend..."
- Editorial in the Financial Times, Tues 6 Jan.

"Borrowing our way out of debt...is exactly the right prescription for our present problems..."
- Anatole Kaletsky, London Times, Thurs 8 Jan.

"If the stimulus package is too weak, conservatives will pile on after it fails to deliver, claiming that the whole concept has been discredited..."
- Paul Krugman, New York Times blog, Sun 11 Jan.


TIME TO SAVE MONEY...? Or even freeze a little of your wealth in Gold Bullion? Whatever the correct course or you, trying to fix the blow-up in credit with fresh money and debt is about to whack savers worldwide. Never mind the rights or wrongs It's time to spend! Spend! SPEND! regardless.

"I'll bring paper!" cry the laureates, and "I'll bring ink!" cheer the columnists, now rocking the boat in place of Percy Bysshe Shelley's poor rain-lashed poets, those unacknowledged legislators of the world.

And there, leaning over the double-pull press...sleeves rolled up, eye-shades on...the policy wonks and elected officials are busy setting the type.

"Only more debt can save us," they mutter, "from all the debt we've created. Hey! Call the type-casting guys...We need more dollar signs and zeroes, pronto!"

Will it work? Might it prove immoral? Can lumbering the future with new debts, just to patch over yesterday's mis-allocation of capital, ever be justified?

No matter. New spending and debt is just what we'll get...like it or lump it. This week's Washington bounce – scratched across equity, currency and commodity markets at Thursday lunchtime in New York – ran back into the red by the time London closed Friday. Whether promised or paid, it had totaled $1.3 trillion on one day alone! But why ever not?

"Even if you're deeply concerned about [our] future solvency," as Paul Krugman blogs from Princeton, "will going for, say, a $300 billion stimulus rather than an $800 billion stimulus do anything significant to help...?"

Put another way, "Obviously, the national deficit is important," says Joe Stiglitz, America's other No.1 bearded economist. (Well, joint-No.1 after Ben Bernanke perhaps...) But noting how some $300 billion of Obama's $800bn stimulus will be instantly swallowed by regional state budgets (now $150bn per year in the red thanks to the collapse in local and property tax payments), "we also have to decide at this juncture what is the priority," he smirked to Bloomberg on his way out the door from a conference last week.

"And the priority is stimulating the economy. If you don't stimulate the economy, the [government] deficit will get larger anyway, because GDP will go down and tax revenues will fall. So we're caught between a rock and a hard place...[and] we need to spend more right now...We need real stimulus spending."

Just roll back a moment, and you'll just how engrained this logic's become. The key words are "spending" its opposite, "saving". The former is good (new hiring and growth), the second is bad (job losses, lower tax receipts). And like pretty much everyone else who gets to make or commend government policy right now – perfectly sensible people such as UK economist Martin Wolf at the Financial Times, for instance – Krugman thinks Washington need to step up as "borrower of last resort"...hovering up savings and spending them, rather than letting them moulder on deposit.

Why? Because US consumers are too leveraged (and thus too high-risk) to raise a red cent. And yet the world needs them – or somebody wearing their pants – to keep spending. Who else ever goes shopping with such forceful abandon? Which means someone else has to keep supplying new credit. And in the absence of that...what with bank balance-sheets shot and emerging-world governments throwing their cash at domestic stimulus instead...someone else will just have to start printing cash.

Right or wrong just doesn't matter. Because it IS going to happen, whatever you think. So the best you can hope is to defend yourself and look after your own. Amid a credit depression, that means saving cash and cutting back spending. In the teeth of global inflation – such as the global money inflation running from 2002-2007 – it means exchanging cash for whatever else might just hold its value.

"If you do not buy goods," said John Maynard Keynes in his infamous radio speech, Saving & Spending, of January 1931, "the shops will not clear their stocks, they will not give repeat orders, and someone will be thrown out of work.

"The best guess I can make is that whenever you save five shillings, you put a man out of work for a day."

Fast forward 78 years, and now the United States wears that same responsibility, dumped onto British housewives by the Cambridge economist. Only the US, of course – here in our post-Keynesian, macro-minded 21st century – is liable for the employment of not just British dock-workers, but of the entire world. Most notably, or so consensus has it, the employment of three billion souls in emerging Asia.

"The US and a number of other chronic deficit countries have, at present, structurally deficient capacity to produce tradable goods and services," notes Martin Wolf at the Financial Times. "The rest of the world or, more precisely, a limited number of big surplus countries – particularly China – have the opposite. So demand consistently leaks from the deficit countries to surplus ones.

"In times of buoyant demand, this is no problem. In times of collapsing private spending, as now, it is a huge one. It means that US rescue efforts need to be big enough not only to raise demand for US output but also to raise demand for the surplus output of much of the rest of the world."

Did you get that? The Anglo-Saxon weakness for using, not making...for eating, not growing...leaves more productive nations short of their No.1 market now our credit bubble's blown up. So like Stiglitz says – only with bells on – Obama better start spending...and start spending big! Otherwise, the social unrest spied by Beijing's policy wonks risks turning into outright social collapse in the world's most populous nation.

If that seems a pretty big burden to dump on US consumers, then no matter. Step forward the US government to pick up the slack. Truly, madly and ever-so deeply, it's hard to over-state the "big picture" analysis driving this global consensus right now. If US consumers can no longer support Asia's capitalist boom, then the US government will have to do it instead. "This was a burden that crisis-hit Japan did not have to bear," Martin Wolf continues. Because deflation-hit Tokyo had only ever remained a net exporter, not a chronic consumptive. Not even 10 years (and more!) of zero-returns paid to cash has managed to reverse that fact.

Whereas the guilt piled on US consumers – already told to "Buy American!" before Obama even takes office – will only be matched by the mountains of money needed to supply them with credit.

"Therefore, O patriotic housewives, sally out tomorrow early into the streets and go to the wonderful sales which are everywhere advertised," as John Maynard Keynes said.

"You will do yourselves good – for never were things so cheap, cheap beyond your dreams.

Keynes advising laying in "a stock of household linen, of sheets and blankets to satisfy all your needs." Less philanthropic investors...less convinced of the "added joy that they are increasing employment," might want to lay in a stock of hard assets by Buying Gold, fine wines, agricultural land, whatever can't be printed or inflated to zero.*

Because you will be setting on foot useful savings amid the blizzard of paper now heading your way...bringing a chance of useful activity via future investment...once the new bubble in money explodes in turn.

* Disclaimer: "These are only examples," in the words of John Maynard Keynes, midwife to the Dollar's reserve-currency status – and scourge of the failed Gold Standard.

"Do whatever is necessary to satisfy the most sensible needs of yourself and your household..."

The Long-Run Value of Gold

Gold is not the ultimate inflation hedge. Nor is it often much use compared to stocks, bonds or real estate...

AFTER FALLING for 18 years as the 20th century reached its twilight, "the twilight of gold appeared to have arrived," wrote Niall Ferguson, now a Harvard professor, then an Oxford scholar, in 1998.

"Gold has a future of course," he added, "but mainly as jewelry" – a common enough long-term view of the metal, repeated every so often by economists, historians, columnists and analysts.

"The stuff has a historical place in the money market," as one New Zealand advisor put it in a client note in 2003.

"But gold's just that – historical," she added. It's so historical, in fact, gold deserves to be scorned – along with human sacrifice, living in mud huts and VHS tapes – as primitive, brutish and uncivilized.

"Was it not I," asked John Maynard Keynes, man of the moment when the world's financial system needed re-booting in 1945, "who wrote that 'Gold is a barbarous relic'...?"

Man of the moment once more today, Keynes was hardly first to disdain the metal as money, however – even if he was part of the Bretton Woods' team which replaced it with US dollars.

Printed at will, the Dollar would prove so much more flexible, more available than tightly-supplied gold. Amid the Great Depression of the late 1920s and '30s, Keynes called for Great Britain and then the rest of the world to stop redeeming its paper notes for Gold Coins or bullion. The supply of money and credit could then start flowing freely once more, boosting demand for goods and services and sparking an inflation in prices that would make the value of outstanding debts evaporate. Yet the scheme was nothing new. More than two centuries earlier, John Law – another visionary economist – had proposed and attempted the very same thing.

A world-famous gambler, convicted murderer and exiled Scot, Law gave the world its first modern bubble and bust. His grand system – first proposed in his book, Money & Trade Considered (1705) – sought to revoke state bankruptcy by replacing gold money with arable land, paper notes, stock-market shares, future tax revenues, the Mississippi Delta...anything but more metal.

"It is in the interests of the King and his people to guarantee bank money and to abolish gold specie," wrote Law as he applied his theory to France's very real financial crisis. Giving monetary power to, say, the stock of his Mississippi trading company, would "diminish the value of gold by taking away its usage as money."

But those dumb Frenchmen! Whenever they took profits by selling Mississippi stock as it doubled, trebled and rose 10-fold, they "thought they might turn it into heaps of gold and silver, which they call realizing," spat Law.

Couldn't they see the truth about gold?

"The lands of France are worth more than all the gold which still lies hid in the mines of Peru," Law declared. "The stocks [of his Mississippi venture] actually surpassed in value all the gold and silver which will ever be in the kingdom."

Yet still the French crowded out of his stock and into gold as the bubble burst in 1720. Come May, John Law banned the use of monetary metal altogether on pain of fines, imprisonment and even death – stealing a march on US president F.D.Roosevelt by some 213 years.

Make no mistake; Law would have been right to price Mississippi stock far above money...if only his Compagnie de l'Occident had held any real value at all. Instead, it owned a million miles of disease-ridden swamp, plus a sick colony of ex-beggars and thieves lost in Louisiana. Whereas gold offered then just what it offers today: very little of productive value, but a time-honored bolt hole when nothing else pays.

Gold's only value, you see, comes in owning it – whether for adornment, to escape the risk of counter-party default, or as a defense from inflation. Any other class of financial asset, provided it offers a yield, income or growth, should win out over gold. Just so long as they it keeps delivering that yield, income or growth. Because gold, a raw lump of metal, will pay nothing and do nothing besides holding its value across the very longest of long terms.

How long is the long term? "It is said that an ounce of gold bought 350 loaves of bread in the time of Nebuchadnezzar, king of Babylon, who died in 562 BC," wrote Stephen Harmston – then an economist at Bannock Consulting – for the World Gold Council (WGC) just when Niall Ferguson was condemning gold as mere frippery ten years ago.

"The same ounce of gold," Harmston went on in his study, Gold as a Store of Value, "still buys approximately 350 loaves of bread today." Which seems an odd swap to us, unless you're very hungry indeed. But "across 2,500 years, gold has in other words retained its purchasing power, relative to bread at least."

Crucially for long-term investors – especially for those with 2,500 years to wait – "Gold has had a real rate of return of zero," as Harmston observed. Meaning it doesn't beat or lag inflation or deflation. Not across the very long run, that period in which "We're all dead" as John Maynard Keynes, himself now very dead for six decades, famously (and fatuously) said.

To get this straight, it bears repeating. Gold is NOT the ultimate inflation hedge, not compared with dividend-paying, growth-dependent stock investments. Not unless you keep your entire savings tied up in Gold Bullion, hedging your very existence against a loss (or gain) in the value of money. And not unless you get to exist for an awfully long time to come as well.

Across the slightly-less long run – say, a mere one-and-a-half centuries, rather than two-and-a-half millennia – the inflation-adjusted value of gold remains well below where it started on average.

The value placed on gold when the Bank of England set the International Gold Standard in motion in 1844 has rarely been seen since. And on the historical view (and gold is "just that – historical" as our Kiwi advisor noted above) it's in fact slipped by 15%, slowly declining before turning decisively lower throughout the 20th century.

Why would the world (the best proxy for which, we guess at BullionVault, is the well-attested British experience) put progressively less value on gold amid the murder and mayhem...bubbles and busts...of the last 100 years? Why did gold lose purchasing power – and then continue to lose value – both during and then for a long while after total war swept Europe, Africa, Asia and the Pacific? Surely such death and destruction should force gold to a premium?

The fact is, however, that the 20th century also brought fresh competitors for investment wealth...competitors rapidly offered to every class of investor as the Second World War receded and then the "Big Bang" of deregulation began under the Thatcher and Reagan administrations.

Yes, it may seem heretical (if not blindingly obvious, depending on where you start), but like charcoal and shire horses, steam trains and gas lamps, the 20th century subjected gold to a sharp loss of relative utility and thus value. Gold's only use comes in its ownership, remember; so its value as a store of wealth necessarily depends on the supply of alternative holdings. And the 20th century brought a flood of competition for that role.

The upshot today, almost a decade after Gordon Brown's Infamous Gold Sales marked not the high-point of anti-gold sentiment but also the very nadir of its 20-year slump? Free from default risk and inflating supply, gold suddenly looks very attractive to fund managers, investment advisors and private individuals who only a few years ago mocked the idea that metal might be worth owning.

Sure, the time may soon come when gold's one single use is matched and bettered again, beaten by other, more productive investments. But until then – and as gold's current price action suggests – what else will you hold as stock earnings tumble, bonds are over-supplied and threaten default, and the value of money itself is forced ever-deeper into genuine crisis?

Gold Bullion

Gold Bullion


Buying gold bullion is now cheaper and easier than ever before. And it's still, by a long way the safest way to own gold. Learn how.

To learn more about what gold bullion is please read on ...

Gold Bullion is valuable precious metal - namely gold or silver. It comes in two main forms :- Gold bullion bars, and Gold bullion coins. What makes it gold bullion is simply that its value derives entirely from its precious metal content.

Unlike jewelry, or numismatic coins, gold bullion has no artistic component in its value. Some people do not understand why without that artistic component a relatively useless material like gold should have such a high value. To understand that you need to understand gold's monetary role.

If you want to buy some gold bullion these days it is relatively easy to do so. Learn how.



Gold bullion coins trade quite close to the world gold price, but you will still pay a premium of perhaps 4% when you buy in quantity, and usually 8% when you buy smaller amounts. You should expect to suffer a similar 4-8% discount when you sell gold bullion coins back to the dealers too.

Bullion bars come in many sizes. Bought from private suppliers for private possession you will usually pay dealing costs similar to those for bullion coins.

Gold bullion bars can weigh anything from a few grams upwards. 1kg and 100 oz (~3kg) bars are sometimes accepted by participants in professional bullion markets in Zurich and New York - though under strict controls to ensure bullion integrity. There is usually a premium on those locations, because London is the world's main physical bullion marketplace.

In London the market deals in the London Good Delivery gold bullion bar. These gold bars are what most people think of as bullion.




This London Good Delivery bar of bullion weighs 400 troy ounces - about 12.4 kilograms - and is about eleven inches long. It is stamped on the top (the bigger face) with the manufacturer's name, the weight, and the assayed purity.

This bullion is commodity gold, and is handled as such in the vaults where the bars are stored. They don't have the idealized super-smooth finish you sometimes see in photographs of mock bullion. The bullion is so soft that the bars are frequently scratched on their faces, and flattened on their edges and corners. Also you can see the finish is slightly dented where the bars have been stacked up on top of one another.

Neverthless, the London Good Delivery bar is the most important bullion product in the world. Loco London (meaning the physical bullion bars will be passed from seller to buyer in London) is the de-facto standard for bullion spot trading all around the world.

All bullion delivered against a London spot market trade (i) must be at least 99.5% pure, (ii) must come in bars of a standard shape weighing about 400 oz (iii) must have been accurately assayed so that he exact gold content of the bar is known (weight and purity are stamped on the bar) (iv) must have been manufactured by one of a listed group of refiners, and (iv) in almost all cases are only accepted from one of a very small number of accredited bullion vaults/couriers.

London Good Delivery bullion is the cheapest form of gold to deal and own, and it fetches the best prices when it is sold. But bullion in this form is not very accessible to private buyers. The reasons are (i) that the bars - being so big - are expensive, and (ii) that the bullion vaults where they must be kept do not deal with the public.

But fortunately if you do want to own bullion as an investment, whether in London, New York or Zurich, you can now access professional market London good delivery bullion through BullionVault.

If you are keen on buying some bullion gold you might like to continue your research by examining advantages and disadvantages of several different ways of buying gold.

Etymology
The word "bullion" itself certainly comes from French; though whether bouillon (boiling), bille (medieval ingot), or buillun (cauldron) is not entirely clear. These three are related to each other anyway.

Gold Bullion Investment: Why buy gold today

ARE YOU THINKING of buying gold for investment today?

You might want to start by asking why anyone would ever want to buy gold in the first place?

After all, gold doesn't pay you an income, and history says gold only really competes with cash-in-the-bank (provided it's safe) or government bonds (provided they pay) when inflation rises faster than interest rates.

Gold bullion rose eight-fold when inflation overtook interest rates in the late 1970s. It doubled in price when the same thing happened again in 2003-2006.

But gold can't compete with stock-market shares either, not when the economy grows and revenues rise. Gold bullion is the most unproductive of assets, and it will never promise you a stake in future profits.

Gold Bullion Investment: Gold vs. stocks

For that very same reason, however, that also means gold bullion doesn't rely on consumer spending, new business investment or clever accountancy tricks for its value. Gold is simply a rare, precious asset that people across the world have used as a store of wealth for more than 5,000 years.

And right now, that simplicity is gold investment's unique appeal.

Buying Gold is as far as you can get from today's complex and exotic debt markets. They're making headlines for all the worst reasons, as banking stocks plunge, mortgage-bonds go into default, and losses pile up at hedge funds. Gold, on the other hand, is recording near three-decade highs, and it still doesn't owe anything to anyone.

In our current financial marketplace, that makes gold bullion rarer still.

Gold Bullion Investment: Gold vs. debt

Gold bullion's lack of "default risk" also sets it apart from the mountain of debt built up by Western consumers and their governments. The average British household now owes nearly £9,000 (almost $18,000), and that's before you account for their mortgage debt! The US government has run up $9 trillion in debt, much of it owed to fast-growing Asian economies like China and all of it waiting for US taxpayers to make the repayments.

Even in Europe, the single currency Eurozone now faces a housing-debt slump in Ireland, Spain, Italy and Portugal. And compared to this epidemic of debt, very few people own gold. Fewer still Buy Gold Bullion and own it outright, in their name alone.

To learn about the advantages of making a Gold Investment today with BullionVault, click through and read about Good Delivery Gold Bullion now.

Krugerrand Gold Coins

The South African Gold Krugerrand was the world's first ounce denominated gold coin. Krugerrands were first offered in 1967 as an excellent way for individuals to make an investment in gold bullion. In 1980 fractional Krugerrand gold coins were offered for smaller investments. Each coin is minted in 22 karat gold.
For decades these coins were the preferred method for investing in gold bullion.

Investing in Bullion and Collectible Gold Coins

With the price of gold at record highs and the U.S. economy on the downslide, it’s no wonder that many investors are setting their sights on gold to hedge against the falling dollar. Many investors think gold bars are the most reliable and cost effective approach to buying gold, but gold coins offer benefits that bars do not because of their smaller denominations and viability as currency.

The first gold coins were made by King Croesus of Lydia in approximately 560 B.C. These coins were not pure gold, but were made from electrum, a natural alloy of silver and gold. When the process later became more refined, coins of pure gold and silver were created. The use of these coins spread to many civilizations, including the Greek and Roman Empires and, later, throughout European countries.

Gold coins typically cost slightly more than their gold content is worth, because a 4 to 8 percent premium is added for minting and distribution. However, coins may make up for this added cost because they are easier to sell and manage and are more widely collected than gold bars. While minted gold bars typically come in weights between 1/10 of an ounce and 20 ounces, coins range from 1/20 of an ounce to one ounce. The smaller size and more manageable shape of coins can be a strong asset if an investor wishes to sell a small portion of gold, or to use it as currency in the event of a breakdown of the U.S. monetary system.


Bullion coins are valued for their weight plus the premium
Bank safe deposit boxes are recommended for keeping gold secure, but it is also possible for investors to keep some of their coins at home. Floor safes are a good choice, as an aboveground safe may announce the location of valuables and be stolen.
“If it is not in a safe, spread [gold] around in many small caches. Some of the places suggested by our customers include under floorboards, in lofts [and] buried in the garden. Although these may sound rather facile, they probably work well in practice, especially if others do not know they are there."

Gold does not tarnish like silver does; however, gold is a soft metal that can be scratched or dented. This can lower the resale value of collectible coins, so gold coins should be protected from rough handling.

There are two main types of gold coins: bullion coins and collectible coins.

Bullion coins

The term “bullion” refers to a form of metal in which its value comes primarily from the worth of the metal itself rather than from an artificial currency value. Bullion coins are priced and sold according to the weight of gold within the coin, plus the additional premium mentioned earlier.

Bullion coins are available in many different weights with the most common being 1/20, 1/10, 1/4, 1/2 and 1 ounce. Many countries make some type of bullion coin. Though the designs vary from country to country, and sometimes from year to year, gold coins are sellable in all countries. Different countries may also produce coins of varying purities, which affects prices.

The U.S. Eagle coin is named for the image of a bald eagle it bears on its surface. They are available in platinum, gold and silver. Golden Eagles are 91.67 percent pure. This makes the coins harder and more difficult to scratch. The Canadian Maple Leaf bullion coin is 99.99 percent pure. The South African Krugerrand, the first national bullion coin ever released, is a 22 karat coin alloyed with a small amount of copper for durability. Many other nations, including Australia and China, also offer their own national gold bullion coins.


Condition and grade can increase numismatic coin values
Collectible coins
Numismatic—or collectible—gold coins are not priced based on their weight in gold. Rather, their selling prices are based primarily on their rarity, age and condition. “Numismatic coins are cherished for their beauty, historical significance, and their potential investment value. Hence, numismatic coins sell at a significant premium over their intrinsic gold content,” according to AmeriGold.

Modern gold bullion coins are not minted in limited numbers, so they are not likely to gain as much value as rare, collectible gold coins when gold is in a bull market, according to the American Gold Exchange.

Although condition, or grade, does not particularly matter when buying and selling bullion coins, these things are important when dealing with collectible coins. Coins in Mint State will be worth more than coins that have been scratched or otherwise damaged.

“In most cases, collectors should look for coins in the highest grades they can afford. However, many of the sharpest collectors and investors will seek out the key rare dates of a series, which can be astronomically expensive in Mint State, in one of the lower grades—provided that they can find a coin with exceptionally high quality for the grade and excellent eye appeal,” according to the American Gold Exchange. “These high quality, lower grade coins are often a better value and far more affordable than the higher grades.” This premium above the coin’s actual gold value varies widely from coin to coin depending on demand, according to American Eagle Exchange.

For investors buying coins, here’s something to consider: Gold is classified as a collectible, which means that profits are not taxed as capital gains but as ordinary income. Long-term capital gains are taxed at a 15 percent rate for those in the 15 percent tax bracket, but gold investments can be taxed at rates of up to 39.6 percent. Those considering putting their money into gold coins should consider what these rates might do to their returns.

Buy Mexican 50 Peso Gold Coin as Safe Investment

With the recent financial meltdowns and declining US currency, smart investors are looking for better ways for asset preservation. Gold coins are one of the most valuable commodities to protect personal wealth and offset risk, which has been discovered during countless crisis situations over the centuries. Although most investors focus on US and European gold coins, Mexican gold coins, especially 50 peso, are also good asset to combat inflation.

Mexican 50 Peso is among one of the most beautiful designs of any gold coins, more than 20% larger than the popular 1-oz Gold Eagles. It features a winged angel with the legendary mountains in the background. The reverse side features an eagle with a snake in its beak.

First minted in 1921, Mexican 50 peso honors the Independence of Mexico. It contains 1.2057oz of gold in an alloy of 90% gold and 10% copper. It was only made from 1921-1931 and then from 1944-1947. Being over 1.2 ounces of contained gold, it is a great vehicle for holding gold than the popular US $20 gold coin, which has less than 1oz of gold. While the price of most of the US gold coins have increased sharply over the past several years, the price of Mexican 50 peso is still in the ground floor. Mexican 50 peso maybe a highly undervalued area in gold coin market. So this is a good time to begin a collection of beautiful Mexican 50 pesos.

Mexican Gold Coins for Gold Investors

Shortly after Columbus discovered the 'New World,' vast amounts of gold were discovered in Mexico. Once turned into coins, Spanish fleets transported the gold coinage through the Gulf of Mexico to deliver to the King and Queen of Spain. Often, these fleets encountered danger, running into hurricanes, losing ships and the precious cargo.

In 1810, Miguel Hidalgo declared independence from the rule of Spain, although full independence of Mexico was not achieved until 1821. From 1821 to 1917, Mexico went through considerable political upheavals. The coinage remained based on Spanish coin types until the adoption of decimal currency in 1864 based on the peso.

Some of the most beautiful gold coins in the world are the Mexican Gold Peso Coins. The Mexican 50 Peso coin (also known as "Centenario") is definitely the most striking one.

The 50 Peso coin was issued from 1921 to 1947 honoring the 100th anniversary of Mexico's independence from Spain. "El Angel de la Independencia" (the Angel of Independence) is pictured on the coin, with a laurel wreath in her right hand and broken chains in her left. The 1821 on the lower left commemorates the year of Mexico's independence. The date on the right indicates year of mintage. The reverse of the coin depicts the Mexican coat of arms, a Mexican golden eagle devouring a snake while perched atop a cactus.

When Americans regained the right to own gold bullion in 1974, Mexican 50 Pesos, quickly become one of the gold bullion industry's standard bearers. It is the ideal coin for gold buyers who want low premium gold coins, coins that have small markups over spot.

What You Need to Know Before Buying the Gold 50 Peso Coins Mexican

Investing in Gold has long been proven one of the safest and most effective ways to protect personal assets against the inflation and declining economy. Buying gold coins such as the Gold 50 Peso Coins Mexican, is the one of most practical ways for average Americans to add gold to their investment portfolios and protect their hard-earned money during times of economic instability. Often times, Gold coins such as the Gold 50 Peso Coins Mexican even increased in value during the economy melt down.

Specifications of Gold 50 Peso Coins Mexican:
Fineness: .900
Actual Gold Content: 1.2057 troy ounce (37.5 grams)
Diameter: 36mm

First minted in 1921, Gold 50 Peso Coins Mexican contains 1.2057oz of fine gold in an alloy of 90% gold and 10% copper, comparing the popular US $20 gold coin that contains less than 1oz of gold. However, the value of gold coin is not only determined by the value of gold it contains, but also the premium it carries. Gold 50 Peso Coin Mexican usually carry small premiums, which means it costs less per ounce and yet give you more gold for your money, comparing to Gold Coins that carry higher premiums. This makes Gold 50 Peso the ideal gold coin for investors who simply want to protect their personal wealth against inflation.

On the other hand, while the prices of most of US gold coins have increased sharply over the past several years, the price of Mexican Gold 50 peso has increased to a reasonable extent. In other word, Gold 50 peso is one of the highly undervalued coins in the gold coin market.

Before making a purchase of Gold 50 Peso, make sure you get all required information of the gold coin—like its minted year, actual gold weight, coin weight, gold fineness—from the seller. If buying online, take a look at the picture of the gold coin as well. The price for the gold coin will be the price quoted by the seller, with his margin and applicable tax.

How to Buy Cheap Gold 50 Pesos Mexico Coin

With the recent financial meltdowns and declining US currency, smart Americans are looking for better ways to protect their hard-earned dollars. Buying gold has long been proven the safest method for asset protection during economic crisis over the past centuries. Gold coins, especially gold coins with small markups such as Gold 50 Pesos Mexico Coin and South African gold Krugerrands, are favorites of seasoned gold bullion investors to combat inflation and offset risk.

First minted in 1921, Mexican Gold 50 Pesos are among one of the most beautiful designs of any gold coins. The coin features a winged angel with the legendary mountains in the background. The reverse side features an eagle with a snake in its beak. With sizing more than 20% larger than the popular American Gold Eagles, the coin contains 1.2057oz of pure gold, making it a great vehicle for holding gold than the popular US $20 gold coin.

So where to buy cheap Gold 50 Pesos now?

You can visit local gold dealers or coin shops searching for good deals. However, Gold Dealers tend to mark up a higher premium for selling Gold 50 Pesos to you because they have to cover their operation overhead and other expense.

The Internet has become one of the best places to find gold coins in my opinion. Online auctioning sites have been a very active market in recent years, making finding great deals of gold coins much easier. These online auction sites tend to offer wider selection of Krugerrand coins and list up-to-the-minute deals constantly, due to the nature of these sites.

Remember to do some homework on the seller before you buy Gold 50 Pesos Mexico Coin via online auction sites. Look at their feedback ratings and check comments left by previous customers. Ideally, you would want to do business with a seller with a feedback score of 100%. But you have to take everything into consideration. If a seller has a feedback score of less than 100% he still may be a reputable dealer. If you see a high percentage of negative comments stay away from that particular seller.

Why Buy Mexican 50 Peso Gold Coin Now?

Nowadays, Mexican coin has become one of the HOT items among collectors and gold investors. The Mexican 50 peso gold coin (a.k.a Gold 50 Peso, 50 peso gold coin, Mexico 50 pesos gold coin) is definitely the most desired one among all Mexican gold coins.

The Mexican 50 peso gold coin is an official re-strike from the 400-year old Mexico City mint. A 20 karat coin, it contains exactly 1.2057 troy ounce of fine gold. It is the most beautifully designed gold coin to date. First issued in 1921 to celebrate the 100th anniversary of Mexico's independence, this peso gold coin is about 20% larger than the 1-oz American Gold Eagle Goin. The popular Mexican coin features a winged angel with the legendary mountains (Popocatepetl and Iztaccihautl) rising in the background. The reverse side of the coin features an eagle with a snake in its beak.

The 50 Pesos carry small premiums over the restrikes, except for the 1921 and the 1931 coins, which can have large premiums.The Mexican 50 Pesos in the bullion coin market normally are restrikes, minted from 1943 onward. If you would like to invest in gold to simply protect your assets during the financial turmoil and declining economy today, I would recommend you investing in gold coins with small premiums, such as the Mexican 50 Pesos gold coin and Krugerrand gold coins.

The Mexican 50 Pesos gold coin cost less per ounce and thus give you more gold for your money than the standard American Eagle gold coin series. It is already well known in the industry and any dealer will readily trade them. If you have $5,000 or less to spend put half in US 90% silver coin, and half in Mexican 50 Pesos or one ounce Krugerrands or American Eagle gold coin. If you have $5,000 to $25,000, put at least half of your money in US 90% silver coin, and the rest in Mexican 50 Pesos or Krugerrands or American Eagle.

Tips of Collecting Mexican Old Coins

When seeking Mexican old coins, coin collectors should know as much about the history of the Mexican gold coins that he or she is seeking. Understanding the history of Mexican old coins, not only makes it easier to spot such coins, but it also makes the act of coin collecting far more exciting and intellectually entertaining. Every Mexican coin has a unique history of its own, and it is recommended coin collectors briefly study the history associated with these coins that they collect, so that they can better detect genuine coins from replicas or fake coins.

Mexican old coins, particularly those made of gold, are proving to be a savvy investment at this time. While much in the present economy is crumbling, gold is still considered a significantly wise and super safe investment. It has been long proved gold is one of the best investment to hedge against recession and deflation, as you can learn from the previous economic crisis over the last century. It is therefore wise for the coin collector to look for Mexican gold coins, as such coins are certain to continue to appreciate in their value even during the uncertain times. There are some gold Mexican old coins that have relatively little mark ups (premiums), such as the popular Mexico 50 Pesos gold coin. These coins are in high demand today when it comes to coin collecting because of their reasonable markup rates.

The year 1921 saw the first minting of the 50 Pesos gold coin and the design of the coin is stunning. This coin, depicting a winged goddess on one side and the Coat of Arms of Mexico on the other, are not only attractive, but contain over 37 grams of gold. Coin vendors and distributors from all over the world are now buying and selling the 50 Pesos gold coin in large quantities on daily basis.

Thanks to the popularity of Internet, it is becoming much easier to get Mexican old coins online at the best prices. If using the Internet to buy Mexican old coins, you would be far better off if you engage in some comparative shopping measures. Different sellers offer different markup rates on the 50 pesos gold coin, and not all sellers are equal in terms of the type of customer service they deliver. It is recommended you check the feedback from previous customers to the seller in order to ensure you buy from a reputable seller. Ideally you want to buy from sellers who have been around for a while and have feedback scores over 90%.

Mexican Coin Collecting Guide

For anyone interested in Mexican Peso gold coins and Mexican coin collecting, it is important for the coin collector to know as much as he can about the Mexican peso gold coin. The more an individual knows about Mexican coin collecting, the more prepared he will be when it comes to purchase Mexican Peso gold coins and other Mexican coins available. When it comes to Mexican coin collecting, of particular importance is one's ability to identify Mexican peso gold coins. This will ensure he is actually getting genuine coins to add to his growing coin collection.

Mexican peso coins first became available in the early 1920s and were created to celebrate the independence of Mexico. This particular coin is called a Centenario. Mexican peso gold coins are made of 37.5 g of gold which is part of an alloy of 10% copper / 90% gold. Like other gold coins, the copper is added to Mexican peso coins so that the coin is much longer lasting and more durable.

For Mexican coin collecting, Mexican peso gold coins are definitely the most popular items among avid coin collectors. Slightly larger than the American eagle gold coins, these Mexico peso gold coins depict the winged goddess of victory holding up a laurel wreath and holding chains in the opposing hand. The goddess depiction stands in front of two volcanoes, the Iztacchautl and Popcatepetl volcanoes located in Mexico.

Also depicted with the Winged Victory goddess is the actual dates that Mexico gained its independence from Spain: 1821. The latter date appears on the right-hand side of the Winged Victory goddess, and a second date appears on the left hand side of the goddess which indicates the date the coin was created. The words “50 PESOS” appears to the right of the goddess depiction, and the words “37.5 Gr. ORO PURO” appear to the left of the same image.

On the flip side of the coin, Mexican coin collecting aficionados will find an image that looks striking to an American eagle but is actually an image of the Mexican coat of arms. The eagle is actually snatching a snake in the image, and it is positioned above a cactus. The latter depiction of the Mexican gold eagle is believed to symbolize the domination of good over evil. The words “ESTADOS UNIDOS MEXICANOS” appear in a semi circle above the Mexican gold eagle. The latter words, when translated come to mean “United States of Mexico,” which signifies the fact that Mexico is a constitutional republic/federal nation.

Besides the most popular Mexican 50 Peso gold coins, you can also add Mexico coins with smaller denominations to your collection, including Mexico 20 Peso Gold Coin, Mexico 20 Peso Gold Coin, Mexico 5 Peso Gold Coin, Mexico 2.5 Peso Gold Coin and Mexico 2 Peso Gold Coin.

American Buffalo Coin Buying Guide

Coin collectors from around the world are currently looking for buying the American Buffalo Coin. The American Buffalo Coin Proof is valued at a sizable price tag: $950 to be precise and was released just three years ago in the year 2006. Coin collectors looking for this particular coin first familiarize themselves with the coin’s characteristics to ensure that they are getting an authentic coin.

American Buffalo Coin is crafted out of 99.99 percent 24-karat gold bullion, possesses a reeded edge, and is roughly 33 millimeters in diameter. The front of this stunning coin features a profile of a Native American and the back of the coin sports an American Buffalo. This particular coin is much like the original Buffalo Nickel first released in the year 1913. The back of the modern American Buffalo Coin has a raised area which reads “$50,” and just beneath that are the printed words “1 OZ. .9999 FINE GOLD” in smaller text. The buffalo on the back of the coin is standing so that its entire body profile can be seen and just beneath its head inscribed the words “IN GOD WE TRUST.”

Coin collectors looking for the authenic American Buffalo Proof Coin should examine the coin to see if it has a “W” on the front of it. This usually indicates that the coin is an uncirculated Proof coin and is one of 300,000 uniquely struck coins. The demand for this coin has increased dramatically since the onset of the recession, and the coin is seemingly becoming more difficult to come by. Nevertheless, Internet has made it more possible to get access to these highly coveted coins. Distributors are offering the option of ordering the American Buffalo Coin online and coin collectors are rushing to get the highly valued coins that they covet.

The American Buffalo Coin comes with a full government guarantee backing the authenticity and the amount of gold that the coin contains. When ordering the coin online, it is highly recommended that you take the time to review all details about the particular coin. And remember to buy from a reputable seller with the most reasonable price offerings.

What’s Buffalo Nickel Value Today?

Neophyte coin collectors interested in finding out the buffalo nickel value will quickly discover that the actual value of a buffalo nickel depends upon the coin itself, such as the minted year and coin condition. The price tag of Buffalo Nickels ranges from $1 to over $20,000. Since Buffalo nickel value diminishes with the wear and tear on the coin, it is possible that some coin collector, upon first discovering a buffalo nickel believe that he may have a coin of considerable value, only to discover that the coin is not as worth as much as he estimated before.

Buffalo Nickels were produced from 1913 to 1938. The year the coin was created clearly affects the buffalo nickel value. The date should appear just below the neckline of the Native American’s profile on the front side of the coin. This positioning of the date causes the date to wear off with considerable circulation so the more the coin is circulated the lower the buffalo nickel value typically is. That being said, some buffalo nickel coins have dates that are nearly completely worn away. If the date is visible the coin is worth more: the clearer the date is the higher the value.



Typically the buffalo nickel value falls between one dollars and ten dollars, again depending upon condition. The buffalo nickel value increase significantly if it is a rare version. Errors in a coin’s creation make the coin a rarity and it is therefore worth more money to the coin collector. For example, there are famous1937 buffalo nickels with buffalo’s possessing only three legs (an error which became present while the coin was made) which proves to have a fairly high value. One can get a considerable price for such a coin: anywhere from $40 to $11,000.

The actual condition of the coin also plays a role in determining the Buffalo nickel value. Finding coins which have the best conditions, few scratches, easily definable features, and good tone and quality are key if looking to get the most value out of a buffalo nickel. Consideration of what mint cast the coin and the actual dating of the coin also play a role in what a coin will be worth.