Rare gold coins against stocks – five tips on why gold coins are better in late 2007

If appearance and emotion had anything to do with it, rare gold coins would hit stocks every time. They are attractive, beautiful, sympathetic to them and represent an interesting part of history because they have existed for some time.

But today, there are other reasons to add more gold coins to your portfolio than stocks, just in time … although making such a claim can threaten to insult traditional stock investors. Do not see the available tips at your own risk. For example…

Tip №1: Call Options Points to High Gold. This analysis is from Prieur du Plessis and Adrian Douglas. In short, these two individuals observed in December 2007 that the gold call option contracts were indeed large, and now number about 122,000. Plus, they were more than 1 in 2.

Based on this “positive gold growth”, both du Plessis and Douglas believe that gold is on the verge of a major price jump. This is not the first time Douglas believes this way. In November 2005, he predicted that the price of gold would rise above $ 460, based on a similar accumulation of gold call options. Two months later, gold rose to $ 100. Next …

Tip №2: Gold Demand is Still High; Gold supplies are still declining. The situation here has only worsened. According to a recent report by the World Gold Council, while world gold demand rose 30% a year ago, supply continues to move south. South Africa, the world’s largest gold producer, has hit a 84-year low despite rising gold prices. And the world’s largest gold producers have seen a 20 percent drop in production since 2001.

Needless to say, increasing demand and low supply lead to higher prices.

Tip №3: “Triple Threat” from the Housing Dilemma. Harvard economist Martin Feldstein warned that we are facing a threefold threat from the housing crisis. According to a Sept. 2 report on Bloomberg’s Jackson Hole speech, Feldstein noted a “triple threat” to housing: a “sharp drop” in home prices and construction; higher borrowing costs and a “freeze” in credit markets – major mortgage losses and more. less home equity loans and refinanced mortgages lead to lower consumer spending.

Needless to say, the overall effect will have dire consequences. “The economy could face a very serious recession,” he added. More reason to diversify into bright things.

Tip №4: America follows the path of the Roman Empire – Chief Inspector David Walker. Yes. You know you’re in trouble when the person in charge of government accountability finds “striking similarities” between the United States and the Roman Empire. The end of the Roman Empire. Among his comments, the United States “suffers from a decline in moral values ​​and political civilization at home, an overconfident and over-expanded army abroad, and the financial irresponsibility of the central government.” He is so serious that he even refused to sign the government’s “books.” Again, yes.

How does this relate to gold and stocks? It is time to take refuge in gold when high-profile members of our government immediately come out and warn us of an “economic tsunami.”

Tip # 5: Inflation, Inflation and More Inflation. Despite all the state statistics in the world, we all know that inflation continues to decline. We know that we fill our tanks every time. And somewhere in our minds, we know that rising energy prices should be bad for the economy, it affects everyone and everyone who sells anything. Not surprisingly, this intuition is in fact rooted. According to the Federal Reserve Bank of Dallas, “Nine of the declines since the Second World War have been caused by a sharp rise in oil prices.”

While the Fed is in a hurry to delay the recession by cutting rates, we also know that somewhere in our minds, the dollar will only weaken further, perhaps even more dangerously, from the historical weakness that exists with each of these reductions. And the result of all these changes is inflation. We will need more dollars to get what we received yesterday.

No doubt you have heard the saying, “In 1911, an ounce of gold could buy a very nice suit. It can still buy today.” This is to say that gold keeps pace with inflation. He did this in 1911. And now, almost a hundred years later. This is what makes gold a weapon of choice to fight inflation.

So why only defend with gold?

In 1995, Dr. Penn State economist. Raymond Lombra did a study he presented to Congress. This 40-page report “proved” that rare coins, including rare gold coins, are among the best performing assets in the last 25 years (and including stocks). He also said that “rare coins dominate gold bullion as a diversifying asset.” These “numismatic coins” do this by reducing volatility while providing improved returns.

Lombra’s latest study in 2003 found the same situation, with rare coins such as rare gold from 1979 to 2003 earning the highest average annual rate of return and beating gold bullion as an investment and inflation hedge.

But if you prefer to take a more aggressive stance than stocks with rare gold coins, or just want a proven financial shelter, time may be right for gold. And this can be a low expression.