Certified Gold Exchange As Your Information Provider and Please Enjoy Your Journey Into Gold!
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Welcome to the CGE’s 2014 Gold Investment Guide Just what you need to know for success with gold and silver. Here you will find the nation’s best information on how to purchase or liquidate precious metals risk free. We feel the best investors are the most informed, so please go through this information thoroughly and list any questions you have or call our advisors at any time. Once you complete the tutorial, you will have the opportunity to open the online version of our award-winning Real Money Magazine or call our professional advisors to have a hard copy mailed to your home. Rest assured by the time you complete this tutorial, you’ll have a solid understanding of the gold market and be ready to buy and sell with confidence. Thanks again for trusting the Certified Gold Exchange as your information provider and please enjoy your journey into gold! Why Invest in Gold? Why Invest in Gold? We buy gold for the same reasons that we buy insurance – because the risk of significant loss of wealth makes it the wise and prudent thing to do. There are a great number of reasons that gold has to continue rising, and these are the top three: #1 Growing global demand and limited supply. According to data published by the World Gold Council (WGC), gold demand fell by 53.1 tonnes to 1097.6 tonnes in the first quarter of 2012. Over that same period, however, combined jewelry and investment demand in India fell by 83.1 tonnes due largely to a new tax on gold jewelry and increases in the import duty on gold. The jewelry tax has now been repealed. Demand outside India actually rose by more than 3.2%, a significant portion of which is due to steadily increasing purchases by the world’s central banks. Mexico’s first quarter purchases totaled 18.2 tonnes and the Philippines’ central bank took in over 31 tonnes in March alone. Russia, Kazakhstan, and Ukraine have also stepped up purchases considerably. New gold production, meanwhile, is reaching its limits. The 5% increase from 2009 to 2010 fell to 3% in both subsequent years. With India back in the game and central banks buying ever greater quantities of gold, demand has already outstripped new production. Furthermore, the protracted period of depressed prices has backed gold mines into a corner. If prices don’t rise significantly they will have to curtail production to force prices up to a point where they can operate profitably. #2 Currency is not backed by gold. All western fiat currencies are in trouble. Fiat money is nothing but an IOU, redeemable only in more of the same. The supply of dollars has doubled over just the past four years, which in the absence of a corresponding increase in demand means the dollar’s value must fall. Central banks are well aware of the risk, which is why they are scrambling to replace their dollar-based reserves with gold. Gold’s purchasing power has been remarkably consistent over millennia, so its price in terms of any declining currency must always rise. That is exactly what has been happening over the past 10 years, as is clearly evident in this chart comparing the gold price to the dollar index: #3 Gold counters inflation. It follows from the previous that the gold price will rise as inflation erodes the value of the dollar. According to the official headline consumer price index (CPI) we have seen a cumulative inflation of 30% over the past 10 years, compared to 87% in the 1970s. But the numbers are misleading. Prior to 1980 the government employed a different method to compute the CPI, one that realistically reflected the increased cost of living for the average American. Since then, however, it has used a method to produce more favorable appearing – but far less realistic – data. Using the earlier method, accumulated real inflation since 2000 is well over 160%. This chart illustrates the credibility gap between the official and real inflation rates: Courtesy of ShadowStats.com Inflation is nothing more than the flip side of a failing currency. Real inflation is the ever growing number of dollars it takes to pay for the things we buy every day. Wage increases and interest rates, however, are tied to official inflation. The difference is wealth lost forever, and gold investment is your best protection against it. Why invest in gold? Simply put, to save your wealth from going down with the dollar. Knowledge is your best weapon in uncertain times, and that’s what this tutorial is all about. To begin we will take a brief look at the various gold investments commonly available today. Client Case Studies We have thousands of client case studies at the Certified Gold Exchange, and here are a few varied scenarios: Client 1 – Truck driver from Fresno, California who drives a route between California and Nevada. Date – February 12, 2003 Spot Price – $355 per ounce Situation – The prospect called our New Mexico location and spoke with advisor Joseph Morton. The man said he was 54 years old and lived in a trailer with his mother on a plot of land he owns. He said he lived very modestly and was able to save $300,000 while his mother had saved $50,000. All funds were in his interest- bearing savings account paying 1.4% annually. Concerned about his mother’s health that was failing with a worsening Alzheimer problem, he felt he may have to eventually take care of her and only wanted to work for another 3 to 4 years. He did not trust the government and wanted rare coins that would be protected from a government confiscation. His goal was to invest $350,000 over several purchases. After an hour of needs-analysis, advisor Joseph Morton recommended 331 MS-64 Liberties selling for $528 per ($174,768) and 408 American Eagle Proofs selling for $428 per ($174,624) for a total investment of $349,392. Joseph recommended these coins based on the man’s desire to hold gold long-term, lack of trust for the government, and fear of gold confiscation. The truck driver went ahead and made the investment, and here’s how it turned out: Portfolio Evaluation Original value of MS-64 Liberties – $528 Current value of MS-64 Liberties – $2,610 Original value of American Eagle Proofs – $428 Current value of American Eagle Proofs – $2,169 Original investment value – $349,392 Current investment value – $1,748,862 Client 2 – Helicopter company in Texas Date – December 2, 2003 Spot Price – $402 per ounce Situation – The owner of the helicopter company called our Albuquerque location and spoke with advisor Michael White. Concerned with the falling dollar and a crumbling economy, he wanted to put both the company’s money and his personal money into a gold investment. His plan was to keep some of the funds liquid, yet he wasn’t sure if he was going to hold his gold under 14 months or over 14 months. He also wanted some long term strategy in case the economy totally fell apart. For this reason, Michael recommended 62 bullion American Eagles selling for $420 per ($26,040) for the short-term working capital of the company and 96 MS-62 Liberties selling for $535 per ($51,360) as well as 48 MS-62 Saint Gaudens selling for $515 per ($24,720) for long-term protection. The helicopter company owner went ahead and made the investment, and here’s how it turned out: Portfolio Evaluation Original value of American Eagles – $420 Current value of American Eagles – $1,865 Original value of MS-62 Liberties – $535 Current value of MS-62 Liberties – $2,128 Original value of MS-62 Saint Gaudens – $515 Current value of MS-62 Saint Gaudens – $2,100 Original investment value – $102,120 Current investment value – $420,718 Client 3 – Husband and wife couple in North Carolina Date – September 30, 2005 Spot Price – $471 per ounce Situation – The couple called our New York location and spoke with advisor Michael White. They were very worried about their retirement accounts and believed that the government would crash completely. The couple wanted nothing to do with the US Dollar currency. They had quite a bit of money inside and outside retirement accounts, and their goal was to invest in gold that could not be confiscated by the United States Government. After a two hour analysis of goals and needs, Michael recommended 759 American Eagle Proofs selling for $592 per ($449,328) for inside their retirement accounts as well as 36 MS-63 Liberties selling for $565 per ($20,340) and 150 MS-64 Liberties selling for $728 per ($109,200) for physical home delivery. The couple went ahead and made the investment, and here’s how it turned out. Portfolio Evaluation Original value of American Eagle Proofs – $592 Current value of American Eagle Proofs – $2,169 Original value of MS-63 Liberties – $565 Current value of MS-63 Liberties – $2,250 Original value of MS-64 Liberties – $728 Current value of MS-64 Liberties – $2,610 Original investment value: $578,868 Current investment value: $2,118,771 Client 4 – A retired woman from Minnesota Date – June, 4 2004 Spot Price – $389 Situation – The retired woman called our New York location and spoke with advisor Kim Cross. She wanted to invest $25,000 in gold for long-term but was not worried of government collapse, instead she was worried about inflation. Kim recommended bullion bars because certified coins were not right for her based on the fact that she said she could sell at any time.