Pat Gorman, President & Owner of Resource Consultants, will provide you an education on the subject of precious metals investing. There is such a concern about the economy, I felt this subject could use some light, instead of smoke and heat.
This is the 2nd installment in a series of 16 articles on acquiring gold and silver for your investment portfolio. The less you have, the smarter you must invest to protect yourself against loss and diminishing returns on your assets.
Read and study this information carefully! You are responsible for your own money! Invest it wisely, and it’ll serve you well.
(Note: Information is given as generalizations of typical portfolios. Some of this information was provided by Patrick C. Gorman, President & Owner, Resource Consultants Incorporated, 6139 S. Rural Road Ste.103 (800) 494-4149 or 480-820-5877. Resource Consultants deals in all gold, silver, and platinum coins, and bullion. Pat sells 90% silver in bags, gold and silver Eagle coins, silver dollars, and can recommend a strategy to fit individual need. His wife, Linda, has been in the business for 25+ years, and is experienced in every aspect of brokerage and precious metals management.
Mr. Gorman has been in the hard asset business for more than 27 years. For the past 19 years, he has also hosted his own live talk show, “Hard Money Watch” and has been rated in the area’s top 5 radio shows for the last 6 years. Further, Pat Gorman and his company Resource Consultants is the most recommended precious metals brokers in the country. They are recommended by more than 20 financial newsletter writers and investment analysts.)
What is Gold?
“The value of gold is the only constant that can keep a government from inflating a currency substitute into oblivion. Gold is a yardstick of value that keeps governments in line; governments staffed by power-crazy and greedy men whom––as history has proven––cannot be kept in control by any other means.” Otto Scott, Otto Scott’s Compass
Do you recall the expression “Good as gold?” For thousands of years, civilizations have looked upon gold as the ultimate form of money. No other substance embodies the unsurpassed luster and beauty of gold. Gold has unique characteristics in ease of workability for jewelry, excellent conductivity for electronic manufacturing, and is virtually indestructible.
Gold is a rare substance––during all recorded history, approximately 125,000 tons have been mined! Based on that figure, all the gold ever produced in history could fit in a cube with approximately 60-ft. sides––about the size of two hay barns on a typical farm. Gold production fulfills approximately 60% of the free-world demand for it.
Gold loans, forward selling, gold scrap, and gold from former USSR countries meet the free-world gold supply shortfall. Africa produces approximately one-third of the world’s annual production of gold, the former Soviet Union countries about one-sixth, the US produces about 10%-11%, while Australia and Canada together produce another 15%. These supply-side facts certainly explain why increased demand for gold at the current price level creates a strong upward pressure on gold prices––there’s just not enough of it to go around!
Additionally, worldwide gold demand has increased steadily, due to increased utilization by the jewelry industry, central bank purchases (to assure their ability to make international payments), gold investors, electronics manufacturing, dentistry, minting of official coins, government treasuries, and miscellaneous industry applications. There is also another indicator created by the Chinese peasants who are now able to have savings accrue privately. These people have been buying gold through the Chinese government, even though they are charged a price that is twice that of the free world price!
In the last several years, the Federal Reserve Bank (the US Central Bank) and the Federal government have tended to decry gold––because using gold as the reserve backing for the issuance of paper currency requires these entities to be accountable for adequate amounts of gold bullion in reserve. As you could agree, it seems the Federal government has chosen not to be accountable for their financial actions in the past several decades!
In 1933, President Roosevelt confiscated gold from American citizens. In 1934, after trusting citizens had turned their gold in, he raised the price 69%, to $35. None of the citizens participated in that profit, yet they reelected him three times! Is it any wonder we’re in such a fiscal mess? It was not until 1974 that American citizens could own gold again. The scramble to get a piece of real money began in earnest, and continues today for those investors who seek long-term security. Indeed, when future monetary dislocation begins due to the loss of faith in and acceptance of the almighty dollar, gold coins may be the only form of money that will have enduring value.
Through continued government and banking market manipulation over the past years, most investors have ignored precious metals for the high-flying equity (stocks and bonds) markets. That market trend is now changing. More people are realizing the ultimate safety and monetary insurance that precious metals provide. In fact, since the market crash of 2008, demand for precious metals has increased three fold, by the regular investment public, searching safety for their diminishing dollar assets.
Based on industry reports, the precious metals vendors currently enjoy an inrush of new purchasers––it seems no one wants to sell their personal holdings. As available precious metals inventory is diminished, there will be increased selling pressure on institutions that hold precious metals in inventory. This will cause a volatile rise, creating wealth and protecting wealth that many people have built up over the years. Remember, Gold is the ultimate insurance policy for wealth.
Remember this: “…the only valuable money Government has to spend is that money taxed or borrowed out of the people’s earnings. When Government decides to spend more than it has thus received, that extra unearned money is created out of thin air, through the banks. When spent, this unearned money takes on value only by reducing the value of all money, savings, and insurance of the people.” From: The Ten Pillars of Economic Wisdom
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