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June 19, 2013
"As long as we have excessive spending and excessive computerized money, you are going to see gold go up""I always go long on gold. And actually, a lot of people who believe in gold are buying. There's actually a shortage of coinage, the actual coins -- there's a high demand. And so the people who believe in gold actually buy a lot under these conditions," ex-Congressman Ron Paul, R-Texas, tells CNBC in a June 18 interview. "I don't look at the ups and downs and the day-to-day operations. But, no, I think when the price goes down, a true believer in gold and the people who are skeptical about the printing press and creating $85 billion new money (a month), they're very hesitant to put their money into and their trust in a system like that. ... "Markets do these kind of things -- they go up sharply, and sometimes they take a rest," Paul said. "But the long term is something you can sort of get a handle on. ... If you look at the record of the value of the dollar since the Fed's been in existence, we have about a 2-cent dollar. And gold used to be $20 an ounce. So I'd say the record is rather clear on the side of commodity money. ... "And history's on our side, like 6,000 years of history shows that it maintains and paper always self-destructs. ... I think long-term gold always goes up. ... There are some who predict the gold price is going to have another record increase for the 13th year in a row. But I wouldn't dare predict that. But I would say long-term, as long as we have excessive spending and excessive computerized money, you are going to see gold go up, and eventually, if we're not careful, it could go to infinity because the dollar could collapse totally." Watch Video
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June 19, 2013
Sri-Kumar Global exec warns of "inflationary consequences of quantitative easing""Because of the deflation that we talked about, that pushes the gold price down, and if we go down to $1,300, you've already gone ... from $1,921 all down to $1,300," Sri-Kumar Global Strategies President Komal Sri-Kumar tells Bloomberg in a June 18 interview. "After that I expect the inflationary consequences of quantitative easing both here -- a pickup in inflation. The deflation may not last very long -- I expect it to be like a couple of months perhaps, and then the turnaround takes place, and that's when, when the deflation hits, that's when you expect to get out of bonds. ... Go into gold; go into commodities. ... I have been negative on commodities for a couple of years. It will change, and I'll become immensely enthused about all of these opportunities at that time. ... The most bullish thing that I see (with gold) is that you can get out of paper money, that it's an alternative to paper. And it becomes a store of your wealth in a form that you can protect yourself against inflation. The situation with interest rates rising as we have had in the last four to six weeks, that's not good for gold because you would rather take the money and put it into fixed-income and earn a slightly higher rate of return. But when interest rates go down and you have a deflationary phase, this is the time you say I'm going to be going more into gold in anticipating the turnaround." Watch Video
June 19, 2013
Labor market improving but not enough to stop bond buying or raise interest ratesThe Federal Reserve said it will keep buying bonds at a pace of $85 billion a month and said that risks to the economy have decreased. "The committee sees the downside risks to the outlook for the economy and the labor market as having diminished since the fall," the Federal Open Market Committee said today at the conclusion of a two-day meeting in Washington. It repeated that it's prepared to increase or reduce the pace of purchases depending on the outlook for the job market and inflation. Chairman Ben S. Bernanke is expanding the Fed's balance sheet toward $4 trillion as he seeks to reduce a jobless rate that stands at 7.6 percent after four years of economic growth. Investor concern that the Fed may soon start to reduce the pace of asset purchases this month pushed 10-year Treasury yields to a 14-month high. ... The Fed also left unchanged its statement that it plans to hold its target interest rate near zero as long as unemployment remains above 6.5 percent and the outlook for inflation doesn't exceed 2.5 percent. The Fed's bond purchases will remain divided between $40 billion a month of mortgage-backed securities and $45 billion a month of Treasury securities. The central bank also will continue reinvesting securities as they mature. The Fed repeated that it will keep buying assets "until the outlook for the labor market has improved substantially." Labor Market "Labor market conditions have shown further improvement in recent months, on balance, but the unemployment rate remains elevated," the committee said. "Partly reflecting transitory influences, inflation has been running below the committee's longer-run objective, but longer-term inflation expectations have remained stable." Read Article
June 19, 2013
John Albanese comments on opportunities in sub-$500 half dollarsGreg Reynolds of CoinWeek continues his series on coin-collecting options for under $500 by focusing on Bust Half Dollars. And once again, Reynolds sought some advice from respected numismatist John Albanese, who founded Certified Acceptance Corp., among his many achievements in the world of rare coins. Among Reich "Lettered Edge" Half Dollars, Reynolds writes: On the whole, except for the 1807, the 1815/2, the 1817/3, the 1817/4 and maybe the 1814/3, representatives of all the "dates" in the set could be purchased for less than $500 each in VF-20 or higher grade. In general, John Albanese recommends Very Fine to Extremely Fine grade Capped Bust Half Dollars.
And on Gobrecht "Reeded Edge" Half Dollars, Reynolds says: The Capped Bust "Reeded Edge" Half Dollars of 1836 to 1839 were designed by, or are directly related to designs by, Christian Gobrecht, who is best known as the designer of silver dollars that were struck during this same time period. As the Capped Bust Half Dollars attributed to John Reich have "lettered edges," the fact that these each have a reeded edge results in the standard "Reeded Edge" name, which is awkward.
"When I was a kid," recollects John Albanese, "I would sometimes walk into a coin store and see a lot of bust halves in a display case. Most were circulated pieces from the 1820s or early 1830s. There would be just a few Reeded Edge Halves, or maybe none at all. I came to think of the Reeded Edge Halves as being cool and exotic."
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June 18, 2013
Ultra-dove Janet Yellen is leading contender, says Bloomberg and Wall Street Journal pollsOn the eve of the Fed's two-day policy meeting, President Obama added another level of uncertainty to the event by suggesting Ben Bernanke is unlikely to remain Fed chairman after his current term expires in January. Bernanke has "already stayed a lot longer than he wanted or he was supposed to," Obama told Charlie Rose in an interview that aired Monday evening. The meeting was already hotly anticipated given the market's obsession with whether or not the Fed will "taper," i.e. signal plans to scale back on its current $85 billion per month quantitative easing program. Now President Obama has reminded everyone about another uncertainty with the potential to move markets: Who will replace Bernanke as Fed chair? According to a Bloomberg poll last month, current Fed Vice Chair Janet Yellen is the most likely candidate to replace Bernanke. Former Treasury Secretaries Tim Geithner and Larry Summers also garnered more than 5% of votes in the poll. A Wall Street Journal poll also listed the usual suspects as top contenders -- most of whom favor the loose, gold-bullish policies that helped power bullion's price gains since 2008. About 29% of economists surveyed by The Wall Street Journal in early April predicted Bernanke will stay on for a third term, while 46% bet Obama will tap Janet Yellen, the current Fed vice chair, as the central bank's first female chair. Another 25% of economists polled believe Obama will select another person for the pivotal post, leaving room for alternatives like former Treasury Secretaries Tim Geithner and Larry Summers, influential Princeton economist Alan Blinder or a number of other candidates. Whoever is chosen will have the challenging task of unwinding the Fed's bloated $3 trillion balance sheet to avoid sparking a bout of inflation, but not before the U.S. economy is healthy enough to stand on its own. Read Article
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