Why Invest in Precious Metals?
That is a very good question. In this extraordinary environment, preserving your personal wealth becomes priority one. Precious metals have successfully preserved wealth for thousands of years because, unlike stocks and bonds and paper currencies, they are not someone else's promise of performance and they are not someone else's liability. Massive credit expansion has put US debt at over $14 trillion, but with the $60 trillion in unfunded pension liabilities and Medicare obligations that the US owes its citizens, actual debt is approaching a staggering 370 percent of GDP. (Total US Debt August 2011- $$54,905,004,000,000.00 Total US GDP August 2011-$14,827,789,000,000.00 From the US Debt Clock)
Precious Metals Are a Safe Haven.
At first glance, most people would say that the price of gold increased from $20 to $1600/ounce. This is not accurate. Gold still buys the same amount of goods and services that it did in 1933. Gold stayed pretty much constant. The value of the dollar fell by a factor of 50 so that it takes 50 times more paper dollars to buy the same amount of goods and services than it did in 1933. Looking forward, you must ask, will the dollar buy more or less in 10, 20, or 30 years. The gold you have today will allow you to buy the same amount of goods and services that your money will buy today, 10, 20, or 30 years from now. Looked at in this way, gold and silver become a way of preserving your wealth. They are a form of wealth insurance.
Most Europeans have long held 10-20% of their net worth in precious metals for this very purpose. They have a history which includes hyperinflation, government changes, borders that have moved and two world wars. The durability of gold has served them well through all sorts of political unrest. In fact, it is the only constant in a world subject to change.
Precious Metals Protect Against Depreciating Dollars.
Since gold and precious metals are priced and traded in US dollars, they surge in value when the US dollar declines. As trillions in new money is printed, the dollar and other currencies will fall precipitously relative to gold. In an environment where the dollar is already weak and other currencies are weaker, investors seeking to preserve and grow their wealth must understand the impact of declining currencies on their portfolios.
The Canadian and US dollars have lost approximately 84 percent of their purchasing power since 1970. The world's other currencies have fared no better. Not coincidentally, 1971 was the year the link to the gold standard was cut. Only gold, along with its two precious metals brethren -silver and platinum- will hold their value in periods of severe deflation and inflation.
Gold benefits from negative economic policies, political tensions, and monetary conditions contribute to a rise of it's price. This is the reason gold has always been referred to as the "crisis commodity" and why investors are rolling their 401k and 401b's into Traditional gold IRA and Roth IRA gold accounts.
The following trends weaken stocks and other paper investments and causing the price of gold to rise:
- High Oil Prices
- Weakness in the U.S. dollar
- Budget Deficits
- Stock & Bond Market Turmoil
- Bank Failures
- Loan Defaults
If you had purchased $25,000 of gold bullion coins in 1970 and held on to it over the past 40 years, you could sell it today for well over $500,000.00. It's no wonder why investors the world over are gravitating to such a stable and profitable vehicle for their 401k, Traditional IRA, and Roth IRA's.
Gold in an IRA is the ultimate asset. It is the purest form of money, and the oldest, most durable wealth-preserving asset on the planet. Governments can't devalue it. It has no debts, no board of directors, no politicians or central bankers that can manipulate it's value. Gold has preserved investors' purchasing power over a span of more than 5000 years..
How To Own Gold and Silver In an IRA?
If you currently have an IRA or a qualified plan such as a 401(k), 403(b), etc most likely your plan does not allow you to own physical gold or silver in your account. If that is the case, there is a way to do it that is relatively easy and inexpensive. What follows is a step by step explanation of how to do it. The first step is to finda custodian that will allow such a transaction. There are several including Sterling Trust Company, Goldstar Trust Company and Entrust. There are many others.These three are the most experienced with holding metals. Once you select a custodian, you will need to open a self directed IRA. This involves a minimum amount of paperwork and a fee to set up the account.
Taking possession of your IRA is qualified as a distribution. Under that circumstance, the IRS requires that a possible penalty and the appropriate taxes be paid. To avoid the penalty and taxes you want to have your IRA gold stored with a custodian that handles precious metals self directed IRAs. Midas Resources' brokers will work with you to select a custodain, and help you through the process of filing the required paperwork to start your self directed IRA.
Once your new account is funded, you can then direct your broker to purchase gold, silver, platinum and palladium for your account. Your broker will withdraw payment for the purchase and send the appropriate amount of metals to the custodian's storage facility. The storage facility will report the receipt to your custodian and show the metals in your account.
What Type of Gold and Silver Can Be Held In an IRA?
The United States government currently allows Gold American Eagles and Gold proof American Eagles in IRA's.
Gold American Eagles are mass produced bullion coins. The value of these gold bullion coins is tied to the gold price. The price of gold fluctuates moving up and down like a heart monitor. This fluctuation in the price is directly tied to investors that buy and sell in an attempt to take advantage of the price volatility.
How Is the Gold and Silver in an IRA Physically Stored?
Your gold is shipped directly to your depository, and the shipment will be opened to inspect the contents. After inspection, the contents will be deposited as follows:
Your gold is repackaged after verification and stored separately. This ensures you will receive the exact material as was deposited when you decide to sell, exchange, or take an in-kind distribution (take personal possession of the material) of your gold.
What Determines the Retail Price of Gold and Silver?
A good bit of confusion exists when a person not familiar with the metals markets finds that the retail price of a gold bullion varies from what is know as the "spot" price, which is regularly reported on various business programs and in the newspapers daily.
"The U.S. Department of the Treasury has established a retail price for the gold products minted in the U.S. Mint to reflect the following: the base metal cost (as determined by the spot price established on the London exchange as of the prior Thursday AM opening), the cost to manufacture and market these products to include: Labor, materials, dies, use of machinery and promotional and overhead expense. They report the respective average ranges for each component as a percentage of total price to be as follows: cost of metal 66%-74%, cost to manufacture (including overhead) 11%-19%, and margin 15%."*
(* Source: Federal Register / Vol. 74, No 3 / Tuesday, January 6, 2009)
What Factors Determine Gold and Silver's Value?
One of the important factors in determining value is the condition of the coin. The recognized specifications of the grade are a decisive factor in the value of a numismatic coin.
Rare coins (numismatics) by their nature are becoming harder to find. Therefore, the values are likely to increase substantially.
The number of coins originally issued (minted) is not always an accurate indication of scarcity. It is the demand of the supply that determines it.
The degree of collector and investor demand plays a key role in determining a coin's value. Rare coins are no longer minted, so the supply is very limited. The supply can diminish due to attrition, hoarding, government meltdowns, and government intervention.
Is Copper the Next Silver?
It can be hard to find value in a volatile market. Maybe you have noticed the price of silver and gold has climbed to the point where most people can no longer afford them. With prices soaring, lead times increasing and budgets getting thinner, now may be the perfect time to take a look at what's happening with copper.
Like silver and gold, the price of copper in dollars skyrocketed over the last several years. Though it is still proportionately expensive to mint copper into medallions, savvy investors diversify their holdings with small tokens of .999 fine copper to prepare for and conduct their day-to-day barter transactions. In the event of a currency collapse, copper may be the only form of money that can easily be used in the marketplace.
What Makes Copper So Valuable?
From the early days of commerce, the value of silver, gold and copper has been understood in all parts of the world. Together these three metals formed a complete currency: gold was a store of value for the wealthy, while both silver and copper served in daily transactions as a currency. Through the millennium, silver was the fulcrum of value, balancing the scarcity of gold and the practicality of copper. In modern times, copper serves as an industrial commodity as well as a barter currency for small trades.
Thanks to low start-up costs and raw material prices, copper has also become popular for use at events, fairs and communities that choose to trade tokens in place of conventional paper tickets. Bartering with copper is fun and intrinsically valuable, and helps reacquaint participants with what real money used to be.
What's in it for You?
Demand for copper is in its infancy. Capitalize early and beat the crowd to market.
How Do I Get Started?
Getting started investing in precious metals is easy! To begin the process, all you need to do is call 1-800-686-2237. Our brokers will take your information and work with you to insure you are investing in coins that will meet your investment goals.
Our brokers are ready to answer your questions and help you get started. Your future is too precious to postpone. Don't delay, call Midas Resources today. 1-800-686-2237.