India's anti-gold policies: Symptom, not cure

What's going on in India is nothing new. We've seen it over and over again throughout struggling economies.

These attempts to control movement of currency are very common when a government is faced with problems like India's. They actually create a more crippling environment than the one they are put in place to improve.

Gold (COMEX:GCZ13) has always been and will always be the safe haven of choice when people lack confidence in their government. Lacking confidence doesn't only mean that they're not certain they'll perform well, but it also may mean that they don't trust their government to operate in their best interest. Starting with allowing economic freedom, and defending the value of the currency.

Will gold climb with tapering?

In yesterday’s Social Gold Mine we featured a couple of tweets regarding India’s ongoing currency wars; the rupee vs. gold. Despite the rupee sitting at an all-time low against the dollar, for the time being it is officially winning the war. Thanks to the weak currency the price of gold bullion is at a record high and August’s gold imports fell by 90% from the previous year.

Now that tensions over Syria appear to have calmed, gold appears almost entirely focused on the FOMC meetingnext week and the subsequent decision. Consensus remains that the Sept. 17-18 meeting will result in an announcement that the Fed will reduce the $85billion monthly purchases by around $10-$15 billion.

Goldman Sachs, not really known for their record gold price predictions, said this morning that gold’s drop will extend into 2014 when the Fed tapers asset purchases. The bank’s economists expect tapering to be the catalyst to push gold lower, “gold prices will decline into 2014 on the back of an acceleration in U.S. activity and a less accommodative monetary-policy stance.”

Goldman Sachs joins a host of other major institutions including SocGen, Citigroup and ABN Amro all of whom have predicted lower gold prices for 2014.

BofA Merrill Lynch Global Research said yesterday that gold is likely to rise even if the Fed does embark on tapering, but only if it is less than expected.

Platinum price

The same group also mentioned platinum yesterday, which they expect to perform well in light of ‘tighter monetary policy’ and improvement in developing markets. Despite this, they have reduced their 2013 platinum price target, by 6%, to $1,575 an ounce. Predictions for 2014 and 2015 are $1,850 and $1,900 respectively.

Whilst India looks likely to lose it shine in the gold market, China is no doubt set to buy even more given their industrial output data released yesterday. August’s industrial output for the country rose by 10.4%, 0.5% higher than expected. Retail sales were up 13.4%.

COMEX default

Is Comex facing a default risk? Inventories have fallen by 36% so far this year, from 11.059 million ounces to 7.034 million. Whilst a default can never be ruled out, we draw your attention to our earlier research that shows the delivery ratios were exceptionally low at present. Having said this, as many are pointing out this does not mean that the Comex is not open to being cornered by a sovereign nation or even a group of wealthy individuals.

Gold’s Superman

Here in the West we are all aware of Warren Buffet’s views on gold. But when it comes to Asia’ own Warren Buffet, Li Ka-shing, it’s a different story.  Also known as ‘Superman’ (much cooler than the ‘Sage of Omaha’), he is the wealthiest Chinese person of descent in the world. And he is buying gold having just invested in CEF Holdings, a joint venture that will acquire gold mining companies and other gold-related assets.

Gold: When western supply meets Asian demand - Issue 3 of 5

TGR: What do patterns in the market trends tell you?

BL: This year the gold market has experienced a number of head fakes, where we thought we had a bottom, then it dropped to a lower plateau, then dropped again. I think the June 28 bottom will hold. The fundamental evidence argues for an extremely tight situation in the gold market, which will keep the prices from dropping to an even lower plateau.

A lot of evidence, from stochastics to moving averages, is delivering very strong buy signals. There is anecdotal technical evidence like the negative GOFO rate and backwardation in the near-term futures. All this added together points to higher gold prices and a more sustained rally.

Yet, in the broader market, sentiment is still not very positive for gold. We're still climbing a wall of worry in regard to sentiment, yet, for those willing to look, an increasing amount of evidence is pointing toward higher prices. This is really the perfect situation.

TGR: Your newsletter reports on a host of companies. Can you tell us about some junior plays with leverage to the gold price, starting with those that have assets in safer jurisdictions like Canada and the U.S.?

BL: Safer jurisdiction is an important point. In this market, there are so many undervalued companies out there that there is no reason to take on sovereign risk if you don't have to. As we start this rebound, it's important to look for undervalued juniors that have proven resources or are in production. You can get them at bargain level prices, and they will be the first to respond.

I expect Brigus Gold Corp. (BRD:NYSE.MKT; BRD:TSX) to surprise a lot of people. The company spent a lot of money to upgrade its facilities and prepare for a higher production rate. Its capital expenses will therefore drop considerably going forward, while it benefits from the higher production rate.

TGR: Brigus just recently increased its guidance by 5,000 ounces (5 Koz) through the end of 2013.

BL: And the exploration potential in the Grey Fox deposit gives it a good growth profile.

TGR: Brigus' new estimate for Grey Fox, issued in July, is up to 736 Koz. How big could Grey Fox get?

BL: It's hard to tell, but grade is just as important as size. Its grades are so exceptional that, if Brigus were a junior, it would be the exploration story of the year. The widths are good, too. Grey Fox should generate fairly high-margin production given the richness of the mineralization. It will be significant to the company's growth profile because of its size, and significant to its earnings profile because of the high grades.

TGR: How about some other names?

BL: A number of exploration stories in the U.S. and Canada are undervalued. Gold Standard Ventures Corp. (GSV:TSX.V; GSV:NYSE) had great exploration success in 2011 and 2012 in Nevada, then was forgotten by the market in the downturn. It has a great geological staff. I think it has narrowed down on the trend and the mineralization. The company is selling at prediscovery price levels, which I find very attractive.

TGR: Gold Standard Ventures recently raised $5 million ($5M) to continue exploring the Railroad project in Nevada. How important was that?

BL: Its ability to raise money validated its project and its upside. Any experienced, knowledgeable hand in Nevada exploration will tell you that Gold Standard Ventures is as close to a sure thing as you can find in Nevada. It's the wise guys' play in Nevada exploration.

Comstock Metals Ltd. (CSL:TSX.V) has a project in the Yukon that could be an analogue to the Underworld Resources Inc. discovery at Golden Saddle—the discovery that sparked the new Yukon gold rush. Recent results were mixed, but did nothing to extinguish the upside potential because it has a number of targets on the project. The question is whether the grades will be high enough over the current widths to justify development in the Yukon. I think it has a really good shot at it.

Gold: When western supply meets Asian demand - Issue 2 of 5

TGR: Could you expand on why you believe China will soon be "driving the bus" for the global gold market?

BL: The Shanghai Gold Exchange (SGE), putatively a futures exchange, is actually a physical delivery mechanism for the Chinese market. Most of the gold traded on the SGE is actually delivered to end-users. As of the end of June, SGE reported nearly 1,100 tons of gold have been traded so far this year. That equates to all of the metal that had been traded on the SGE in 2012, which itself was a record year.

Put another way, at this rate of consumption, demand on the SGE this year will equal the entire newly mined global output projected for 2013. In effect, all of the new gold supply in the world is being consumed by a single exchange in a single nation.

China will soon exceed India as the largest source of gold demand in the world. There are demographic factors behind this: a deep cultural affinity for gold, a growing population and a rapidly growing middle class. The per-capita use for gold in China is still relatively low but has a lot of upside. As incomes grow in China, gold demand will grow on a per-capita basis even as the population grows. The potential for growth in the demand for gold is almost exponential.

TGR: Who in China is buying gold?

BL: The assumption is that the People's Bank of China is buying gold to build up the nation's gold reserves. China also has become the world's largest gold producer, yet none of the gold it produces ever gets exported.

There is tremendous upside potential in central bank buying of gold in China, in that China holds a huge amount of U.S. dollars in its foreign currency reserves. If it were to increase its gold reserves to the average level of most developed nations, it would quickly absorb all of the available metal in the global gold market.

TGR: Would the gold price be on an even stronger upward trajectory if India hadn't taken measures to curb gold buying?

BL: Yes, Indian demand would have been much stronger if its central bank hadn't increased the tariff in phases to 10%. Just as importantly, it imposed an 80/20 rule, which requires that 20% of all of the gold imported into India must be subsequently exported as finished goods. Those rules, imposed without explanation of how to follow them, effectively shut down Indian gold imports from the end of July through the end of August.

TGR: You recently wrote "Gold has bottomed. The market is set up for a large sharp rally when and if a short covering stampede is sparked." What could those sparks be?

BL: One appears to be the situation in Syria, although we don't know how that will develop.

A more important and fundamental driver for a short-covering rally would be the flow of economic data in the U.S., where economic growth had been showing signs recently of slowing. That slowdown, if it were confirmed, would eliminate any justification for tapering off the Federal Reserve's QE program. A growing consensus that QE will be here for a while will be the driver that gets the shorts to abandon their bearish gold positions.

TGR: How does all this translate to gold equities?

BL: The majors had a fairly good rebound and were outperforming gold until the Syria situation erupted. That touched off broader equity market selloffs, and the gold stocks were victimized.

Interest is just starting to filter down to the junior resource stocks. I'm not as negative on that subsector as some of my compatriots. Greed is the most powerful motivator in the investment markets, and greed will draw investors to the juniors like iron filings to a magnet if we see a sustained upward trend in gold and silver.

Gold: When western supply meets Asian demand - Issue 1 of 5

The global rally for gold underway since late June will soon translate to juniors, says Brien Lundin, CEO of Jefferson Financial and the publisher/editor of Gold Newsletter. With so many undervalued companies in safe North American jurisdictions, he sees no reason to add sovereign risk to a portfolio. In this interview with The Gold Report, Lundin details which companies he follows and why, highlighting one area where major discoveries are "lined up like pearls on a string."

The Gold Report: Brien, judging from the tone of the September 2013 issue of Gold Newsletter, you have renewed excitement for precious metals equities. Why?

Brien Lundin: You're absolutely right, and it's all based on the metals markets. In a typical year, the precious metals markets bottom out at the end of July to early August, when physical demand from Asia abates, before kicking back up in late August and September.

This year, gold bottomed out in a final downward thrust at the end of June and then started building back up. At the same time, a lot of anecdotal evidence began to reveal an extremely tight supply situation in the global gold market. Taking all of that together, I was fairly confident in calling a bottom for gold.

Then, the equities started to respond. However, the situation in Syria prompted some safe-haven demand in the last few days and the mining equities stepped back; with safe-haven demand, investors want the metal, not the paper. But that was just a brief blip. I see an open road ahead for gold metal and gold equities.

TGR: Gold is moving higher, but without much of an explanation. What is your take on the situation?

BL: The market has had some strong performance, jumping $15, $25, even $35 in a day. I think those spikes are a result of the extremely tight demand situation in the gold market. In the spring, Western speculators and some of the big holders of SPDR Gold Trust (GLD), the gold exchange-traded fund (ETF), abandoned the market in anticipation of the imminent end of quantitative easing (QE). We also had some manipulation, notably on April 12 and April 15, in a blatant attempt to force the market through sell stops, thus benefiting from short positions. As a result of these speculative selloffs, the market was dramatically oversold.

But this rapid price decline sparked tremendous bargain hunting in Asia. Asian demand more than overcame the selling by Western speculators. The supplies of gold in the Comex warehouses dropped to record low levels. We saw gold being transferred from vaults in the West to the East, causing the rare occurrence of a negative Gold Forward Offered (GOFO) rate—the interest rate difference between gold holdings and LIBOR. That has happened only twice in this bull market, at the beginning of the major bull trend around 2000, and in 2008. Both times it marked a major turnaround in the metal.

There is a lot of evidence that this unprecedented supply situation was behind the sharp, brief upward spikes in the gold price. As you add up these sharp spikes, gold was gradually and then more rapidly coming off that bottom in late June.

There are number of players in the East who want gold and are willing to pay higher prices. There also is a shortage of gold in the West. From a fundamental supply-demand standpoint, we still have some room to go in this oversold rebound.

When silver shortages reach the mainstream - Buy From Calaveras Coin & Pawn Today!

Many observers have realized that the price of silver will rise dramatically at some point because the amount of paper silver is many times the amount of physical silver. When this fact is even partially acknowledged by the mainstream, silver will probably move much higher.

Furthermore, silver has historically been a real money substitute for paper fiat currency. The governments of the world cannot afford to allow silver’s price to rise on the perception that people are losing confidence in their country’s paper fiat currency.

Manipulation Has Contributed to Physical Silver Shortages

The price of silver has been kept in check by via the management of a profitable and decades-long net short futures position held by the market’s largest banking players, who have allegedly been acting as agents for the controllers of money. 

Of course, if these controllers selling silver make a futures market trading loss, they only have to print more paper money to pay for it, since the seller of a futures contract controls whether or not physical delivery occurs.

Lower paper silver prices also allow them to pick up cheap physical silver from the unsuspecting public that still typically remains unaware of the futures market manipulation.

Chronic Shorts Unwinding

That these illegal and manipulative short positions currently appear to be unwinding as public awareness and even official scrutiny rises has now become widely accepted. Perhaps this is a visible response to the CFTC’s ongoing and largely ineffective five year investigation into silver futures price manipulation.

The revelation that J.P. Morgan Chase and Goldman Sachs are basically exiting commodities also seems timely. Both of these banks are members and primary dealers for the U.S. Central Bank — the privately owned Federal Reserve Bank. JPM and Goldman are essentially acting as fronts for the Fed’s market presence and therefore are one and the same.

While the Fed is neither fully federal nor a reserve, like its name would imply, its independence seems more and more at risk as the need for a buyer of last resort for U.S. government debt is growing. It now seems almost inevitable that the need to prop up the ailing Treasury market will be 100% once the bond market really begins to fall.

Physical Supply and Demand Factors

Still, what if the big players agreed to look the other way and actually allow silver’s price to rise because of an acknowledged industrial shortage? This sort of reasoning reduces the risk to their funny money fiat currency system. The price rise could be framed as simply being due to an increase in volatility, or perhaps more negatively portrayed in the media as speculator driven.

The mainstream has never acknowledged silver’s steady investment demand, and always seems quick to parrot questionable "surveys" that count coin demand as surplus.   Furthermore, the bullion banks seem to desperately need gold bullion, if the progressively negative GOFO rates the gold market has recently seen are any indication. Negative GOFO rates are a relatively rare occurrence that means the bullion banks will pay physical gold holders to lease their bullion and are indicative of a physical gold shortage.

Given the recent widening of the gold to silver ratio, silver could readily outperform gold this year before garnering too much attention. This could be the mainstream’s justification for a rise in silver over coming in months, especially since silver’s price has already fallen considerably along with the quantitative easing taper-induced free fall in equities.

Silver prices: How high could they go?

One of the questions most often asked by those interested in investing in silver pertains to not only how low, but how high silver’s price can go.

The range is anywhere from a paper price of zero, given the role of the bullion banks in the decades long silver market price suppression conspiracy, to infinity in the event of a U.S. dollar hyperinflationary scenario.

Fair warning should be given that any discussion of price assumes that it is expressed in terms of a fiat currency or forced legal tender.

Of course, the ultimate measure of silver’s value is instead its purchasing power, although this value is much murkier and more difficult to compute given that investors are currently living in an age of faith-based fiat currency.

Bullish Scenarios for Silver Prices

A number of bullish scenarios exist that could substantially increase the price of silver if they were to materialize. They include the following:

When Physical Shortages Spike Premiums: Retail scarcity of silver could ignite physical premiums, thereby completely detaching the physical price from whatever paper price is being printed by the CFTC 'regulated' markets.

If Price is Determined Outside of the United States: Physical demand would prevail once again and would very likely cause the price of silver to overshoot its inflation adjusted highs.

Without a Concentrated Short: A silver market that trades freely based on the amount of available investment grade silver would likely overshoot anything currently considered reasonable in terms of price.

The Historic Gold-Silver Price Ratio: This measure has typically traded between 10 and 20 ounces of silver to 1 ounce of gold, rather than the currently observed value in excess of 60 to 1.  This historical price ratio range roughly parallels the mining ratio of 9 to 1.

Gold to Silver Investment Ratio Inverted: Using the above ground investment grade 1,000 ounce bar form, the gold to silver ratio reverses, thereby potentially making silver more valuable than gold since silver is rarer in its investment form.

Continuation of Syrian War & How It Effects Gold Prices!

On the other side of the gold equation we have of course seen evidence of gold being used as a defense weapon in this war against Syria. In February 2012 sanctions on Syria, from both Western and Arab nations proved too much. The country resorted to selling some of their 25.8 tonnes of gold reserves ‘at rock bottom prices’ to try and raise revenue.

Previously the country had traded in gold, as well as other precious metals, until February 2012 when the European Union prohibited trade in precious metals with Syrian state institutions.

Internally, the gold market is not a booming one. Since 2009 the import of manufactured gold jewelry has been banned, whilst other gold objects above 0.5kg are also banned from being imported.

When the war broke out and sanctions took hold, citizens rushed to sell their gold; however, few were looking to buy as cash became king in a country where there was little money to be made anywhere.

Since 2000 it is estimated that the number of gold workshops has fallen from around 600 to just 200. There is yet little evidence that those caught in the middle of the conflict are turning to gold as a safe-haven. However data for smuggling is not yet available, we would also hypothesize that many of those escaping the conflict have taken whatever precious metals they own, recognizing it as a faceless currency.

Does war affect the gold price?

Talk of war and the act of war clearly affects the gold price. The price of the yellow metal obviously continued to climb after each of the three examples we provide. But in truth very little happens when the talk of war turns into action.

This brief look at a small selection of wars suggests that the gold price peaks prior to and at the beginning of military action, before returning to levels seen not long before. It then, of course goes on to extend its bull run. But how much of it was to do with wars that happen in the Middle East?

We believe very little, whilst geopolitical instability clearly is a driver for the gold price, it does not obviously have a long-term impact on the price of bullion. It may be interesting however to look at how the economic impact of wars go on to affect the price.

For instance, what many appear to forget when they discuss Syria, tapering and gold in the same breath, is that a war means money printing will have to happen regardless of what you call it.

What does war mean for the gold price?

In the last week or so there has been a changing sentiment toward what is driving gold, a large part of the focus is now directed toward Syria and less so on the FOMC’s tapering. Depending on whom you believe, Syria may determine the outlook for the gold and silver price.

But how much of an impact will a war with Syria really have on the gold price?

Other commodities, such as oil are also impacted by murmurings of war but even they too are looking at factors beyond Syria as price drivers.

Many analysts believe the gold price (COMEX:GCZ13) will climb as investors turn to it as a safe-haven in times of geo-political crisis. This may be the case, but whether this will matter once foreign military action begins, or even if it never begins, is an important question.

On the face of it, it may seem obvious that the gold price will climb as action surrounding Syria holds the world’s attention. After all, the price of gold has climbed to a three-month high reportedly on the back of events in the Middle East and the war rooms of the West.

In the last month, as discussions surrounding Syria have heated up the gold price has climbed by as much as 9%. At the time of writing it is up by 6%, as the threat of war seems less imminent than it did earlier in the month.

Gold and war

There is much to be said about the run to gold during a war, the mentality of both civilians and soldiers during war and how they react to gold but let’s put this to one side for now and look at how gold behaves in the run up to a war. Whilst it may seem there are too many wars, there are also several ‘run-ups’ to them before anything, if at all, happens.

Rumors of military action

Of course, at the moment all we have is talk of a war. This has happened many times before, and often with no outcome.

As rumors of a war with Iran peaked at the beginning of November 2007, gold soared to reach a 27-year high touching $806/oz. This was five-months after the U.S. government issued a warning to all U.S. citizens not to travel to Iran and just a month or so after the first batch of U.S. sanctions were placed on the country. Again, it seemed gold ‘smelled’ war.

The red line indicates when gold soared, it then fell to levels not seen since the previous month before climbing and falling over the next couple of months. It wasn’t until the beginning of January when the gold price pushed above the highs seen in November.

The 1933 Saint-Gaudens Gold Double Eagle - Illegal Coins To Own

The 1933 Gold Double Eagle was Never Officially Issued:

The U.S. Gold Double Eagle, Saint-Gaudens type, had been issued from 1907 until 1932. Although 445,500 Double Eagles had been minted with the 1933 date, none were released into circulation because of changes made to currency laws during the Great Depression. In an effort to end the run on the banks and stabilize the economy, President Franklin Roosevelt took America off the gold standard. Not only were no more gold coins to be issued for circulation, people had to turn in the ones they had.

The 1933 Double Eagles are Ordered to be Destroyed:

It became illegal for private citizens to own gold coins, unless they clearly had a collectible value. This law was enacted during desperate times to prevent the hoarding of gold currency. Since there would be no more gold currency issued in the U.S., the Mint had melted down the 1933 run of Gold Double Eagles and converted them to gold bullion bars by 1937.

Some of the Double Eagles Escaped the Melt Down:

Two of the 1933 specimens were given by the Mint to the U.S. National Numismatic Collection at the Smithsonian Institute. These were the only two legal specimens to ever become part of a coin collection; however, by 1952, the Secret Service had confiscated 8 more 1933 Double Eagles! How did they leave the Mint? Why weren't they melted down?

Was the 1933 Double Eagle Switched for Another Coin?:

We may never know for certain how these coins left the Mint, but there is a general consensus among scholars that a Mint cashier by the name of George McCann exchanged about 20 1933's doomed for destruction and replaced them with earlier dated Double Eagles. This way, the accounting books would balance and nobody would realize that anything was amiss.

What we do know for sure is that a Philadelphia area jeweler by the name of Israel Switt came into possession of at least 19 of the coins.

The Coin of a King:

Israel Switt sold at least 9 of the 1933 Double Eagles privately to collectors, one of which found its way into the collection of King Farouk of Egypt. When the Secret Service discovered that these coins had surfaced, they confiscated them all because they were considered to be stolen property of the U.S. Mint. However, King Farouk had legally exported his coin before the theft was discovered, and the Secret Service was unable to recover his specimen through diplomatic channels.

The King's Specimen is Recovered in a Sting Operation:

After King Farouk was deposed in 1952, his 1933 Double Eagle briefly appeared on the market, but when it became clear that U.S. authorities still wanted to confiscate it, it vanished again! More than 40 years later, British coin dealer Stephen Fenton showed up with it in New York, and the Secret Service finally seized it during a sting operation during which they purportedly negotiated to purchase the coin.

The 1933 Double Eagle is Nearly Destroyed by Terrorists:

Fenton fought a several year-long legal battle in the U.S. courts over ownership of the coin, during time which it was stored in the Treasury Vaults at the World Trade Center. A mere 2 months before the terrorist attacks of September 11, 2001, the lawsuit was settled and the Double Eagle was moved to Fort Knox. Fenton and the U.S. Mint had come to a compromise: the coin would be sold at auction, with the proceeds split between the Fenton and the Mint.

Legal Tender at Last - and the Most Valuable Coin in the World:

The 1933 Double Eagle sold at auction on July 30, 2002, for $6.6 million, plus the 15% buyer's fee, which brought the total cost to the buyer to $7,590,000, plus $20 to monetize the coin and compensate the Mint for the $20 it believes it lost when the coin was thought to have been stolen. The buyer chose to remain anonymous, so once again we don't know where the Farouk specimen is, or when it might suddenly show up again. One thing is for sure: the Secret Service can't confiscate it any more!

Ten More Specimens Hang in Limbo:

In September of 2004, Joan Langbord, one of Israel Switt's heirs, discovered ten more specimens of the 1933 Double Eagle amongst his effects. Apparently unaware of the legal status of these coins (or perhaps just a bit too trusting of the government) she sent all ten specimens to the U.S. Mint to have them authenticated. The Secret Service declared the coins to be seized, and now Langbord is fighting the government over ownership while the specimens languish at Fort Knox.

Is the 1933 Double Eagle Still the World's Most Valuable Coin?:

It will be interesting to see, should the 10 Langbord coins ever come to market, if the 1933 Double Eagle will retain its place as the world's highest priced coin when the number of available specimens increases ten-fold.

5 Tips On How To Find An Honest Coin Dealer

Step number one any dealer willing to share this article must not be afraid and is probably on the right track.  No its not step #1 but obviously a very true piece of sound advice.

(1) Is the Coin Dealer Experienced? There's an old saying around numismatics that goes, "Buy the book before you buy the coin." While this is excellent advice, and I strongly recommend following it, the fact is that not everyone can become an expert. If you are buying coins, especially for investment purposes, you want a knowledgeable, reliable coin dealer who can give you accurate advice. Would you go to a novice for advice on investing in the stock market? If not, then don't go to a coin dealer unless he has solid credentials.

Our Answer: Calaveras Coin & Pawn has been in the numismatic industry for over 20 years with far more than that in the study of coins.

(2) Does the Coin Dealer Have Any Assets? Although the overwhelming vast majority of coins on the market are genuine, there are occasionally some fakes that turn up. You want to know that the dealer is likely to still be in business five years from now if that $20 Saint Gaudens High Relief treasure turns out to have been a high tech fake somewhere down the line. Although certification services and slabbing have palliated this concern somewhat, a coin dealer's financial stability is a good indicator of the likelihood that he'll be around for a long time and financially able to provide recompense.

Our Answer - We have just expanded to meet the overwhelming demand that folks wanting to invest in something other than the stock market have created.  We are not going anywhere and can handle transaction both small and into six figures.   We also guarantee our coins to be genuine.

What Determines the Value and Price of Coins?

There are many factors that go into determining the price and value of a particular coin. First of all you must understand the difference between price and value. To most people these two terms are used interchangeably. To coin collectors they mean different things. The "price" or "retail price" of a coin is what you pay for that coin when you purchase it from a dealer. The "value" or "wholesale price" of a coin is what a dealer would pay to you to buy the coin from you. The coin market is intricate and complex and there are many factors that influence coin prices and values. The following are the major factors that determine values and prices of coins.

Answer:

Mintage

The major influence on the value or price of a coin is the supply of that particular coin in a particular grade that is available for people to buy. The total possible supply available to the market is determined by the initial mintage of that coin. For most countries, at the end of a year, the coin dies with that year on it are destroyed and never used again. Hence, once a year is done the supply of that coin for that date is fixed (note: this does not take into account restrikes).

The 1895 Morgan Dollar - The King of Morgans - The Most Valuable Morgan Dollar

The 1895 Morgan Dollar:

The 1895 Morgan Dollar is known as the "King of the Morgan Dollars" because it is the rarest and most valuable of the entire Morgan Dollar series. PF-68 specimens of this rare coin have sold for upwards of $120,000 at auction.

According to U.S. Mint records, there were 12,000 regular circulation Morgan Dollars struck for 1895, and 880 Proof specimens struck. However, only 75 to 80 of the 1895 Morgans have been accounted for, all of them Proofs. Where did 12,000 plus coins go?

A Mysterious Disappearance?:

Numismatic scholars are divided in their opinions as to why the 12,000 business strike specimens of the 1895 Morgan Silver Dollar have vanished into history. Most believe that the coins were never minted in the first place, and that this notation in the Mint accounting ledgers is in error. Some believe that the coins were minted, but melted down for various reasons. I even read one theory that proposes the coins were lost at sea in a shipwreck.

Silver Prices... How High Could They Go - Continued

Technical Analysis

Fairly conservative technicians currently seem to expect $100 to trade after a $50 breach, although a correction to test the base at $50 could then materialize.

Revised CPI Measures: When the price of silver is inflation adjusted from its historic highs using the old CPI measure, people like John Williams have been quoted saying it should be as high as $500 per ounce.

Using Money Supply: Given the rapid expansion of the money supply since the gold standard was most recently abandoned in 1971, which has accelerated even further after the 2008 financial crisis, analysts like James Rickards have pointed out that a price of $7,000 to $10,000 for an ounce of gold would make more sense. Using the historically reasonable 20 to 1 price ratio, this analysis would put the price of silver in the $350 to $500 per ounce range.

Alternatives to Paper Money: Gold and especially silver may not achieve official currency status any time soon, but they are the best candidates for unofficial non-fiat money that investors can readily purchase.

Financial Repression: Current monetary policy continues with low interest rates, captured bond buyers and real (as of yet absent) growth priced in forced legal tender.

Hyperinflation to Quadrillions of Dollars per Ounce

Un-backed fiat currency money printing is running rampant under the flimsy guise of quantitative easing. Silver investors have all heard quadrillions associated with derivatives for a few years now. The BIS changed their calculation in 2009, making the amount of outstanding OTC derivatives smaller by approximately $500 trillion. Also, the market has long known that the Abe regime in Japan will soon pass the 15 zeros of debt mark, if they have not already done so. The devil is in the details and in this case the hyperinflationary details remain firmly entrenched in a cacophony of noise and distraction.

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50 State Quarters, District of Columbia and U.S. Territories Roll Values

How Much Are My 50 State Quarters Uncirculated Rolls Worth?

Image Courtesy of: The United States Mint, www.usmint.gov

This coin value guide will give you an idea of how much your 50 State Quarters, District of Columbia and U.S. Territories rolls of uncirculated coins are worth. These coins were minted between 1999 and 2009. The table listed below provides coin values for rolls of 40 uncirculated coins with a face value of $10.00 USD.  If the coin shows evidence of wear on it due to being used in commerce, it is considered "circulated." If it was never used, then it is classified as "uncirculated." Please reference the pictures below to see examples of each condition.  Caution: you cannot increase a coin's value by cleaning it. In fact, cleaned coins are worth considerable less and coin dealers can spot a cleaned coin immediately.  Therefore, never clean your coins.

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Hyperinflation in America: When a Loaf of Bread is $3 Billion

Too few understand just how disruptive hyperinflation in America would be.

Truth is, it would be a nightmare.

In an episode of hyperinflation, money loses value so rapidly that people spend it as quickly as possible, which only feeds the cycle of pushing prices higher and higher at a faster and faster rate.

Imagine prices at the food store and gas pump not just going up a few cents at a time, but doubling in a matter of months, weeks, or even days.

And now some economists and market experts think many of the ingredients for hyperinflation are brewing in America.

Top 10 Most Valuable U.S. Coins Found in Pocket Change

There are a number of fairly valuable U.S. error coins and die varieties in circulation today. These coins are overlooked by people because they have small distinguishing characteristics, such as a modest doubling of the coin image, or minute differences in the size or spacing of the letters in the legends. Learn which of your pocket change coins is worth a large premium over face value, and why.

Note: Click on the images to greatly enlarge them and see details.

Tip: Be sure to do your hunting with at least a 6x power magnifier so you don't miss anything!

1. 1969-S Lincoln Cent With a Doubled Die Obverse

Photo courtesy of Heritage Auction Galleries

This coin is exceedingly rare. The early specimens were confiscated by the Secret Service until the U.S. Mint admitted they were genuine. Counterfeits abound, but usually have the wrong mint mark.

How to Detect: Look for clear doubling of the entire obverse ("heads" side)except for the mint mark. If the mint mark is doubled, it is probably a case of strike doubling, rather than a doubled die, which isn't worth much. (Mint marks were punched in the dies separately in 1969, after the doubled die itself had already been made.)

Approximate Value: Around $35,000 or more in EF-40 or so.

3. 1972 Lincoln Cent With a Doubled Die Obverse2. 1970-S Small Date Lincoln Cent With a Doubled Die Obverse

As with virtually all true doubled die varieties, only one side of the coin shows doubling. If both sides exhibit doubling, the coin probably exhibits strike doubling instead, and is worth little.

How to Detect: The rarer Small Date variety is most easily distinguished from the common type by the weakness of LIBERTY. The Doubled Die Obverse is best demonstrated by doubling in LIB and IN GOD WE TRUST.

Approximate Value: Around $3,000 in EF-40 or so.

The 1972 (no mint mark) Lincoln Cent doubled die variety shows strong doubling on all elements. The "Cherrypicker's Guide to Rare Die Varieties", which was an important source for this article, suggests using a "die marker" to help verify your finds. A die marker is a gouge or crack that identifies a particular die.

How to Detect: Clear doubling of all obverse elements; look for a tiny gouge near the edge above the D in UNITED as a die marker.

Approximate Value: About $500 in EF-40 or so.

4. 2004-D Wisconsin State Quarter With an Extra Leaf

Variety experts disagree about the cause and long-term value of this type, but I've included in the list because it is very findable in pocket change and worth hundreds of dollars right now.

How to Detect: There is some defect on the die that makes it appear as if there's an extra leaf on the lower left-hand side of the ear of corn on the reverse. The leaf is very clear. Known in two varieties, the High Leaf and the Low Leaf type.

Approximate Value: $200-$300 in MS-60 or so.

5. 1999 Wide "AM" Reverse Lincoln Cent

This variety is known for 3 dates, 1998, 1999, and 2000, with 1999 being by far the rarest. The mint erroneously used a proof die to strike normal circulation coins.

How to Detect: The AM in AMERICA on the reverse is clearly separated in the Wide variety. In the normal variety for these dates, the letters AM are very close or touching.

Approximate Value: $5 to $25 in circulated condition, $75 to $600 in MS-63 or better depending on color. 1999 brings the highest prices, with 2000 being second.

6. 1982 No Mint Mark Roosevelt Dime

At the point in time that these coins were made, the dies sent to the individual branch mints would be punched with the proper mint mark letter for that branch. This variety is believed to be caused because one or more non-punched dies were used to make coins. (The letter P was being used for Philadelphia on dimes at this time.)

How to Detect: The 1982 dime is missing a mint mark.

Approximate Value: About $30 to $50 in AU-50, more for higher grades.

7. Presidential Dollar Edge Lettering Errors

Ever since the first Presidential Dollar (the Washington Dollar issued in 2007) there have been errors associated with the lettering on the edge of these coins. In some cases it is missing entirely. In others, the edge lettering has been placed there multiple times.

How to Detect: Look at the edge. The inscription should appear fully incused all around the circumference of the coin. Missing or doubled inscriptions are rare and valuable.

Approximate Value: $50 to $3,000, depending on the President.

8. 1995 Doubled Die Obverse Lincoln Cent

This doubled die variety generated a lot of mainstream interest when it was featured as a cover story in USA Today. Specimens are still being found in circulation all the time!

How to Detect: Clear doubling in LIBERTY and IN GOD WE TRUST.

Approximate Value: About $20 to $50 in Uncirculated condition.

9. Certain Uncirculated State Quarters

As the economy has worsened, people who have been hoarding rolls of State Quarters have been spending them into circulation. If you can put together whole rolls Uncirculated quarters of certain in-demand states, you can get as much as $50 per roll for them.

How to Detect: Demand changes from time-to-time based on major coin dealer promotions. Currently, look for Georgia, Connecticut, Tennessee, and Illinois. Quarters must be Uncirculated!

Approximate Value: $20 to $52 per roll for strictly Uncirculated rolls of certain states. For current updates, see the State Quarter Rolls Value Guide.

10. Silver Half Dollars

Most people think that the silver in U.S. coins ended in 1964, but this isn't true. The Half Dollar coin had silver in it until 1970. Many people spend the Half Dollars from 1965 to 1970, or sells them in rolls of halves they take to the bank, not realizing they are 40% silver.

How to Detect: If the Half Dollar is dated 1964 or earlier, it is 90% silver. Halves dated from 1965 to 1970 are 40% silver. You might also find silver Proof Half Dollars, which are 90% silver and dated to current. Silver Proof Halves have very shiny, mirror-like surfaces and there is no copper color when you view the edge.

Approximate Value: Value is based on silver spot price.

eBay Auctions from Calaveras Coin & Pawn

Pawn Shop Goes Upscale: Is This a Good Way to Score Extra Cash?

California -based dentist Dr. Michael Hammond intended to finance his dental practice using a small business loan from a traditional bank. Given his strong credit and business plan, he assumed he’d have no issues.

But the bank wouldn’t grant the loan he expected, so Dr. Hammond moved on to plan B: selling family jewels to the pawn shop for $40,000.

Though the words “pawn shop” tend to evoke thoughts of “Cash 4 Gold,” online pawn shops have taken the strongest part of the business model (fast cash in exchange for your stuff), and revamped it for a higher-end customer. With banks getting loan-shy post-recession, these virtual shops offered consumers another source of funding—which they could procure from their jewelry box or favorite curio drawer.