Buy Gold Now Book Review

Buy Gold Now should be on every investor’s bookshelf.

Buy Gold Now:  How a Real Estate Bust, Our Bulging National Debt and a Languishing Dollar Will Push Gold to Record Highs

By Shayne McGuire
John Wiley & Sons, 2008
224 pages.  $34.95

Ancient Egyptians believed that gold was the flesh of the gods.  To the Aztecs, gold was “the excrescence of God.”  Hindus believed gold was a form of the gods.  In Chinese alchemy, gold was the essence of the heavens.  Christianity was ambivalent toward gold.  On the one hand, gold represented spiritual treasure and incorruptibility.  On the other hand, gold stood for idolatry – the Golden Calf – and worldly wealth.

The idolatry of gold continues in today’s world.  Those who idolize gold are sometimes called “gold bugs” by way of disparagement.  Gold bugs are people who believe the end of the world is just around the corner.  Therefore they advise selling everything you own and buying gold and canned food.  In other words, in a world gone crazy, owning gold is the only refuge.

Naturally, then, lots of gold bugs write books about investing in gold.  Likewise, lots of gold bugs read such books.  Buy Gold Now was not – negative – written by a gold bug.   It was written by Shayne McGuire, the Director of Global Research at Teacher Retirement System of Texas, which is one of the nation’s largest pension funds.  McGuire is a mainstream investment advisor.  In fact, he is so mainstream that one could call him “old guard.”

Not only is Buy Gold Now an excellent read, but it’s a surprising one.  Why is it surprising?  Because McGuire advocates gold – along with silver – as an attractive investment.  And he’s the same guy who – back in the bull market of the 1980s and 1990s – advised against gold as an investment.

Why did he change his mind?  That’s what Buy Gold Now is all about.  In it, McGuire carefully examines today’s global economic situation from the viewpoint of historical trends.  Translation:  he did a ton of research.  Then he analyzed the results of his research and came to some unique conclusions.  Those conclusions – and the process by which they were attained – are presented in Buy Gold Now.

Buy Gold Now is divided into five parts.

Part One focuses on the colossal and ever-growing U.S. national debt.  In essence, the problem is this:  the U.S. national debt is about $65 trillion.  American household debt continues to climb, while savings are nonexistent.  This means America’s economy runs by borrowing money from foreign lenders.  If king dollar loses its luster “all currencies” may crumble as they chase “the dollar down.”  At that point, the only way to prop up the dollar would be for America to assume even more debt.  Not a pretty picture.

Remember that Buy Gold Now was written in 2007 and published in 2008.  So it appears the ugly picture is – right now – hanging in America’s rumpus room.

Part Two discusses the recent implosion of the real estate market.  One more time, Buy Gold Now was written just before the bottom dropped out of real estate.  Yet McGuire saw it coming.  In chapter 5, he says “Like other observers, I believed this real estate boom was a bubble with a delayed pop, one that will take years to recover from and which is likely to lead the United States into a recession.”  The prophet Isaiah couldn’t have been more accurate.

According to McGuire, real estate would implode because of negative amortization loans and mortgage equity withdrawal.  As McGuire points out, negative amortization loans sound great in theory, but in practice they turn out to be “money-sucking financial instruments that reduce home equity.”  Debt goes up, while equity goes down.  Exacerbating the problem is the fact that “in recent years Americans mainly have been using refis to raise cash by increasing their debts.”  In other words, one problem opens the door to another problem, causing a snowball effect.  The result?  Most new home buyers – in 2006 – now have negative home equity.  Put simply, they “are upside down on their mortgage loans.”

Proceeding to Part Three, McGuire takes a look at the end of the economic boom.  The boom is coming to an end because “Americans have been in a cash flow deficit for several years.”  There’s more money going out than there is money coming in.  Under the right circumstances, this results in deflation.  Asset values decline, yet debt stays the same.  Which means debt “becomes a larger burden on the balance sheet and individuals’ net wealth falls.”  McGuire calls this living in “affluent poverty.”

Then McGuire poses a startling question:  “But what if … the Fed is forced to cut interest rates deeply to reactivate our debt-reliant economy?”  It’s as if he was looking into a crystal ball as he asked the question, because that’s exactly what has happened.  In such a scenario, McGuire predicted the eventual collapse of the dollar.  To counteract the impending collapse, he recommended gold.  “The strong possibility of a dollar collapse is the most important reason to buy gold.”

Now that he has set the stage, McGuire opens the curtain to Part Four, wherein he presents ‘The Case For Gold.’  His presentation begins in 1970 and advances year by year up to 2007.  During that period, gold has steadily gone up as the Dow Jones Industrial Average remains flat.  And as McGuire explains, there are two catalysts for gold’s continued rise:  “The first is a decline in the value of paper currencies led by the dollar.”  Which is happening right now.  The second catalyst “is the growing lack of attractive opportunities” for investors.  In other words, in the global financial beauty contest now occurring, gold is looking prettier than ever.  And McGuire provides a cogent, detailed and persuasive analysis as to why gold will win out over its lackluster contestants – stocks and bonds.

Part Five is entitled ‘How To Buy Gold.’  And that’s exactly what it does.  McGuire tells investors how much gold they should own, what they should own, and how to buy it without getting ripped off.  He points out the advantages and disadvantages “of owning gold indirectly via mining stocks, ETFs, and through digital gold.”  He cites the rare coin market as “a very aggressive way to profit from rising gold prices.”  And he explains the correct way to approach investing in rare coins.  There’s also a section about silver investing, about which McGuire is bullish.

Buy Gold Now concludes with a short section worth its weight in gold:  ‘Don’t Be A Gold Bug:  Sell When It Is Time To Sell.’  In other words, be smart.  There’s an old adage that advises, buy low, sell high.  Or as McGuire so eloquently puts it, “Once monetary balance is restored, gold and silver will stop being investments promising strong returns…”

Altogether, this is an excellent book.

Written in a direct and comfortable style, Buy Gold Now should be on every investor’s bookshelf.

On the Read-O-Meter, which ranges from 1 star (horrible) to 5 stars (marvelous), Buy Gold Now commands 5 gold-plated stars.

Tags: buy gold now

Get the Skinny on Silver Investing Book Review

Get the Skinny on Silver Investing, It's just a little too skinny.

Get the Skinny on Silver Investing
By David Morgan
Morgan James Publishing 2009
109 pages.  $9.95

A few years ago, the social philosopher Charles Handy wrote an article entitled ‘Type Two Accountability.’  In his delightful article, Handy pointed out that accountability is “a tricky notion when you get into it.”  He then defined two types of errors.  Type one errors were when an individual was simply wrong.  Type two errors occurred when an individual was right but not right enough. 

Handy asserted that accountability followed a similar pattern.  Type one accountability was “our responsibility for not getting it wrong.”  Type two accountability, “for making it better than it otherwise would have been.”

In Get the Skinny on Silver Investing, David Morgan is guilty of a type two error.  He’s right but not right enough.  For the book could have been a lot better than it is.  

At the beginning of his introductory remarks, Morgan states “The main purpose in writing this book was to make the investment community at large aware of what I believe to be the single best investment in the world at the present time – silver!”  He then uses the succeeding chapters to provide evidence to support his premise.  Unfortunately, the evidence is either superficial – at best – or puff at worst.  Deciding between the two alternatives depends on one’s perspective.  For example, the author – comparing silver and gold – writes, “By far, silver is the more undervalued of the two precious metals.”  Numbers to prove this assertion are provided.  Yet rather than demonstrating that silver is undervalued, the numbers appear to show that gold and silver are sympathetic.  When the value of one moves up, so does the value of the other. 

Chapter 2 of Get the Skinny – supposedly – furnishes more grounds for investing in silver.  In reality, all the chapter does is inform the reader that silver is the by-product of base metal mining operations.   “Nearly seventy five percent of silver coming to the surface is the result of copper, lead, zinc and gold mining.  This is an important fact because this does present some unique conditions for the silver market.”  Which sounds great.  But there is no discussion of the “unique conditions” or what impact they have on silver investing. 

Morgan concludes chapter 2 with a short summary.  The final sentence of the summary is this:  “Since demand for these items is expected to grow substantially, it is reasonable to project that demand for silver from these traditional applications will remain strong as well.”  No data is provided to support this statement.  The reader is left wandering through a statistical wasteland, wondering how the demand for silver has grown in the past, and whether or not the demand will increase or decrease in the future.

The fourth chapter of Get the Skinny discusses ‘Silver Leasing.’  However, there is no frame of reference.  In other words, there is no explanation of what silver leasing is, along with the pros and cons of leasing.  Instead, the entire chapter is “courtesy of Investment Rarities from an article from Mr. Ted Butler.”  The article is described as “controversial” and possibly “somewhat libelous.”  In fact, it’s so controversial that a disclosure statement is included.  The disclosure statement ends by saying, “We do not guarantee the accuracy or correctness of these somewhat inflammatory statements.”

The author was right to include the disclosure statement, because the article seems to be nothing more than an angry diatribe against silver leasing, which, by the way, is quite common.  The reader comes away from the chapter feeling intellectually impoverished.  For the article is full of sly sarcasm, innuendo and false logic.  Any objective discussion about silver leasing is fugitive. 

Get the Skinny on Silver improves dramatically in chapters 6, 7, and 8.  These chapters consider the monetary characteristics of silver, new uses for silver, and silver bullion.  Beginning investors should find the content enlightening as a primer. 

However, in chapter 9, Get the Skinny on Silver sinks back into mediocrity.  ‘Silver-Stocks-How to Pick a Good Mining Company’ is the title of the chapter.  Wherein mining is described as a tough yet vital business.  But the ‘how’ of picking a good mining stock is never broached. 

Chapter 9’s subheadings include Exploration Risk, Assay Risk, Management Risk, Financial Risk, and Trading Risk.  Sadly, none of the topics is covered adequately.  Morgan skims rapidly through them, as if eager to finish his book.  He concludes the section on Trading Risk with the following remark:  “My point is that determining the best investment areas for mining companies involves as much art as it does science.” 

Such a statement may contain some truth, but it instills little confidence in readers of the book.  For it sounds as if Morgan is saying that investing in silver mining is equivalent to the interpretation of omens.

Aside from a lack of any concrete information, Get the Skinny has other problems.  For one, it needs the talents and efforts of an editor and a proofreader.  There are simply too many grammatical, syntactical and spelling errors to overlook.  After a while, the reader stops hoping to glean any helpful information and starts looking for abuses of the English language.  Which is too bad, because the book does contain some useful advice.

Also problematic is the tone of the book.  Get the Skinny comes across as nothing more than a propaganda pamphlet – an example of cheerleading.  Rah, rah, rah!  Sis-boom-bah!  Buy silver!  There’s very little explanation as to ‘why’ you should buy it.  Just the exhortation to ‘buy it.’

Which brings us back to the type two error mentioned in the opening paragraphs of this review.  Get the Skinny could have been a lot better than it is.  For it’s obvious the author is intelligent and understands investing in silver.  Only he fails to convey his knowledge in a comprehensive, objective and absorbing manner.

On the Read-O-Meter, which ranges from 1 star (deplorable) to 5 stars (outstanding), Get the Skinny on Silver Investing comes in at 2 gaunt stars.  It’s just a little too skinny.

Tags: david morgan, get the skinny on silver investing

The Collapse of the Dollar Book Review

Collaspe of the Dollar, Turk and Rubino outdo themselves

The Collapse of the Dollar and How to Profit From It
By James Turk and John Rubino
Currency Books 2004
252 pages. $14.95

According to Greek legend, there once lived a young woman named Cassandra. She was the daughter of Priam and his wife Hecuba. Priam was the King of Troy. The god Apollo fell in love with Cassandra and gave her the gift of prophecy. Later, in a fit of jealous anger, Apollo regretted his gift. So he made the gift worthless by causing people to disbelieve Cassandra’s prophecies. Poor Cassandra! She correctly prophesied what the future held. But no one listened to her.

James Turk and John Rubino wrote The Collapse of the Dollar, in which they prophesy the demise of the U.S. dollar. It’s a prophecy of gloom and doom. Which immediately gives rise to the following question: if your forecast is so obvious, why can’t the government economists see the handwriting on the wall? In other words, are Turk and Rubino today’s version of Cassandra? Are they correct and no one is listening or are they paranoid street corner prophets wearing sandwich boards that predict the end of the world?

There are two ways to answer the preceding questions. The first is, do nothing, simply wait and see what happens. The second is to examine the information they provide in their book and see if it is reasonable. The latter method seems the most intelligent approach. For doing nothing implies an unhealthy and fatalistic philosophy.

In answer to the question about the perceptive abilities of government economists, Turk and Rubino point out that “as a group, political and intellectual leaders hardly ever recognize major turning points until after the fact.” For example, no one predicted the Crash of 1929. Likewise, when Nixon dismissed the gold standard in 1971, the pundits thought the price of gold would drop through the floor. It didn’t. In fact, gold went from $35 an ounce to $850 by 1980. No one predicted the dollar’s decline in the 1970s or the junk bond rupture of the late 1980s or the dot-com debacle of the 1990s.

More importantly, assert the authors “conventional economic and financial thought is operating under some dangerous misconceptions.” The four misconceptions are that debt doesn’t matter, that government can perceive problems and adjust, that the U.S. economy is not impacted by foreign markets, and that gold is an out-of-date concept which serves no useful function.

Having said all that, Turk and Rubino proceed to make their case for gold. Their case is composed of four parts.

1. Why the dollar will collapse.
2. Money then and now.
3. Why gold will soar.
4. Profiting from the dollar’s collapse.

In part one, the ever-growing problem of debt is discussed. Constant borrowing provides the illusion of prosperity. Only this type of prosperity is cosmetic. Underneath the make-up lie financial fissures, which keep getting wider and deeper. And, as the authors point out, more and more mascara is required to gloss things over. Which means the printing of more and more money. This, in turn, leads to unbalanced trade and a sagging dollar.

Part two gives a good explanation of what money is and explains how fiat currencies came into existence. According to Turk and Rubino, fiat currencies always fail in the end, because they manage to “both debase and inflate” money “simultaneously.”

The third section explains why gold will continue to become more and more attractive. The simple explanation revolves around the concept of supply and demand. In other words, more people and governments want gold. And there isn’t enough to satisfy the demand. For example, China is buying up as much gold as they can get their hands on, along with India. All these factors mean the price of gold will ascend at ever-accelerating rates.

The fourth and final part of the book centers on how to profit from the dollar’s collapse. Gold is the ‘how.’ But the ‘how’ involves strategy. For as the authors make very clear, “with physical gold (bullion coins, gold bars and digital gold) you’re storing wealth, avoiding risk, and maintaining liquidity.” Whereas with gold-based investments – mining stocks, derivatives, and rare coins – the investor may increase capital. “Investments, in other words, are for expanding but not necessarily storing wealth, and with their upside potential comes the risk of loss.”

Turk and Rubino outdo themselves in this section. Their explanations are stellar. They walk the reader through the process of analyzing mining stocks, clarify the issues, and provide sensible guidelines for building a portfolio of such investments. Then they go on to examine silver and other precious metals as potential investments. And in case you’re wondering, they view silver as an investment latent with profit possibilities.

In the final chapters, the authors evaluate other investment possibilities, such as stocks, bonds, and real estate. They give their recommendations, presenting multiple scenarios and the best way to “hedge” against them. For example, they believe U.S. Bonds are one of the worst possible places to invest. Why? Because “bondholders will thus be paid back in increasingly worthless dollars.” And they describe Foreign Bonds as “early winners, late losers.”

The Collapse of the Dollar makes a cogent case for investing in gold and silver. The information is organized and lucid. The authors do not make the mistake of ‘assuming’ the reader is conversant with economic concepts and financial terminology. Each and every concept and term is carefully defined in non-technical language. Which means it’s a book designed for professional investors and for beginners. Readers will have to decide for themselves whether or not the authors’ prophesies are correct or not. However, taken at face value, their thesis is rational, based on historical trends, wrapped in monetary logic, and very persuasive. It appears Cassandra has spoken. Now who will listen and act accordingly?

On the Read-O-Meter, which ranges from 1 star (bankrupt) to 5 stars (precious), The Collapse of the Dollar glitters with 5 gold stars.

Tags: The Collapse of the Dollar

Three Free Reports on Silver Worth Reading

The Internet is filled with information on investing in gold and silver, and much of it is thinly-disguised advertising material. Here I’ve identified three reports that do have commercial interests, but are worth reading even if you have no intention of buying their products.

Are the Fundamentals of Silver Fundamentally Flawed?

url: http://www.silver-investor.com/freereport/
In this free report offered by silver guru David Morgan, the fundamentals of silver are explored in great detail. Morgan explains that there are two entities that report on global silver inventories: the CPM Group and GFMS of the United Kingdom. The two firms vary greatly in their estimates of total existing silver—by around 33%.

CPM Group estimates there are around 400 million ounces of bullion silver in the world, while GFMS says the total is closer to 600 million. Of course, less than 400 million ounces can be pointed to and “proven,” and this is the basis for Morgan’s analysis. He uses the “best case” scenario of 600 million ounces and shows how virtually all of the world’s real silver is “investment silver”—leaving very little for industrial demand or other purposes. This makes for a very tight market.

Morgan also points out how investment demand for silver has soared with the introduction of new products such as ETFs: in the three years since the silver ETFs first hit the market, they’ve grown from using 130 million ounces of silver to more than 350 million ounces—what’s going to happen to the price of silver if demand continues to grow along this trajectory? What’s going to happen if Chinese citizens, who are being urged by their government to invest in silver, start taking that advice? Even if just 0.5% of China’s billion-plus population started buying silver, the price for the precious metal would go through the roof.

Jason Hommel’s Silver Stock Report

url: http://silverstockreport.com/
Jason Hommel’s Silver Stock Report is not a standalone report, but rather a free subscription service updated every week. The report is one of the most influential newsletters in the silver-investing world today. Some recent articles include “How I Got Into Silver,” “What Naysayers Are Saying,” and “Greenspan Misapplied Free Market Theory.”

An especially good article to read is Hommel’s “Wisely Avoid the Paper Silver Fraud.” In it, he says that over 99% of investments in silver are in “paper” silver—as opposed to real, physical bullion. The problem is that much of this “paper” silver is not backed by the real thing—it’s just imaginary. People with large investments in “paper silver” stand to get burned, just as the holders of fractional-reserve bank notes used to get burned by bank runs.

But the one most indispensable piece written by Hommel is his “Introduction to Silver,” which can be viewed at http://silverstockreport.com/introduction.html. Here he makes the succinct case for gold to be trading at much higher prices in the near future—and then shows why silver is indisputably a better investment than gold.

Is Silver’s Decline Just Starting?

url: http://www.commoditysilver.com/Free-Report/
This short, two-page report takes a contrarian view. It argues that silver will not be the commodity that governments turn to in the financial crisis, alluding that they may instead use gold to back their debt when their creditworthiness has become all but eviscerated. The report also claims that governments and central banks hold a relatively small amount of silver, compared to gold.

These are interesting points. However, the report is off the mark when it talks about how jewelry stores are suffering during the recession—only a small amount of silver is used in jewelry; most silver is used in industrial applications. To answer this, the report says that some firms are trying to use alternative hybrid metals to replace silver, but the fact is silver is the most indispensable metal there is—they’ll never develop a hybrid that can beat silver.

Finally, the report addresses the Hunt Brothers’ manipulation of the silver market in the early eighties. Why this is seen as bearish for silver is beyond me. The fact that silver swung from $1.50 to over $50 an ounce over a short period of time is bullish in my view—it suggests that it could do so again at some time, only this time, it should go a lot higher than $50.

Although I don’t agree with the general thesis of this report, it does raise some interesting questions. Besides, it’s always important to consider both sides of every story.

Tags: silver reports

The Top 25 Hard-Money Tweeters on Twitter

Twitter was the social networking phenomenon of 2009, and though the buzz has died down, it can still be a great tool for precious-metals investors—or anyone else. Like any other tool, it’s all about how you use it.

Some people immediately scoff at the mention of Twitter, but that’s their loss. You can choose to follow Ashton Kutcher and Brittney Spears (the two most followed tweeters on Twitter), or you can use the site as a time-saving news aggregator. By following some or all of the tweeters listed below, you can not only stay abreast of gold- and silver-related news, you can also get some fresh new investing ideas, 100% free of charge.

1. gold_tracker

Followers: 4,839. Tweets: 8,710.
The top hard-money tweeter on Twitter isn’t an offline celebrity and he doesn’t represent a larger media organ or investment company—he’s just a guy named Hal. But Hal, who’s also an avid disc golfer, tirelessly tracks the prices of gold and silver throughout each trading day and posts links to market-commentary articles, too. His perspective is very skeptical towards the government’s “official numbers,” and that’s a good thing as far as I’m concerned.

2. silver_bullion

Followers: 2,571. Tweets: 909.
The silver_bullion Twitter account is focused on showing why silver is a superior investment to gold. This tweeter takes it for granted that you know you should be in precious metals, and makes the case for silver—a case most Silver Monthly readers agree with. The account also tweets links to silver-related news and commentary from around the Internet and links to eBay auctions and other sites where you can find deals on silver coins.

3. silvermonthly

Followers: 955. Tweets: 85.
Of course I’m a bit biased, but the Silver Monthly Twitter account is one you most definitely should follow. Not only does the administrator post links to new articles and blog posts at Silver Monthly, but also news stories and market commentary from around the ‘Net.

4. silverguru22

Followers: 319. Tweets: 133.
World-famous silver investor David Morgan operates this account, which, despite its limited number of followers and tweets, is ranked the #1 most influential Twitter account on the topic of silver by the Twitter aggregator WeFollow. Here, Morgan tweets links to his free online “webinars” as well as audio commentaries and other articles.

5. APMEX

Followers: 1,319. Tweets: 766.
APMEX is probably the best source to buy gold and silver online—at least as long as you’re not planning on spending several thousand dollars. That’s why the firm’s Twitter account is so great: by following APMEX, you can be alerted to their special, limited-edition sales before non-followers. For example, APMEX tweeted a link to its year-end inventory reduction sale (the IRS taxes inventory as if it were earnings) early on December 24, long before the email advertisements went out.

6. currencynews

Followers: 19,939. Tweets: 8,130.
currencynews isn’t a “hard-money” tweeter at all, but the links it posts to news and commentary about the world’s fiat currencies are well worth reading—even if they need to be taken with a grain of government salt sometimes. The real value of gold and silver are best measured against other commodities, not paper money, but since we don’t typically buy our gold or silver coins with crude oil or pork bellies, staying abreast of the forex market is important for every gold and silver investor.

7. CommoditiesNews

Followers: 978. Tweets: 11,300.
CommoditiesNews is a tireless and largely thankless tweeter—just 978 followers with 11,300 posts. That’s by far the highest number of tweets per follower for any of the tweeters on this list. Nevertheless, CommoditiesNews is definitely worth following—why others don’t seem to think so beats me. Perhaps it’s because the account’s operator is too busy posting great links to really market himself. As stated above, it’s important for gold and silver investors to follow the commodities markets, as the relationship between commodities and precious metals reveal their real price better than fiat money. And of course, gold and silver are commodities themselves, and CommoditiesNews posts to articles about the gold and silver futures markets, as well as gold and silver stocks, too.

8. myztryk

Followers: 2,069. Tweets: 1,792.
Like #1 tweeter gold_tracker, the #8 tweeter on our list is “just a guy.” Mike Parkin, who tweets as myztryk, describes himself simply as a “hard currency advocate.” The links he posts are most often to hard-money commentary pieces, but he also tweets messages from people looking to buy or silver precious metals and related items.

9. PeterSchiff

Followers: 1,788. Tweets: 188.
Peter Schiff was always the token bear they let on CNBC and Fox News business shows during the “irrational exuberance” of the 2003-2007 bull market in stocks and housing. The Keynesian talking heads literally laughed at him when he predicted the financial crisis of 2008, but nobody’s laughing now. Next to Ron Paul, Schiff is the most visible proponent of Austrian economics, and he posts links to his videos and commentary, as well as articles written by others. The only problem with the PeterSchiff account is that Schiff has decided to run for office in Connecticut, and thus some of his political posts clog up the otherwise worthy investment content.

10. Judgenap and shellyroche

Followers: 7,639 / 16,316. Tweets: 69 / 2,501.
If you are interested in the more purely political side of things, then you’re probably a fan of Judge Andrew Napolitano. He hosts Freedom Watch on Fox News, though unfortunately, the show is only “aired” online. But frequently, “Judge Nap,” who has authored such books as Nation of Sheep and The Constitution in Exile, fills in for the decidedly less pro-hard money Glenn Beck. His assistant Shelly Roche is a lot more active on Twitter, though, and through her you can tweet questions to the judge.

11. AustrianEcon

Followers: 5,108. Tweets: 4,504.
You don’t have to understand economics in order to make money investing in precious metals, but it doesn’t hurt, that’s for sure. An understanding of and appreciation for Austrian economics can help give you the confidence that what you’re doing is right, even when the market goes against you in the short term. This Twitter account posts links to the Austrian Economics blog, which in turn often links to the Mises Institute and other Austrian economics sites.

12. thesilverbar

Followers: 391. Tweets: 2,796.
One way to get followers on Twitter is to post a photo of an attractive female as your profile pic. With that in mind, it’s surprising that thesilverbar doesn’t have more followers. Whether or not the image belongs to the individual doing the actual tweeting is irrelevant, of course, but the links he/she posts are excellent. In addition to precious-metals news, thesilverbar also posts links to personal finance articles, and he/she tweets inspirational quotes as an added bonus.

13. DailyFXTeam

Followers: 1,403. Tweets: 7,114.
Another good tweeter that keeps tabs on the relationship between the world’s fiat currencies, and indirectly, how they relate to gold and silver. Unlike most Twitter accounts, DailyFXTeam is virtually all commentary (no links), and posts dozens of tweets each day.

14. DillonGage

Followers: 609. Tweets: 585.
DillonGage is similar to DailyFXTeam, only their tweets are focused strictly on precious metals, rather than fiat currencies. DillonGage posts multiple updates every day tracking the spot prices of gold and silver, and is affiliated with the Dillon Gage Group.

15. tomesnyder

Followers: 182. Tweets: 1,635.
Tom Snyder says he’s a “defender of the faith and liberty.” He posts links to a wide variety of articles from a libertarian and libertarian-conservative perspective, including plenty of stuff on gold, silver, and fiat money.

16. goldsilvertrnds

Followers: 737. Tweets: 410.
goldsilvertrnds tweets forecasts and predictions for various commodity items, most notably gold and silver. Its predictions are useful for day- and swing-traders.

17. Goldline

Followers: 778. Tweets: 187.
Goldline follows the spot price of gold throughout the trading day, and also posts links to interesting articles. Its most recent tweet, as of the Christmas weekend, linked to an article predicting gold at $5,000 an ounce

18. Silvernews

Followers: 265. Tweets: 40.
Silvernews provides independent and objective news for silver traders. The only problem is that it does so infrequently. As of Christmas weekend, its most recent three posts were made on December 21, December 15, and December 9. Then again, quality is more important than quantity, and that’s why you should follow Silvernews.

19. BullionBulls

Followers: 642. Tweets: 262.
BullionBulls provides macroeconomic commentary and analysis with extreme skepticism for the “official story.” Recent tweets disparage the validity of U.S. housing numbers and the FDIC’s ability to insure savers.

20. wolfeblog

Followers: 1,178. Tweets: 2,349.
Here’s something completely different: wolfeblog is the Twitter account for the blog of the same name, which has its focus on “survivalism.” As Wolfe explains it, his blog is for you if you’re interested in “learning how to do things yourself, getting off the grid, and back to the land.” Wolfe describes himself as a libertarian, ham radio operator, and homesteader. If these things interest you, as they do many silver investors, be sure to check him out.

21. FirePips

Followers: 1,137. Tweets: 252.
One more forex tweeter for good measure: FirePips is a 27-year-old, full-time forex trader who shares his experiences (and free forex signals) via Twitter.

22. myinfo4u

Followers: 3,546. Tweets: 341.
myinfo4u seeks to “expose the truth” in housing, politics, the economy, peak oil and “our corrupt central banking system.” He also posts links to a variety of money-making opportunities (some legit, others “get-rich-quick” schemes), and inspiring stories about people making do in the down economy.

23. buymetals

Followers: 3,658. Tweets: 9,047.
buymetals posts tweets to great deals on coins and bullion from all over the Internet. Although the account is affiliated with a copper seller (World Market Copper), buymetals posts links to gold and silver coins, too, and does not merely shill for its own copper-coin sales. There are several links posted to non-World Market sites, but the World Market deals are pretty good on their own—good enough for over 3,600 people to be following buymetals.

24. silverbullnews

Followers: 218. Tweets: 1,123.
silverbullnews has posted some outstanding links and other tweets, as well as hard-money-influenced political commentary. If this list had been composed two months earlier, silverbullnews would have been one of the top-ranked tweeters. Unfortunately, the account hasn’t been updated since November 11. It’s still worth checking out, though, and hopefully it will come back.

25. BarterGoldRamth

Followers: 1,516. Tweets: 2,560.
This Twitter account is operated by Terry Sachetti and affiliated with the Barter Gold and Silver blog. That’s a great site, and at first glance, BarterGoldRamth looks like a great tweeter to follow… But Sachetti mostly reposts the same articles over and over again. The articles are all outstanding and worth reading, which still allows BarterGoldRamth to make the cut—barely. Over 1,500 Twitter users are following BarterGoldRamth, probably in the hopes that Sachetti will post some new content. It might be worth following him for a while to see if he does.

Tags: silver twitters

Leveraged Silver Investing

iStockphoto: williv

 Using Money, Options, and Time in Your Favor

First to understand leveraged silver investing, it’s vital to know what leverage is, how it works, and the different types of leverage an investor can use. Leverage as Princton defines, “money as a way to amplify potential gains.” Now most of this leverage will be borrowed money, but there are other types of levearage such as futures contracts, options, and time. We’ll talk about each of these below.

Borrowed Money

Generally speaking for individual investors, borrowed money for investments in silver will come in the form of margin. Margins are set up as loans against stocks traded on major exchanges. The interest rate on margin accounts will range from 8% to 11% depending on your personal income, investment experience, and amount of leverage you use. Words of warning, a stock can move both ways, margin won’t. While you will benefit from a stock on margin moving up, you will still pay margin for a stock moving against you.

Second, if you could find a silver mining stock that would pay a high enough dividend yield to pay the margin payments, then technically you’d own the stock with borrowed money. But again, leverage is great for stocks moving in your favor, but can burn when going against you. It takes an incredible amount of financial knowledge and experience to profit from leverage.

Options

Options are an amazing form of leverage. Options work as leverage because of the difference between the price of the underlying asset and the cost of the option to buy the underlying asset. For example, say you wanted to invest in Silver Wheaton Corp. (SLW). In this example you have $1,000 to invest. You can either buy shares around 62 shares, or you can buy options. For Silver Wheaton, you could buy options for  7,200 shares using the same $1,000. Be sure to read all the risks before using options. Options work the same way as debt, it’s incredible when moving with you, and burns when it turns against you.

Futures

Futures are similar to both options and margin. As Investopedia explains, “In the futures market, leverage refers to having control over large cash amounts of commodities with comparatively small levels of capital.” That’s similar to the options because of the amount of silver you could control, but also similar to a margin because you might eventually have to pay the total sum of the futures contract you hold.

Time-Value Leverage

Time-Value leverage remains unique to the silver investing market because of the collection premium most coins collect over the years. In this example, the investor holds 20 coins from a later date, say 2004. The difference in markup between the current year and the year this investor holds is: $1.00 or more. Since, this investor remains interested in silver as an inflation hedge, she doesn’t have a preference about the year of her holdings. She would then sell the older coins, and buy the current year. Now, because of the time-value collectors have placed on the later year, with the extra premium she can now buy a whole new silver eagle.

This collector premuim works to the silver investor’s favor because he or she can continue to build her silver portfolio buy selling older coins and buying the current year. It’s true compounding for the silver investor.

Tags: leveraged silver investing, silver futures, silver options

The 5 Best Online Videos on Gold, Silver, and Fiat Money

When television was first invented, scholars marveled at its educational possibilities. But in no time, TV was taken over by the government, and henceforth, it has served as nothing but a tool for distracting people from their lost liberty. Thankfully, the Internet and then YouTube have intervened.

Although YouTube has its share of junk programming, the difference between it and regular TV is that it’s not all junk—there are a lot of great, educational videos to be seen on YouTube, none of which have been stamped with the approval of our government. That’s especially true of the five videos profiled here.

1. Money, Banking, and the Federal Reserve

This video, produced by the Ludwig von Mises Institute, is without question the best on the topic of the Federal Reserve. While others diverge into conspiracy theories, bizarre fits of thinly veiled Anti-Semitism, and downright bad economics, the Mises Institute keeps things focused on the reality of the Fed—what it is and what it’s not.

A central focus of this video is inflation: who it hurts, who it benefits, and how it’s caused. This is a subject that roughly half of the anti-Fed movement is ill equipped to tackle, since they support the congressional issuance of “public” fiat money to replace that controlled by the “private” central bank, but this is wholly misguided. The truth of the matter is that inflation is the true evil perpetrated by the Fed, not the interest it collects on government debt securities (which it dumps back into the Treasury by the way).

The video also looks at some early forms of money, and how money came into existence in the first place. This may seem uninteresting to the typical Alex Jones fan, but it’s essential to understanding the crime that the Fed and its fellow central banks are perpetrating against the citizens of the world. Gold and silver emerged as money by the consensus of the free market—there is no need for the government to “declare” anything as money, or to standardize coinage. The only reason governments have done this throughout time is so that they can debase the currency and redistribute wealth.

2. Peter Schiff Was Right

Here author, Austrian economist, and money manager Peter Schiff predicts the housing bust as early as 2005, while the talking heads on CNBC laugh in his face. In the first segment, from way back in 2002, he says most so-called investment advice is “propaganda” by brokers whose real clients are the big firms who want to get rid of stocks.

On April 26, 2005, Schiff said that the coming “financial disaster” was inevitable, while CNBC’s Keynesian non-economist Steve Leisman (his bachelor’s degree is in English and his master’s is in Journalism) arrogantly mocks, “We should all just give up right now.” Everyone laughs. Four months later, Schiff said, “Our bubble economy rests on the foundation of the housing market” and compared the housing market of the day to the Internet market of the late 1990s.

Finally, in the most famous clip in this video, Schiff goes head to head with “supply-side” economist and government shill Art Laffer. When Schiff predicts a coming recession, Laffer says, “No, I don’t believe any of it, whatsoever.” Laffer still refuses to pay up on the bet he lost to Schiff concerning the future of the economy.

3. Jason Hommel and Mike Maloney Discuss the Economy, Gold, and Silver

In this three-part video, Mike Maloney of GoldSilver.com interviews Jason Hommel of Jason Hommel’s Silver Stock Report. Viewers get to listen in as these silver gurus share what they know about the most undervalued precious metal. Subjects include the fraudulence of the current monetary system (Maloney refers to it as “reverse Robin Hood”), how the dollar will collapse quickly when it finally collapses, the public’s “awakening” to gold and silver, and many more.

In Part 2, Mike and Jason talk about how the lack of silver miners making a profit is actually a very bullish sign. After all, these miners can’t keep producing silver at losses, so eventually, the price has to come up or supply will be severely reduced—and that will, in turn, push the price up anyway.

In Part 3, Jason explains why he’s diversified into copper stocks as well as silver. This is actually quite ingenious: Copper will do better during a more bullish economy, while silver should outperform in a bear market, but both metals should outperform either way.

4. Jim Rogers: I Will Continue to Buy Gold But I Prefer Silver

In this video, world-famous investor and “adventure capitalist” Jim Rogers is asked where he sees gold going. His response: He owns gold. If gold goes down, he’ll probably buy more. If gold goes up, he’ll probably buy more, too. But, he says, he thinks he’ll make more money in agriculture—and silver.

Rogers also calls attention to the distortion of the precious-metals markets by the International Monetary Fund (IMF). They have a tremendous amount of gold that they intend to sell, and when they do, it will suppress the price—temporarily. But long-term, gold and silver are the closest things in the world there are to “sure things.”

Rogers also talks about the difficulty of making money in commodities futures contracts on an inflation-adjusted basis—this is especially clear for people whose native currency is something other than the U.S. dollar. Later in the video, Rogers voices skepticism on India as an investment opportunity, saying he still prefers China. As a #2 emerging market, Rogers says he likes Sri Lanka: “Whenever I’ve seen a war come to an end, it’s nearly always been huge opportunities for the people who get there.”

5. Silver is the Best Hedge Against Inflation

Best-selling Rich Dad, Poor Dad author Robert Kiyosaki says the best way to protect against inflation is to do what the Chinese are doing: buy silver! This short video says a lot, as Kiyosaki has a knack for making the complex simple. He talks about the trillions of dollars being printed by the Fed, and concludes by saying, “Silver is the #1 investment today… Silver is a smoking deal!”

Tags: best on-line videos, best silver videos, silver videos