Tag Archives: gold investing

U.S.Debt hits new all-time Record!

What would you say f I told you that Americans are nearly 60 TRILLION dollars in debt? Well, it is true. When you total up all forms of debt including government debt, business debt, mortgage debt and consumer debt, we are 59.4 trillion dollars in debt.

That is an amount of money so large that it is difficult to describe it with words. For example, if you were alive when Jesus Christ was born and you had spent 80 million dollars every single day since then, you still would not have spent 59.4 trillion dollars by now. And most of this debt has been accumulated in recent decades. If you go back 40 years ago, total debt in America was sitting at about 2.2 trillion dollars. Somehow over the past four decades we have allowed the total amount of debt in the United States to get approximately 27 times larger. This is utter insanity, and anyone that thinks this is sustainable is completely deluded. We are living in the greatest debt bubble of all time, and there is no way that this is going to end well. Just check out the chart…

When the last recession hit, total debt in America actually started going down for a short period of time.

But then the Federal Reserve and our politicians in Washington worked feverishly to reinflate the bubble and they assured everyone that everything was going to be just fine. So Americans once again resorted to their free spending ways, and now total debt in the United States is rising at almost the same trajectory as before and has hit a new all-time record high.

We see a similar thing when we look at a chart for consumer debt in America…

For a while after the recession it was trendy to cut up your credit cards and get out of debt.

But that fad wore off rather quickly, didn’t it?

It is almost as if 2008 never happened. We are making the same mistakes with debt that we did before.

As I noted recently, total consumer credit in the US has risen by 22 percent over the past three years alone, and at this point 56 percent of all Americans have a subprime credit rating.

And have you noticed that a lot of people are not afraid to extend themselves in order to buy shiny new vehicles these days?

During the first quarter of this year, the size of the average vehicle loan soared to a new all-time record high of $27,612.

Five years ago, that number was just $24,174.

And as I noted in one recent article, the size of the average monthly car payment in this country is now up to $474.

That is practically a mortgage payment.

Speaking of mortgage payments, even though home sales have been falling and the rate of homeownership in the United States is the lowest that it has been in 19 years, a very large percentage of those who own homes are still overextended.

In fact, one recent survey discovered that a whopping 52 percent of Americans cannot even afford the house that they are living in right now.

At the same time, an increasing number of Americans are acting as if the last financial crisis never happened and are treating their homes like piggy banks.  Home equity loans are soaring again, and when the next great crisis strikes a lot of those people are going to end up getting into a lot of financial trouble.

There has been much written about what is wrong with the housing industry, but the truth is that home prices are still way too high and young adults cannot afford to purchase homes because they are already loaded down by huge amounts of debt even before they get to the point where they are ready to buy.

In fact, a newly released survey found that 47 percent of millennials are spending at least half of their paychecks on paying off debt…

Four in 10 millennials say they are “overwhelmed” by their debt — nearly double the number of baby boomers who feel that way, according to a Wells Fargo survey of more than 1,600 millennials between 22 and 33 years old, and 1,500 baby boomers between 49 and 59 years old.

To try to get out from underneath it, 47% said they spend at least half of their monthly paychecks on paying off their debts.

When I read that I was absolutely astounded.

Of course the biggest debt that many young adults are facing is student loan debt. According to the Federal Reserve, there is now more than 1.2 trillion dollars of student loan debt in this country, and about 124 billion dollars of that total is more than 90 days delinquent.

What we have done to our young people is shameful. We have encouraged them to sign up for a lifetime of debt slavery before they even understand what life is all about. The following is an excerpt from my previous article entitled “Is College A Waste Of Time And Money?”…

In America today, approximately two-thirds of all college students graduate with student loan debt, and the average debt level has been steadily rising. In fact, one study found that “70 percent of the class of 2013 is graduating with college-related debt – averaging $35,200 – including federal, state and private loans, as well as debt owed to family and accumulated through credit cards.”

That would be bad enough if most of these students were getting decent jobs that enabled them to service that debt.

But unfortunately, that is often not the case. It has been estimated that about half of all recent college graduates are working jobs that do not even require a college degree.

Considering what you just read, is it a surprise that half of all college graduates in America are still financially dependent on their parents when they are two years out of college?

According to the U.S. Census Bureau, only 36 percent of all Americans under the age of 35 own a home at this point. That is the lowest level that has ever been recorded.

And we are passing on to our young people the largest single debt in all of human history. Weighing in at 17.5 trillion dollars, the US national debt is a colossal behemoth. And almost all of that debt has been accumulated over the past 40 years. In fact, 40 years ago the US national debt was less than half a trillion dollars.

But this is just the beginning. As the Baby Boomer “demographic tsunami” washes through our economy, we are going to be facing a wave of red ink unlike anything we have ever contemplated before.

Meanwhile, the rest of the planet is drowning in debt as well.

As I wrote about the other day, the total amount of debt in the world has risen to a new all-time record high of $223,300,000,000,000.

Our “leaders” keep acting as if these debt levels can keep growing much faster than the overall level of economic growth indefinitely.

But anyone with even a shred of common sense knows that you can’t spend more money that you bring in forever.

At some point, a day of reckoning arrives.

2008 should have been a major wakeup call that resulted in massive changes. But instead, our leaders just patched up the old system and reinflated the old bubbles so that they are now even larger than they were before.

They assure us that they know exactly what they are doing and that everything will be just fine.

Unfortunately, they are dead wrong.

(originally reported by The Economic Collpase – http://theeconomiccollapseblog.com/archives/the-united-states-of-debt-total-debt-in-america-hits-a-new-record-high-of-nearly-60-trillion-dollars)

How low will Gold and Silver Prices Go?

Here at Numis Financial we have been getting a tremendous amount of calls and emails regarding, when we anticipate the current precious metals market will “bottom out”. To answer this as scientifically and unbiased as possible, we wanted to shed some light on some key factors to consider before entering the market.

Physical Demand VS Paper Demand

Even though the paper markets have been selling off at a rapid rate (MARKET MANIPULATION) the demand for physical gold has been higher than ever before. The US mint has sold more metals in 2013 than the previous 5 years. See charts below.

US Mint Chart

Hard Cost to Produce 1oz of Gold

This evaluation is based on pure production costs along with basic supply and demand fundamentals.  As the chart below indicates the hard cost to produce 1 ounce of Gold is between $1,135 (Gold Corp) to $919 (Barrick).  With the current Gold spot price at $1,276 it is easy to see that if gold prices get any lower production will have to slow down or stop completely.  If this does occur, there will be more demand than supply so naturally the physical demand for gold will increase gold prices back up to par production levels and beyond . Keep in mind with this evaluation there is no room for market manipulation, because we are only taking into consideration hard cost and not leveraged speculations.  It is our opinion that the likelihood of gold prices going below $1,135 is very low; this creates a great buying opportunity for long term investors to cost average their metals position.

gold picture

Hard Cost to Produce 1oz of Silver

In order to get a good grasp of production cost on silver, we looked at (Fresnillo) the largest silver mining company in the world. As you can see after all the expenses the hard cost to produce 1 ounce of silver is $20.88, currently silver is trading at $19.43. Ironically the U.S. mint has a 2 month delay in procuring American Silver Eagles.  Using the same reasoning as we did for gold we feel that the likelihood of silver going below $19.00 is very low.

Silver charts

chart again

 

In Conclusion, fundamentally the economy has not changed. We are not producing more jobs, importing less goods or cutting down on our spending. There has been however a great deal of market manipulation that has occurred by the investment banks. Market manipulation can only go so far; at some point physical demand will supersede market manipulation and regulate prices.

All hard fundamentals and production evaluations point towards a bullish metals market from here on out. It is our opinion that now (more than ever) is the best time to take advantage of the market.

 

Investing in Gold

Investing in Gold

If you were offered 100k in cash or 100k in Gold but you couldn’t touch either for 5 years, which would you take? Most people who are educated about the subject would take gold, let’s find out why.

Supply plays a very large role in the price of gold. It is impossible to say exactly how much gold has ever been produced. The best estimate suggests that if you add up all the gold ever produced it would fill up 2.9 Olympic sized swimming pools. This illustrates that there isn’t an unlimited supply of gold, frankly every year the world only produces about 14 cubic feet of gold, that just enough to fill an average sized living room. Till this day there isn’t any means of creating artificial gold, therefore the metals we do have cannot be diluted, unlike the US dollar supply. Gold has been something of value for the last 5,000 years and it’s always has been a world-wide recognized currency.

Although supply is an important factor of gold’s prices, demand has as much importance if not more.  There are five big reasons why gold has a very high demand, and why most investors choose to purchase gold over other investments.

Security against Inflation:

Gold is in such demand is because it offers security against inflation. Currently the U.S is in debt 16.6 trillion dollars. As more money is printed goods and services cost more. This causes the purchasing power of the dollar to decline due to inflation.

Tangible Asset:

No matter what happens in the paper currency market gold will always maintain some intrinsic value and therefore a stable “safe haven” for investors whenever there is an uncertain economic climate.

Highly Liquid:

Just like how real estate is a tangible asset, precious metals are also tangible assets. However unlike real estate gold is very liquid and can be easily converted into cash. Selling precious metals is as easy as calling your precious metals dealer and making a request. Unlike real estate there is no need to market or open escrow in order to liquidate your asset.

Diversification:

As mentioned before gold is considered a “safe haven” investment. We normally recommend our clients to have 20-30% of their portfolio in precious metals. This is because the metals market typically counter acts the equities markets. So when stocks, bonds, and mutual funds go down. Precious metals go up in value. Having a diversified portfolio is an important factor in successful investing.

Profit Potential

As mentioned before gold has been of value for the last 5,000 years, and just in the last 10 years gold has given investors an annual return of 20% on their investment. Even thou Gold is a great way to protect your money against the declining dollar, it is also a great way to increase your portfolio value.

Numis Financial offers two ways of purchasing gold, the first way is by physical delivery, and second is to hold gold within your retirement account. If you are new to precious metals Numis Financial offers a Free Precious Metals Guide  to help you during due-diligence  and educational period. Requesting a Free Precious Metals Guide is very simple, simply go to www.NumisFinancial.com and submit your request. After your request has been submitted, a account executive will call you to verify shipping address and also answer any questions you may have. This service is done free of charge even if you’re not quite ready to invest yet.

Russia is Prepping for The Economic Collapse by Adding Another 600,000 Oz of Gold to Their Reserves

On January 19, 2013 Russia announced that they added another 600,000 ounces of gold to their reserves in December. This brings the official gold total to 3.2 Million Ounces in 2012. With the Fiscal Cliff and the Debt Ceiling raise just days away, it’s obvious why Russia is hedging against the paper market with precious metals. Gold is currently at a great buy price; please call your account representative at Numis Financial to discuss strengthening your metals portfolio. 

 

Russian-gold-reserves