Reprint from the American Numismatic Coin Association @ http://money.org

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$10 gold coins as part of the “First Spouse” series.

coin to bear the motto.

All of a sudden we have Silver prices at $16-$17 an ounce with Gold prices hanging over $1000 an ounce and this has happened almost overnight!   I knew the dollar was going down, I knew the economy was in horrible condition and I knew that we were in a recession.  But now here’s the phenomenon…  Have you noticed the ‘We Buy Gold & Silver’ commercials everywhere in the last two years or so?  A girlfriend of mine invited me to a gold party where everyone brings their old Gold in, they weigh it and offer the attendees that want to sell a good price for their Gold.  Then, as recently as the last two years I’ve noticed that the cost of a simple Silver necklace, ring or even a pair of Silver earnings cost just as much as gold did 10-15 years ago.  Mmmm, I guess I am getting older and finally see inflation…  Like when my Grandmother says I remember when a candy bar was five cents!   It was so far fetched when I was younger to think of a fifty cent (when I was 12 years old) candy bar as being a nickel!  What a crazy idea.  But then again, candy bars are now over a dollar and I actually did watch the dollar continue to go down or the cost of living continue to go up!  I used to philosophize and think that everything is actually relative.  For instance when my Grandmother, who was born in 1914 was growing up, she paid five cents for a candy bar but it was relative to the amount of money people made in that time.  Simply put, in the age of factories, the industrial age, workers were paid $15 per week. So if we do the math and divide five cents into fifteen dollars a week we could buy a candy bar 300 times.  If I look at the same scenario for today, minimum wage is now $7.25 an hour in NYC.
Let’s figure on a 40 hour work week the average person would make $290.00 before taxes.  Guess what?  You would only be able to buy a $1.00 candy bar 290 times!  So, I was right, it does seem to all be relative.

I am not a financial analyst but I did major in Business.  I do know that supply and demand are supposed to determine the marketplace.  In a nut shell if there is an unlimited supply of something then it should cost less.  That’s why when new technology hits the scene like a flat screen TV, they were all way too expensive for many of us to buy.  The 42″ Flat Screen LCD TV was over $1500.00 when flat screens first hit the scene.  I know everyone went to buy one to keep up with the neighbors but I didn’t jump on the band wagon because I really didn’t think it mattered whether I watched a box TV or a flat screen!  In fact I just bought my first flat screen TV AFTER Christmas on my Business Credit account with Best Buy and snagged that 42″ on behalf of my corporation for business expenses so it’s a tax write off, yes I will be doing many presentations on it and for only $499!  So, I waited about 5 years before keeping up just so that the market would flood with the flat screen TVs and of course this would drive the price down as we have seen over and over with technology.  I will not go buy the new iPAD this year, I’ll buy it next year if I really need it!  So now that we know everything is relative there are certain things in our society that break away from the norm.

Since the beginning of time Silver & Gold were always precious metals.  For instance you buy your special someone a gold necklace, ring or bracelet and the higher in pure Gold the more expensive.  Or if you either preferred Silver to Gold or just couldn’t afford Gold then you would buy your loved one Silver and make sure its pure…  It had better have that 925 stamp inside for Sterling Silver purity (US).  But something has been changing as our society progresses.  I’m not going to write to you like an economist here.  I am not going to waist time on the long story about how the US dollar was backed by Gold until President Nixon decided to make the dollar a promissory note.  Instead we are going to keep it in the new millennium and discuss technology!  Thomas Edison created the light bulb, in order for it to work, we must use pure silver. There is a new cell phone for us to buy every month if not every week! The components in the cell phones to allow us to communicate is dependent on pure Silver.  So, Silver has become an industrial commodity which is why it is continually going up.  20 years ago Silver was selling for $3-$5 per ounce.  As of the date of this article Silver is selling at $16 an ounce!   According to the Silver Institute “Silver Uses Demand for silver is built on three main pillars: industrial and decorative uses, photography, and jewelry & silverware.  Together, these three categories represent more than 95 percent of annual silver consumption.  In 2007, 455.5 million ounces of silver were used for industrial applications, while over 128 million ounces of silver were committed to the photographic sector, 163.4 million ounces were consumed in the jewelry market, and 58.8 million ounces were used in the silverware market.

Why is this indispensable metal in such demand?  The reasons are simple. Silver has a number of unique properties including its strength, malleability and ductility, its electrical and thermal conductivity, its sensitivity to and high reflectance of light and the ability to endure extreme temperature ranges.  Silver’s unique properties restrict its substitution in most applications.”  Here are a few applications of Silver.
* Traditional
o Coinage
o Photography
o Silver Jewelry
o Silverware and Table Settings
* Industrial
o Batteries
o Bearings
o Brazing and Soldering
o Catalysts
o Electronics
* Emerging
o Medical Applications
o Mirrors & Coatings
o Solar Energy
o Water Purification”

Now let’s look at Gold, it is currently selling at over $1000 per ounce when 20 years ago the price was hanging around $400 per ounce.  Here’s a chart to show how Gold has increased over the years.

20 Year Gold Prices

Additionally, according to an article published on MSN Money November 21st 2007 by Michael Brush entitled Why Gold is going Straight to $1000 he stated that there are 4 main reasons for Gold’s increase which are;

No. 1: The dollar’s in trouble
No. 2: Gold production lags demand
No. 3: Gold producers are buying gold
No. 4: Gold follows oil

So with this information we can gather that to insure our wealth as business owners and entrepreneurs we need to buy assets.  Investing in Silver & Gold has been and always will be a safe way to hedge yourself against the declining dollar and buying Silver & Gold can be done in many ways.  Of course, you can play the stock market and try to understand how to be a trader.  But many people enjoy buying the metal in coin form.  There are several countries that offer the metal of which you can buy from their Mint facility which is the facility of the government which actually makes coinage.  There are several countries that you can buy Mint Coins from which are listed below but continue reading before you make a mistake…

• Northwest Territorial Mint (United States)
• The United States Mint (United States)
• The Austrian Mint / Die Münze Österreich (Austria)
• The British Royal Mint (United Kingdom)
• The Dutch Mint / De Nederlandse Munt (The Netherlands)
• Golden State Mint (United States)
• Israel Government Coins and Medals Corp. (Israel)
• La Monnaie de Paris (France)
• The Perth Mint (Australia)
• The Royal Canadian Mint (Canada)
• The Singapore Mint (Singapore)

From each of these facilities you can purchase Gold and Silver bullion coins.  Bullion simply means any precious metal that can be found in bulk.  These Bullion Coins and bars are worth the value of the metal in the market as we discussed earlier plus a few extra dollars because the metal has been converted from a raw metal to an actual coin.  But, before buying a simple bullion coin there is one more step that you can take to insure the value of your assets go through the roof!  A Graded Silver or Gold MS70 Coin means the coin has been graded by a third party company.  There are many coin graders out there but there are three top graders that investors trust for authenticity which are ANACS the oldest grading company in the world, NGC and PCGS .  Have you ever seen the coins that are sealed and encased being sold on television.  The grading is what sets one coin apart from the other.  First of all only one out of every ten coins that the Mint makes is considered perfect, without flaw and 99.9% pure.  The graders certify and authenticate the rarity, quality and purity of the coin among other things.   Each year there are several Mint State 70 coins made.  After the year is done and the supply is gone, this adds another value of collectability to the coin.  When these same coins are encased before they are circulated and graded by one of the top graders it turns a bullion Silver coin worth only $20 ($16 for market value and a few extra because it is actually money) to a coin worth over $115 today!  A bullion Gold coin or bar is worth approximately $1100.00 (market price + the fact that it is money).  A graded gold coin would be worth over $1400.00.   These coins can be purchased in many places.  To give you an idea, the 1I have put my trust in the Numis Network to buy quality Mint graded Silver & Gold one of the top sellers in the world of these coins has been Mike Mezack.  He has sold millions of dollars of these coins on the Home Shopping Network.  Everywhere we look we are seeing We Buy Gold & We Buy Silver commercials, Pawn Shops and Billboards.  There is a paradigm shift happening, a window of opportunity for the average person to gain some wealth.