Gold Investor

What would you pay for a non-alcoholic sparkling beverage that has been "suffused" with 24-karat gold? We have seen the gold leaf sandwich, which was priced at $160 but had some redeeming qualities in the form of a generous helping of lobster. While this $150 per bottle sparkling non-alcoholic white wine features grapes from Spain and Germany and some specks of pure gold. The rationale for producing this non-alcoholic sparkling wine is to hit up the wealthy Middle Eastern market where alcohol consumption is forbidden (or only allowed under strict rules), the people have a lot of money to burn and an image to maintain. Enter the Lussory Gold sparkling non-alcoholic white wine. And a quote that describes the state of things in this part of the world:

"Tony Colley, head manager of Lootah Premium Foods, told Reuters: “It has gold in it for no good reason apart from it’s fun, it’s fantastic, it’s frivolous, it’s totally Dubai.”

Fear and uncertainty caused by geopolitical strife, threats of terrorism and mediocre economic outlook mire most of the world. In this type of uncertain environment, it seems that the super rich are looking to get their hands on physical gold (bars) even as the (paper) price for gold continues to show weakness. Of particular intrigue is the huge increase in 12.5kg gold bars being bought by wealthy customers. These bars will run you around $491,000 a piece and are of the type seen in the popular movie "The Italian Job". The UK Telegraph reports:

"The number of 12.5kg gold bars being bought by wealthy customers has increased 243pc so far this year, when compared to the same period last year, said Rob Halliday-Stein founder of BullionByPost. "These gold bars are usually stored in the vaults of central banks and are the same ones you see in the film 'The Italian Job'," added David Cousins, bullion executive from London based ATS Bullion."

Not all gold and silver bullion/coins are created equal. Literally. We have long known that there was a robust fake coin manufacturing industry in China and even high value gold bars have found to be filled with tungsten. So gold and silver investors and collectors need to aware that there are many fake coins and bars floating around. Many of these fake coins are being sold as "souvenirs" but the price increase over the last 10-15 years has made this a very profitable criminal enterprise. Silver.com has put together an informative video and infographic to teach us how to detect and avoid these counterfeit gold and silver bullion products.

There are many gold and silver prognosticators out there, with many calls on future prices, but this interview of Harvey Organ by Greg Hunter of USAWatchdog.com was bolder and more provocative (some may say ridiculous) than most. His explicit call for $3,000 per ounce gold and $200 per ounce silver by the end of this year (with big spikes up after that in 2015) may be music to the gold and silver bugs ear, but you have to ask whether this is just re-enforcing the bias/view you already hold about gold. I'll give Greg credit for pushing Harvey to explain how he gets the number, and though there is some rationale in this 30 minute interview for potential physical shortages, the end number is purely arbitrary. You watch the video and make up your own mind.

Interviews and opinions of Jim Rickards have been featured on this site multiple times. In this interview with Money Morning, Rickards provides a good overview of his economic and strategic philosophy. His belief is that the US is in a long term depression, similar to one it went through between 1870-1900 and the Fed's efforts to pull the economy out of this depression through money printing are not working and distress is hidden. Every dollar of debt is only generating $0.03 of growth versus $2.41 from fifty years ago. Presentation wise, the interview come off as a bit "stiff" (mostly the interviewer) but the first half hour is well worth watching after which there is some native advertising for a version of his book The Death of Money being pushed via Money Morning, which includes some unpublished content he describes as the US government's "Day After Plan Declassified", video briefings and investing/financial advice from Rickards.

Gold has strong historic links to Peru, from the days of the Inca empire to the Spanish looting of South America's gold and silver hoard. And to this data, mining plays a big part of Peru's economy. But the country also has a large number of illegal gold mining operations which pay no attention to the environment and are in fact laying large parts of the Peruvian Amazon basin to waste. Nick Miroff reports more on this in a story in the Washington Post. Its an interesting look at both the depths that people will go to, in order to extract a small amount of the yellow metal and the swift and ruthless justice that is handed out to illegal gold mining operations by the Peruvian authorities.

Workers demolishing a hundred year old home in St. Cloud, Florida thought they had hit pay dirt when they found over 60 pounds of silver coins hidden in glass jars within the walls of the home. But alas that was not meant to be as the loot of hundreds of silver half dollars, quarters and dimes was confiscated by the local police as the last owner of the house had over half million dollars in fines and levies owed, with the city having a lien on the property.

And in a somewhat similar story, workers in Normandy, France were working on a house and came across a treasure of their own. Once again hidden in jars, these workers found six gold kilo bars and 600 gold $20 coins from 1924 and 1927 - worth a total of over a million dollars in gold - and decided to split it amongst the threesome. After selling the stash to a local coin collector, they were arrested as they came under suspicion after depositing high value cheques.

The tug of war between the deflationists and the (hyper) inflationists is enough to confuse most investors. Both scenarios are plausible and scary when taken to their extreme. David Morgan of Silver-Investor.com talks with The Doc & Eric Dubin of SilverDoctors.com and delves into many of the economic and investment topics that can help guide investors.

There was much "hope" that the incoming Narendra Modi government would ease up the gold import restrictions but if the new finance minister Arun Jaitley is to be believed, restrictions on gold import are likely to remain in place.

"Each step is being continued...efforts are being made to continue each of these steps," Jaitley said while referring to measures taken by the UPA government last year to contain Current Account Deficit (CAD) that touched a record high of 4.7 of GDP or $88.2 billion in 2012-13.

"The measures taken by the government and the RBI helped contain India's current account deficit to $32.4 billion in 2013-14 and build up foreign exchange reserves to a level of $316.4 billion on July 4, 2014," Jaitley said in reply to questions in Rajya Sabha."

Sudan has been through a tumultuous (recent) past with the country being split up, based largely on the lines of religion and an ongoing problem with alleged support of terrorism. But the country is the third largest producer of gold in Africa and hopes to leap ahead of Ghana and South Africa before the end of this decade, to become the largest gold producer in Africa.

The Sudanese government, including its minister of mining, Ahmed Mohamed Sadiq al-Karuri, have been pitching the gold industry to visiting mining companies and governments. Any success in increasing mining of gold, and iron, chromium, and copper, would help the country make up for the loss of oil production, which is now located in South Sudan.