Posts Tagged ‘gold & silver’



Thanks for joining us here at TPS and congrats for taking time to see if owning precious metal is a wise choice for you. I view silver & gold as wise to own but ultimately it is you that must find comfort in trading cash for history’s oldest true source of money. The reason I mention “comfort” is because this is what it takes to not lose faith in something highly volatile and definitely necessary. Gold was considered volatile when I first bought it over ten years ago at less than $400 per ounce. Maybe this is why a close friend said I was crazy to take tens of thousands of dollars and trade it for something so risky. 

Few realize how politics play into the price we pay for precious metals OR how political miscues will drive both metals (silver & gold) higher. My emails stacked earlier this week when US presidential hopeful Mitt Romney picked Paul Ryan to share his November ticket. I guess optimistic senders found encouragement in the above ticket but failed to realize how insignificant government officials are in the cure to a failing economy.

Please don’t misinterpret this last paragraph to mean voting is insignificant, it is not. But the facts show your local election has a greater impact on you personally than the presidential election of 2012. Why you ask.

Because the direction in motion is long determined and regardless who leads this great country the plan must be to borrow, spend and divert attention away from constituents.

Most of you read a post like this for one reason. You’re looking for legitimate reasons to prove gold & silver will grow in value or price. You really don’t care what PM (precious metals) have done but only what they will do in the future, I understand. But even the most diligent reader sometimes misses the signs signaling gold and silver upward. Please let me explain.

Right now political decisions affect nearly all aspects of your life. Their decisions for war send our youth to fight. Their decisions to raise taxes take more of your hard earned paycheck. Their decision to use eminent domain can take ground your grandfather worked seven days a week to amass. Everything from speed limits to chlorinated water rests in the hands of a growing entity called government that has grown too large to support.

I personally like a young man like Paul Ryan and view his plan for fiscal restraint as a step in the right direction. But even his plan, as I see it, doesn’t address ever increasing deficits in this decade, or the next, or the next. We can’t wait 30 years to deal with the one burden that saddles us all, sorry.

What young politicians, like Ryan, are realizing is a truckload of sandbags will not hold back rising tides of debt. The ill effects of debt know drag all economies downward and 90% of those making decision recommend adding more debt to solve old debt problems. So, where does this leave you and your growing stack of silver & gold? Let me explain.

Everything supported by government will decline or suffer as tax revenues and borrowing lessen (yes, borrowing is not bottomless and will decline or cease). This means wealth invested in industries or corporations depending on government revenue will dramatically decline. This decline will create panic selling and then panic buying of real assets like silver and gold, nothing new here, just history repeating itself.

Those buying silver and gold now are far ahead of the curve. Owing PM today is no different than investing in industries of the future. Some readers ask what such a day will look like but actually some cities already offer a glimpse of tomorrow. Take Oakland for example. Oakland can’t pay its police force so law enforcement has declined around 30%. Crime hasn’t declined so the market still exists for protection of life and property. This is why private companies now service the businesses and fine folks living in the city of Oakland.

Even taxing 100% of wealth cannot forever support the level of spending most municipalities or states now need to operate.

Here is yet another example of too much government spending what we don’t have. The Department of Agriculture just announced it will buy $170 million of pork, lamb, chicken and catfish to help support farmers suffering from the drought. Now, let me ask you a question. Does it sound prudent to spend $170 million when we’re borrowing over $.40 of each dollar spent? Does this sound like a political favor in order to shore up more voters?

I spent the last couple of days fishing and enjoying my state’s population of deer and elk with the owner of a large West coast farming business. He described this year as one of millions in profits but also mentioned years in the past far less than profitable. He then mentioned something each of us must grasp and keep in mind each time we hear of another politically motivated bailout. He mentioned that in good years or bad, he understands and accepts the risk of farming. When governments (politicians) take or borrow money, in your name, and then dish it out they are creating a dependency regardless if it’s handed to a multimillionaire or the unemployed.

Your decision to own gold is a preparation for tomorrow. Owning real wealth (not dependent on taxpayer support) allows us to prepare for a future when a government can no longer support all those it promised. The value of silver and gold doesn’t hinge on stimulus or government support. This is 100% why I have readers who divested from traditional retirement accounts and into gold. Assets supported by government will decline and assets “real” will hold or grow true value, regardless who wins the next election or the one after.


Question: I couldn’t disagree more with your opening chapter in Why Silver & Gold Will Go Higher. You downplay the importance of elected leaders when you know good and well our liberal ideology is what brings down this country.  Why not say it like it is? The rest of the book is right on but the chapter on politics is way off!!

TPS Reply: Thanks for your comment and question. Yep, I realize you and many others feel this way but I’m sticking with my first chapter and here is why. Conservative minded folks blame overgrown social programs and the liberal minded for too much debt and destruction of our economy. Liberal minded folks blame our failing economy on war capitalists and greedy Wall Street executives.

The fact is both sides are correct but this doesn’t change my opinion in the least regarding politics and gold. My belief is both sides of the political aisle will support more spending, regardless why, and this will drive gold prices higher by driving our economy deeper toward the abyss. We can argue all day who is to blame but the newly elected folks repeat the same monetary mistakes and until we the people roll heads this will not change. Until then, my friend, stay focused on things of value and less focused on one disagreeable chapter.


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History tells of no other time or place as promising as the Roman Empire. We often refer to the fall of Rome but actually the fall was more like a long decline ending in a very poor dwindled down version of itself deeply divided into two parts. I can’t help but watch the United States (actually the entire world) follow the same mistakes that buried Ancient Rome and like the Roman Empire history will divide the blame according to wealth and social status. My goal is not to argue why Rome fell but simply compare its fall with ours today. Some readers continue to question gold’s worthiness but fail to connect historical dots proving why real money sustains monetary mistakes, like Ancient Rome and like America 2012.

Nero and other emperors debased the currency in order to supply a demand for more coins. By debasing the currency is meant that instead of a coin having its own intrinsic value+, it was now only representative of the silver or gold it had once contained. By the time of Claudius II Gothicus (268-270 A.D.) the amount of silver in a supposedly (100%) silver denarius was only .02%. ABOUT.COM

To prove why your silver and gold are soon to skyrocket in value we must first systematically compare our currency debasement to Romes. Unlike today, Rome used coins of silver as currency but soon realized the Empire’s wealth couldn’t sustain, or appease, a overgrown government providing too many entitlements.  As you can see by reading the paragraph above the answer to fulfilling entitlement was decreasing the amount of silver (denarius) from 100% to .02%.

Money debasement in days of Ancient Rome is no different than our version of printed or digitized currency. The reasons to print, or in Rome’s case the reason to decrease the amount of silver in each coin, are the same too. The world is flush in currency only because folks refuse to give up such a comfortable way of life and refuse to hold central banks or elected officials accountable.

Roman emperors gave the people what they cried for and our world’s leaders today do the same. For you to fully grasp why an ounce of silver or gold will rise in value you must first understand this monetary repetitiveness of misfortune. I guess if truth be known misfortune is limited to those NOT holding real money (precious metals) since real money always rises to the surface in the times like we’re describing.

Your silver and gold coins safely stored away are minted with a number representing a currency worth, like the coins of Ancient Rome. Some of my gold coins represent $50 but no one in right mind will trade an ounce of gold for fifty bucks. Today this $50 gold coin is worth around $1675 even though the coins say otherwise.

The world no longer uses gold or silver coins as common currency but if we did I can guarantee you my $50 gold coin would be worth around $50, not $1675 like it is today. Please hang with me here because it is very important each of us understand how our wealth dwindles away by debasement.

The process of taking your wealth and then giving it to others (banks, politicians, entitled, etc) happens by printing more currency. Rome couldn’t sustain itself so it raised taxes and minted more coins each time lessening the amount of silver in each coin. This was and is no different than the massive currency printing happening as you read this. You can’t control central banks handing out worthless cash (to only the select few) but you can buy silver and gold, at least for the time being.

Our world today has chosen to follow Ancient Rome’s footsteps even though the outcome is clearly defined. Bailouts and fascism are now the norm and fiscal restraint is viewed as hurtful and irresponsible. The best you can do is grasping the protectiveness of PM and then stand clear of flying debris as this thing unravels.

I receive email after email with readers asking if I’m sure PM (precious metal) will rise like I write about in Why Silver & Gold Will Go Higher. Each reader holds a level of skepticism but only because they have yet to grasp our economic plight. We are Rome; if we stay the course our outcome will simulate the decline of the Roman Empire.

History also paints a disturbing picture of Romans waiting for a return to normal much like we see today. Nothing is normal about all currencies of the world in full print and borrow mode. To patiently wait for a return in housing values or a strengthening stock market is no different from expecting a return of the Roman Empire of 2000 years ago.

If you are still skeptical I have a suggestion to prove precious metal’s worthiness. Watch and see how often restraint supersedes printing more currency, or new taxation, to appease those crying in the streets. At the same time, keep in mind each dollar printed, and backed by nothing but a promise, reduces your wealth stored in savings and soft assets.

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One of the many highlights of founding a site like this is when we receive great questions from readers who truly hunger to understand PM (precious metals). Such a question came in recently asking for a further explanation why gold or silver could bubble leaving many falsely protected. My goal is to explain gold and silver without over complicating PM along the way. Today’s topic might be a little overwhelming for those new to silver and gold, if so, I’m sorry in advance.  But like most questions, if one person is willing to ask then others are asking as well. By the way, the question below is one long question broken into several replies.


I appreciate the work you’re doing and have been an avid reader of your blog (The Prospector Site) for the past 6 months which is when I began to accumulate physical gold and silver. My question to you revolves around the so-called ‘exit plan’ from previous metals. Many precious metal experts seem to be of the view that the price of gold and silver will ultimately rise to bubble territory similar to 1980 and that it would be wise to switch to an undervalued asset such as property at that time before the inevitable crash. Reading your blog, I conclude that you share this view. Please correct me if I am wrong. PROSPECTOR REPLY: Congrats on jumping into the world of physical gold & silver. You are correct, I view PM as someday ramping into bubble territory.

QUESTION CONTINUED: However I’ve come across another long running blog which seems to suggest that despite paper gold becoming a bubble, physical gold can never become a bubble as its fixed supply can never be ramped up at will to support demand. The author argues that physical gold is essentially the opposite of bubbles and absorbs the monetary energy of bubbles that pop. He limits his theory to only physical gold and not silver as he is of the opinion that silver will behave as a commodity and not act as a future store of wealth.

PROSPECTOR REPLY: Silver is far more than a commodity, it’s money. I doubt this will change in our lifetime but no one knows the future. Please remember,  silver doesn’t have to be worthy but perceived as a worthy harbor for wealth. This silver theory goes against conventional wisdom especially when we conclude most (99%) still await some form of economic recovery. Nevertheless, it is wise to physically hold both metals in my opinion.  Unfortunately, many will soon find gold too expensive leaving silver as the next option, interesting observation.

QUESTION CONTINUED: He states that as the US dollar loses its reserve status, physical gold will rise in value tremendously many times over and then stay elevated as the ultimate world’s monetary wealth reserve while the paper gold market crashes. He uses the example of the world’s Central Banks accumulating physical gold to support his view and points out that they are not doing this with silver. He is also not accepting of the argument that silver will act as the poor man’s gold as he says that the difference between rich men and poor men is that the rich have inter-generational wealth that lies very still and maintains its value as savings whereas the poor would be forced to circulate their silver to meet their daily needs.

PROSPECTOR REPLY:  Great point and why we recommend owning silver rounds for such a barter/trade possibility. Rounds are easy to own and usually sell closer to spot than legal tender coins. Trading silver rounds for other assets, or necessities, could be necessary during a reserve currency reshuffle. One other point, rich men are buying silver since I know of several billionaires heavily invested in silver, as well as gold (David Hoffman with Miles Franklin mentioned a $5,000,000 silver transaction earlier this week, ONE TRANSACTION, wow). Back to gold for a second if you will, I don’t assume central banks will play the same role in future money as the other author.  Is it possible central banks like gold over silver because of gold’s ability to compact wealth? Central banks once held huge reserves of silver but this no longer seems to be the case, they seem more interested in gold.

QUESTION CONTINUED: He warns that silver may not play a part in the future monetary focal point as its supporters seem to think. The 1980 peak and subsequent fall of the gold price is dismissed by him as not a gold bubble event but rather a central bank intervention to save the fiat currency by raising interest rates steeply which he argues would be impossible for the current authorities to consider as it would lead to a financial collapse. Serial bubbles are formed by Central Bank inflationary policy according to him and are not a product of hard-earned real capital which he says will always flow to the safest point which is physical gold. I found his stance quite interesting and would love to know what your thoughts are on this matter. The author concludes by saying that unlike 1980, this time gold will go up and stay up. And that although there may be a temporary overshoot in actual purchasing power, with the threat of hyperinflation in the background, it may not be worth attempting to catch the overshoot as you may find yourself in the wrong paper at the wrong time which is something I am sure we would all like to avoid given how far we have come and are likely to go on this journey of ours.

PROSPECTOR REPLY: As you already realize, there is no easy answer to your question. I have given plenty of thought to the same questions you’re asking since timing a jump from PM can be challenging.  I just find it impossible to believe masses of currency chasing any asset can do anything but drive an asset (gold or silver) beyond relative value? What we must agree on is importance of real money, like gold and silver, regardless if they overshoot in real purchasing power (bubble). It really does come down to whether or not central banks choose to print currencies into worthlessness or a country like China pulls private gold to establish a new gold/renminbi (yuan) currency, we just don’t know yet. In the meantime, I’m buying both metals and recommend all readers consider PM in the very near future. Oh, one last thing if I may. Crazy times like we live create a tendency to over think issues, I know this firsthand.  Not one person on this earth can predict our future with 100% success, this only leaves us to make the best decisions possible with information at hand. Thanks for the great question, you make great points!

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Little puts more fear into the hearts of PM (precious metal) holders than the word “confiscation”.  Since silver is the hot metal of the decade I would like to continue our discussion on all things silver related.  We often associate gold with confiscation and unbeknown to most silver fell victim to gov’t confiscation as well. My goal for today is provide proof silver confiscation happened, yes in the US, but unlikely to happen anytime soon.  Since I don’t sell silver I feel comfortable describing silver’s good, bad, and ugly side.  If you’re new to silver please don’t interpret this post as anything but a lesson why silver ownership is wise.  Nothing once confiscated is valueless, silver certainly isn’t.  Let’s dive in.

Franklin D. Roosevelt convinced constituents to elect him four times; only because of his death did American citizens realize a new president.  Below is a currency in circulation graph (USD) beginning shortly before Mr. Roosevelt’s era to today.  One glance at this currency graph (compliments of the Federal Reserve Bank in St. Louis) provides proof why PM had to be confiscated to allow a fiat currency room to create a debt based system and then continue to monetize debt. What does this mean to the guy who works for a living? It means the only way to legally print your currency into worthlessness is to control real money (gold & silver) at least until paper currency became the new normal. It’s worth noting gold & silver graph similarly to the currency graph below all rising along the way.

Please notice how the amount of currency in circulation stayed flat until early 1940s.  This only shows the level of fiscal constraint our US dollar held while hinged to PM.  Confiscating gold first and then silver were the missing link government needed to spend at will without the restraint of pesky gold or silver.  Since this era, and up until the second you read this post, it’s impossible to define an accurate value of our USD; this is why both gold and silver continue to climb.  The most recent activity on our graph is not for the faint of fiscal heart but it is relevant to those holding PM (probable most relevant for those not holding PM).

For anyone interested here is a link to Executive Order 6814 – Requiring the Delivery of All Silver to the United States for Coinage, confiscation of August 9, 1934.  It is interesting reading exclusions for industrial, commercial, professional, artistic, and monetary use.  I’m not sure how receptive silver holders were to 50 cents per oz exchange or the immediate tax on silver sold prior to the 90 day confiscation exchange period.

It helps to broaden our view of something like confiscation to keep future confiscation in perspective.  Unlike Pre 1930s, PM today has no limiting effect on digitally printed money.  Unlike 1930s most folks on the street see nothing monetarily relevant with gold or silver coins.  This is why our Federal Reserve can simply increase the currency, monetizing debt and funding programs, as it pleases and the amount of gold on hand is meaningless.  This certainly was not the case before the dollar gold standard, but is today.  This is why I honestly feel private metal ownership has little odds of modern-day confiscation. Combine this with the trace amounts of both metals compared to trillion of dollars in circulation and you can see my point.

This could, and hopefully will, change someday if our monetary system reenters a PM standard but this could be a distance down the road.  Owning some metal in Canada, or other international vault programs, is worth exploring just in case of the worst case scenario. No doubt interesting times we live.  Oh, one last point for those asking if silver poised to increase in dollars.  The silver supply is proportionally only a small fraction of the currency supply shown above and in our graph.  This means while silver/gold rise lockstep with dollar printing, metal supplies are not.  Few interpret such fact as anything but favorable for PM holders.



COMMENT:   Thank you for pointing out the TRUTH about the dollar. You have pointed out something that should be so obvious, but I didn’t see until you brought it up. Where the dollar has lost much of its value over the past 80 years, gold’s value has increased 100 fold! Amazing and crazy! It would be wise to consider the value of investing in hands-on gold.

PROSPECTOR REPLY: Thank you for reading.  You make a good point with investing hands on and I always recommend newbies own physical gold/silver first before anything else.  This is also why we recommend making the effort to understand PM before spending one dime. Silver and gold can be a little confusing and the only remedy for this confusion is spending the time to self educate, having said that, I have no problem with mining stock or paper metal as long as we’re comfortably protected with physical first.  We have many readers who own pounds of both metals leading them to venture, or speculate, on other PM sources.  Thanks for the comment.

QUESTION:  We took advantage of the last drop in silver by ordering 500 one oz  Canadian Maple coins.   Our goal is to add another 500 over this year and this where the confusion comes in.  Are we better off to buy some each month or wait for a dip like the last one?

PROSPECTOR SITE: Thanks for the question.  To be honest we have readers using both buying methods.  One is commonly called dollar averaging and the goal is to average high and low into a comfortable medium.  The problem with this system is timing, let me explain.  The silver market is volatile and this will not change anytime soon.  Understanding this volatility and using it in your favor (buying the dips) can be the difference between tens of thousands of dollars someday soon, no kidding.  Buying on dips does require patients and confidence.  Regardless, the most important point is to own precious metal, congrats!!

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I usually begin each morning catching up on a couple of trusted PM blogs before turning on the early morning news.  My time invested in morning news is mostly wasted because political positioning is the flavor of the month and will be until November, nothing anyone can do about this.  I say wasted because historical events are shaping our world and nearly all have to do with you, your wealth, and our silver/gold.  During a commercial break I noticed an advertisement warning viewers to watch a doomsday video about a dollar collapse among other not so cheery but dire predictionsNow I have no clue what is in the video and to be honest don’t really care to.  Why?  Because I don’t need to be shocked into buying gold or silver.

If you take one thing from today’s post I want it to be this.  What good is it to break the grips of debt and monetary debasement only to shackle yourself with fear?  I refuse to succumb to a scared straight version of precious metal ownership and my hope is you feel the same way.  Owning PM is prudent and each day provides yet another layer of evidence of such wisdom but too many are willing to capitalize on growing fear. Today is the first part of a two-part series  (part II this Friday called Bait-n-Switch Silver & Gold) exposing those more than willing to profit first from fear and secondly from haste.  Part 2 will expose a few popular B & S techniques often used by those more concerned with a higher commission than you owning the right PM, don’t miss it.

Are bad things happening more today than ever before?  Should we prepare for a time of economic correction? The answer is yes but most issues like conflict, government overreach, and civil unrest stem from the symptoms of too much debt; this has little to do with fear.  Fear is the reaction folks experience who are unprepared for such a time.  I’m guessing since you’re taking the time to read this post this doesn’t include you. Trading currency for silver or gold must be a calculated process based less on human emotion and more on a long-term plan.  This is not the norm and unfortunately bullion dealers and media know this too well.

I have no way to prove this as fact but believe it to be as true as the nose on my face, 90% of the today’s crises news/information is primarily focused on profiting from your fear and uncertainty.  This is no different from using attractive women to sell beer or handsome men to move cologne, this form of advertising does work.  Several million people looked up JOHN 3:16 after Tim Tebow pasted the scripture on his face.  Levi pants became popular after James Dean wore them while acting like the cool guy he was.  Gold and silver sells when buyers swell with fear while looking for a monetary life preserver.  Think about this if you will, did you know gun sales grow lockstep with physical precious metal sales?

Don’t let the market dictate when or what you buy (silver and gold speaking).  My efforts on The Prospector Site are about providing useful facts based on current events and trends thus allowing you to develop a precious metal plan.  I don’t sell silver or gold, I don’t profit if you buy 1000 ounces nor do I lose if you don’t.  Take the time to research the best and most affordable methods BEFORE contacting a seller or bullion broker.  See you this Friday when we expose Bait-n-Switch pitfalls.

FLASHBACK, if you are new to silver and gold please take a minute to read First Steps to Buying Gold & Silver.



COMMENT:  While reading Real Estate in Collapse as Gold Stands Strong I noticed you stopped just short of saying a home is not an asset, I disagree.  I do agree owning gold and silver is important but far more have wealth in our homes than PM.  Real estate has, historically speaking, always been a great store of wealth and will be again someday. Still enjoy reading the site but have an issue on some real estate opinions. Thanks.

PROSPECTOR REPLY:  Wow, I published the post you mentioned in June of 2011 so you must have dug it out of the archives.  Thanks for the comment and sharing your opinion.  You are correct by mentioning the lion’s share of private wealth is in real estate, the bummer is this wealth is vanishing whether we want to admit it or not.  Not since the Great Depression have we realized such declining R.E. wealth, not my opinion but fact.  Maybe sharing a conversation with a friend will help us decide if a home is an asset.

This friend bought a new home forty years ago this June paying around $25k then.  Several houses in the neighborhood recently sold and simple math values this same home around $125k in today’s dollars. If my math is right, my family friend’s home increased 400% over 40 years.  Now I want to compare this same $25k to silver and gold but also want to disclose a family can live without PM but not a roof over their heads. My point is nothing other than comparing assets to assets in hopes of proving, or disproving a home as an asset.  The same $25k in gold is now worth around $675,000. The same $25k in silver is now worth around $603,000.

Please read carefully because my motive is not to sell you gold or silver, I don’t sell either.  My motive is to provide accurate as possible information so each of us can make the best monetary decision possible.  The concerning aspect is one asset is in major decline while the other is ascending, to make things interesting let’s extend today’s trend out five short years.  In five years it is likely my friend’s home may be worth $87,000 while an equal savings in silver/gold worth around $1,500,000.00, if our current trend continues (FYI, this puts silver around $94 per oz. and gold @ $3900, respectively).  My opinion is these trends WILL NOT continue; I honestly feel housing worth less than our trend example, in five years, and PM worth more because of worldwide ownership opportunities.  If today’s trend continues few will view a home as an asset, not at least compared to inflation resistant PM. THESE ARE ONLY TREND SUPPORTED OPINIONS, NOT PREDICTIONS!

This is why several years ago I sold a larger than needed home, downsizing, (reducing risk in a declining asset) and supported my PM holdings shortly after (supporting risk in an appreciating asset).  One last thing you pointed out, I too agree that today’s trends will someday change finding favor in R.E. values.  The question is when? I hope you agree long-term PM wealth over R.E. is something worth investing more time and research into, soon. Thanks for bringing it up, and your view.


Just as I ready to publish both metals are down around 3% which could mean a buying dip for those still on sidelines.  Worth watching if in the market to buy gold or silver.

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Have you noticed the nature of a horse race or track meet?  The start line and finish line is relatively one and the same.  The only difference at race end is time and distance, I’m beginning to see gold the same way.  Gold started out thousands of years ago as money and everyone accepted this as fact.  Eventually governments, ancient Athens & Rome, felt a currency of gold only stifled prosperity and power so gold took back seat (sorry, chariot) to currency.  Like a horse race, societies continue to go full circle but gold always ends up dragging paper money across the finish line.  I’m afraid today’s economic woes will play out the same, this is why I own GOLD.

As I’m writing what you are now reading the big news of the morning is better than expected job numbers. What few will acknowledge is we now live in an age of nonstop Federal Reserve monetary participation and influx.  To cheer job creation or positive economic data without considering the destructive nature of its origin is misleading. I’m not knocking those finding employment but just being realistic.  Eventually a growing economy has to sustain job growth under its own power.  Until it does, at least in my eyes, it is an economy on life support dependent on a never-ending supply of digital currency.

Money’s progression is the purist example of history repeating itself as any I know. We couldn’t accept limitations of a gold-backed currency so we kicked gold to the curb.  This allows us, all existing currencies in fact, to print or create volumes of currency (not money) as we feel needed.  The Fed feels we need more jobs so they create more currency hoping it will stimulate job growth.  I have no doubt printing has accomplished some job growth but not nearly what the Fed has hoped for.  So the trillion-dollar question is where will all this lead? Maybe history can help.

Okay, so we went from real money (gold) to paper money (dollars) to now digital currency. Digital currency to the Federal Reserve is like attractive women to Steven Tyler.  We’ve accepted digital currency under the pretense of convenience and online banking services prove this as fact.  Few write checks anymore and our youth rarely carry cash like we once did.  Swipe the debt card and off you go is the new normal way to buy and sell.  Thieves love this digital age as well because a computer replaced a gun, mask, and a trip to the bank.  It seems all around the digital age is finding acceptance, hook, line, & sinker.

Sometime not long ago a trillion replaced a billion (I was still getting used to a million). Selling you on the comforts and convenience of digital currency was necessary in order to create the type of worthless revenue needed to support economies of the day. It is virtually impossible to print equal the digital dollars needed to prop up such an economy. History describes the same situation when Roman Treasury switched gold and silver with  cheaper metals.  This was their version of digital currency over real money.  Using cheaper metal as coinage allowed exclusions of real money for the chosen few but wooden nickels for the masses, no different from today.

Understanding this progression as history repeating itself is another step to wealth preservation and independence. Understanding gold as real money is something few can grasp in such a digital age.  We continue to hear many complain if only they can earn more dollars or higher pay. They fail to understand making more is less a problem than declining buying power of what they do earn.  We  must understand the power of real money to fully grasp the protective nature of gold and silver.


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There is a professor who begins each new class by asking students to take ten minutes and write down their three major weaknesses.  Most answers are typical college age weaknesses like staying out too late, unorganized, not calling home enough, and not taking school serious enough.  Only after each student verbally confesses one weakness does the professor explain the assignment.  The professor explains most weakness are actually misuses.  He gives examples of what some perceive as unorganized as simply a misuse of time.  When some neglect to take eduction seriously it’s really a misuse of opportunity. The professor takes the entire first class to explain the value of misuse, from marriage, faith, to volunteering, using the lesson to challenge his class.  Today we look at the misuses of gold & silver.

I see gold related misuses daily. Some confuse misuses for mistakes but the majority I see misuse by calculation more than mishap.  One common example I see is a confusion (misuse) between opportunity and greed.  Greed and gold usually end with a catastrophic collision.  Have we entered a time when do-overs are soon to be extinct and misuse will be very costly?  I certainly believe this time is close at hand.  Maybe before we look at common gold related misuses we should ask you a question.  Are you misusing an opportunity to protect your family’s future?

I remember the conversation like it was yesterday when actually it was years ago. Over coffee, a gentleman explained his position to capitalize (by way of borrowing on his personal residence) a sure investment in tech stocks.  His plan was to make a fortune, by way of leverage, but unfortunately his greed outpaced commonsense.  The great bubble burst of the Dot-com industry wiped out his plans, dreams, and home.  If you have quick plans for gold or silver I want you to read this next sentence closely.  Owning gold & silver for short-term opportunities is more risky than not owning at all.

The bubble generation, us, were mislead by non-sustainable earnings all derived from asset bubbles. Do you recall the run to real estate just before the crash of 2006? Millions used leverage to the point of nearly collapsing the banking system.  The true victims of the housing crisis rarely are identified.  They’re our elderly, our savers, and our frugal. The principals that built our economy, heck our country, now penalized for being responsible.  They are now asked to not whine and pay their fare share.

The run to precious metals is no where close to full speed. I caution buyers to not get caught up in the frenzy and confusion soon to hit both gold & silver.  The first step to owning gold/silver is to first educate yourself on what to buy, how much to pay, and where to store it.  The second step is realizing this is a long-term plan that needs very little attention.  The next step is developing an exit strategy.   Yes demand will push gold well beyond its true worth requiring owners to sell before the metal bubble bursts. Until then enjoy the ride, and profit.

Our primary fear here at The Prospector Site might surprise you. We are not afraid of being discredited or afraid of advising folks to buy only to watch metal drop like a rock.  Our primary fear is folks will become so attached to gold’s wealth preservation and profit they’ll refuse to turn loose down the road (years down the road).  There will be a time to release interest in PM and begin buying other severely discounted assets.  Failure to recognize this as fact will be a misuse of gold.

This is our take so tell us yours.  Send questions or comments here.


QUESTION:  Enjoy reading this site very much but something makes little sense to me.  Why spend so much time encouraging readers like me to own gold only to preach selling it soon after?  Maybe I’m missing something but this seems more like a card game than investing?  Do enjoy and agree with most of what you say, thx.

ANSWER: Thanks for the reading our site and thanks for the great question.  This question falls lock step with today’s post (hopefully today’s post answers part of your question).  We must view the economic world around us differently if we want to preserve and prosper.  We have little control of the rules but, unfortunately, the rules are changing.  Think of owning gold like a storm shelter in turbulent times.  A shelter’s purpose is to provide protection until life-threatening weather passes by.  Without this shelter we are vulnerable and unprotected against unknown forces.  But once we enter a shelter we don’t make plans to spend the rest of our lives there, do we?

Gold and silver’s run is no different than a shelter during  vulnerable times.  Substitute inflation and fear for rain and wind.  Like everything else, this too will pass leaving gold/silver overbought and other assets (stocks, real estate, etc) undervalued.  Hope this helps and thanks for asking.

Worth Repeating:

Many of our readers ask how will 2012 affect gold & silver prices. Predictions are difficult to time and our opinion is long-term gold opportunities are all around us.  We ran across an interesting article this morning and it’s a must read for those interested in PM prices for the near future.  Please take a few minutes to read it here (JIM RICKARDS- War with Iran has begun, Gold to break $2000).

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This opening statement  will surprise most readers, possibly scare off new ones, but it’s the truth.  Gold and silver are the most ridiculous investment sources I know of.  Neither metal pay a dividend or provides cash flow.  Once your money lands on gold or silver it usually stays put for a while which leaves most financial advisers scratching heads.  Having said that, we feel physical gold and silver ownership is as important now as ever before.  But the reason we recommend ownership is because of what some readers will see as strange.  Today we expose a strange gold trend.

Last month I completed my part of a yet to be named e-book based on a two month series of posts from The Prospector Site. On the advice from our co-author, this precious metal book is nothing more than simple reasons and ways to buy, own, store, and sell, gold and silver.  Everything you need to feel comfortable, and secure, about your first or next purchase is within the pages of this soon to be released book.  The odd part of it, the success of this book is not within its words but the message it provides.  Let me explain.

You have been doing something strange lately and we’ve noticed. Majority of new registrants, for our weekly recap newsletter, do so very late in the evening or very early in the morning.  This tells us some folks are losing sleep trying to figure out what the heck is going on with today’s crazy economy. For this awareness we congratulate you. But like Humpty Dumpty, all the president’s men can’t put our economy back together regardless how much  money thrown at it.  This really is no surprise to us, hopefully no surprise to you either, and certainly no surprise to gold or silver.

The movement into gold and silver is not about its investment power or wealth derived from it. It’s not about getting rich, it’s not about status, and it’s certainly not about keeping up with the Jones’. The trend to own gold is something entirely different but this difference is really nothing new at all.  What is driving gold, driving new readers to this very sight, are folks like you taking back control of your future (taking back control one ounce at a time). This is sweet music to our ears since this revaluation, economic revolution, has been a long time coming.

Folks are beginning to realize no one looks after your best interest like you do. Not a bigger government, not more central bank involvement, not more regulation, not more bailouts, and surely not more debt.  The trend to buy gold/silver is part of a bigger trend of modern-day independence.  People don’t read a site like this because we are good writers.  They read sites like this because we connect the dots of freedom and self-reliance.  Gold and silver play a major role in your future and independence so offering insight how to buy, what to own, and when to sell, only makes sense.

About You:

Something we hope to do soon is make this site a forum for our readers.  Think of it like a place where you can tell others what has worked for you or why you own gold or silver.  Others need to hear and read about your experiences.  You cannot believe the cloud of confession (about buying/owning gold and silver) that grips folks around the world today. If you have something to share please feel free to do it here.

Thanks for spending a few minutes of your day with us!

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How serious would you say today’s economic conditions are?  If you had to rate importance of putting city, state, and our national house in order would you say it is top priority?  I certainly would but the unfortunate fact is most politicians aren’t listening to what gold and silver are saying.  Their not listening to us either.  As folks realize traditional ways to invest, save, and prosper no longer work more turn to precious metals and are wise to do so.  There are so many interested in learning more about metal but surprisingly little information is available.  My recent trip to the US Mint proved more Americans are hungry for gold facts and willing to ask plenty of questions.

If you want to visit Denver’s US Mint I recommend making an online reservation well in advance.  I noticed the next two weeks fully booked with folks willing to wait outside the entrance in case of cancellation. No question some of the interest stems from reckless leadership like  what came out of California over the weekend.  Yet another example how politicians refuse to face the fact of a serious economic correction caused from too much debt and bursting bubbles.

Two pieces of economic news comes out of California every gold holder should be aware of. It could seem these news worthy items don’t affect your metal but they do.  The first quarter of 2011 is showing a 700 million decline below California’s expected income.  California has enacted a “trigger system” of cuts so as revenue drops so will funding for schools, programs, etc.  The crazy part is even as the state teeters on automatic trigger cuts the Governor of California signed new legislation growing government.  The two laws relate to gun ownership restrictions for private citizens and access to state-funded finances for illegal immigrants.

Now I’m not the least bit concerned with how California handles its social interests but what this does show is the lack of concern for real issues like putting our economic house in order.  The poor residents of California will soon face the fact the solution to a spending problem is taxing the one’s working more.  Think of it like a firmer grip around the throat of the golden goose.  This would hardly be news worthy on www.theprospectorsite.com but unfortunately other states and countries are handling their economic problems the same way.  How far can the middle class stretch before something breaks?

Telling readers to run out and buy gold and silver is not so simple. So many indicators now point to the benefits of private metal ownership it’s not funny.  The sad part is as gold prices rise so does the cost of living.  But as the cost of living increases the average take home pay across America declines.  Please consider the insurance value of gold and silver as a way to protect yourself during these uncertain times.  I have no doubt those owning gold and silver will not only protect but prosper from the effects of poor leadership like just described in the Golden State.


My tour guide at the US Mint made a good point as my group left the building that claims to hold a portion of our nation’s gold.  He said, “This place is the only place the government’s work truly makes cents.”  I would have to agree with him.

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Most conflicts derive from love, money, or both.  The average person on the street doesn’t realize it yet but a worldwide conflict over money has begun and your financial future is at stake.  To underestimate this volatility is dangerous and unfortunately if history is an indicator bloodshed should be expected.  This war is hidden because unlike something obvious like your favorite product increasing its price, currency devaluation is subtle and less obvious.   If you think this doesn’t affect you please give me 500 words to prove otherwise.  If you’re not a believer in gold it shouldn’t take long to give solid evidence why I hold my savings in real money like gold and silver.

I like to explain things in simple terms, shocking right? Let’s say you are a business owner in a small town doing very well and well-respected.  One day you see a new business pop up across the street selling the same products you sell.  As the week progresses you notice fewer customers but masses visiting your new competition.  Curiosity and concern lead you into your competition’s business as you realize your competition is selling for far less than you are.  You call your suppliers asking how your competition can sell for so much less when you hear something very odd.  Your neighbor doesn’t buy its products in dollars but euros or francs.  The reason they trade not in dollars but in foreign money is because they can buy more for less money.

Countries are in the same competition as the business example above.  The difference is each country is trying to sell cheaper than the next since many economies are export-driven.  Desperation has replaced competitiveness as countries battle just to keep social unrest under control.  The Swiss are a perfect example of a currency, franc, holding a strong value but “priced out” when selling exports.  To make it simple too many investment dollars have flooded into the franc making it too valuable ( Swiss National Bank went as far to set a ceiling for the franc ultimately leading to a sell-off of the currency).  The Swiss National Bank said, ” the overvaluation of the Swiss franc poses an acute threat to the Swiss economy.” Can you imagine this?  If you are a Swiss saver being prudent and responsible you just witnessed your country attempt to devalue your wealth!!

The entire world is in a race to devalue its currency to stay competitive in a worldwide market. No different from businesses on Main Street, USA trying to sell a little cheaper than competition just to keep doors open.  Now here is where your money comes into play.  Most of us use US Dollars to spend and save.  It’s no different in Japan, Europe, or China.  Each citizen uses it currency as a way to buy, sell, and save at least in most cases.  But the problem is all countries have developed so much debt trying to keep economies moving forward they are now in desperation mode.  Countries, currencies, have no choice but to devalue money, and private wealth, right along with neighboring countries.  Building a strong dollar or yen or yuan is no longer an option in this age of currency competitiveness. War and riots as one country devalues its currency over another should be expected.

So what does all this mean to the average Joe trying to just get by? It means this decision to devalue currency will create great conflict among countries, citizens, and neighbors.  The result is a currency war, at best, and worthless dollars we all work so hard for.  But how does gold play into this worldwide conflict?  Those holding gold find themselves as spectators to this horrible currency conflict.  Gold is the only universal currency unaffected by dollar, yuan, yen, pound, etc devaluation.  The more currencies decline the higher gold grows in each respected currency.  The more currencies decline the counter result is more investment money landing on gold and silver.

A general understanding how worldwide currencies work together is not that complicated.  This same type of conflict intensified the Great Depression ultimately leading to WWII.  Watch how often the word “austerity” is used as this conflict intensifies. Conflict should be expected as gold holders take cover behind the world’s oldest form of wealth.

Yesterday we posted Why You Will Pay More In Property Tax receiving a few interesting comments from readers.  One caught my eye as a common example how ordinary folks are growing tired of useless spending and unproductive attempts at improving our economy. Here it is.

There is such an outcry on high property taxes now… officials can try… but if they don’t want good old fashioned BOYCOTT being formed, they won’t provoke and punish the good folks still able to pay a mortgage and taxes. Because, they will simply stop and join the rising masses of good folks who cannot pay cutting off the money tap to city coffers. No taxes, no paychecks, no enforcements…

The American public has a HUGE VOICE called MONEY!!! We vote with it in the stores, online…etc. We keep good businesses open and shut down bad businesses by what we buy. If banks & counties are smart… they will renegotiate loans to start getting more money in (and taxes) at a greatly reduced level… tell the stockholders… too bad… little money is better than none. And leave people alone trying to do the right thing.

And this is smart for banks… because those losing their homes have NOTHING more to lose… and banks have a lot to lose! If former evicted owners strip down homes, rip them apart and make them worthless… the bank loses. If they help the owners lower mortgages and keep the home… BOTH WIN.

The heyday of never ending rivers of money have hit the mother of all droughts. And two outcomes are for certain… homeowners & banks work together to survive… or they both will go down hard and fast… everyone loses. -Choose : ANONYMOUS

Well said ANONYMOUS.  If you comment and we post it we’ll send you a free 1/2 ounce silver round just for responding.  Shipping on us too.

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