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5.2.2018 - Free Investment Newsletter Bookmark

NOTE>> I sent the following article to my members on Sunday. A few asked me, that since I didn’t have any specific stock plays mentioned, would it be okay to forward to friends.   I said sure.
 
So, since this was a more “general” article about the purchase of precious metals, instead of individual ETF’s or Gold mining companies, I’ve decided to put it out to the Free Newsletter people. For you Insiders Club Members, we’re going to be talking about some specific gold and silver stock and options plays this weekend. Stay tuned.

 
Metals, What Do I Buy?

Hopefully you read Sunday's Newsletter, because in that I spell out why it feels like the metals are about to make a more sustained move higher. If that’s right, then as I said in that letter, it’s probably best to buy some physical gold and silver over the coming month or so, as it could get considerably more expensive.
 
For those of you who have never bought any physical metal, you might ask “what do I buy, and where?” So let’s start there.
 
The most recognized “coin” in the world is the US silver eagle. It is one troy ounce of pure silver, and it’s intricately engraved. ( Side note, I had the chance to actually speak to the man that designed the Eagle, and it was really intriguing. Interesting man)
 
So, while I cannot “tell” anyone what to do, that would be my first choice in buying silver. While there are dozens (if not hundreds) of what we call silver “rounds” out there, the Eagles are “better” from the perspective of using them in trade. Let me explain.
 
There’s mints all around the world that take pure silver and mint up coins. There’s coins with Chinese Panda’s on them, coins with “nature’s predators” on them, coins with philharmonics on them, etc. They are all real silver, and they’re all very beautiful. I have quite a few of these “rounds” and I enjoy them very much.
 
Some people collect rounds from around the world, and I’ve seen a few collections that were simply stunning. While some people get real enjoyment out of collecting stamps, or baseball cards, or what have you, likewise, some people enjoy collecting silver rounds. I can surely understand that, because 1) they are indeed pure silver, and 2) they are art pieces. Some of the engraving work is simply stunning.
 
But let’s get ugly for a minute. Let’s say something really wicked happened, and society fell apart. Maybe it’s from an EMP, or a real nuclear war started, or a pandemic, or what have you. If you were going to trade your metals for food, or medicine or fuel, what would the seller of those goods rather have? Would he accept a Sunshine mint coin with a beautiful bird engraved on it? He might. Or, he might question whether he was really looking at silver, instead of some form of fake.
 
With the “Eagles” you take away that doubt. Eagles are only produced from certified US mints, and the level of detail and perfection, is way too complicated to fabricate as fakes. So in a real SHTF situation, Eagles would be more easily bartered than any of the “rounds”.
 
Now, if nothing like that ever happens, then naturally you can sell your rounds on the open market very easily. Silver dealers are very familiar with the mints of the world, and the different series of coins that produce. You can sell them in an instant. So I’m not “against” owning silver rounds, I’m simply saying that if you’ve never bought any silver, I think going with your first stash of Silver Eagles is the best plan.
 
NOTE>> The Canadian Maple leafs are an excellent alternative to the US Silver Eagle. The Canadian Maple leaf is perhaps one of the most beautiful silver coins in the world. Made with 99.99% fine silver, the Maple leaf is one of the most pure silver coins produced, compared to most bullion coins at 99.9% purity. The silver maple leaf has been in production by the Royal Canadian Mint since 1988 and I have NO issue with people buying them. They are recognized around the world as a first class coin, Equal to our Eagles.
 
Once you have a comfortable amount of Eagles, then you can expand into rounds, or, if you’d like, you can experiment with actual “bullion”. So, what’s bullion? In a loose sense, think of bullion as ingots or ‘bars” of metal. It doesn’t have to be hundreds of ounces, in fact a 10 ounce silver bar, is bullion.
 
I think that even if you’re never going to be a metals investor, everyone should buy at least one 10 ounce silver bar. Why? A lot of reasons. One is that it’s still cheap. With silver at say 16 bucks, you can get a ten ounce bar shipped to your house for under 200 bucks. Don’t forget, it’s still silver and if the metal does go back to even just the 2011 highs, you’ve tripled your investment.
 
But the other reason to do it is because of the “lure” of the metal. How “heavy” it is. How mirror like the shine. They are truly interesting pieces. I often ask people if they’ve ever held a “bar” of silver. 99% say no, they’ve never even seen one. Then I hand them one and the first response is always the same “wow, I didn’t think it would be this heavy!”. Silver is very dense, and yes, that little bar seems to weigh more than its size would allow. So even if you never want to truly play in the silver game, get yourself 10 Eagles, and a 10 ounce bar, and just enjoy them.
 
PS... people often struggle to think of something good to give kids and teens for their birthday. I can think of no better birthday gift for a kid, than a couple Silver Eagle coins. Sure they’re only worth 18 bucks, but 1) it’s a precious metal, 2) they probably don’t have or have ever seen one, 3) there’s a chance that in their lifetime it will appreciate to 50, 70, or over 100 dollars. 4) they’re beautiful to look at, 5) I guarantee no one else will be giving him/her that same gift. Consider it.
 
What about gold? Gold is without a doubt, one of my all time favorite things to own. Gold is the money of kings, quote as riches in the Bible. Gold is such a unique metal, that it’s been money for longer than humans could write. One almost impossible fact, is that even people in long lost lands, cut off from most humanity, living in jungles, seem to know that gold is valuable when they’re shown it. It’s almost ingrained in our DNA.
 
How is it that as the British were exploring the world, it didn’t matter if they landed in Asia or South America, the natives were using gold as money, adornment, or power? These are people divided by oceans, with incredibly different back grounds, and yet, gold was a common denominator. How’d that happen? Because no matter where people are from, gold is treasured as “special” and I don’t think it’s by accident.
 
Having started life as a jeweler, I’ve handled more of that stuff than most and I always found it to be alluring. I’m focusing on silver in this letter, just because of price right now. With gold at the 1300 level, let’s face it, it takes a lot of money to buy a little bit. Back in 2001 - 2005 when I was banging the table and urging everyone that would listen to buy the stuff, it was only 300, 400, 500 bucks.
 
One way to combat that, is to buy half and quarter ounce gold Eagles. Yes there’s more mark up on the smaller amounts, but it lets you get into the gold game without spending a fortune. As much as I’m a silver bull, I’m always a much bigger gold bull. No matter what, I believe everyone, and I do mean everyone should have “some” gold. How much is some? For many it’s only one ounce. For others it’s 5 or 10. For some, it’s 25.
 
I do find it interesting that people will insure their car, their house, their boat, etc, pay thousands of dollars per year, but not spend a few bucks each year to buy the “insurance” against a fiat dollar fail. Insurance against inflation. Gold is an insurance policy, with no debt attached to it. It just sits there being gold. Yet in harsh times, it always rewards the owner.
 
Okay, so where do you go to buy this stuff? Well there’s quite a few places, from a local coin shop in your town, to online outfits. But the real bottom line is that you TRUST whom ever you buy from. Trust is the single most important aspect, NOT price.
 
I’ll say it again. Do NOT let price dictate your decision on who to buy from. When you’re buying gold and silver, you have to KNOW that you’re going to get the exact metal you ordered, and for the exact price you’re quoted on the day of your payment. Having 100% trust in the seller’s integrity, is miles more important than getting it for 40 cents an ounce cheaper somewhere else.
 
Not too many years ago, a lot of people got scammed out of thousands and thousands of dollars, because dealers tried to be the cheapest guys on the internet. Eventually, they weren’t making enough money to buy more metal at the days price, so they’d take new money from orders, and buy enough to fill existing orders, and so on, until “boom” they went belly up. Or, they just ran away with customers money.
 
Some of these failures were epic in size. In one case hundreds of consumers lost millions of dollars. So as you can see, bartering over pennies per ounce should be the last thing on your mind. Trusting that you’re going to GET the metal you bought is paramount.
 
Naturally, that means that the best method is to find a silver/gold dealer in your own home town. That way you can see the metal, touch the metal, pay for the metal and leave the same minute with your metal. However, it’s not always easy to find a dealer in your area, that’s going to have what you want, or that isn’t terribly overpriced. Remember, you’re not there to buy collectible coins you’re really after the metal itself. Many coin dealers mark up their silver, as if you’re buying collectable coins. We’re not, we’re buying silver.
 
If you can’t/won’t find a local dealer that’s trustworthy and at least fairly priced, then it’s time to go online. There’s several outfits on line that have now been proven trustworthy, by both the time they’ve been in business and the reviews they get. I have personally bought from several of them, with no issues. However, I have only dealt with one supplier for the past 10 years.
 
I use Cornerstonebullion.com. I developed a personal relation with Chad and his wife and his dad, and they’ve always serviced me and my members with excellent care. I can recommend them with an open heart. What you order, you will get, and at a very fair price.
 
I don’t get a commission for recommending them, I simply do it because they’re good at what they do, and over the years I’ve heard from dozens of my subscribers that had excellent experiences using them.
 
Okay, so once you buy some, what do you do with it? That really depends on the amount of metal you buy. If you’re thinking that one day the wheels are going to fall off this global economy, and we’re going to have a 2008 style melt down or worse, you might be buying “monster boxes” of the stuff. ( silver) That’s 500 coins in a sealed box from the mint. Others might buy 10 Eagles and that’s that.
 
Obviously, where you store your metal will become important. You can hide a dozen Silver Eagles throughout your home very easily. You can’t hide too many monster boxes that easy. So each situation will be different. Crooks are pretty amazing at finding valuables in a very short period of time, and you’ve got to be creative. Use your imagination when thinking of areas to “hide” your silver or gold.
 
For instance, the bad guys will rifle through your dressers, they’ll rife your closet. They’ll tip over furniture, looking for stuff taped to the bottom. They’ll pull out drawers and flip them to see, etc. They have their own training classes in where to look for hidden treasures. So you’ve got to make it time intensive to find your stuff.
 
Think about it like this: You might think it’s clever to hide 10 Eagles in your toilet tank. No one’s going to look in there, right? Wrong. That’s a common as it gets. But what about say, pulling out your clothes dryer, removing the rear panel on your dryer and stuffing some coins in there? Do the bad guys 1) have the time to go through pulling it out and unscrewing the back? 2) would they think you’ve done something that intensive? Probably not. So again, use your imagination.
 
Let me wrap this up by saying that it’s always wise to buy “things” when they aren’t getting a lot of attention. Gold and silver have been shoved aside for the lure of easy money in stocks. Well, stocks have been stuck for 3 months now, and more and more big name people are starting to think that Gold and silver could be getting ready to move. I agree with that, and I hope you “get some”.
 
The Market.
 
So, today was the day we heard from the FOMC about economic policy and their view on things. For the most part the “street” was comfortable about their statement, and it sounded to most that they were going to follow the script and continue gradually hiking rates. They didn’t really give any indication that they were going to increase the amount of rate hikes going forward.
 
At first the market liked it. We were red across the board and a few minutes after the release at 2 pm, we had the DOW up 44 and the S&P up over 3. But then the nervous Willies started chewing on them. They started getting worried about Friday’s upcoming jobs report.
 
If Jobs come in too strong, they fear that the Fed’s will hike rates in June AND tell everyone at the press conference that they “could” add another hike into the mix this year. So they worried over that. Then they worried that if the jobs report wasn’t very strong, it would lend credence to the idea that earnings have peaked and going forward the economy will soften.
 
By the time we closed, the DOW wasn’t up 44 any more. It was RED by 179. The S&P wasn’t green by 4, it was RED by 19. As I told my Insiders Club members at 2:30 today, “I would have expected more pop to the upside, this market feels very heavy”. It was.

The noose is tightening folks. We’ve been bouncing up and down inside the brackets of the 200 day moving averages at the bottom and the 50 days at the top. The problem is that those indicators are converging.Back in February, the distance between the 200’s and the 50’s was 2,290 points.
 
Today that spread is only 778 points. On the S&P right now, only 69 points separates the 200 day support, from the 50 day resistance.That’s a one day move In this crazy market.
 
As that cone continues to narrow down, the market is getting compressed, and at some point, we break out and over the 50’s and run. Or, we break under the 200’s and fall. In between them, all we’ve done is chop, pop, drop, bounce, wiggle and move sideways.
 
The noose is tightening. Something’s going to happen and it’s getting closer all the time As I told my members, “history” says that what ever the direction of the market was as it entered into the sideways triangle pattern, is the way it exits the pattern. That would mean we break over the 50’s and put in a really sustainable run.
 
But there’s a lot of reasons to think that this time it won’t happen. We’re 10 years into this expansion. Earnings may have peaked. Rates are rising. One thing is certain, which ever way this resolves, we should know it in the next couple weeks. Get your ideas lined up to go long, or short when it decides.

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