Rhodium on the Rise!

Rhodium is again on the upward trend. Remember just a year ago it was down to $700 per ounce. Today is it $1800-2100 per ounce (that price discrepancy depends on who your quoting source is and whether you're buying or selling.

The chart below shows the price of rhodium as quoted by Kitco. You can see it's been steadily moving up from $1500 to $1800 over the past few days. The $2100 price is the quoted price if you want to buy an ounce of it, which is considerably higher.

Rhodium Price Chart

Rhodium Coins Prices Rising

If you'll recall we did an interview with Eitan Cohen of Cohen Mint regarding the minting of the Cohen Mint Coins (full article here). Checking the Cohen Mint Rhodium Bullion Coin site, since the coins came out a few months ago, they've climbed from their starting price of $89.99, to $92.99, to $99.99, to $102.99, and just today to $104.99. Rhodium bullion is rising so the cost of making rhodium coins is also rising. At $104.99 it will cost you about $3300 to get your hands on an ounce of rhodium (remember these are 1-gram coins so you'd need 31 to have an ounce).

You may be thinking that owning 31 small coins isn't the best way to own an ounce of rhodium. Let me tell you, though, it is the only way. There is a company online that allegedly will make a bar for you and sent it, but I haven't read about anyone ordering one from them.

$1100 Gold Coming Soon!

I was wrong. I said a couple weeks ago that gold will peak at around $1050 (but I searched to find where I said that, so I guess I'm not wrong, right?!). Today the gold price is $1095.

This is a historical high for gold in dollar terms, surpassing it's many previous highs that it hit in October, 2009. We've seen quite a few instances of a gold all time high over the past few months. Let's look at a chart which shows it a bit more clearly.

Rise to $1100 Gold Chart

As you can see from the chart above gold nipped $1000 in February, nearly did it in May (both were near historical highs at the time) and in September in remained comfortably over $1000 for over a month long period. In October its holding level was around the $1050 mark. Now we're tinkering with $1100. Will it hold here for a month again? I'm not going to take a guess this time!

And, for your reference, the chart below shows gold's previous run up to $1000 when it did it in the spring of 2008. Then it pretty much remained below $1000 for a year before continuing on its current spike.

Should You Sell or Buy Gold Bullion and Gold Coins?

Right now, if you paid under $700 for your gold bullion coin and would like to realize a $500 profit, I wouldn't say that you'd be making a mistake by selling it. I do think it will go higher, but that will be slowly and not a sudden increase unless if something drastic happens in the economy. So, also, if you decide to buy gold right now, your investment decision will also be wise! I do think gold will dip again, though.

Should I Sell Gold and Buy Silver?

I wouldn't say this is a bad strategy, since silver has a much higher chance to double or quadruple as gold does. If you've been reading the site you'd know that I have all my money tied up as it is and I'm not saving too much so I haven't been buying as I'd like to. I did manage to buy a few small silver bars the other day; and I didn't have to sell my gold to do it!

Holy Sh*t!: US Debt Clock Live

Discovering the US Debt Clock Live for the First Time

And holy sh*t is all I could say. I sat staring at the screen for five minutes without moving, trying to fathom the astronomical amounts of money I was seeing. After coming back to earth, my eyes started wandering down the clock to see the various forms of growing debt. The US government debt, yearly deficit, citizen's debt, is scary.

Numbers Explained

First, let me explain how much money we're talking about. I actually had to look up what comes after a trillion.

• 1,000,000 = 1 million (Brad Pitt made $20 million this year, Tiger Woods $100 million)
  
• 1,000,000,000 = 1 billion (Bill Gates and Warren Buffet are worth about $40 billion each)
  
• 1,000,000,000,000 = 1 trillion (US government has spent $3 trillion so far in 2009)
  
• 1,000,000,000,000,000 = 1 quadrillion

Screen Shot of US Debt Clock Live

Here is the exact screen shot that made me sit dumbfounded. I found the clock over at US Debt Clock.org (links below). However, realize that you're simply looking at an image. What I saw was more harsh.

US Debt Clock Screen Shot (click to enlarge)

(Screenshot taken Wednesday, October 28, at approximately 1:30 am)

US Debt Clock Climbing

Were you able to handle it? Did you read through all of the numbers? That was taken on Wednesday, October 28, 2009. What is the date today, and how much has it risen? This is what might boggle your mind like it did mine. Click on this next photo to go to the www USDebtClock org site. Not only will you see what you saw above, but it will be be climing as you watch it! If you don't know what a certain number means, simply run the mouse over the number and an explanation will pop up.

Current US Debt (click for today's figures)

(Screenshot taken Wednesday, October 28, at approximately 1:30 am)

How does that make you feel? If your son or daughter were born today he would be nearly $40,000 in debt if we divided evenly amongst all US citizens the $12,000,000,000,000 (trillion, I just wanted to write out all of those zeros). Staggering, isn't it?

How Much is a Trillion Dollars?

The US has over $100 trillion in unfunded liabilities, which includes Medicare and Social Security. Many soon-to-be retirees are worried the government will soon be unable to pay. $3.5 trillion of the $12 trillion US debt is held by foreigners. What happens when these creditors start demanding the US government to pay up?

On Inflation

Look at"Federal Reserve Money Creation" on the left hand side. Do you see how fast this is rising? They are printing money at a rate of $60 million per hour. This is why our palladium coins and gold bullion have been rising in value and why inflation has been a part of life since 1972 (before which the dollar was backed by gold). Eventually we will see gold, silver, and all other commodities reach astronomical heights. Technically, they should be much higher than they are now, but thus far people are trusting the US government to eventually pay its debts and things are still semi-stable.

I'm not going to write a book here. This is a choppy article of my thoughts; what went through my mind when I looked at the clock. I've read a lot of books about the economy, business, commodities, stocks, etc. Some of these books are from 2003, some are from the 90s, some are more recent. The other day I read one from the 70s when the debt was just a few $billion. Many mention the total US debt, which just a few years ago was $2-3 trillion. Now, it's $12 trillion and I'm just astonished.

National Debt Clock in New York City

Finally, here's a picture of the US Debt Clock pasted on a wall of a building in New York City for everyone to see. "The idea for the clock came from New York real estate developer Seymour Durst, who wanted to highlight the rising national debt" (http://en.wikipedia.org/wiki/National_Debt_Clock). Click to read the full story about the clock.

National Debt Clock (Click to enlarge)
(Linked image from Wikipedia)

What Does All This Mean?

What does this mean? That there are too many people in the world; there is too much money backed by no solid assets; there are too many people in debt; here is too much pollution; there aren't enough resources....I could go on. But the fact is that our society has become extremely complex in terms of the economy, resources, and population. Something big is going to happen in our lifetimes. And some of us will be prepared.

Palladium Shines! (Gold Price Predictions)

Palladium Shines!

Palladium is doing very, very well, folks! The gold price is glittering right now as people the see the $1050 price. This shows a near 10% gain for gold. Silver is up 14% to over $17.50 per ounce. Platinum, over the same time period of a month or so, rose under 10%.

But look what's shining: palladium! Palladium has risen 16% over the same time period. It's current price is $336 per ounce palladium coin or per ounce of palladium bullion. Buy palladium bullion as it's still a good investment. It woudl have been a better investment a few months ago at $180. Remember that?

Investment Strategy

We've been giving you tips every couple months on which metal to buy or which to sell. It's usually short and at first decided we wouldn't do this, but people like it so we're doing it. We never guarantee any of our predictions though, so keep that in mind.

Gold Predictions

We have a long-term prediction for ALL of the metals to rise. I think you know that simply by us maintaining a precious metals site. In the short-term, as in, what you should do right, we think you should buy silver. Silver has never been this under-valued compared to gold. When gold hit $1000 in 2008 silver bullion was selling at $22 per ounce or closer to $30 for the silver coins.

If you don't have money to buy silver now, Selling an ounce of gold (we're assuming there are low fees involved) for $1055 would buy you about 60 ounces of silver. So, six ten ounce silver bars (coins would likely cost more) could be had. We say that not only because we think silver undervalued versus gold right now, but because it is so rare and when demand increases so will its price.

Palladium Predictions and Platinum Predictions

We don't think palladium will reach $400 any time soon. Similarly, we don't think $1500 platinum will come any time soon. Gold's popularity, as evidenced by $1000 gold or $1050 gold, proves we're in a recession and people want to hedge with gold. Palladium hedge and platinum hedge don't work the same because they are more industrial in nature and will rise with more demand from auto manufacturers. In the long-term, both will rise, as we're predicting, but not this year.

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Here's an article predicting gold to reach $2000 within the next 10 years.