The global gold currency and savings plan
designed for the average income
Shadow
I AM GOLD...

Why Own Gold?

 

There are six primary reasons why investors own gold:

  • As a hedge against inflation.
  • As a hedge against a declining dollar.
  • As a safe haven in times of geopolitical and financial market instability.
  • As a commodity, based on gold's supply and demand fundamentals.
  • As a store of value.
  • As a portfolio diversifier.

Gold is a monetary metal whose price is determined by inflation, by fluctuations in the dollar and U.S. stocks, by currency-related crises, interest rate volatility and international tensions, and by increases or decreases in the prices of other commodities. The price of gold reacts to supply and demand changes and can be influenced by consumer spending and overall levels of affluence.

 

Gold is different from other precious metals such as platinum, palladium and silver because the demand for these precious metals arises principally from their industrial applications. Gold is produced primarily for accumulation; other commodities are produced primarily for consumption. Gold's value does not arise from its usefulness in industrial or consumable applications. It arises from its use and worldwide acceptance as a store of value. Gold is money.

 

In contrast to other commodities, gold does not perish, tarnish or corrode, nor does gold have quality grades . Gold mined thousands of years ago is no different from gold mined today. Therefore, gold existing in the aboveground gold stock is interchangeable with newly mined gold.

 

The early 1980s presented an once-in-a-lifetime opportunity to buy stocks. Today, economic and political conditions appear to offer a similar opportunity in tangible assets. The macroeconomic and political landscape has not looked like this since the hard asset bull markets of the 1970s. The problems plaguing your stock portfolio are jet fuel for hard assets.

 

"A RECIPE FOR DISASTER? The global economic and financial market climate looks increasingly precarious. Financial imbalances have never been greater following an extraordinary period of easy money. Many countries have experienced housing bubbles and massive increases in leverage, and global trade imbalances are at unprecedented levels. RisingU.S. interest rates and high oil prices now threaten to push the system to a breaking point." (BCA Research)

 

Like today, the 1970s were a time of huge budget deficits, loose monetary policy, soaring oil prices and the open-ended costs of war. Today, the combined costs of fighting the war in Iraq and fighting terrorism at home could match the 12 percent of GDP that the Viet Nam War cost.

 

In the coming decade, as the dollar suffers one of the great meltdowns in monetary history, gold will reclaim its place at the center of the global financial system. Gold's value, relative to most national currencies, will soar. "When East Central Bank buying outstrips West Central Bank selling, and it will in the not-too-distant future, the other remarkably bullish fundamentals for gold will take over and drive the gold price to levels that most people can scarcely imagine today." (John Embry, Investor's Digest, March 4, 2005)

 

Take a look at the following summary of the six primary reasons for investors to own gold. They may never be more relevant than they are today.

 

I. HEDGE AGAINST INFLATION

 

Gold is renowned as a hedge against inflation. The most consistent factor determining the price of gold has been inflation - as inflation goes up, the price of gold goes up along with it. Since the end of World War II, the five years in which U.S. inflation was at its highest were 1946, 1974, 1975, 1979, and 1980. During those five years, the average real return on stocks, as measured by the Dow, was -12.33%; the average real return on gold was 130.4%.

 

Today, a number of factors are conspiring to create the perfect inflationary storm: extremely stimulative monetary policy, a major tax cut, a long term decline in the dollar, a spike in oil prices, a mammoth trade deficit, and America's status as the world's biggest debtor nation. Almost across the board, commodity prices are up despite the short-term absence of a weakening dollar which is often viewed as the principal reason for stronger commodity prices.

 

Oil, Inflation and Gold

Although the prices of gold and oil don't exactly mirror one another, there is no question that oil prices do affect gold prices. If oil prices rise or fall sharply, investors can expect a corresponding reaction in gold prices, often with a lag.

There have been two major upward moves in the price of gold since it was freed to float in 1968. The first occurred between 1972 and 1974 when oil prices climbed 325%, from $2.44 to $10.36. During the same period, gold prices rose 268% (on a quarterly average basis) from $47.45 to $174.76.

The second major price move occurred between 1978 and 1980, when oil prices increased 105%, from $12.70 to $26.00. Over the same period, quarterly average gold prices rose 254% from $178.33 to $631.40.

 

II. GOLD - HEDGE AGAINST A DECLINING DOLLAR

 

Gold is bought and sold in U.S. dollars, so any decline in the value of the dollar causes the price of gold to rise. The U.S. dollar is the world's reserve currency - the primary medium for international transactions, the principal store of value for savings, the currency in which the worth of commodities and equities are calculated, and the currency primarily held as reserves by the world's central banks. However, now that it has been stripped of its gold backing, the dollar is nothing more than a fancy piece of paper.

 

III. GOLD AS A SAFE HAVEN

 

Despite the fact that the United States is the world's only remaining superpower, there are a myriad of problems festering around the world, any one of which could erupt with little warning. Gold has often been called the "crisis commodity" because it tends to outperform other investments during periods of world tensions. The very same factors that cause other investments to suffer cause the price of gold to rise. A bad economy can sink poorly run banks. Bad banks can sink an entire economy. And, perhaps most importantly to the rest of the world, the integration of the global economy has made it possible for banking and economic failures to destabilize the world economy.

 

As banking crises occur, the public begins to distrust paper assets and turns to gold for a safe haven.

When all else fails, governments rescue themselves with the printing press, making their currency worth less and gold worth more. Gold has always risen the most when confidence in government is at its lowest.

 

IV. GOLD - SUPPLY AND DEMAND

 

First, demand is outpacing supply across the board. Gold production is declining; copper production is declining; the production of lead and other metals is declining. It is very difficult to open new mines when the whole process takes about seven years on average, making it hard to address the supply issue quickly. Gold output in South Africa, the world's largest gold producer, fell to its lowest level since 1931 this past year as the rand's gains prompted Harmony Gold Mining Co. and rivals to close mines despite 16 year highs in the gold price.

 

Growing Demand - China, India and Gold

 

India is the largest gold-consuming nation in the world. China, on the other hand, has the fastest-growing economy in modern history. Both India and China are in the process of liberalizing laws relating to the import and sale of gold in ways that will facilitate gold purchases on a mammoth scale.

 

China is teaching the West something new. Its economy, growing at 9 percent per year, is expected to become the second largest in the world by 2020, behind only the United States. Last year Americans spent $162 billion more on Chinese goods than the Chinese spent on U.S. products. That gap has been growing by more than 25 percent per year. China 's consumer class, meanwhile, is spending on everything from bagels to Bentleys - and will soon outnumber the entire U.S. population. China's explosive growth "could be the dominant event of this century," says Stapleton Roy, former U.S. ambassador to China. "Never before has a country risen as fast as China is doing."

 

China recently passed legislation that will allow the country's four major commercial banks to sell gold bars to their customers in the near future. Currently, individuals in China are only allowed to buy gold-backed certificates from the Bank of China and the Industrial and Commercial Bank of China.

 

V. GOLD - STORE OF VALUE

 

One major reason investors look to gold as an asset class is because it will always maintain an intrinsic value. Gold will not get lost in an accounting scandal or a market collapse. Economist Stephen Harmston of Bannock Consulting had this to say in a 1998 report for the World Gold Council, " ... although the gold price may fluctuate, over the very long run gold has consistently reverted to its historic purchasing power parity against other commodities and intermediate products. Historically, gold has proved to be an effective preserver of wealth. It has also proved to be a safe haven in times of economic and social instability. In a period of a long bull run in equities, with low inflation and relative stability in foreign exchange markets, it is tempting for investors to expect continual high rates of return on investments. It sometimes takes a period of falling stock prices and market turmoil to focus the mind on the fact that it may be important to invest part of one's portfolio in an asset that will, at least, hold its value."

 

Today is the scenario that the World Gold Council report was referring to in 1998.

 

VI. GOLD - PORTFOLIO DIVERSIFIER

 

The most effective way to diversify your portfolio and protect the wealth created in the stock and financial markets is to invest in assets that are negatively correlated with those markets. Gold is the ideal diversifier for a stock portfolio, simply because it is among the most negatively correlated assets to stocks.

 

Investment advisors recognize that diversification of investments can improve overall portfolio performance. The key to diversification is finding investments that are not closely correlated to one another. Because most stocks are relatively closely correlated and most bonds are relatively closely correlated with each other and with stocks, many investors combine tangible assets such as gold with their stock and bond portfolios in order to reduce risk. Gold and other tangible assets have historically had a very low correlation to stocks and bonds.

 

Although the price of gold can be volatile in the short-term, gold has maintained its value over the long-term, serving as a hedge against the erosion of the purchasing power of paper money. Gold is an important part of a diversified investment portfolio because its price increases in response to events that erode the value of traditional paper investments like stocks and bonds.

50 Random Facts About . . .

Gold
  1. The term "gold" is the from the Proto-Indo-European base *ghel / *ghol meaning "yellow," "green," or possibly "bright."
  2. Gold is so rare that the world pours more steel in an hour than it has poured gold since the beginning of recorded history.
  3. Gold has been discovered on every continent on earth.
  4. Gold melts at 1064.43 degrees Centigrade. It can conduct both heat and electricity and it never rusts.
  5. Due to its high value, most gold discovered throughout history is still in circulation. However, it is thought that 80% of the world's gold is still in the ground.
  6. Seventy-five percent of all gold in circulation has been extracted since 1910.
  7. A medical study in France during the early twentieth century suggests that gold is an effective treatment for rheumatoid arthritis.
  8. Gold is so pliable that it can be made into sewing thread. An ounce of gold can be stretched over 50 miles.
    eating gold
    Gold is edible
  9. Gold is edible. Some Asian countries put gold in fruit, jelly snacks, coffee, and tea. Since at least the 1500s, Europeans have been putting gold leaf in bottles of liquor, such as Danziger Goldwasser and Goldschlager. Some Native American tribes believed consuming gold could allow humans to levitate.
  10. The largest gold nugget ever found is the "Welcome Stranger" discovered by John Deason and Richard Oates in Australia on February 5, 1869. The nugget is 10 by 25 inches and yielded 2,248 ounces of pure gold. It was found just two inches below the ground surface.
  11. Amid recession fears in March 2008, the price of gold topped $1,000 an ounce for the first time in history.
  12. Traditionally, investors try to preserve their assets during hard economic times by investing in precious metals, such as gold and silver. The World Gold Council released a report in February 2009 that indicated the demand for gold rose sharply in the last half of 2008.
  13. The Dow/Gold ratio, which shows how much gold it would take to buy one share of the Dow, is a good indicator of how bad a recession is. In early 2009, the Dow/Gold ratio appeared to be heading toward the same low ratios that occurred during the 1930s and 1980s.
  14. Gold is chemically inert, which also explains why it never rusts and does not cause skin irritation. If gold jewelry irritates the skin, it is likely that the gold was mixed with some other metal.
  15. One cubic foot of gold weighs half a ton. The world's largest gold bar weighs 200 kg (440 lb).
  16. In 2005, Rick Munarriz queried whether Google or gold was a better investment when both seemed to have equal value on the stock market.h By the end of 2008, Google closed at $307.65 a share, while gold closed the year at $866 an ounce.
    olympic medals
    The last time Olympic gold medals were entirely of gold was in 1912
  17. The Olympic gold medals awarded in 1912 were made entirely from gold. Currently, the gold medals just must be covered in six grams of gold.
  18. The Incas thought gold represented the glory of their sun god and referred to the precious metal as "tears of the Sun." Because gold was not yet used for money, the Inca's love of gold was purely aesthetic and religious.
  19. Around 1200 B.C., the Egyptians used unshorn sheepskin to mine for gold dust from the sands of the Black Sea. This practice is most likely the inspiration for the "Golden Fleece."
  20. In ancient Egypt, gold was considered the skin or flesh of the gods, particularly the Egyptian sun god Ra. Consequently, gold was unavailable to anyone but the pharaohs, and only later to priests and other members of the royal court. The chambers that held the king's sarcophagus was known as the "house of gold."
  21. The Turin Papyrus shows the first map of a gold mine in Nubia, a major gold producer in antiquity. Indeed, the Egyptian word for gold was "nub," from gold-rich Nubia. While Egyptian slaves often suffered terribly in gold mines, Egyptian artisans who made gold jewelry for the nobles enjoyed a high, almost priestly status.
  22. Though the ancient Jews apparently had enough gold to create and dance around a golden calf while Moses was talking to God on Mt. Sinai, scholars speculate that it never occurred to the Jews to bribe themselves out of captivity because gold was not yet associated with money.
    holy bible
    There are more than 400 references to gold in the Bible
  23. There are more than 400 references to gold in the Bible, including specific instructions from God to cover furniture in the tabernacle with "pure gold." Gold is also mentioned as one of the gifts of the Magi.
  24. The Greeks thought that gold was a dense combination of water and sunlight.
  25. In 560 B.C., the Lydians introduced the first gold coin, which was actually a naturally occurring amalgam of gold and silver called electrum. Herodotus criticizes the materialism of the Lydians, who also were the first to open permanent retail shops. When the Lydians were captured by the Persians in 546 B.C., the use of gold coins began to spread.
  26. Before gold coins were used as money, various types of livestock, particularly cattle, and plant products were used as currency. Additionally, large government construction projects were completed by slave labor due to the limited range of money uses.
  27. The chemical symbol for gold is AU, from the Latin word aurum meaning "shining dawn" and from Aurora, the Roman goddess of the dawn. In 50 B.C., Romans began issuing gold coins called the Aureus and the smaller solidus.
  28. When honking geese alerted the Romans that the Gauls were about to attack the temple where the Romans stored their treasure, the grateful Roman citizens built a shrine to Moneta, the goddess of warning. The link between rescued treasure and Moneta led many centuries later to the English words "money" and "mint."
  29. Between A.D. 307 and 324, the worth of one pound of gold in Rome rose from 100,000 denarii (a Roman coin) to 300,000 denarii. By the middle of the fourth century, a pound of gold was worth 2,120,000,000 denarii-an early example of runaway inflation, which was partly responsible for the collapse of the Roman Empire.
  30. The Trial of the Pyx (a public test of the quality of gold) began in England in 1282 and continues to this day. The term "pyx" refers to a Greek boxwood chest in which coins are placed to be presented to a jury for testing. Coins are currently tested for diameter, chemical composition, and weight.
  31. During the fourteenth century, drinking molten gold and crushed emeralds was used as a treatment for the bubonic plaque.
  32. In 1511, King Ferdinand of Spain coined the immortal phrase: "Get gold, humanely if possible-but at all hazards, get gold."
  33. Both Greeks and Jews begin to practice alchemy in 300 B.C. The search to turn base metals into gold would reach its pinnacle in the late Middle Ages and Renaissance.
  34. In 1599, a Spanish governor in Ecuador taxed the Jivaro tribe so excessively that they executed him by pouring molten gold down his throat. This form of execution was also practiced by the Romans and the Spanish Inquisition.
  35. Venice introduced the gold ducat in 1284 and it became the most popular gold coin in the world for the next 500 years. Ducat is Latin for "duke." It is the currency used in Shakespeare's Romeo and Juliet and is referenced in The Merchant of Venice. In his song "I Ain't the One," rapper Ice Cube sings that "he's getting juiced for his ducats." The ducat is also used in the "Babylon 5" sci-fi series as the name of the Centauri race's money.
  36. Originally the U.S. mint made $2.50, $10, and $15 coins of solid gold. Minting of gold stopped in 1933, during the Great Depression.
  37. The San Francisco 49ers are named after the 1849 Gold Rush miners.
  38. Gold and copper were the first metals to be discovered by humans around 5000 B.C. and are the only two non-white-colored metals.
  39. The value of gold has been used as the standard for many currencies. After WWII, the United States created the Bretton Woods System, which set the value of the U.S. dollar to 1/35th of a troy ounce (888.671 mg) of gold. This system was abandoned in 1971 when there was no longer enough gold to cover all the paper money in circulation.
    gold bars
    The world's largest stockpile of gold is five stories underground in the Federal Reserve Bank of New York's vault
  40. The world's largest stockpile of gold can be found five stories underground inside the Federal Reserve Bank of New York's vault and it holds 25% of the world's gold reserve (540,000 gold bars). While it contains more gold than Fort Knox, most of it belongs to foreign governments.
  41. The "troy ounce" of gold comes from the French town of Troyes, which first created a system of weights in the Middle Ages used for precious metals and gems. One troy ounce is 480 grains. A grain is exactly 64.79892 mg.
  42. The gold standard has been replaced by most governments by the fiat (Latin for "let it be done") standard. Both Thomas Jefferson and Andrew Jackson strongly opposed fiat currency. Several contemporary economists argue that fiat currency increases the rate of boom-bust cycles and causes inflation.
  43. The Mines of South Africa can descend as far as 12,000 feet and reach temperatures of 130 degrees F. To produce an ounce of gold requires 38 man hours, 1400 gallons of water, enough electricity to run a large house for ten days, and chemicals such as cyanide, acids, lead, borax, and lime. In order to extract South Africa's yearly output of 500 tons of gold, nearly 70 million tons of earth are raised and milled.
  44. Only approximately 142,000 tons of gold have mined throughout history. Assuming the price of gold is $1,000 per ounce, the total amount of gold that has been mined would equal roughly $4.5 trillion. The United States alone circulates or deposits over $7.6 trillion, suggesting that a return to the gold standard would not be feasible. While most scholars agree a return to a gold standard is not feasible, a few gold standard advocates (such as many Libertarians and Objectivists), argue that a return to a gold standard system would ease inflation risks and limit government power.
  45. The first recorded gold ever discovered in the United States was was a 17-pound nugget found in Cabarrus, North Carolina. When more gold was discovered in Little Meadow Creek, North Carolina, in 1803, the first U.S. gold rush began.
  46. In 1848, while building a saw mill for John Sutter near Sacramento, California, John Marshal discovered flakes of gold. This discovery sparked the California Gold Rush and hastened the settlement of the American West.
  47. In 1933, Franklin Roosevelt signed Executive Order 6102 which outlawed U.S. citizens from hoarding gold. Owning gold (except for jewelers, dentists, electricians, and other industry workers) was punishable by fine up to $10,000 and/or ten years in prison.
  48. Tiny spheres of gold are used by the Amersham Corporation of Illinois as a way to tag specific proteins to identify their function in the human body for the treatment of disease.
  49. The purity of gold is measured in carat weight. The term "carat" comes from "carob seed," which was standard for weighing small quantities in the Middle East. Carats were the fruit of the leguminous carob tree, every single pod of which weighs 1/5 of a gram (200 mg).
  50. Carat weight can be 10, 12, 14, 18, 22, or 24. The higher the number, the greater the purity. To be called "solid gold," gold must have a minimum weight of 10 carats. "Pure gold" must have a carat weight of 24, (though there is still a small amount of copper in it). Pure gold is so soft that it can be molded by hand.

Enduring Characteristics

Let's start with the basics. I have some characteristics that no other matter on Earth has...

I cannot be:

  • Printed (ask a miner how long it takes to find me and dig me up)
  • Counterfeited (you can try, but a scale will catch it every time)
  • Inflated (I can't be reproduced)

I cannot be destroyed by;

  • Fire (it takes heat at least 1945.4 degrees F. to melt me)
  • Water (I don't rust or tarnish)
  • Time (my coins remain recognizable after a thousand years)

I don't need:

  • Feeding (like cattle)
  • Fertilizer (like corn)
  • Maintenance (like printing presses)

I have no:

  • Time limit (most metal is still in existence)
  • Counterparty risk (remember MF Global?)
  • Shelf life (I never expire)

As a metal, I am uniquely:

  • Malleable (I spread without cracking)
  • Ductile (I stretch without breaking)
  • Beautiful (just ask an Indian bride)

As money, I am:

  • Liquid (easily convertible to cash)
  • Portable (you can conveniently hold $50,000 in one hand)
  • Divisible (you can use me in tiny fractions)
  • Consistent (I am the same in any quantity, at any place)
  • Private (no one has to know you own me)

I am internationally accepted, last for thousands of years, and probably most important, you can't make any more of me.

"Gold Is Money"

You've heard that statement before - but do you know what it really means? Money is a medium of exchange and a store of value. Almost anything can be used as money, but obviously some things work better than others. It's hard to exchange things people don't want' and other things don't store value well. Over thousands of years, I have emerged as the best form of money (along with silver).

The paper dollars in your wallet are technically a currency, not real money. In other words, they are a government substitute for money. The man you call Aristotle best defined the primary reasons why I'm considered money: a good form of money must be durable, divisible, consistent, convenient, and have value in and of itself.

  • It must be durable because you can't have your money disintegrating in your pocket or bank. That's why you don't use wheat; it can rot or be eaten by insects.
  • It must be divisible, which is why you don't use diamonds or artwork; they can't be split into pieces without destroying the value of the whole.
  • The lack of consistency is why you can't use real estate. One piece is always different from another piece.
  • It must be convenient, which is why you don't use other metals like lead. The coins would have to be too big to handle easily to be of sufficient value.
  • It must have value in and of itself. This is why you shouldn't use paper as money.
  • And one more thing: I can't be created out of thin air. Not even the kings and emperors who clipped and diluted gold coins used paper as money, so Aristotle didn't include this in his list, but it's vital.

So you see, there's no superstition here. It's simply common sense. I am particularly good for use as money, just as aluminum is good for making aircraft, steel is good for the structures of buildings, uranium is good for fueling nuclear power plants, and paper is good for making books. If you try to make airplanes out of lead or money out of paper, you're in for a crash.

And by the way, don't fret about those who say I'm not as good an asset as an income-producing vehicle. They misunderstand my role. I'm not trying to be a stock, for example. My function is as money and a store of value, so the proper comparison is to your dollars, or what you call Treasury Bills (of similar nominal value). And here is where I excel and serve my purpose: since 1913, the US dollar has lost 96% of its purchasing power. I have lost none.

Remember, I am the only financial asset that is not simultaneously someone else's liability. I don't require the backing of any bank or government.

The History Lesson

Because I am eons old, I've observed something throughout history that you may not have thought much about: government fiat currencies are a relatively new invention, and none has endured. Eventually, they have all failed. Me? I've never been defaulted on or worth zero. Remember this the next time you have any doubts about my long-term worth.

Another of my roles is to protect your purchasing power. Here are a few examples of how my purchasing power has endured:

  • During the time of Christ, an ounce of me purchased a Roman citizen his toga (suit), a leather belt, and a pair of sandals. Today, one ounce will still buy a good suit, a leather belt, and a pair of shoes.
  • In 400 BC, during the reign of King Nebuchadnezzar, some scholars reported that an ounce of me bought 350 loaves of bread. Today, an ounce still buys about 350 loaves ($1,700 divided by 350 = $4.85/loaf).
  • In 1979, my average price was $306.68. This bought an average-priced full-size bed. Thirty-three years later, $1,700 would still buy you a nice full-size bed (and then some).

You can rest assured that over time, I will hold my value. And when you near the end of your life, you can pass me on to your loved ones, knowing full well they will have something that cannot be devalued, debased, or destroyed.

What Color Is Your Money?

Like you, I'm concerned about the current state of fiscal and monetary affairs. It seems your government leaders have boxed themselves into a corner. They've incurred too much debt and are spending too much money. It's important that you understand some lessons from history about this kind of behavior so that you're certain of what I can do for you.

The common denominators that lead to the downfall of every fiat currency are the two big Ds: debts and deficits. With that in mind, consider the following:

  • Morgan Stanley reported that there is "no historical precedent" for an economy that exceeds a 250% debt-to-GDP ratio without experiencing some sort of financial crisis or high inflation. US total debt currently exceeds GDP by roughly 400%.
  • Detailed studies of government debt levels over the past 100 years show that debts have never been repaid (in original currency units) when they exceed 80% of GDP. US government debt will exceed 100% of GDP this year.
  • Investment legend Marc Faber reports that once a country's payments on debt exceed 30% of tax revenue, the currency is "done for." By some estimates, the US will hit that ratio this year.
  • Peter Bernholz, a leading expert on hyperinflation, states unequivocally that "hyperinflation is caused by government budget deficits." Next year's US budget deficit is projected to be $1.3 trillion.

The solution many of your leaders are pursuing is to create more currency units. Here's an updated picture of the increase in the US monetary base vs. my rise in price since 2008, when your problems starting surfacing.

(Click on image to enlarge)

The monetary base has grown 205.8%, while my price is up 65.8%. This alone implies that my price in dollars is likely to climb much higher.

This is also the reason why I'm not in a bubble, as some have tried to claim. It is your central banks and bond markets that are in a bubble. The fact that my price is rising is a warning that what your leaders are doing is unsustainable and potentially dangerous to your currency.

Think about this: the US has debt backed by debt, based on debt, dependent on debt, and leveraged with debt. You can, for example, buy a bond (i.e., lend money) on margin (i.e., with borrowed money). This is not a sound way to run financial markets.

Meanwhile, the warning bells continue to sound regarding Europe's debt crisis. In just the past 30 days:

  • Moody's cautioned that it may cut the triple-A status of France, Austria, and the UK; and it downgraded six other European nations including Italy, Spain, and Portugal.
  • Standard & Poor's cut the triple-A status of France and Austria, while Italy, Spain, Portugal, Cyprus, Malta, Slovakia, and Slovenia were downgraded.
  • Fitch downgraded Belgium, Cyprus, Italy, Slovenia, and Spain, and stated there was a 50% chance of further cuts in the next two years.
  • Standard & Poor's downgraded 34 of Italy's 37 banks.
  • Moody's warned just last week that it may cut the credit ratings of 17 global financial institutions and 114 European ones.

The European crisis is far from over; and the path of least resistance for politicians is to create more currency units. This action can and will have clear and direct consequences: currencies will devalue, and inflation - perhaps hyperinflation - will result.

Once again, I encourage you to use me to protect some of your wealth.

How Much Is Enough?

Given the state of your monetary system, you should accumulate me on a regular basis. Just buy some every month and put it in a safe place. After what I've witnessed throughout history, and based on the current path your government leaders insist on pursuing, I suggest using me as your savings vehicle instead of putting dollars in a bank.

If you don't own enough of me when these fiscal troubles really accelerate, I fear you will regret it. I've warned many in the past about the dilution of nations' currencies, and those who didn't heed my warnings experienced severe financial pain. Excuses won't pay the mortgage nor feed the family when the effects of currency debasement hit your home and pocketbook.

Make sure you own enough of me to make a difference to your portfolio. This means having more than a couple.

How do you know if you own enough? Ask yourself:

  • If inflation returns, or even hyperinflation hits...
  • If the economy is flat...
  • If uncertainty and fear continue around the globe...
  • If stock markets languish...
  • If the amount of spending from the world's governments proves futile...
  • If government interference in the economy continues to increase...
  • If the value of the US dollar takes a major fall...
  • If the world enters a recession or depression...
  • If you wonder if you have enough "safe" money...

 ...would you feel that you own enough of me?

Buy a sufficient amount so that as your currency continues to lose value, your portfolio won't. If you do your part, I promise that I'll do mine.

Your monetary friend,

Gold

Pricing Facts

Short answer: Karatbars is affordable by anyone, on any budget. We have the best price in our asset class, regardless of what happened when you divided the spot price of gold by 31.2. Long answer: read on!
 
 
 
 

 

CONSIDER ALL OF THE FOLLOWING...

Most customers when looking to BUY Gold, ANY gold, usually deal with RETAIL.  All they typically see or know to compare is price. 

Some retail companies may give them a special discount for a purchase.  But it's still retail without other financial rewards.  When the deal is done, IT'S ALL DONE.

And without knowing all the features and benefits included in KARATBARS, they may jump to conclusions.  They don't know.  For many, it may not be that important to them.  But those who want the facts will get them.

WHY?  Because they have NEVER been exposed to anything like this before.  KARATBARS is a Category-Creator.  NO one is doing what Karatbars is doing globally.

So LOGICALLY, without some explanation, someone may ASSUME that Karatbars is in some kind of "BAKE SALE" and simply include it with other "gold" companies.  It's LOGICAL...But INVALID.

So, why should one NOT look at only price to make an accurate, informed complete comparison?

Karatbars has the lowest price for their gold category.  Compare BMW to BMW, not Ford to BMW.  Google: kinebar grade 1 gram gold . 

But before we get into all the reasons why owning a 1-gram Karatbar makes far more sense in this economy than owning a 1-ounce bar-even though the same amount of gold may be lower in price, let's compare prices of several 1-gram bars:

Prices For KARATBARS

kb kinebar gold bullion

 

When you're thinking about the price of KARATBARS gold bullion and you somehow come to the conclusion that the prices are too high, you haven't compared apples to apples.  It's like this:  A Chevy Cavalier is a car just like a Corvette is a car.  Bottom line is they're both cars.  But the fact is one costs more, is worth more, and retains its value better. Gold coins, bars, and ingots are all gold, but with varying purity and weights.

 

Comparing Prices With KARATBARS Gold Bullion

The first thing in comparing prices of ANY commodity is understanding that you must do an apples-to-apples comparison. For example, if you are going to buy a pint of milk you must compare the price with other single pints of milk.

What you DON'T do is find the best price for a GALLON of milk (which, for the sake of discussion, lets say is $4) and then divide $4 by 8 pints (which is 50 cents per pint), and then compare that price to buying a single pint. We all understand what it means to buy in bulk. As with any product, there is what is commonly called volume discounts. The reason bulk prices are less per ounce is very simple: there is more labor cost to produce several units verses one unit, but the flexibility of use benefits are significant with 1-gram gold over larger weights.

To get an accurate price comparison (not taking into consideration the MANY benefits that come with owning a flexible transaction-friendly 1-gram Karatbar), you cannot take the spot price for an ounce of gold and divide it by 31.1. (There are roughly 31.1 grams per troy ounce of gold.)  And you cannot take a gram price and multiply it by 31.1. You must price Karatbars gold bullion by the gram against other similar-quality gold that's sold by the gram to make an accurate comparison.

Is The Price of KARATBARS Gold Bullion In Line With What's Out There?

With gold and silver, you pay more for smaller weights regardless of your source. Just like you pay more for 1 can of soda or beer than you would pay for a case of 24 cans. The more you buy, the better price you get.

If you want to be accurate and compare apples to apples, ask your broker what his/her price is for a 999.9-grade 1-gram 
gold bullion produced by an LBMA-certified refinery? No one can touch Karatbars price!  Karatbars has consistently maintained a 2-4% better price. Even if a broker could match or beat Karatbars prices, will they give you free gold for referring others?!?  I think not.  And all require you to buy many 1-gram bars even if you only want to buy one and although they may advertise they can deliver, they are often out of stock or cannot actually deliver gold in one gram weights.

Check the prices and compare 
for similar quality and same currency:

Swiss PAMP Gold Bar Weight 1 gram

UBS Gold (Kinebar) Weight 1 gram

 

kb goldKARATBARS Weight 1 gram 
 

KB's program is NOT for traders. It is for savers and many ask "what does it cost"? This is a poverty mentality because a wealthy mentality asks "what is it worth"!

As of mid-February, 2012, when $1 (USD) exchanges for 1.32 Euros, the price of a 1-gram Karatbar was approximately $78.  It's not what it costs; it's what the market says it's worth.  Cost and worth are two different things, much like an acre of land on the U.S west coast inMalibu is worth more than an acre of land in Iowa.  Karatbars is "prime real estate":  It costs less than comparable 1-gram gold bullion bars of this quality; it resells for more; and it holds its value out of the vault.

POINT #1

KARATBARS are private issue (produced by a private refinery and mint and exclusive to Karatbars) 999.9% 24-carat Gold Bullion... and are not subject to seizure under the current International Bullion Laws and U.S. Law.  

Gold coins that have minted and issued from any government can be recalled to issuer (the government).  All gold from Karatbars is privately issued and CANNOT be confiscated by any so-called authority.

  • Karatbars gold is Private Issue bullion, 999.9% Fine Gold, each Karatbar weighs in at 1.01 grams
  • Transactions are completed offshore, gold is vaulted offshore, and all transaction records belong to Karatbars

Karatbars carry the LBMA certification which lends them to be "Good for Settlement of Debt "http://lbma.org.uk/pages/index.cfm

 

You, as an Affiliate, are responsible to report any earnings to the local authorities (country, state, etc), (Terms & Conditions).  Karatbars DOES NOT REPORT to any Affiliate earning to any government body.

  • Karatbars is an Offshore E-Commerce company with an Affiliate marketing program.
  • Karatbars does not apply to the FTC (NOT an MLM) or the BBB (Domestic Rating Agency), all are which come under U.S. government jurisdiction, or any other jurisdiction not held under the International Bullion Laws.
  • Karatbars does not apply to the Securities Exchange Commission (SEC), since gold is not considered a financial instrument. (paper) 
  • Karatbars does not give legal, tax, or investment advice and all Affiliates should not either.

Karatbars falls under the International Bullion Laws set forth by the World Trade Organization under the Harmonious Tax Code.

ANY and ALL gold purchases and gold coin purchases that are done in USA are RECORDED.  The U.S. government knows exactly who has what.  Most coins are PURE gold on the ALLOY Standard - 91.9% - because 24-carat is too soft.  You do not actually OWN any government-issued coins; you are merely THE BEARER of the coins.  Governments in financial duress can "recall" gold coins and only pay bearer FACE VALUE only.  Ask yourself this: "Where do you think the U.S. government is going get the gold to restock THEIR shelves?"

Karatbars ingots weigh in at 1.01 grams, above the legal limit if a country tries to exercise a VAT Tax on 1-gram bars.  We have a niche market of transaction-friendly weights which
 make it a viable form of payment and exchange, under ALL economic circumstances, in ALL countries.

Karatbars accounts are private and SECURE, more so than the FDIC, CDIC, or ANY gold sales in the USA or Canada.

100% of all funds you deposit into your Karatbars account are used to buy gold bullion.  There are no extra fees.

Karatbars does not report any Customer transactions under $10,000 to any government agency in any country.  And Karatbars does NOT ask for a Social Security Number (SSN) or Social Insurance Number (SIN).  Your identity is kept confidential for your account as long as you are NOT charges and convicted with money-laundering, involved in drug trafficking, or other international crimes under the U.S. Patriot Act.

 

All transactions are recorded by username and account number.  When verified by German authority auditors, you only need to verify your account number, deposit, and whether the deposit was transferred into physical gold and transferred to the vault or shipped to you, the Customer.  Germany is possibly the toughest country in the European environment in which to do business.


Karatbars International is an offshore (Germany) e-commerce company with an optional Affiliate Marketing program.  Karatbars International is NOT governed by the USA.  It is on the same level of trade existence that the U.S. government uses when dealing with any other country. 

 

We merely have our own personal Karatbars accounts, and we can refer others to get their own private Karatbars account.  We do not sell financial paper instruments, nor does Karatbars.  Affiliates do not sell gold; Karatbars does, OFFSHORE.  Some licensed gold resellers do resell Karatbars.  Only Karatbars account holders can make referrals, and we are rewarded for referring others. New Account holders can get a Karatbars account only by being referred by a Karatbars Affiliate account holder.

Although we resemble a leveraged type of marketing structure, we are NOT considered MLM in any country.  Karatbars is an e-commerce Affiliate business model.  Our Compensation Plan pays out only when paper money is exchanged into gold money.  That's it.  There are  NO enrollment fees, etc.

POINT #2

Karatbars in 1-gram weights have many more benefits than gold in 1-ounce weights.  They are both gold, but it's like comparing an apple to a rock!  You CANNOT compare by price.  The features and benefits are simply too far apart.

 

USE GOLD TO BUY GOODS AND SERVICES, NOT AS AN INVESTMENT!

 

The majority of those who look at gold will ALWAYS start by comparing price, thinking the only reason to own gold would be as an investment.  It is not.  They do not understand that one ounce of gold is one asset class, and one gram of gold is a totally different asset class, even though they are both gold. Even though they are both gold, the benefits of owning a gram of gold compared to owning an ounce of gold are significant.  Karatbars is about owning 1-gram gold bullion ingots that you could use as a form of exchange, much like you use paper money and credit/debit cards.  It would be much more difficult doing that with larger weights of gold and certainly not with a 1-ounce gold coin.  Following are things to consider when buying gold:

 

IS IT REAL?  KARATBARS CANNOT BE COUNTERFEITED

 

Gold can and is being counterfeited.  In order to know the gold is not fake or counterfeit, one must sell that gold to a gold dealer who has the tools to confirm it is pure.  With Karatbars, ANY merchant who is taught what to look for with the naked eye can quickly and easily determine that every Karatbars is not a fake because it has:

  • The stamp of the London Bullion Market Association (LBMA) Atasay Refinery on the gold.
  • The signature of the Atasay Refinery's Assayer on the card.
  • An embossed serial number that is unique to that particular Karatbar.
  • The Refinery's unique hologram covering the entire back of the gold.

You want to own 1-gram Karatbars so that your gold does not need to be sold and converted back to paper money in order to get some future use out of them.

 

BUY-BACK PRICE

 

Withal weights of gold there is a buy-back price that's less than the sell price.  With Karatbars there are MANY more options available than simply selling them back.

  • Use them to buy goods and services from the many Merchants who accept them as payment.
  • Post them in the Karatbars Member Marketplace at or near the Karatbars daily posted retail price.
  • List them in any of the many Karatbars Affiliate chat rooms to sell at or near the current retail price.
  • Sell back to Karatbars at a higher price than you would get from any gold dealer.

Only Karatbars allows one to find a way to get at or near the current day's retail value when ready to dispose of some.

 

NO NEED TO USE MORE THAN IS NECESSARY

 

If you own an ounce of gold, and need only a few hundred dollars, you will need to sell the whole ounce.  If you have high inflation, you will want to leave as much as possible in gold.  The inconvenience of finding a dealer willing to give you a fair price without having to stand in line etc., is something to consider as well.  Karatbars (1-grams) eliminate the need to convert to cash or use more than is required at that time.  You cannot chip off a piece from an ounce and expect anyone to give you just that amount in paper cash or goods and services.

 

THE MASSES CANNOT AFFORD TO BUY IN LARGE AMOUNTS

 

Karatbars bring gold to the masses.  Almost everyone can afford to buy $65 at a time. 

 

EARN FREE GOLD

Anyone, without ANY fees or costs, is able to introduce others to Karatbars and earn a commission.  Yes, you can buy 100 grams of gold or an ounce if you choose.  But why not, with very little effort, introduce others and have your gold bought with commissions earned?

POINT #3

Karatbars Gold has ALL the bells and whistles on it in its standard feature.

Produced by an LBMA-certified "good delivery" refinery.  See http://LBMA.org.uk (Click on "Good Delivery� tab / Gold List.  Scroll down to Turkey.  Click "Atasay..."), Karatbars are good for "settlement of debt" worldwide.  Do not take the LBMA-certification lightly:  It takes 3 years of zero issues for a refinery to get LBMA-certified. Our Karatbars cannot be counterfeited, and are verifiable by obvious and instant inspection.

Free storage abroad, in various geographic locations. 

Low-cost shipping (about $20 for 40 grams) if you want your Karatbars delivered to you.  Or you can have them moved to your own vault for an additional fee of approximately 2/10ths of a Euro per gram.  Our company subsidizes the portion of the shipping cost that ensures the shipment reaches the Customer's designated destination.


One insurance is through SecurLog, as they record on video every single packaging for delivery and the actual card numbers, etc. sealed. And SecurLog has their own private insurance company.   SecurLog has their own on-site Insurance.  They are recognized by the World Gold Council, one of the largest in the gold industry.  Once your Karatbars leave the company's hands, they are double-insured by both Karatbars and SecurLog.  They are shipped via FedEx.  Large deliveries are done by G4S, the largest global armored delivery company in the world.

The extremely high affiliate marketing internal payout (14.5% on the 100 gram Purchase Plans) allows Karatbars International to prepare for infrastructure labor and expansion. 
 On one-time purchases, payout is 5.5%.

We have "Green Gold:  Karatbars Green Technology Extraction Process uses NO mercury or cyanide.  This makes them a serious TACTICAL PLAYER for gold production globally. 


We are recommended by Bund de Sparer, a German independent consumer watchdog organization:

http://www.bds-deutschland.de/a/index.php/ist-gold-ausverkauft-mainmenu-370

.


Karatbars are stored in vaults, not in circulation or around circulation like a savings deposit vault of a regular bank.  They are NOT held as collateral for something else like a prime funding venture or anything like that.  If for some reason you cannot fully trust an offshore account then get your Karatbars delivered directly as a one-time purchase, right now.

Gold deposits are stored in large bars until ready to be minted into card denominations of your choice (0.5 gram, 1 gm, 2.5 gm, and 5 gm ingot cards.  Until Karatbars has expanded to every country we can possibly in, we only offer 1-gram ingot cards.


Understand: 
To exchange into gold is one thing; to exchange out of gold is another.  Karatbars is the simple, no-nonsense, worldwide solution to a full-presence answer to both types of exchanges.  Karatbars offers a multi-faceted EXIT strategy unlike any other gold source.

Karatbars International will buy back your Karatbars with the guaranteed best buy-back price.

You can sell to other Karatbars Customers or Affiliates.  (I sold 19 grams for $1290, that day's sell price, for a Customer who wanted part of his 100 grams sold, and I did it all in 1 day.) Use Karatbars to buy goods and services within the Acceptance Points Network(merchants). Soon, we will be able to exchange fractions of a gram online, not using the cards.

Other major financial institutions see us a reliable financial partner; for example, The Vatican bought and branded 100 kilograms of our gold and branded it with our Karatbars. NO ONE can doubt that the Vatican is a major financial giant worldwide.  The Vatican doesn't get involved with hokey companies at all, Period.

We have made many presentations and expect to produce more Affinity Cards like the Pope cards.  Football Teams,
 Hip-Hop artists, several churches, an Airline, and more are considering a private labeled Karatbar for themselves.  We are just getting started.

Remember

EARNING FREE GOLD is better than buying it at ANY discount. That being said, you can see the 5g card approximates the spot price

 

 
 
 

 
 
 
 

 

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The Karatbars Pay Plan

The purpose of this section is to help you understand the parts of the Karatbars pay plan that really matter. If you download the affiliate pay plan document, you will see that there are 7 income options. Let me save you some time and tell you that:

  1. Income options 1-3 are not incredibly lucrative.
  2. Income options 6 and 7 will not matter until you have a gigantic organization or you have purchased the VIP Exclusive package
  3. The heart and soul of the pay plan are income options 4 (Package Bonus) and 5 (Dual Team Bonus).

Now that I have narrowed down the pay plan to income options 4 and 5, let's note that the Package Bonus is not a residual income option. Affiliates are only required to purchase a package one time. So read through the pay plan document and see how it works.

So finally we get to the real meat and potatoes of the pay plan: Income Option #5, the so-called "dual-team" or "dual-system" bonus. This income option is truly binary payout regardless of what you might hear. So, if the binary is the meat and potatoes, then how do we put food on our plate in Karatbars? One thing only: the fact that every gram of gold purchased puts 1 unit in your binary. This is what powers your organization and allows for the gigantic yet mathematically accurate gains presented in the 12-week plan to financial freedom.

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Copyright © July 2013 Daniel Reese - All rights reserved.