Is Your Portfolio Ready for 2012?

Accelerating U.S. Debt Load Could Mean A Riskier Economy

Many economists and investors have been focused on the debt crisis in Europe. But did you know that debt in the United States is now more than 90% of GDP, a sign of increasing economic risk? In fact, the gap between debt and GDP has narrowed considerably over the past two years (see Chart 1 below). This is placing increasing strain on the U.S. economy. Is your portfolio prepared to weather this uncertainty? Now is the time to review your portfolio and make sure you’re adequately diversified among stocks, bonds, cash and Gold — the fourth asset class.

In today’s video, APMEX Chief Executive Officer Michael Haynes talks about how growing debt levels in the U.S. are creating greater uncertainty in our financial markets. He also explains how a diversified asset allocation may help minimize risk in your portfolio.

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9.2.11 Weekly Recap

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Happy Labor Day Weekend to our APMEX customers!

Gold has ended the week with solid gains because of safe haven buying by investors fearful of the future. Uncertainty remains the name of the game on Wall Street as we wrap up another week of trading.  Many markets have continued their large back-and-forth swings of the last few weeks. 

Monday looked fairly bright due to data released indicating that consumer spending, regarded by many as the main driver of U.S. economic activity, increased 0.8% in July after slipping slightly in June.  This data is good news for many investors, as it helped push stock prices substantially higher.  It also shows that the U.S. may not be quite as near a recession as was feared recently.  Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania said, “It’s a little far-fetched to truly believe that we are headed into another recession.  This data doesn’t support that view at all.”

One of the main contributors to the housing crash of 2008 was the sense false of security given when ratings companies gave an AAA rating to subprime mortgage securities.  Now S&P has rated a new batch of subprime mortgages as AAA higher than the AA+ rating it gave the U.S.  On Aug. 24, Gregory W. Smith, general counsel for the $41 billion Public Employees Retirement Association of Colorado, said, “Everybody has been led to believe…that AAA means AAA means AAA across the board…anybody that didn’t learn in 2008 that (AAA) doesn’t apply should find another line of work.”

Dennis Lockhart, President of the Federal Reserve Bank of Atlanta, said the Fed should be ready to provide more stimuli to the economy, possibly in the form of greater quantitative easing.  He cited “the weak data we’ve seen recently and… the rising concern about chronic slow growth.”  The first half of 2011 was the weakest six-month period since the recession.  However, three other Fed Presidents are against further stimulus; they voted to not approve the Fed statement that stated interest rates would remain low until mid-2013.

Data released on Thursday and Friday overshadowed the bullish optimism from Monday, indicating a slowdown in manufacturing productivity and a complete lack of creation of new jobs.  Once again the numbers have fallen below expectations according to the jobs report released Friday morning.  Most projections were for between 68,000 -71,000 new jobs to be created, but there were no gains and unemployment holds at 9.1%. Gold and Silver prices moved further up on the news.

 

Weekly Spot Prices

Gold:
Spot Gold prices opened this week at $1,799.20. The high was on Friday, Sept. 2nd at $1,884.60, while the low for the week occurred on Monday, Aug. 29th at $1,781.20. Gold ended the week up $89.50 at $1,888.70. This week, the most popular Gold bullion products were 2011 Gold American Eagles, 1 oz. Pamp Suisse Gold Bars, and 2011 1 oz. Gold Maple Leafs.

Silver:
Spot Silver prices opened this week at $41.13. Silver reached a high of $43.24 on Friday, Sept. 2nd, while this week’s low for Silver occurred on Monday, Aug. 29th at $40.49. Silver ended the week up $2.24 at $43.37. The most popular Silver products on APMEX.com this week were 2011 Silver American Eagles, 2011 Silver Maple Leafs, 1 oz. Silver Buffalo Rounds and 10 oz. APMEX Silver Bars.

Platinum:
Spot Platinum prices opened this week at $1,830.30 and ended the week up $56.20 at $1,886.50. Popular Platinum products this week included, 1 oz. Platinum Bars, 1/10 oz. Platinum American Eagles, and 1 oz. Platinum American Eagles.

Palladium:
Spot Palladium prices opened this week at $759.80 and ended the week up $16.50 at $776.30. Palladium investors preferred 1 oz. Pamp Suisse Palladium Bars and Palladium Canadian Maple Leafs this week.

PROMOTIONAL APMEX SILVER BARS

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APMEX is one of the most trusted and well-recognized leaders in the precious metals industry. These wonderful 1 oz. APMEX .999 fine Silver bars  carry the APMEX name and feature the patriotic American eagle design. Celebrate the Labor Day weekend by diversifying your portfolio with discounted Silver bars from APMEX. All 1 oz. APMEX .999 fine Silver bars are available to you for only $0.99 per bar over the spot price – but only while supplies last! Act now as this special pricing is in effect until 12 p.m. (CDT) Monday, Sept. 5.

Balance your portfolio with the 4th asset class of Gold today.

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The U.S. Dollar is the World’s Reserve Currency -Does it Really Matter?

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The short answer is yes.  America has advantages with the U.S. dollar as the world’s reserve currency that other nations, such as China, would love to enjoy. Since the U.S. dollar is the medium of exchange in worldwide transactions, the U.S. pays for transactions in its own currency.  Other countries are required to exchange their currency into the U.S. dollar which results in additional transaction fees with each exchange. This means they will pay slightly more for the same commodity than the U.S. would pay. This reserve currency status also allows Americans to borrow at advantageous rates because our dollar is in a higher demand.  Last but not least, the U.S. can always print more dollars to pay its global bills.

We hear on occasion of appeals that America must go back to the Gold standard. Although I am not opposed to this idea; I do not see this happening. If we went back to the Gold standard monetary system, the participating nations would lose their ability to print more money to pay their bills.  I do see the possibility that the world reserve currency may actually become a basket of different currencies which would include Gold.  If you do not understand by now that Gold is a currency and not a commodity, you should. Central banks around the world began exchanging U.S. dollars for Gold back in late 2009; in 2011, they have only picked up the pace. I think the direction is that reserves for currency will be a possible basket of U.S. dollars, Gold, perhaps euros and maybe remnibi. You cannot count the Chinese out; they intend to be a global financial power.

As we watched the price of Gold break $1800 per ounce recently, many people directly attribute this to the loss of faith in government-backed paper money – more accurately, it is a loss of faith in paper money by their own central banks! What do they know that perhaps we should know?   

 By Peter LaTona, Vice President of Sales at APMEX

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Investors Worldwide Choose Gold as 4th Asset Class; Gold Hits $1800 per oz. on Wednesday

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In Wednesday’s video message, Michael Haynes, CEO at APMEX, discussed why foreign investors buy Gold in greater quantities than the U.S. investors and how the worldwide acceptance of Gold as the 4th asset class has established Gold as a global asset. Gold Prices reached record highs over the past few weeks as investors worldwide flock to Gold as a safe haven.

Historically, investors buy Gold and Silver to balance and diversify their portfolios during high inflation periods. With the value of the dollar continuing to spiral downward, many investors have chosen to invest in precious metals.

Michael R. Haynes is a 30-year veteran of the precious metal and rare coin markets. He has served as a board member, president, COO or CFO of nine different public and private companies engaged in the specialty retail, distribution, e-commerce and manufacturing businesses.

Balance your portfolio with the 4th asset class of Gold today.

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8.5.11 WEEKLY RECAP

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Gold has moved opposite of the S&P 500 since February. The chart above gives a graphic example of the negative correlation between Gold and one of the other asset classes, stocks. Since February, economic stress in Europe and the U.S. has pulled the S&P 500 down while Gold moved higher.

After the Democrats and the Republicans came to an agreement and prevented a default on our nation’s debt, conventional wisdom says the market would boost as business and investor confidence increased. However, today’s reality is that the stocks ended low in the face of uncertainty over the debt deal. The terms include a $400 billion increase in the debt limit immediately, a $500 billion increase this fall, immediate spending cuts of $900 billion, and the creation of a Congressional commission to identify another $1.2 trillion in spending cuts.  Former Under Secretary of Commerce Robert Shapiro described these terms as “a mindless way to run a government.” J.J. Kinahan, managing director with TD Ameritrade, was quoted as saying, “Debt deal or no debt deal, we have some fundamental problems in the economy that we’re not dealing with.”

Monday’s extremely disappointing manufacturing report and last week’s revision of first-quarter growth estimates caused this change in focus. More bad news for the economy was released Tuesday; even though incomes rose in June, consumer spending fell (along with consumer prices). With most economists’ expectations of a credit rating downgrade from the top-notch AAA rating, stock futures were down and investors flocked to safe havens including Gold, which hit new record highs this week before falling victim to the massive selloff affecting all markets.

The stock markets are viewing a recession as likely as prices have continued to decline; stock prices hit their lowest points in almost two years. The concern has driven a number of investors to Treasuries, which is causing inflation concerns with the Swiss Franc and Japanese Yen. Mike Ryan, Chief Investment Strategist at UBS Wealth Management Americas, said Thursday, “The mood right now is gloomy…The burden of proof is for better data that show the economy is not falling into recession. Tomorrow’s payroll report is crucial. If we see another disappointment, the stock market will have significant downside from here.”

The highly anticipated payrolls report was released this morning; it indicated an increase of 117,000 jobs in July. The unemployment rate fell .1% down to 9.1%. These numbers were better than expected which finally brought some relief to Wall Street after two days of tension. Gold gave up early gains amid the news but one analyst says that South Korea’s recent purchase of Gold signals that it’s still not too late to buy Gold. An executive of one company stated that South Korea’s purchase is “significant, as it represents the first purchase of Gold by the East Asian country in over a decade. It would seem South Korea has joined the ranks of those countries that have lost faith in the U.S. dollar … it is no coincidence that many of these central banks are from emerging-market economies. Many of these countries have experienced the grim reality of enduring a currency crisis first-hand.”

WEEKLY SPOT PRICES

Gold:
Spot Gold prices opened this week at $1,628.00. The high was on Thursday, Aug. 4th at $1,684.90, while the low for the week occurred on Monday, Aug. 1st at $1,608.20. Gold ended the week up $22.30 at $1,650.30. This week, the most popular Gold bullion products were 2011 Gold American Eagles, 1 oz. Pamp Suisse Gold Bars, and 2011 1 oz. Gold Maple Leafs.

Silver:
Spot Silver prices opened this week at $39.95. Silver reached a high of $42.30 on Thursday, Aug. 4th, while this week’s low for Silver occurred on Friday, Aug. 5th at $37.56. Silver ended the week down $1.93 at $38.02. The most popular Silver products on APMEX.com this week were 2011 Silver American Eagles, 2011 Silver Maple Leafs, 1 oz. Silver Buffalo Rounds and 10 oz. APMEX Silver Bars.

Platinum:
Spot Platinum prices opened this week at $1,781.90 and ended the week down $66.90 at $1,715.00. Popular Platinum products this week included, 1 oz. Platinum Bars, 1/10 oz. Platinum American Eagles, and 1 oz. Platinum American Eagles.

Palladium:
Spot Palladium prices opened this week at $832.30 and ended the week down $90.30 at $742.00. Palladium investors preferred 1 oz. Pamp Suisse Palladium Bars and Palladium Canadian Maple Leafs this week.

 

Platinum American Eagle Coins

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Released in 1997, the Platinum American Eagle coin is the only investment-grade platinum coin from the U.S. Mint. Since its introduction, the Platinum Eagle has become one of the world’s most widely-traded platinum bullion coins because of the patriotic design and platinum value. The obverse design celebrates freedom and opportunity with a portrait of the Statue of Liberty.  The reverse design is unique in that it changes each year; strength and security are portrayed in the theme of the American eagle. 
  
APMEX features the Platinum American Eagle coins in 1 oz., 1/2 oz., 1/4 oz., and 1/10 oz. denominations as well as uncirculated, certified, and proof conditions. Offering a wide selection of platinum products, APMEX can help you establish a platinum portfolio. Eligible for placement in precious metals IRAs, Platinum American Eagles can act as building blocks for investment portfolios. Start building your Platinum investment today!

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