Welcome to Money Metals Exchange's weekly market wrap podcast. Helping precious metals investors during these treacherous times. Now, here's this week's market wrap with commentary and analysis from the fastest growing precious metals dealer in America, Money Metals Exchange.
Welcome to this week's market wrap podcast, I'm Mike Gleason.
Well, the big news this week is the geopolitical crisis in Syria. The threat of war has sparked volatility in commodity and equity markets and helped stimulate safe-haven buying of gold.
The United States appears poised to unleash military action against the Syrian regime. The Obama Administration is making the case for missile launches, though Obama himself said in an interview, "I have not made a decision."
Constitutional purists note that it's the job of Congress to decide whether or not to take the nation to war. But in recent years, Presidents have repeatedly usurped this power. Ironically, the current President is the same man who rode into office after campaigning against George W. Bush for launching an undeclared war on a Middle Eastern country that had not attacked us.
Obama administration officials talk of limited airstrikes against Syria rather than toppling the Assad government. But those who believe a few quick strikes will bring a lasting solution to an inflamed nation are engaging in wishful thinking. Here's a brief history lesson from a CBS News report.
The quick strikes rarely solved America's problems. In 1986, the US bombed Libya in retaliation for terrorist attacks against Americans. Two years later, a suite case bomb created by Libyan agents brought down Pan Am flight 103. After the bombings at two US embassies in Africa in 1998, the US launched cruise missiles at an Al-Qaeda camp in Afghanistan. That did not stop Osama Bin Laden from ordering the 9/11 attacks. A strike against Syria would be designed to convince dictator, Bashar al-Assad not to use chemical weapons again. Air strikes never succeeded in changing the behavior of another Mid East dictator of Iraq, Saddam Hussein until he was finally captured and hanged.
The unmistakable lesson for investors is this: plan for the likelihood of geopolitical turmoil erupting in the Middle East – again and again. Sometimes the social chaos will be confined to a particular country that isn't that significant to the world economy. But when conflicts spread and world powers get drawn in, risks rise for things like oil supply disruptions, terrorist strikes, and expensive long-term military engagements.
The U.S. has already committed a fortune to remaking, rebuilding, and stabilizing Iraq and Afghanistan. The costs will be borne for years to come – and even more quote "Projects" in the Middle East will only add to those costs.
To begin with, conflict in the Middle East drives up oil prices. And government expenditures on war drive up inflation.
Putting aside the question of whether any particular military action is just or appropriate, the fact is that the borrowing, spending, and money printing undertaken to finance wars lowers the value of the currency and lifts precious metals prices. Not day to day, necessarily. But over time.
Since 9/11, we've been on a war and inflation super-cycle. It has contributed to dramatic rises in precious metals prices. And after a two-year correction, you can bet that dramatic gains lie ahead from here.
As for this week's market barometer, the price action in the metals has been choppy following the strong gains we saw in recent weeks. Gold appears to be benefiting somewhat from the escalating tensions in Syria. As of Friday morning recording, gold trades at $1,396 an ounce and silver comes in at $23.50.
Silver knocked on the door of the $25 level earlier in the week but couldn't break through. Prices retreated, and silver now appears headed for a flat to slightly lower finish on the week. But for the month of August, silver will still post an impressive gain of roughly 20%. Congratulations to those of you who stepped up to the plate to buy during the summer doldrums!
Great value can still be found in silver however. The white metal is still cheap on a historical inflation-adjusted basis. It also remains relatively cheap versus gold, giving silver room to play catch-up and outperform.
Money Metals Exchange is happy to announce slightly lower premiums and faster delivery on Silver American Eagles and Canadian Silver Maple Leaf coins than we've been able to since the pre-April price decline in spot prices, although 1-oz rounds as well as 10-oz and 100-oz bars remain the best value in silver bullion right now. Meanwhile, the supply tightness that has existed in the Pre-1965 90% silver coin market for the better part of the last six months has loosened up a bit – thanks to higher silver prices drawing out a few more sellers. But elevated premiums in so-called "junk silver" pre 1965 coins still persist for now – and that's why we are recommending rounds and bars for value investors who want to accumulate more ounces for their money.
Of course, in times like these, owning both silver and gold in physical form is a must. Right now one of the most cost-effective ways of owning gold is through 1-oz gold bars. For those preferring the coin form, buying Australian gold coins and Canadian Maple Leafs offer a nice 1 to 1 ½% premium savings versus the U.S. Gold Eagles.
To get live up-to-the-minute pricing on all of our products, or to place an order 24-hours a day, 7-days a week through our secure shopping cart, just visit www.MoneyMetals.com.
Of course, you can also reach out to us by phone Monday through Friday by dialing 1-800-800-1865. One of our knowledgeable, no pressure, and non-commissioned Specialists will be happy to answer any questions you may have. Even if you're not yet ready to buy, they can help you decide on the best forms of bullion to purchase when the time comes to maximize your investment dollars.
Well that will do it for this week's market wrap podcast, thanks for listening. This has been Mike Gleason with Money Metals Exchange reminding you that we remain fully committed to getting you the most precious metals for your depreciating dollars…with speed, with accuracy and with top notch service. Have a great holiday weekend everybody.
Thank you for joining us for this edition of the Money Metals Exchange Weekly Market Wrap. Be sure to come back next week, and don't forget to subscribe to our weekly podcast through iTunes. For answers to all of your questions, or to discretely and securely buy or sell gold or silver coins, bars, and rounds, call 1-800-800-1865. Our knowledgeable and no-pressure specialists are standing by between 7:00 a.m. and 5:30 p.m. mountain time, Monday through Friday. Visit us at www.MoneyMetals.com or call 1-800-800-1865.
About the Author:
Mike Gleason is a Director with Money Metals Exchange, a precious metals dealer recently named "Best in the USA" by an independent global ratings group. Gleason is a hard money advocate and a strong proponent of personal liberty, limited government and the Austrian School of Economics. A graduate of the University of Florida, Gleason has extensive experience in management, sales and logistics as well as precious metals investing. He also puts his longtime broadcasting background to good use, hosting a weekly precious metals podcast since 2011, a program listened to by tens of thousands each week.