Federal Reserve Inches Toward Global Monetary Control

Historic Sound Money Can Be Obtained near Melt Value

Mike Gleason Mike Gleason
New Radio Release
January 18th, 2014 Comments

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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.

Mike Gleason:

Welcome to this week's market wrap podcast, I'm Mike Gleason.

Coming up on this week's program, we have a special presentation on risks and opportunities in historic U.S. gold and silver coins. You can still obtain some of these increasingly scarce items at bullion prices, while others are heavily marked up by those dealers pushing so-called “rare” coins. I'll reveal what you need to know when it comes to shopping for historic coins.

But first, let's get to this week's market action. It was a relatively uneventful week for precious metals through Thursday's close. Gold, silver, platinum, and palladium entered Friday little changed on the week, about as flat as flat could be. As of this Friday morning recording, gold is trading higher at $1,248 per ounce. Silver comes in at $20.28 an ounce, unchanged from the prior week's close for what appears to be a second straight week – baring any sort of end of day changes in the market. Silver remains mired in a trading range that's been in place since Thanksgiving week nearly two months ago.

Metals prices didn't find a catalyst in the Consumer Price Index report released Thursday by the Labor Department. According to the federal government, consumer prices rose just 1.5% in 2013. And the Producer Price index was up only 1.2% on the year. These figures are well below the Federal Reserve's target inflation rate of between 2% and 2.5% annually.

Fed policymakers believe they have a mandate to try to force up the prices of goods and services across the economy. At some point, it's likely that they will overshoot and struggle for years to bring inflation rates down. But for now, investors should be bracing for various novel ways of injecting monetary stimulus into the economy – courtesy of new Fed Chair Janet Yellen and her right-hand man Stanley Fischer.

Fischer, who was appointed last week by President Barack Obama to be vice chairman of the Federal Reserve, is an Israeli dual citizen who served as second-in-command of the International Monetary Fund for seven years. Perhaps a more globally oriented Fed will work more in cahoots with the IMF, the European Central Bank, and other foreign bodies to impose an integrated monetary order.

The first attempt at a world monetary order was the Bretton Woods system established in 1944. It was based on a U.S. dollar standard tied to gold. However, since 1971, the U.S. dollar has not been convertible into gold. The dollar now risks losing its status as the world's reserve currency as major powers such as Russia and China increasingly buck the dollar in international trade and dump their U.S. government bonds for gold.

U.S. citizens can adopt their own sound dollar standard by owning precious metals, including historic U.S. coins from periods when our money had intrinsic value in its silver and gold content. These include dimes, quarters, and half dollars minted in 1964 or earlier. They are 90% silver by weight, and Money Metals Exchangesells them by the bag at very low premiums above silver spot prices.

We also offer classic Indian and Liberty Head gold coins in various sizes and denominations, which were minted from 1849 to 1929, as well as the $20 St. Gaudens gold coins, minted from 1908 to 1932. Because of our deep connections with suppliers, we are able to offer these relics of America's era of sound money at prices that are comparable to ordinary bullion coins, as low as 6.75% over the melt value!

Now to be clear, these Indian Heads, Liberty's and St. Gaudens gold coins are not going to be in brilliant uncirculated condition, they're considered to be lightly polished or jewelry grade quality. They show some wear, so hobbyists – as opposed to serious gold investors – don't generally want them. But they're still impressive pieces of history you can hold in your hand. And more importantly, they're gold bullion at really nice low premiums.

One advantage to owning historic U.S. gold and silver coins instead of rounds, bars, or most of the popular bullion coins is that the historic, no-longer minted coins carry at least some additional appreciation potential due to their historic status. As interest in bullion ownership increases worldwide, items that are inherently scarce have a greater potential for being bid up to higher values.

Unfortunately, a lot of rare coin dealers use this and other pitches to try to get customers to pay WAY, WAY more than these coins' actual intrinsic value. Most coin dealers who sell historic coins steer customers into so-called numismatics that are professionally slabbed and graded. These types of coins carry enormous premiums that are difficult to justify if your main interest is in the metal itself. And if you sell the coin back the next day, you should expect to lose at least 30% of your original investment.

Rest assured, the only types of historic coins Money Metals Exchange sells are those that we can offer at or near bullion prices – and we generally buy them back for only 5% less than we sell them.

Since our inception, we have been a leading voice in raising awareness about the national epidemic of rare coin rip-offs. In October of 2012, one of our alerts on the subject got spread far and wide on the Internet. It caught the attention of a professional narrator who voices video documentaries, and he decided to lend his powerful voice to our text. The insights and lessons contained in the presentation are just as relevant today as they were a year and a half ago.


Our specialists get several calls a week from customers learning one of the harshest lessons in precious metals investing; the vast majority of coins being sold as collectible are actually a dime a dozen. The enormous premiums over the coins' melt value paid for those so-called rarities go straight into the dealer's pocket, never to be seen again. It's a painful kick in the groin for someone who makes a wise decision to protect their wealth with precious metals, but calls the wrong kind of dealer and gets snookered into an investment in numismatic or semi-numismatics. These dealers price their products using some variant of the following formula: one part actual metal value plus two parts fairytale.

Take the story we ran across last week. It begins with the Royal Canadian Mint producing a limited run of kilo-sized gold coins, 32.15 troy ounces, in 2009 and selling them to dealers as modern rarities due to the limited mintage. Dealers obtained the coins for about 30% more than melt value. Dealers then send the coins off to one of the numismatic grading services and spend maybe $100 each getting the coins graded and slabbed, encased in plastic with the holographic seal displaying the coin's grade on the numismatic scale. The coins get a high mint state grade, of course. They were delivered directly from the mint to the grading service. A modern rarity is born.

Along comes Harry. He's been sitting on a big pile of cash. His stock investments took a beating during the 2008 financial crisis and he realizes owning precious metals makes a lot of sense. He's been bombarded with radio and TV ads for firms selling gold, so he calls one. He gets connected with a polished broker and asks him for a recommendation on what to buy. The broker knows just the thing: a limited run MS69 grade Kilo coin from the Royal Canadian Mint. He makes a convincing case for the coin's potential to appreciate dramatically and talks Harry into buying it for, 300% over the coin's melt value, approximately $3,200 an ounce when the spot gold traded at $800 an ounce.

Three years go by and gold prices are up; way up. Harry calls the original dealer to sell, but their offer price is a big disappointment, just 2% over the coins' melt value, or just over $1,800 an ounce. The rare coin he purchased for four times the value of its gold content brought almost no premium at all when it was time for him to sell and Harry lost nearly 50% of what he intended to be a gold investment during a period when the gold price more than doubled.

The bull market in precious metals and the widespread fears of inflation have resulted in a field day for unethical firms trading in these sorts of coins. We can tell you based on the hundreds of calls we have taken from people like Harry, the only people profiting with them are the rare coin dealers who use lies and disinformation to exploit gold investors. Beware.

Mike Gleason:

To inquire about pricing and availability on any of these historic U.S. gold coins, or any of the other gold, silver, platinum, or palladium bullion we offer, just visit us online at www.MoneyMetals.com, or by phone at 1-800-800-1865.

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 value for your depreciating dollar… with speed, with accuracy and with top notch service. Have a great 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 Money Metals Exchange or call 1-800-800-1865.

Mike Gleason

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.