Al's Insights – Sat 21 Jan, 2012

We’re all in this together and we are going to win!

Click download link to listen on this device: Download Show


Featuring:
Al Korelin
View related posts on:

Comments:
  1. On January 21, 2012 at 12:19 pm,
    John Higgins says:

    What will US living conditions be like for the average person when gold reaches $5000? How about for retirees?

    • On January 21, 2012 at 12:41 pm,
      Big Al says:

      Thanks John,

      Can I use your last name or only the first?

      Best,

      Big Al

  2. On January 21, 2012 at 12:49 pm,
    Clark Nowlan says:

    Has there been any progress toward an audit of the U.S. gold holdings? Do the panel members believe the gold is there and unencumbered? Feel free to use my full name? Thanks Al and the very best to you and the panel.

  3. On January 21, 2012 at 12:50 pm,
    Paul S. says:

    Can the volitility in the markets be of design(lets say the Fed government and Central bank) helping out just to increase tax revenue income for them?
    Governments are desperate for more taxes.

    • On January 21, 2012 at 1:12 pm,
      Paul S. says:

      Example would be, when Bid Laden was killed on a Sunday, and this started a waterfall sell off in silver in the Asian market, before the US markets were open.

  4. On January 21, 2012 at 1:58 pm,
    Dick vail says:

    Rounds vs. maple leafs or American eagles. If an oz of Silver is worth an oz of Silver, what difference does it make which one you purchase? I own all three but want to add and see 3 difference prices to purchase

    • On January 21, 2012 at 3:00 pm,
      Jed Davis says:

      Maple Leafs are pure Gold or silver whereas American Eagles have 10% additional alloy to make them less scratch resistant. In the end, you might get a little more for than the other depending who you are selling to and where but the difference is negligible. I prefer Maple Leafs because they are pure Gold and silver and they are beautiful. Also, if I have to leave the US be Aussie turmoil, Canada woould be a likely alternative. In that scenario, th Maple Leaf is more recognized, trusted and fungible. Bottom line: An ounce of Gold is an ounce of Gold.If you have the real thing, there isrwLly nothing to worry about.

      • On January 21, 2012 at 4:17 pm,
        A says:

        Hi Jed,

        I agree with your thoughts on Maple Leafs, but I personally buy rounds or bars.

        Best,

        Al

        • On January 22, 2012 at 5:21 pm,
          Jed Davis says:

          If a round has no identity, you have a harder time using it to purchase anything because it has to go to someone in the know to exchange. A Maple Leaf or American Eagle has an identity and therefore a greater swath of credibility. Remember, these rounds are an insurance policy. Therefore, fungibility and liquidity intot he prevailing currency is crucial.

      • On January 22, 2012 at 4:31 pm,
        impeachemall says:

        Can’t agree with Jed much.
        Coins or rounds? Internationally, differences do exist in taxation and the severity of anti-counterfeiting reactions.
        Dick, if you are not absolutely sure you won’t sell and re-purchase part of your stack, considering the present spreads and your regional market’s preferences is the key.

      • On January 23, 2012 at 6:23 pm,
        Glenn Olson says:

        I agree, but recognize that buffaloes and philharmonics are also pure gold, attractive and recognizable. I prefer a little diversity. However, I also like to keep in mind that if an ounce is worth a $5,000, prices of goods will also be much higher, yet a dollar will still be a dollar. Will wages rise too? I’m on a fixed income, so gold makes a lot of sense to me. I don’t buy rounds, mostly because most people would not recognize it and might distrust the quality or purity.

    • On January 21, 2012 at 3:33 pm,
      Marc says:

      I simply buy rounds, bars and junk silver -In my humble opinion, pure silver is just that pure silver….maple leafs, eagles, etc. are simply more in dealer’s premiums. The premium is significant when you make large purchases. Why pay the additional premium? There is absolutely no need,
      Marc

      • On January 21, 2012 at 3:35 pm,
        Marc says:

        FYI, of course, junk silver is 90% silver…and I pay based on that figure.
        Marc

      • On January 21, 2012 at 4:17 pm,
        A says:

        As you saw in my response to Jed, Marc, I agree with you in terms of purchasing.

        Big Al

    • On January 21, 2012 at 6:07 pm,
      Bobby says:

      Dick,
      A well respected dealer that i know said, “at the peak there will be no premium” The more ounces the better. I buy what I can at the lowest premium that i can find.
      bobby

      • On January 21, 2012 at 9:13 pm,
        John W. Robertson says:

        That’s interesting advice Bobby. I think the dealer is probably (and Al per above) are right. I was on Aurcana’s website the other day and noticed they have their own ‘brand’ of rounds. Kitco does too. Wish I could work for a company that could pay in silver!

    • On January 21, 2012 at 9:06 pm,
      John W. Robertson says:

      It will probably never matter, but Canadian bullion like silver maple leafs have a $5 CDN face value, while US Walking Liberties are only $1. In 2002 when silver was $3.85/oz, that was actually a factor. Whether inflation or greater industrial use comes, it really isn’t likely to matter. Liberties seem to fetch a small premium when in the US. As Jed says, consider where you wish to redeem them if you want maximum value.

  5. On January 21, 2012 at 1:58 pm,
    Karen says:

    With continued inflation and rising energy cost how will the junior explorers be able to stay in business?

  6. On January 21, 2012 at 2:33 pm,
    MattB says:

    As gold and silver are a store of wealth vs depreciating currencies and the price is in USD’s could you ask the panel members what they believe the actual debt levels of the United States is ?
    What price levels could gold and silver be when the US is made to account for their debt?
    When could this account be held and under what scenario will gold and silver hold those levels (when the real debt vs gold is realised) ?
    Many thanks.

  7. On January 21, 2012 at 3:22 pm,
    allen says:

    Jed,
    My American Eagles say 99.99%
    Not 90%…
    Please let me know if I am missing something.
    Thanks!s

    • On January 21, 2012 at 3:43 pm,
      Marc says:

      No Allen,
      Absolutely not! The 90% derives from the bag of “junk silver” you can acquire in 1/4, 1/2 and full bags – (calculate 178.75 oz. of silver per 1/4 bag). These are pre-1964 US coins, consisting of 1/2 dollars, quarters and dimes. After 1964, the silver content started to be reduced with each passing year. Now, there is hardly ANY SILVER in these coins! Another way of inflating away and cheapening honest money out of the system. Absolutely criminal! FYI, refer to Martin Armstrong’s excellent article on the history of the U.S. Dollar and study Greek and Roman history….same thing – just a different time.
      All the best,
      Marc

      • On January 21, 2012 at 6:12 pm,
        Bobby says:

        Mark, Starting in 1965 US quarters, and dimes had NO silver content, the kennedy 1/2 were reduced to 40% silver from 65-70 . Some proof IKE dollars contained silver as well.

        • On January 21, 2012 at 6:16 pm,
          Bobby says:

          BTW, the silver war nickles 1942-1945 contain 35% silver and can normally be pruchsed below spot silver prices.

        • On January 21, 2012 at 7:36 pm,
          Marc says:

          I stand corrected…thanks.The silver then was taken out that quickly? Even worse!!

  8. On January 21, 2012 at 3:29 pm,
    Marc says:

    Big Al,
    I often here palladium’s future tied into car production/catalytic converters, etc. What long term merits does this metal have standing alone as just a PGM? Secondly, do you guys consider it a very profitable investment in the long term irregardless of economic conditions, i.e. industrial vs, investment demand?
    Marc in SD

    • On January 21, 2012 at 9:22 pm,
      John W. Robertson says:

      Marc,

      Palladium (and to a lesser extent, platinum), as considered industrial for the auto use you mention. It has had several profitable swings the last few years. I was also curious a few years ago, but like many commodities, you really have to get to know the market. Little bits of obscure news can move the special metals quickly.

      Long term, hard to say. Catalytic converters will be around for a long time, as will EGR valves, so we’ll see swings in palladium. The cobalt I talked about the other day, or electrolytic manganese are probably much better for organic growth as they are used in all types of electric motors, batteries, iPods, etc. Silver too is being consumed (not just included within and later recycled in a product, but permanently consumed) in new industries.

      • On January 21, 2012 at 9:53 pm,
        Marc says:

        Thanks John W.,
        Maybe then cobalt and EM are better long term bets for growth based solely on supply vs demand scenarios? Are PGM’s also inflation plays?
        Marc

        • On January 24, 2012 at 2:15 pm,
          John W. Robertson says:

          There was a bit of talk at the Cambridge House conference about plat/pall, including the response to your question (Al asked it to the panel!). Probably, your first question was in regards to holding the actual metal as a precious-metal. Although David Morgan says he owned a small amount of one of them (sorry, don’t recall which one), the general idea was it may be more commodity than precious. Yet, owning some (in a recognizable form) might not be a bad idea.

          The cobalt and EEM I mentioned are certainly not metals you hold. In fact, despite large projections for their future demand, new production might soften their price a bit. However, the companies that make the stuff would probably stand to do well. So, sorry, but I turned your owning-platinum question into a “look at equities for other metals” answer. But there doesn’t currently seem to be much institutional or retail demand for platinum or palladium at this time.

          • On January 25, 2012 at 3:50 pm,
            Marc says:

            John W.
            You are very much appreciated in this forum! Thanks for your info, help and very insightful commentary.
            All the best,
            Marc

  9. On January 21, 2012 at 3:49 pm,
    shawn says:

    The trouble with most of the electorate is that they are to easily influenced by rhetoric and they spend very little time with substance; I know this is not what was asked but I don’t want to see Gingrich, Romney, or Santorum, get The GOP nomination..

    • On January 21, 2012 at 6:03 pm,
      Marc says:

      Shawn
      I wholeheartedly agree with you! Go Ron Paul!
      Marc

  10. On January 21, 2012 at 4:19 pm,
    John Higgins says:

    Al…feel free to use my complete name. You can even use my middle initial (W) if you wish.

    By the way, will the masses be able to hear the pannel? This sounds like a great pannel and I would love to listen.

  11. On January 21, 2012 at 7:06 pm,
    allen says:

    Al,
    After 14 months of investing in jr producers, my question is what chance do we have when there seems to be manipulation of pricing?
    The fundamentals don’t seem to matter many times.
    I am told that eventually we will win but when and how?

  12. On January 21, 2012 at 8:49 pm,
    wealthcreator says:

    Can you pls discuss the views on 1)John Bollinger and Robert Prechter(elloit wave guy) reg the end of the gold bull market. 2) what is the view on the currencies of the emerging markets i.e. India and China and their impact on PM in the future

  13. On January 21, 2012 at 8:58 pm,
    benb says:

    Hi Al, gee I really wish I could be there for that panel, that is going to be a good one.
    I dont know about this question but I have a hard time reasoning this out.
    We have manipulation of stock prices,obviously we need to research to avoid unscrupulous managment,mf global,(cant kid ourselves its not the last) algorithmic trading (i have read moving to resource sector) being paid in depreciating currency,
    bank holiday?,and the ever present threat of the entire system shutting down.
    Are we supporting criminal enterprise by buying shares? with potential 15-20 bagger or more in physical silver (how greedy are we?) Why take the risk in purchasing shares? if physical silver is a 20 bagger whats a share have to pay for additional risk?
    Maybe there is more than 1 question there but Im sure you get the gist and why Im having a hard time reasoning this out. Maybe the best thing is to stop buying and let people in control know we dont get back in until the corruption is cleaned up. I guess its kinda tuff for guys making their living in this. Anyway thanks for the opportunity and if you could ask any or all that would be great.

  14. On January 21, 2012 at 9:48 pm,
    John W. Robertson says:

    Some good questions already. Here’s a couple more:

    * What percentage of investment in junior exploration/production companies today are institutional, and what % is retail? What does the panel see in 2-3 years from now?

    * Most mining companies seem to list on the TSX Venture. Is there any urgency in the industry to seek more US-listed exchanges like AMEX for better liquidity and awareness?

    Al, considering what you do with “Korelin & Assoc” could suggest the above question might benefit you, so to be clear, I’m asking both questions based on the idea that mining needs more capital and more liquidity to really sail through to its potential.

    • On January 23, 2012 at 5:45 am,
      Tex says:

      John’s second question is very timely as a large US brokerage/insurance firm has ceased to allow trades on foreign exchanges!

  15. On January 21, 2012 at 10:13 pm,
    Ron says:

    Dear Al, the question I pose to you an the panel is what do you see as the future of the platinum metals group (platinum, palladium, rhodium ).  We hear negative statements that platinum prices will fall as it is an industrial metal. I can argue that silver is mainly an industrial metal. Further the cost of platinum mining is very close to current spot prices. Like silver there is not much above ground reserves and supply is predominantly from Southern Africa with labor, energy and political problems. A further price fall will likely stop production. Platinum is very often more expensive than gold so is not the current state very bullish for platinum/palladium. 

  16. On January 21, 2012 at 11:20 pm,
    Ken says:

    I just wish there was a definitive answer to the inflation vs deflation question.

    I think there will be inflation for the necessities and deflation for every thing else although that is somewhat over simplfying.

    I listen to the Pup over there at Financial Sense and he had Quint Taters on who was pretty bullish…but then you read things like this…

    http://www.silverbearcafe.com/private/01.12/darkinventory.html

    http://oilprice.com/Energy/Oil-Prices/Why-Oil-Prices-Are-About-To-Collapse.html

    And you don’t know what to believe.

  17. On January 21, 2012 at 11:21 pm,
    Ken says:

    I just wish there was a definitive answer to the inflation vs deflation question.

    I think there will be inflation for the necessities and deflation for every thing else although that is somewhat over simplfying.

    I listen to the Pup over there at Financial Sense and he had Quint Taters on who was pretty bullish…but then you read things like this…

    http://www.silverbearcafe.com/private/01.12/darkinventory.html

    • On January 22, 2012 at 4:52 pm,
      Keep Stacking says:

      Hi Ken,
      We are seeing both at the same time. Deflation in real estate. Fed chair will probably start QE3 aimed at helping real estate values. Inflation we see at the
      grocery store and gas pumps.

      • On January 24, 2012 at 8:02 am,
        Jerry O^OTB says:

        yes they want the real estate values to go up…so , locals and state can raise taxes,
        to cover the state employees penion funds….

  18. On January 21, 2012 at 11:22 pm,
    Ken says:
  19. On January 21, 2012 at 11:23 pm,
    ConservativeCanuck says:

    If Obama were to win, could you see the greenback becoming worthless in the next 3-4 years?

    • On January 23, 2012 at 3:51 pm,
      Bobby says:

      CC, you will see that anyway, unless perhaps RP gets elected. Even then, the president has not the final say.

  20. On January 22, 2012 at 8:54 am,
    bj says:

    Bang for the buck in 2012 for a 12 month buy and hold.

    Day to day, week to week, many of us trade around our core holdings. This question is focused on the best weighting of core holdings for 2012. Please rank order these commodities based on your beliefs of the best return over the next 12 months: Silver, gold, oil, uranium or grains?

  21. On January 22, 2012 at 12:17 pm,
    Clay says:

    My question to resource companies is:

    How far out into the future are current plans projected? If the company is junior exploration looking for resource, is the company exploring to invite takeover or to go from exploration to production and what set of circumstances would these plans change? How and what things is the company doing to protect current owners in either case.

  22. On January 22, 2012 at 3:51 pm,
    Jerry O^OTB says:

    MY QUESTION IS…..(hope you can answser)

    If you had to purchase only three silver stocks , which ones would they be?

    • On January 23, 2012 at 3:56 pm,
      Bobby says:

      Imho, SLW, PAAS (down today on the steal of minfinders, and SSRI would be my picks i own the first two. OR why not deverify SIL a nice etf of silver miners.
      I AM NOT A REGISTERED ADVISOR SO BEWARE OF WHAT I SAY.

  23. On January 22, 2012 at 5:06 pm,
    Clay says:

    Another question to ask: What is the difference between Money and Currency?

    • On January 23, 2012 at 4:43 pm,
      Bobby says:

      Money is Gold. change is Silver…..all fiat it currency

  24. On January 22, 2012 at 6:09 pm,
    James C says:

    What will it take to prevent the USA from defaulting on the debt or to avoid high / hyper inflation?

  25. On January 22, 2012 at 8:01 pm,
    jimmy d says:

    What is the possibility that the IMF will sell off some of the gold bullion that they hold; who would buy it and what impact would it have on the market? Should we be concerned about this happening? Otherwise, how Europe find its big bazooka?

  26. On January 23, 2012 at 5:47 am,
    Tex says:

    QUESTIONS: What will end the PM bull market and how can one tell that the end has arrived?

    • On January 23, 2012 at 4:45 pm,
      Bobby says:

      when you ask 5 people at random and all of them say they are buying gold.

      • On January 23, 2012 at 5:42 pm,
        Tex says:

        wouldn’t even need to run a t-test on those stats!

  27. On January 23, 2012 at 11:30 am,
    JamesC says:

    Do you think gold will hit $2000 this year and silver $50 ?
    Regardless, do you think it will close higher at the end of the year again, like the past 10 years?

  28. On January 23, 2012 at 8:03 pm,
    Bobby says:

    Al. I would ask the resource companies, how many ounces do you have in the gound and how soon can you turn them into bars.

  29. On January 24, 2012 at 9:57 am,
    Tom says:

    Hi Al,
    I was interested in some advice. I have some money to invest and was thinking that there must be a way to make some modest to moderate gains in the stock market if your patient and do your homework. The trouble is, I don’t know where to start. Could you recommend some good reading to get someone started on the right path to making some money in the stock market? I’m not trying to get rich, but would like to find a way to supplement my income. Any advice from others on the forum would be welcome also. Thanks, Tom

  30. On January 24, 2012 at 11:23 am,
    Jerry Mabie says:

    Tom,
    Is the money you have to invest money you can afford to lose? Do you have 12 month’s income set aside? If you have a family, do you have life insurance to protect them in case something happens to you? Is your credit card debt paid off? If you answered yes to the above then it could be time to begin your venture into the investment community.
    Right now oil & gas and precious metals show the best potential but that can change rather quickly. There is a lot to learn before you begin and I have found that the best way to learn is by listening to everything on all the blogs, news stories and investment sites. Gather the information and then begin the sorting.
    Just my opinion but it has worked for me. I’m sure others here can assist and probably know a whole lot more than I do. Stay tuned.

  31. On January 24, 2012 at 12:46 pm,
    benb says:

    @Tom. Maybe look into physical metals they are supposedly your least risk.
    The more you know the more you may want to question investing. There are huge criminal elements out there that are not being looked into even with years and years of smoking gun evidence. so be careful. Thats why you may want to look at physical metals.
    You need to know that gold is money and currency is anything a government says it is. Feathers to yak dung can be used. Its only to fasilitate buisness. Good idea to understand the differance.
    Then understand that gold protects purchasing power, you may notice its cost in currency increases approximatly with an increase of products.(most people call it inflation) Inflation is actually the increase in money supply the increase in cost of product is the result of inflation. Might be an idea to understand that.
    Silver some argue is money others say no but there is something called the silver story.
    Silver could be called an investment (I know big al calls it insurance) some say in time it will be the same price as gold due to many factors. some say it is within reason to see it at lets say 100-5– per once given a few years.
    At least you have sort of defined your goals. there are shares of companies out there that will pay lets say a 10% dividend per year that are alot less risky than other shares.
    I taught my daughter to understand risk. no one can tell you what is right for us,we can make a disision and be right or wrong but as long as you understand the risk you know what your doing(sort of) and no one can call you crazy.
    I suggest to people that currency in a bank is nuts, right now we risk the banks closing down and the insurance on the accounts count for didly as there is just to much debt. (a little research required) so the risk is greater than the less than 1% return you get.I personally could get better than 1% lending to my friends. Just trying to give an idea of risk. in this envirnment #1 is dont lose.
    Good luck to you.

  32. On January 25, 2012 at 9:45 am,
    roger wiegand says:

    We think its just as important to have personal needs stored PERSONALLY ON YOUR PREMISES JUST AS MUCH AS PHYSICAL PRECIOUS METALS. There are more than 200,000 around us now with NO electric power. A generator would sure help them. Food, water and stuff to get through the day is equally as important as gold and silver which we recommend in shares and coins. Folks in the 1930’s were also trading cleaning products, tools, liquor and cigarettes. –Traderrog

    • On January 25, 2012 at 9:59 am,
      John W. Robertson says:

      Excellent comment Roger. I used to teach some emerg preparedness. Whether for earthquakes or collapses, all of what you mentioned is a good idea. Some others…batteries, mac n cheese (kids love it), bottled water, towels, plastic bags/sheet plastic, and of course, duct tape!

  33. On February 22, 2012 at 5:55 am,
    daniel says:

    Great Read I think the key here is contissency..if you write for a blog network, you have to do what you say you can do you have to have a steady work schedule.