Eric Roseman of the Sovereign Society has been blanketing the web with a teaser about a “different way to own gold” — one that he says might give you a discount of as much as $600 an ounce. Here’s what he says …
“Recently, I’ve been researching different ways to own gold – and two months ago — I came across a little-known form of the yellow metal.
“The shocking thing is, it has outperformed “normal” gold investments by a factor of 10… or more!
“During the great Depression – it soared 69% overnight. And according to the indicators I track, it has equal potential today. Bottom line, it belongs in EVERY investor’s portfolio (at least in my opinion).
“There’s just one problem – there’s very little to go around.
“Here’s what I mean: Last year when 1.2 million of these “little guys” were offered, they sold out in just 11 months… now… this year a similar offering has been made, except, and this is critical – that 1.2 million has plummeted to just 50,000. That’s all that are being made available in 2009 – creating huge demand.”
For someone like me, who’s not necessarily much of an expert on gold, this ain’t a waik in the park, but I’ll try to dig into it anyway. If you want the answer from Roseman, he’ll ask you to first subscribe to his Commodity Trend Alert service, which will run you about $1100 a year.
For free, there are a few things I can tell you … and I can at least make an educated guess about the rest:
First, though elsewhere in the piece he says that he wouldn’t recommend any US minted coins, the total sales of US-minted American Eagle gold coins were just about 1.2 million last year. I don’t think there are any specific US gold coins that are limited to 50,000 this year, but given his dislike for US minted coins that doesn’t seem too likely, anyway. I’m guessing that he’s comparing apples to oranges in this ad, which is not atypical for teasers — there were 1.2 million “similar” coins last year, this year there are 50,000. “Similar” is a nice word, it can mean pretty much whatever you want.
So … what are we dealing with here?
Eric Roseman, I expect, agrees with some of the other gold bugs in that he probably has some fear of US government gold confiscation — the specter here is of FDR, who confiscated bullion gold coins back in the early 1930s. At the time, gold coins that were “collectibles” were exempted, so many folks think that there is some extra safety in holding either collectible or commemorative gold coins that may be argued to have some value above and beyond their melt value.
So what coin has collectible or commemorative value, is minted in a limited run of 50,000, and trades without a huge premium?
Well, I was hesitant to answer this without digging in for a few other clues, so I skimmed through the video that they’re teasing us with for this one, and they added a few more details …
It’s from a G-7 country. It’s purer gold than the Eagle. It’s commemorative, specifically, which means that Roseman thinks it won’t be confiscated if the US again confiscates privately held gold (he does mention this as a specific concern in the video).
They of course still don’t reveal the “secret” in the video, but they do talk through the details enough to make me confident that the “$600 discount” is because some folks on eBay have been paying ridiculously high prices for American Eagle gold coins in recent months, up to $1500-1600, according to Roseman, and this coin trades for just 5% or so over spot gold prices, so closer to $1,000. That’s your “discount.”
So … let me be clear that the Thinkolator is not particularly precise when dealing with numismatics or gold, but it did help me put together a guess.
Here it is:
The 2009 Canadian Gold Maple Leaf, specifically the commemorative version that’s minted to celebrate the 2010 Vancouver Olympic Games.
This is a pure gold coin, .999 pure (more pure than the American Eagle, which is alloyed for durability), and it is minted in a limited run of 50,000 coins (per year — this is a three year series, last year, this year, and 2010, when the Olympics actually are held in Vancouver).
It’s also currently available from many dealers, though it doesn’t look like it’s available direct from the mint anymore, and I’ve seen it priced at right around $1,000 recently, a bit above in most places. It seems on a quick glance like it’s now squeaking up to more like a 10% premium from some dealers, thanks in part to the runup in gold over the last few days. Prices I’ve seen run from $1,000 or so from a few websites to $1200 on eBay, so who knows how much it might really cost if you decide you’d like to own one.
There are all kinds of other commemorative coins sold by the Royal Canadian Mint, too, including some “gold colored” coins and some very limited edition gold designer coins that cost substantially more. There is also a 2008 coin already available in this series and it has a different design, so if you’re interested in these be careful that you know what you’re looking at.
And of course, I also have no idea whether or not this is really a great coin to buy — it’s a pure gold modern bullion coin but also a commemorative, so I guess it’s fair to call it collectible … but so far, folks aren’t paying all that much more for it than they are for American Eagles or for regular non-commemorative Maple Leafs. And if this is the match, then it’s not really much of a “$600 discount” anymore — American Eagle coins are trading at just about the same price these days or even less, it looks like most folks are charging a 5-10% premium over melt for Eagles even on eBay, where wacky price swings in gold coins are commonplace as sentiment changes.
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I also can’t guarantee that this is really the coin Eric Roseman is talking about — just my best guess. There may well be other commorative high purity gold coins minted in a run of 50,000 by a G-7 country this year, I’m just not aware of them.
I don’t personally own any of these, though I do have a few other gold and silver coins. And I know that there are many of you out there in Gumshoe Land who know more about this stuff than I do … please feel free to share that wisdom with a comment below.
Some people have been touting pre 1935 gold as a means to circumvent the confiscation of gold. I believe they want to classify this gold as a collectible numismatic variety. What is never indicated by most individuals is that the govt. taxes your collectibles (long term) for 28%. Duh, as if most of the gold bugs are going to indicate their purchase and subsequent sale of the commodity.
Travis,
I think that you are right on the money in your review of Eric Roseman’s flaunt.
I believe that it is the Canadian coin.
Also, the $600.00 saving is the difference between what he says some individuals are charging on the e-bay and what the coins can be obtained for from the Canadian Mint. If you are stupid enough to pay a $600.00 premium, then Eric Roseman has a deal for you.
I check your reviews regularly.
Right you are Travis, my brother dables in these types of coins &
the 2009 Canadian Gold Maple Leaf is indeed the coin being discussed above. I wouldn’t bet the farm that the 5% premium will continue much longer, especially with gold breaking out as it has recently.
The thinkolator can take a bow!
I just received a flyer for the Canadian Olympic Maple Leaf coins from First Federal Coin Corp. (800-222-3891)(included in a mailing from Oxford Club?? or one of their affiliates in Baltimore). They offer the gold coins for “as low as 5% over spot” and the silver coins for “as low as $3 over spot”–minimum of ten coins. They mention a worldwide limit of 50,000 coins each year for the gold one. That makes it certain this is what was teased. Too bad for me that they have the ten coin minimum–I might have wanted one or two.
Steve:
You are spot on with your guess I am a numismatic bug and I don’t think it will make any difference if the government wnats your gold they are going to take it. I say bury it in your yard, just don’t tell anyone where you buried it except me.
WARNING TO ANYONE THAT IS CONSIDERING BUYING ANY FORM OF GOLD WHATSOEVER.THE IMF ARE AWAITING CONGRESS TO GIVE THEM THE GO AHEAD TO SELL 403 TONNES OF GOLD.THEY NEED TO DO THIS OWING TO ALL THE MONEY THEY HAV BEEN GIVING TO MANY BANKS THROUGHOUT THE WORLD,NEVER MIND TO THE USA BANKS ONLY.ALSO GERMANY ARE OF THE SAME MIND,THOUGH MY INFORMATION DID NOT SAY THE AMOUNT OF GOLD THEY PLAN TO SELL.OF COURSE THEY WILL HAVE TO INFORM ALL THE CENYRAL BANKS THROUGHOUT THE WORLD ASWELL.PERHAPS YE ARE NOT AWARE OF THE WAY THE CENTRAL BANKS LEASE GOLD OUT TO EACH OTHER ON THE OPEN MARKET TO SUPPRESS THE RISE IN GOLD ASWELL/GOD BLESS YE ALL.PATRICK O SULLIVAN(LIVING IN IRELAND)
The Chinese and Arabs are net buyers of gold. The IMF may have a short term effect on gold but as long as trillions of paper keeps coming off the presses tangable items should fare well. The Aulstrailian Lunar series has 12 coins that have a max of 30,000 each but carry a high premium, espesially the year of the Dragon.
HI again Travis and all
I see no purpose for the USG to confiscate gold now. The confiscaton in the 1930’s was a two step process based on the fact that then the dollar was pegged to gold in value. It was about 23 dollars to the ounce – then FDR took it all from people. But of course under the Constitution he had to give people their 23 bucks per ounce. Then he revalued the dollar to about 35 dollars to the ounce. Instant profit for the USG – a fund they still have and use. Absent prior confiscation devaluing the dollar would not have given the government its profit. Today the dollar is not pegged to gold. So what if the government confiscated eveyone’s gold? How can it make any money from that. It would have to sell it right back to someone. But it would have to pay for it first – ergo a wash unless the government could somehow charge more for its ounces than it had just paid.
Bottom line, the gold was not confiscated for nothing, it was paid for and the profit came in the subsequent devaluation. Today the government is devaluing the dollar daily since it is fiat money.
Folks better check on the tax consequences of selling gold in any form including an ETF – I think that is taxable at 28 percent rate.
best
john sloan
Huh? Explain for dummies like myself, what does ‘remember there is no velocity of money when you keep gold in a safe deposit box’ mean?
Thanks,
Dan
Velocity of Money, I give you a $100 dollars, you purchase $100 worth of food, supermarket uses that $100 to make a profit, pay employees, pay distributor for food, and on and on. Distributor pays trucking,farmers, etc.. That one dollar you have will go thru many hands, the dollar in savings at the bank will go to X 10 to loan people $$ and his trophy wife will also be able to spend on jewelry.
First post but I felt compelled to add my 2 cents. I must admit to spending 40 minutes of my time listening to the recording they had on how to save $600 on gold with great interest only to be extremely disappointed that they would use such a lame example as someone buying it off of ebay? I made some nice profits in the late 70’s and am now sitting on a 300% profit on some gold purchased about 2000. I have purchased gold through 3 different companies in the last 9 years, one from Louisiana, one from Texas and Monex in California. Monex gave me the best pricing and service and I would never buy again from the other two since they put you on their speed dial and their premiums were much, much greater than Monex which I seem to recall was 3 or 5% – cannot recall. But getting back to Agora, they put out a lot of good, free information but in this case they really were stretching it!
Enjoy your daily articles. Am a new kid on the street. Wondering if you have any new info on ARNA. Thanks for Gunshoe
If gold is so valuable why are dealers taking paper money… (soon to be valueless from all the ‘advice’ I get)… for it at only a 5% ‘profit’? Somebody help me out here.
Thanks HY — I must admit, I haven’t followed it at all since I wrote about it, though the combination of more ads from S&A, the exposure it got in this space, and the conference presentation ARNA gave earlier this week all probably helped drive the price to this point, it’s certainly been a nice week for anyone who jumped right in.
I wouldn’t be at all surprised if there are plenty of chances to buy on dips in the months to come if you decide this is a stock you need to own — this first Phase III trial isn’t guaranteed to have excellent results, and there will be more news later this year, and lots of time before they can actually hit the market (if they can).
My suspicion would be that in this turbulent market, folks won’t hold on for a long wait and they may well sell off on impatience or on anything that smells disappointing (let alone anything that’s genuinely bad news). But that’s just me, and just a guess — I expect we’ll keep seeing the ads, they must be working pretty well.
I agree that silver coins, so called “junk silver” are the way to go. Everyone recognizes a dime, quarter and 50 cent piece and they can easily be used as a medium of exchange. These can easily be used for daily transactions and can be determined to be 90% silver by looking at the edge. Selling gold back to a dealer can be very costly and will probably be reported to the government. You might also want to check out CEF, a Canadian silver/gold ETF, which might be a bit harder for “Uncle” to confiscate. Why would the government take our gold? Because they will have nothing else to back our funny money. It will also be very easy to confiscate gold and silver in our EFT’s and then reimburse us for the siezure. Currently, I believe $35 per ounce is on the official books, but this may have changed.
Any thoughts about Kitco’s “Pool” accounts?
I think having a good food supply would be prudent to have as well, don’t you?
Have recently been receiving mailings from the Agora group of companies offering 1/10th oz.PANDA gold coins from China that are also PURER than American gold coins. There pitch is that a limited amount of M69 graded coins will produce a future premium as the expanding middle class in China begins to learn more about numismatics investing. According to the report BOTH American grading services are attempting to be first on the block in the Chinese market.
Single coins are priced at $159. package of 5 @ $149 EACH!
Right you are, Mark — everyone knows the real money is in Beanie Babies!
ETF’s are not taxed as collectibles, they are taxed as STCG/LTCG depending on the holding period. They also are not “taxed in advance or taxed before actual paper profits are realized” by marking them to market as are commodities contracts. Why would the government confiscate gold when the dollar is not backed by the gold metal………? let’s let the hypothecator ruminate on this one for a moment. The Fed requests the BEP to print ridiculous quantities of paper or digital money…backed by nothing but you and me. Foreign governments and their SWF’s see that the amount of liability created by this wonderful set up is nothing short of crushing and impossible to repay. They decide to no longer accept this fiat “money” as an exchange medium. So what’s the World’s Newly Birthed soon to be Largest Nanny State to do? Devalue the currency, let the market discount/devalue the currency, print new currency………..backed by the same ol’ debt crushed you and me, or perhaps start paying in gold? The last time I ran the numbers on it, which was before the massive expansion of the money supply in September of 2008, and way before the massive “800 billion plus bank bailout”, in order for all of the US$ in circulation to be backed by the reserves of gold in Fort Knox (taken on faith), gold would have to be fixed at over $35,000 an ounce. There are many sources I’ve read that “guesstimate” the amount of gold held privately in the US. They are all over the board but suffice it to say that there’s probably at least as much in private hands as in the governments and probably more. If that were confiscated and used to back the currency, that gets us to around $17,500 per ounce and possibly as low as roughly $12,000 per ounce. Many of the pundits I’ve read believe that over the next few years that gold could easily be in the multi thousands per ounce and I personally believe their case for it is strong, and don’t forget golds old inflation adjusted high was approximately $2500 per ounce. It’s not that far of a stretch to imagine a scenario where government may take the metal and again revalue it. Would foreign governments and SWFs let this happen…..I don’t know but they all have huge holdings in the yellow metal. it’s something to ponder!
if you purchase rare coins, gold or otherwise, from a reputatable dealer and then sell them a few years later, the dealer is not legally obligated to report the sale(profit or loss) to the IRS.
Check it out.