Panama Investor Blog

I'm getting out of dollars!

Like many of you I am very concerned about the U.S. dollar due to the printing presses moving into high gear these last few years. In fact all fiat currencies are at great risk as countries the world over believe their only option to get rid of their debts is to inflate by decreasing the value of their currencies. Unfortunately it means the price of all things will go up dramatically and the saving (if you are fortunate enough to have any) is being debased every day. In my eyes there are only a few options to protect your money and your future. Move out of fiat currency and into physical assets such as real estate that is and will be in demand, food producing farms or precious metals. Land can be a good value in inflationary times, but it is not easily and quicly sold if you need cash. Precious metals that are physically held by you can be very secure, but turning them into cash can be a challenge and time consuming, especially if you live abroad.

Gold and Silver have been incredible performers over the last 10 years and in just the last year gold has seen over 30% increase and silver an incredible 80% against the dollar. How high can they go? The question really is, how low can the dollar or any paper currency go. In reality there is no limit because once the devaluation begins it will only continue and can accellerate rapidly. Look at every currency in history and you see they have all eventually seen hyperinflation. It is the nature of the beast.

Must see video

 

There are a number of companies that offer precious metal storage services that I have used over the years, but I have found  Bullion Vault to be the easiest and most viable way to store gold or silver and still have ready access to  cash when I need it. How so? You buy and sell gold or silver on line and it is stored in one of three jurisdictions in vaults audited by Lloyd's of London each day. Although you may not hold an exact amount in grams, ounces or bars that are segregated, Lloyd's guaranties that the total amount of gold or silver held by all Bullion Vaults customers is physically accounted for each day. It means that I have an exact amount of metals held in an agregate pool account that is accounted for each day.

I can buy precious metals at the press of a button from other participants in Bullion Vault for a very small transaction fee. If I need cash I just send a notice to Bullion Vault to send x amount from my cash holdings that I recently converted by selling some of my holdings. How can I be sure someone does not access my account? Any cash sent from my Bullion Vault must go back to the bank account from which the original account was established. Even if someone got access or forced me to access the account, the funds could only go to my bank which certainly complicates life for a would be thief. For more details on how the account works go here.

I believe 2011 is going to be tumultuous for fiat currencies, especially the U.S. dollar as there is a very good chance that the worlds largest lenders will change from using the U.S. dollar as the reserve currency to another new currency and all commodities including oil must be paid for with his new currency. When that happens the price of everything in dollars will sky rocket overnight. I don't know what this new currency will be and I doubt if you or I would have access quickly enough once the announcement is made to change out of dollars, so holdings in gold and silver is the only safe bet.

How I make money when you buy gold

Bullion Vault currently holds over $1 billion in individual accounts. If you use them I get a .25% of their small transaction fee (you can too) for each transaction you make, which is why I promote them on my blog as a sponsor. But like all my sponsors, I  don't advertise them If I don't use them myself or know them to be very solid and of great value to my readers. Check them out and if you decide to open an account with Bullion Vault be sure to share with others about their great service and watch your personal account grow too.

So how high can gold go in 2011? The following is from the Sovereign Society's daily newsletter today and it shares more information about the past performance and future of precious metals in 2011.

How High Will Gold Go in 2011?

Jeff Clark, BIG GOLD

After stellar years for both gold and silver, what prices will precious metals hit in 2011? Here's an analysis based strictly on their price behavior in the current bull market.

First, take a look at the annual percentage gains that gold has registered since 2001 (based on London PM Fix closings):

Excluding 2001, the average gain is 20.4%. Tossing out the additional weak years of '04 and '08, the average advance is 24.8%.

So we can make some projections based on what it's done over the past 10 years. From the 12-31-10 closing price of $1,421.60, if gold matched…

The average rise this decade, the price would hit $1,711.60

The average rise excluding the three weak years = $1,774.15

Last year's gain = $1,858.03

The largest advance to date (2007) = $1,875.09
But what if global economic circumstances continue to deteriorate? What if worldwide price inflation kicks in? And what if government efforts at currency debasement get more abusive? If Doug Casey is right, a mania in all things gold lies ahead – what if that begins in 2011? Here's what price levels could be reached based on the following percentage gains.

35% = $1,919.16

40% = $1,990.24

45% = $2,061.32

50% = $2,132.40

1979's gain of 125.7% = $3,208.55
It thus seems reasonable to expect gold to surpass $1,800 this year, as well as reach a potentially higher level since the factors pushing on the price could become more pronounced.

Here's a look at silver.

As you can see, silver had its biggest advance in 2010. The average of the decade, again excluding 2001, was 27.5%. And also tossing out the '08 decline, the average gain is 34.3%. So, from the 12-31-10 closing price of $30.91, if silver matched...

The average rise this decade, the price would hit $39.41

The average gain excluding 2008 = $41.51

Last year's advance = $56.22

The 1979 gain of 267.5% = $113.59
So, $50 silver seems perfectly attainable this year. And that's without monetary conditions worsening.

It's titillating to ponder these advances for gold and silver, especially when you consider we might be getting close to the mania. And if we are, that should do wonderful things to our gold and silver stocks, too.

I would add one caution: the odds are high that there will be a significant correction before gold begins its march to these price levels. In every year but two ('02 and '06), gold fell below its prior-year close before heading higher. And here's something to watch for: in every year but one ('08), those lows occurred by May.

In other words, a buying opportunity may be dead ahead. And if you buy on the next correction, your gains on the year could be higher than the annual advance.

At BIG GOLD, we’ll continue to keep track of gold and silver as well as some of the best medium- to large-cap mining companies in the industry. With the gold mania possibly just around the corner, there’s no better time to try BIG GOLD risk-free for 3 months, with full money-back guarantee. More here.

As gold reaches new highs, Panamanians make buys

It appears from this article in La Presna that Panamanians are beginning to see the value of buying gold rather than investing in the markets or hording cash. Gold passed $1340 yesterday and is continuing its climb to what many believe could be $5000 in the near future. It was not so long ago that you could buy gold for around $275 an ounce. Here is the article from La Prensa that shows how much gold they have sold to Canada with a one liner on how much gold one of the banks has sold locally. If you want to buy, trade or hold gold I know of no better way than Bullion Vault.

Gold glitter is reflected in the country

According to the Comptroller General, in the first half shipments of gold to Canada totaled $ 33 million.

ALEX E. HERNANDEZ
[email protected]

The price of gold seems to know no boundaries, and yesterday reached a new record $ 1340  per ounce, $ 24 more compared to the price achieved on Monday.

To some experts, the bright metal could reach before the end of the year the barrier of 5000 dollars an ounce, boosted by the weakness of the dollar against other currencies like the euro, which has led traders to seek other options to improve the performance of their investments.

According to Joey Levy, a specialist in financial planning, gold has preserved its purchasing power because it can not be created "from scratch" and can not be devalued as the "money" in paper form.

In Panama, the increase in price was the top export to Canada, mainly by shipments of the metal by the Petaquilla Gold, which has a mining concession in the province of Colon. According to the Comptroller General, in the first half shipments of gold to Canada totaled $ 33 million. The contract stated that total sales of Petaquilla the State would receive 4%.

Elena Chong, manager of treasury Credicorp Bank, an institution which this year began selling pieces of gold, said to have placed 5 000 ounces of the metal, adding that those who invest in gold do so to preserve their purchasing power.

He added that those interested in buying gold must meet the requirements of know your customer policy for financial institutions in Panama apply under the rules and regulations of the Superintendency of Banks.

For employers engaged in wholesale jewelry, the increase does not translate into profits, because the more expensive to buy the metal, have to sell the parts at higher prices. Some customers are discouraged from making the purchase. Others seize the moment and invest in something that is worth more today than yesterday.

How not to bring gold coins to Panama

This fellow made a serious mistake when he decided to bring his gold coins and store them in a vault in Panama. Talk about making a really wrong turn. One man's loss is another country's gain! Hat tip to Gary.

Machine translated from El Siglo

The Federal Police arrested at the International Airport of Mexico City to the U.S. Martin Thomas Arnold, 58 years old, who was scheduled to travel to Panama with 150 gold coins in his possession, with a total weight of five kilos 33 grams.

The Federal Police arrested at the International Airport of Mexico City to the U.S. Martin Thomas Arnold, 58 years old, who was scheduled to travel to Panama with 150 gold coins in his possession, with a total weight of five kilos 33 grams, he presented no documents to protecthis property.  (El Universal)

  By requesting the documents to protect the merchandise, Arnold Martin was a simple photocopy of proof of purchase letterhead, which only specified the purchase of 51 gold coins, worth $ 171 thousand each, reported the Ministry of Security Public (SSP) federal.

  The detainee also were secured three thousand 680 U.S. dollars in bills of various denominations.

The federal agency reported that police conducted random checks of passengers of Flight 381, a commercial airliner bound for Panama and Thomas Arnold Martin noted that "showed obvious nervousness."

  As he passed his hand luggage scanning equipment were observed several plastic containers with gold coins.

  Fifty of these coins had the words " SOUTH AFRICA", while the other 100 reads "UNITED STATES OF AMERICA."

Gold for bread-Could it happen here?

Hat tip to Mike for sharing this heart wrenching video about Zimbabweans forced to starvation with only mining of gold to survive. No paper money is accepted and if you want to eat you must have gold, the only form of exchange. This once prosperous African nation was brought to this present situation by Robert Mugabe, their less than benevolent dictator. As you will see in the video, they thought he was going to bring them prosperity and instead he has brought them misery and death. Think it can't happen to a first world country? When those in power turn to tyranny, it is the natural evolutionary flow of a society.

Revealed: The true horror of everyday life in Zimbabwe

A Guardian film smuggled out of Zimbabwe brings home the economic devastation and deprivation Robert Mugabe has wreaked upon his own people. With Morgan Tsvangirai, the opposition leader, preparing to take up the post of prime minister in a unity government, Sam Chakaipa, at considerable risk to himself and as an act of resistance, returned clandestinely to his village, 125 miles from Harare, to document the plight of his former neighbors.

I have researched various organizations that work to help these poor souls in order to find one that is honest and uses the funds wisely. If you feel compelled as I have to help, please take a look at this website for the Zimbabwe Benefit Foundation.

Gold price climbs over $1040

So, is now the right time to buy gold? Is it headed to $2500 or more as many gold pundits have been predicting? I remember buying gold at $252 an ounce in late 1999  and it has increased over 400%. Since 2006 it has more than doubled. So is a doubling of tripling again unrealistic? Or, is this just a bump to be pulled back down below the $1000 level where it has been trading over the last few months. We can't be sure, but one thing is for certain, the trend is going to be up because the dollar trend is down. It may take a while for inflation to really set in, but if the rumblings in the market are true and a new currency is in the making, then the only real safe investment right now is precious metals. Panama is tied to the U.S. dollar so here is a way to protect your savings from the dollar depreciation that is sure to come.

If you haven't put gold in your investment portfolio now may be the right time and Bullion Vault is by far the best way I have found to do it. It is how I buy and store gold. Click on this banner to learn more.

The demise of the dollar?

This article from the the UK is really making the rounds. I have seen it on a number of blogs and newsletter in the last 24 hours and it has caused the price of gold to jump significantly. If what it says is true, China, Brazil, Russia and a number of Middle Eastern countries are going to come up with a currency so they don't have to trade in dollars. They also mention Gold and silver as a part of the basket of backing for the new currency.

Excerpts from The Independent UK: 

In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

Read the rest of this story here.....

Gold rises as China changes paper for metal

It is starting to look like China may be shying away from U.S. bonds and according to this article,  increasing the gold reserves. One would wonder why they would not have done this a long time ago, but keeping the price low while buying lots of the golden metal may be the reason. Gold had been down about $60 this last week, but this news has brought it up considerably.

China reveals big rise in gold reserves

By Jamil Anderlini in Beijing and Javier Blas in London
Published: April 24 2009 09:31 | Last updated: April 24 2009 19:06
China has quietly almost doubled its gold reserves to become the world’s fifth-biggest holder of the precious metal, it emerged on Friday, in a move that signals the revival of bullion after years of fading importance.
Gold rose to a three-week high of more than $910 an ounce after Hu Xiaolian, head of the secretive State Administration of Foreign Exchange, which manages the country’s $1,954bn in foreign exchange reserves, revealed China had 1,054 tonnes of gold, up from 600 tonnes in 2003.
The news could spark interest in gold among other central banks. “When the largest holder of foreign exchange reserves discloses an increase in gold holdings, other countries may decide to think more carefully about underweight gold positions,” said John Reade, a precious metals strategist at UBS.
The increase in China’s gold reserves has come primarily from domestic production and refining. However, the news raises questions about the future of Beijing’s foreign reserves policy.
Ahead of the G20 summit in London this month, China suggested global reliance on the US dollar as a reserve currency should be reduced.
China has been diversifying away from the dollar since 2005, when it broke the renminbi’s peg to the US currency and officially marked it to a basket of currencies, but it still holds more than two-thirds in US dollar-denominated assets by most estimates.
As its trade surplus and forex reserves ballooned in recent years, Beijing continued to buy huge amounts of US Treasury bonds while raising the proportion of purchases it allotted to other currencies and to gold.
China’s accumulation of gold has taken place as European central banks have gradually cut back back gold sales following a 1999 agreement to prevent the market from being flooded after prices were dragged sharply lower after the UK decided to sell part of its reserves.
“China’s announcement signals a broader shift in central banks’ attitude towards gold,” said Philip Klapwijk, chairman of GFMS, the precious metal consultancy.

There’s gold in them thar hills

The Petaquilla mine in Panama has poured its first gold at its Molejon mining project.  The mine is projected to come into full production in 2009 and is expected to produce 100,000 ounces of gold annually.  That’s a lot of shiny metal!

TORONTO (miningweekly.com) – Vancouver-based Petaquilla Minerals poured the first gold at its wholly-owned Molejon mine, in Panama, on April 7, as part of the commissioning process.

 

Read more here 

Arab gold backed currency?

Looks like the Arabs are getting ready to dump the dollar for their own gold backed currency.

Excerpt from The market Oracle; That I have not heard about the Khaleeji until about a week go is surprising to me for two reasons. Firstly, the common currency for the GCC has apparently been mulled since at least 2002 by the IMF giving more than enough time for the word to spread. Secondly - and here is when it becomes interesting: speculation is about for the GCC currency to be backed by gold . And why shouldn't it ? Not only has the introduction of a then still called ‘ Islamic Gold Dinar ‘ as a global currecny been suggested since early 2001 . No, in addition a group of Saudi businessmen has purchased gold to the tune of $3.5 Billion in an off market transaction in November 2008. Add to that impressions of the world renowned Dubai Gold Souk and I would be very surprised if gold does not at least become a major component in the basket of goods lending punch to the new currency.

Read the rest of this story here

Gold climbs a wall of worry

Gold continues to be seen as a safe haven in these troubling times. Today's signing of stimulus package by President Obama does not appear to be bringing a lot of confidence to investors. For the first time in a very long time we are seeing the gold market move the opposite direction as the stock market.

Excerpts from Bloomberg: Feb. 17  -- Gold climbed to the highest level in seven months on demand from investors to protect the value of their assets as stocks slump and the global recession deepens.

Gold has jumped 40 percent in almost four months as investor confidence in financial assets erodes and central banks spend trillions of dollars to prop up banks. The U.S. Treasury will likely borrow a record $2.5 trillion this fiscal year ending Sept. 30, according to Goldman Sachs Group Inc. Asian stocks slumped the most in three weeks today.

"There's a lot of money flowing into gold as the stock market continues to decline," said Ellison Chu, manager of precious metals at Standard Bank Asia Ltd., from Hong Kong.

Investors are increasing holdings of gold in exchange- traded funds, depository accounts and coins and bars. The value of gold held by investors at the Perth Mint in Western Australia has doubled to “comfortably over $2 billion” in the past year, with 80 percent from overseas, Nigel Moffatt, treasurer and manager of the mint, said last week.

Read the rest of the story here.