That Small Shinny Yellow Thing

After a long time leaving my blog because the business - or laziness, I will start again to write in this blog because an incident that happened to me on my business trip. At that time I am on a short 1,5 hour flight and sit beside me is a man - I guess on his mid 40's - a government employee and also on his business trip. We have a chat for awhile, he ask me about my job and he said that it must be fun to have a job like me, the income must be high and travel a lot to a various beautiful places in the world (yeah right). In the end he is quite surprised when he knows that I'm a married man with 2 daughters of 7 and 2.5 year-old in my 32.

FYI: I am married when I was 23 with a woman that hates me so much (She hates me because she can't stop loving me :-P). Immediately only 1 year after the marriage,  God send us a beautiful angel - who at the moment loves learning Pencak Silat (an Indonesian Martial Art) and playing violin, and  5 years later another angel came to us and make our family live more colorful.

Anyway,  back to our story on the plane. At first, I thought  he will scold me because I'm married in a very young age (in our society getting married in a very young age often happened because your girlfriend is "accidentally" got pregnant because you are not "becareful" enough). But in opposite he told me that I'm so lucky of getting married so young because he got married in his late 30's with a woman 9 years younger that him (you're a lucky bastard!) and at the moment he has an 8 year-old son. He told me his worried that in around 10 years he will be retired and at that time his son in his time where he will need financial support for his school and college. He said also that at the moment he tries to save some money for his son's future need but he still worried about the the school fee will increase every year and he cannot afford it at the time his son entering the university.

 I told him the same good old story about purchasing gold for your financial security. He said that it is easy for me to buy gold because my high salary and I asked him back how much he can save a month. He answered the amount that actually enough to purchase about 2 grams of 24K gold (at the current gold price) not a large and heavy gold bullion but he can just buy that small shinny yellow thing that he can afford every month. In the end he will consider my advice and buy gold for his future financial security.

I believe myself that purchasing the gold is not to multiply your money but to secure it so in the future the value of money that you have at the moment is the same that you have in may be 30 or 40 years in the future. Remember that actually not the gold price is the one that increasing  but because the value of our money is the one that decreasing.

For the people who have more money, purchasing the properties or investing your money in some businesses are some ways to secure their financial future. But for that man on a plane who only has small amount of salary, purchasing 2 or 3 grams of that "small shinny yellow thing" every month  may be the easiest and has the lowest risk way available to secure his financial future. If his salary  increasing annually and  nothing big happen in his financial life within 10 years he can have 240 grams of gold - at the current value that small shiny yellow thing in that weight is enough to put his son in a modest university in my country.

The Best Insurance for your Financial Disaster

This early November 2010, we are shocked by several disaster struck an archipelago nation of Indonesia. After the flood in Wasior district, west Papua, earthquake and tsunami in Mentawai Island and the last is the Merapi volcano eruption which when this article is written is still happening. Those disaster claims hundreds of live, damaged the infrastructure and belonging and force other hundred of thousand people to flee seeking for refuge.

Natural disaster is one of the risk that we must embraced since we live in a fragile place called the earth and disaster can be happened anytime and anywhere and we must be prepared to cope with the worst situation that may be happened. Not only natural disaster, all of us also vulnerable to financial disaster. Like natural disaster, some of them can be predictable but some of them are not. but both can claim our precious thing including our "live".

So, how to prepare the contingency plan to prevent, cope, manage, and recover from such of financial disaster? 


One of the simplest thing is you must have reliable insurance that has been battle proven in any global's worst financial condition. The insurance is GOLD. History has proven even in the worst condition gold became the savior in financial disaster. It is never too late to learn and to prepare for your financial disaster, but why wait until tomorrow if you can do it now, because we never know exactly when the disaster came and wipe all the things we have. 

Gold: A human Obsession

Since the dawn of civilization human is already enchanted with this sparkling yellow metal named GOLD. This precious metal became a human obsession since its economical value is only comparable with the quest and efforts to find it. Human willing to explore the new world and done thousands miles of journey to the new world and to the unknown wilderness to get it. GOLD also created conflicts of interest between human which led to the war, human exploitation and nature devastation.


GOLD is the reason why western civilization make a journey to the new world. Their spirit of adventure and conquest is based on three elements: GOLD, GLORY, and GOSPEL. Nor Glory or gospel came first bur GOLD. Glory and Gospel is the secondary goal, the primary is to get as much gold as they can. GOLD also as tools to attract the immigrants to go to the new place to get a better life. Even though the situation is completely different in the new place, exploitation, torture, misery, or death is haunting them. We know how some Americans make a propaganda to the Chinese in 19th century to "invite" them to come to the wonderland called America, where every inch of soil you step on is containing GOLD. But after they arrive in America they're worked as hard labor for rail track laying, mining, and others muscle work.

GOLD also created mystery and legend. This legend and mystery also make some curious men that most of them motivated not to get knowledge nor adventure but GOLD's economics value. We learn how Spanish conquistador Hernán Cortés de Monroy y Pizarro or simply famous with Hernán Cortés overthrew the Aztec empire successfully and get his gold. Or the legend told by survivors of the failed Narváez expedition about Cibola - the seven city of GOLD - which led countless of waste-efforts expeditions to find it. The fascinated and eluded legend about "Lost City of Gold" or El Dorado that attracts the fortune hunter even until today since the days of the Spanish Conquistadors. Gold also force people known as the tomb raiders to disturb the dead by breach their sacred eternal resting place and loot the precious GOLD. This also done by the modern tomb raiders who called them selves archeologist. One of the famous modern mystery about gold perhaps about Fort Knox, how much gold saved there and why it is become "one of the safest place on earth".

The story of gold is never end, even in the new world order where people is more confident to keep and use paper with the number on it which called bank note or money, Gold will always become the human obsession even for centuries more.

Gold: The savior for workers and company

when I saw this morning news on local TV station, there's one news that disturbing my minds. The news is about demonstration. it seems only an ordinary demonstration because everyday people express their opinion about political issue, economic issue and another issues through this classic way. one that make me interested in this news because the demonstration was done by a factory labors to ask their company to rise their wages which is still in the same amount after 5 years. The company where they work states their objection to fulfill the labor's demand because the company financial condition is can not afford it. The result is labor strike. In this case both parties will gain loss.

The case will be different if the company pays its workers by gold or silver or at least by gold and silver standard. Gold as well as silver has been proven able to survive in any world's worst financial condition, depression, and inflation. If the company pays the labor with gold or silver, it no needs to check and adjust between the salary and the rate of inflation. So the rise of salary happened only if someone get higher position with higher responsibility.

The problem is to make this come true since the company also related with other business entities that not put their payment standard on Gold or silver or other goods with "real" value. If this solution is not implemented, tomorrow and in the future the demonstration on the same issue will be happened, again and again.

Gold: Insurance for Financial Security

In June 2007, on my flight from Singapore to Frankfurt, I met this young lady that coincidently came from the same home town with me. I figure it out later that she works for new airlines dealing with flight insurance. Just a few months later in the early 2008 because of mismanagement and some accidents and incidents, the airlines is collapse and bankrupt. I never heard from her anymore where she works after the bankruptcy of the airlines.


Our life is full of risks, so many insurance companies offer their products to the consumers that want to protect their assets and them selves. The insurance may vary start from health insurance, car insurance up to live insurance - the last one you will never taste it because you must die first before  claim it.


Our finance is also one of the risky thing. I still remember when monetary crisis happen in 1997 my savings as the result of hard work for 8 hours a day 5 days a week in 8 years just vanish in one night. Well, I mean the money is still there but the value drop in unbelievable rate. Before, with my income,  I can take my family to eat in a nice restaurant every month, watch movie at least twice a month, buy beautiful clothes for my children and save the rest of my income to buy a car I dreamed of. But just in one night - yes, its true - everything never be the same. I must bury my dream quite deep since the price of car doubled just in a few weeks. Suddenly the income cannot cover the expense and all my hard work for 8 years became nothing.


At that time my wife's jewelry is the savior. We sell some of it and survive until everything back to normal. From the time being I realize that gold my insurance for my financial security, and as i write on my previous post that I put my money in the bank and the amount is just enough to live for two weeks. The rest of income i used it to buy gold. now, i can buy my dream car and the next is ...a bigger house.


From long time ago until today, at least for me from 1997, gold has been proven as good insurance for my financial security. It is time for you to prove it. 

Gold: A good choice?

When I told my friend that in my bank account my money is only enough to live for two weeks, he laugh and called me big fat liar. After I show him my account print out he surprised and ask me whether I was broke and need some loan from him. I explain to him that I take most of my money from the bank and I buy a few grams of gold. The argumentation then started because most of the time he put all of his income in the bank and so far he felt nothing goes wrong.  He got good interest, bonuses, etc, etc.. and his money amount is getting bigger each year. Yes, nothing to complaint about.


Well, not only my friend that will think exactly the same, perhaps you has similar opinion. My questions are how much interest you get from the bank? 5% - 6% per year?? How much they take for administration fee? tax? insurance? etc..etc.. The most important after all of that is how much is the country's inflation rate that year?


For example the 2008 inflation rate is around 11,06 % in my country, In 2005 the rate is even worse 17, 11% . In 2009 and 2010 the inflation is only around 2%  SOURCE. In overall,  how much is the total  inflation  in - let's say - 5 or 10 years???
All of us can see that it seems that our money in the bank is getting bigger but actually the value of our money is getting smaller and most of us we didn't aware of that.


Now let us see the table below, This table is the gold price in 2005 (table 1) and gold price in 2010 (table 2) provided by the trusted one kitco.com

Table 1. Gold Price 2005

Table 2. Gold price 2010

Source Kitco.com

Let us compare the average Gold Price on June, 2005 and June 2010. The data shows that on June 2010 the average gold price reach US$ 430,66 per ounce at the same month in 2010,  it reach US$ 1232,92 per ounce or increase around 287% in 5 years! 


So my final question is: can your bank give you 287% interest in 5 years? :)

Gold: Stronger Than Yesterday

The title of this post is absolutely different with what I'll say. First, If you see the image at the bottom of the page, you'll see that everyday the gold price is getting higher and higher. You can compare it with the image on the right side of the page (24 hrs and 8hrs gold price), what you can get? Yes in short terms the gold price is up and down depend on several factors caused by markets activities, but in long terms the trend is climbing every year.


As I told you before again and again, actually the value of gold is almost flat, the problem is on the value of your money of which the gold value is compared. Inflation is one factor of money value to decrease. 100 years ago you cannot imagine what you can buy if you have US$ 1000 in your hand, today of course you cannot buy as much as 100 years ago with that amount of money. But 100 years ago or even 1000 years ago if you buy a good cattle for 10 grams of pure gold even today you can buy the same amount of cattle with approximately the same price of that gold.

Figure. 1

Look at figure 1. let's say that blue line represents the value of gold and red line is the value of money. Remember value not price. That sample shows that actually the gold value is "almost" the same, but your money value is decrease because of inflation.

Figure 2

Look at figure 2 (Blue-money, red-Gold) since we always compare the gold value with money value (which has unique denomination, $1, $5 and soon) that we always think that money will always has the same value as the nomination written on the paper. The gold values seems always climbing and climbing. The point is if you have $10 today and you keep it, 10 years after now it's value is not $10 anymore even the number on it is the same, but if you have 10 grams of gold today and you keep it, 10 years from now it is still 10 grams of gold. So, Gold is not stronger than yesterday, it is same as yesterday but your money that weaker than yesterday and make gold seems stronger and it will always like that. Still interested to keep your money as financial security? Think again.

Your choice: Gold Or Money ??

Once upon a time, man fulfill their needs taking directly from the nature. When the life is more complex and they start to find and made contact another societies which have new goods and commodities, the trade is created.


At first they trading by exchanging goods with other goods. For example meat with fish. Weapons with clothes, etc. Soon they realize that this is not practical. So, they create the tools of trade known as MONEY.


At the beginning money made of material that has been agreed that can be exchange with the goods they needs. The materials like shell or even carved stone become the money. Then they realize that those materials are not worthed and easy to be counterfeited. They try to find new materials that its value is equal with the goods they trade and anti counterfeit. Their choice is precious metal gold and silver.


The sparkling yellow gold that easy to form in to shapes and bright white silver enchanted their eyes. For centuries it's became the tools of trade, Investment, and financial security.


Bringing such of heavy metals in the trading journey is not only troublesome but also risky. They start to create a system where they can give their gold at a place and get a letter so he can take their gold at other appointed place. And the bank is created. In the further development The traders can give it to someone as a proof that he has the amount of gold in a certain bank and that person also can use it in trading without any needs to changes it into gold. That's where the time paper money is created and why it is also called the bank note.


Our paper money is the same letter that bank and everyone agreed can be used as the tools of trade. Thats's fine.  But as the tools of investment or financial security? Well let us figure it out.


When you sell a bar gold for $50, for example, you only receive a paper with $50 on it. The value of the paper itself perhaps only $00,5. Try to keep it for 2 years and buy the same amount of gold. Is it still in the same price? or may be not!  Actually the gold value is the same but the value of your money is declining, So you will feel that gold price is getting higher and higher every year.


Remember when your grandpa said that he can buy a huge house for $5000 in 1950's and right now even you cannot afford a small flat for the same amount of money? Yes, It's because the value of money is decline or what the guys in Wall Street call it "the inflation". But imagine if that time your grandpa buy that house with let's say as the same value of 300 grams of pure gold and today or tomorrow you have the same amount of Gold at the same content of course. You can buy the same house for sure.


So, Now it's your choice: Gold Or Money?

The Best Time To Buy Gold

Gold Price In recent 10 Years

If you see in the side bar in previous 24 hours gold price drop in range of US$ 1133 to US$ 1135 per ounce and start to climb and stabilize at range of US$1140 per ounce today. This anomaly is normal and nothing to be afraid of.

Gold Price In 2009

According to my experience last year, the gold price will keep up and down but the price trend will keep decreasing and will reach its lowest price around July or August. The price will start to climb in September and will reach its peak around November or December.

For speculator it said that July or August is the best time to buy gold and sell them when gold reaching the highest price in November or December. In some parts they were right but not all. If you want to become Gold Investor not Gold Speculator, buy it whenever you want is the best time. Of course if you want to get higher revenue you can buy at the lowest price. Remember, even at the highest price within a few years  you still can get good revenue from your gold, even it is only stay still in your safebox.

Why Gold

Some people still keep their doubt about investing in GOLD. Most of their worried based on fluctuative gold price every year. So they keep trust their paper money and their bank savings until the world economics colaps and they realise that GOLD is still strong even in the worst economic crysis.

Why must wait until tommorow if you can invest in GOLD today? to support this questions I'll quote the article of Mark Aucamp the Money Saving Expert. Mark is recognised as an authority in the field of Debt Management and has extensive experience in providing Advice & Solutions. He wrote twelve reasons to invest In GOLD Today!

Mark Aucamp's Twelve Reasons to invest in Gold today!

1. During the last run on gold in the 70's and 80's the price of gold increased by 20 times.

2. There is a fall in gold production worldwide that is adding to its scarcity.

3. India and China have a veracious appetite for gold and as their economy powers forward they will drive up the gold price through demand and the limited supply globally.

4. There have been no new discoveries of gold deposits recently and it can take up to ten years to bring a new mine to full production.

5. When ever the world is on the verge of a recession people turn to gold as it is provides security.

6. It does not deteriorate and will last forever.

7. It is sought after for jewellery and electronic manufacture.

8. Governments can print paper money quickly, but they cannot just produce gold.

9. No other investment has the wealth preserving power of gold.

10. The Gold price will continue to be pushed by the current American debt and trade crisis.

11. Gold is an inflation-proof investment.

12. Gold is the only truly international currency.

Source: Link

If you are interested to invest in GOLD after reading those reasons, there are some suggestions from me.

1. The best way to buy the GOLD is in the form of coin or bullion bar.
2. It is better to buy in high carats (22K or 24K) and in small weight. so if you need an emergency quick cash you can sell one of it or put it in pawnshops.
3. Buy your GOLD from authorised and trusted minting company or seller to assure the quality.
4. It is better to buy GOLD with certificate/assay card.
5. GOLD is better to use as long terms investment not for short terms price speculation object.

So, What are you waiting for? Start your GOLD investment Today!

Real World Ways to Invest in Gold

• Gold bullion. - Refiners produce gold bars from one gram to 400 ozs.
• Gold coins. - The most popular are one oz coins such as the American Eagle, Canadian Maple Leaf, the South African Krugerrand, and the Austrian Vienna Philharmonic. They are easy to keep and transport and closely match the price of gold with a small premium.
• Numismatic coins. - Older coins which fit the description of collectibles have a premium to the value of gold included in the coin. The holder is dependent upon an accurate and fair appraisal.
• Gold certificates. - A certificate which represents ownership of gold bullion held by a financial institution for convenient and safe storage. There is a fee for storage and insurance.
• Gold futures and options. - A futures contract traded on one of the futures exchanges, such as the COMEX in New York. This method is generally leveraged and options provide price movement much more than that of gold itself. It can be used to sell short and can be used to benefit from a drop in the price of gold.
• Gold Mining stocks. - Stock ownership of a company traded on one of the exchanges. The price movement is dependent not only upon the price of gold, but also upon the future of the corporation and management. It's price movement is almost always more than the movement of gold itself. Market Vectors Gold Miners ETF (GDX) is one way to invest in stocks.
• Jewelry. - Representing the largest consumption of gold each year, jewelry is a major method of savings in developing economies.
• Exchange Traded Funds (ETF)- Perhaps the safest method of buying and owning gold by buying shares in a fund based solely on the existing market price of gold. No leverage or storage problems. GLD, GDX, and SLV.
• Gold Mutual funds. - A relatively safe method of buying and owning gold stocks allows the owner to diversify among many stocks and allows the investing decisions to be made by a professional. Investment methods vary among funds and provide many different styles of portfolio management for an investor to choose from. Prices move faster and further in both directions than the price of gold.
  

Reasons to say YES to Gold

• The dollar is weak and getting weaker due to national economic policies which don't appear to have an end.
• Gold price appreciation makes up for lost interest, especially in a bull market.
• The last four years are the beginning of a major bull move similar to the 70's when gold moved from $38 to over $800.
• Central banks in several countries have stated their intent to increase their gold holdings instead of selling.
• All gold funds are in a long term uptrend with bullion, most recently setting new all-time highs.
• The trend of commodity prices to increase is relative to gold price increases.
• Worldwide gold production is not matching consumption. The price will go up with demand.
• Most gold consumption is done in India and China and their demand is increasing with their increase in national wealth.
• Several gold funds reached all-time highs in 2007 and are still trending upward.
• The short position held by hedged gold funds is being methodically reduced.
• U.S. government economic policies over the past decade have systematically projected the U.S. economy down a road with uncontrollable federal spending and an uncontrollably increasing trade deficits. Both will cause the dollar to lose in international value and will increase the price of alternative investments, such as gold.
• With the recent devaluation of many international currencies, the U.S. dollar was the international safe haven of last resort. We are seeing signs of this ending due to many financial factors, the most important one being a falling dollar.
• There are over One Trillion dollars ($1,500,000,000,000) of U.S. debt owned by foreigners which could be repatriated under certain conditions. This could cause a major decline in the value of the dollar and a soaring gold price.
• If you believe in 'buy low, sell high', gold is still low, but climbing.

Why Gold?

One of the way to secure your financial investment is to buy gold or other precious metals. Why? because the gold price tend to follow inflation rate. Say, you save your money in a bank and you have an interest of 5% of your saving per year, compare with your country inflation rate. some countries has the inflation rate more than 10% per year which is make your money looks more in number but less in value. The opinion below I quote from the assessment of Oxford Club collaborator and investment guru Chris Weber Mr. Weber's article comes to us courtesy of Dr. Steve Sjuggerud's Daily Wealth which share his opinion that:


"The price of gold rose during the 1970s. In fact, it soared. From $35 in January 1970 to a high of $850 in January 1980: that was a rise of 2,329%. And might I remind you that for most other investment classes, like stocks and bonds, the decade of the '70s was dismal. But what is often overlooked – except by those who actually lived through that era and were holders of gold – is that there was a long period in the middle of the decade when gold either went nowhere or lost up to 50% of its value.

No price goes up – or down – forever. And even the mightiest bull market makes time to correct. It has often been observed that a price can retrace its prior great move by 50%. It tests that 50% level, and how it passes the test can determine what the next leg looks like. Well, this is what happened to gold starting with its $200 peak in December 1974. Over the next 19 months, the price worked its way lower. Indeed, in August 1976, gold touched the $100 level – meaning it had lost 50% of its prior bull market move.

Of course, at the time, no one was certain this would be the absolute low – that no future price would ever get so low. And – crucially – it wasn't until well into 1978 that gold surpassed its previous record high of $200. So think about that. Someone who jumped on the gold bandwagon at the end of 1974 had to wait over three years to stop losing money. And that's assuming they waited. I'm sure many threw in the towel long before those three years passed. But those who held on to their positions were greatly rewarded.

From the $100 low in August 1976, gold soared over the next 3½ years to a high of $850 in January 1980. Those few lucky enough to time their purchases at the low saw 750% returns. But those who identified the bull market early and were able to keep their heads about them in the correction were able to reap as much as 2,300% over the life of the bull. (That's not using leverage, either.) Of course, today it is possible gold will turn up from here and start to soar again, soon testing its old $1,030 high. But we have to keep open the possibility that the correction will last much longer and take gold even lower than it is now.

How far could it fall? Well, there's no way to be sure, of course. But there are a couple of ways that are possible. A fall similar to the 50% decline we saw from end-'74 to summer '76 would mean a fall in half from $1,030... or $515 gold as the low. However, there is a more optimistic way to look at things. If gold retraced 50% of the giant move it made from the low of $253 to the high of $1,030, this would mean giving back half of the $777 difference between those two extremes. Half of this is $388.50, and subtracting this amount from the $1,030 high gives us a much better low of $641.50. (One important point: I'm not predicting gold will touch either $641 or $515. I'm just saying it is possible, given history and a study of the markets.)

My advice remains as it has been. Have enough cash to ride through any unexpected correction in any of your other assets. But by all means, own some of the metals area. Don't try to time the purchases; if you get it exactly right, it'll be by accident alone."

Buying gold not because you want to use it as the speculation tools where when the price is low you buy gold and when the price is high you sell it. NO. Use it to secure your finance and an investment tool which means no matter the price is low or high buy gold for your finance protection.