Archive for the ‘Business’ Category

The outlook of Buying Gold

Thursday, February 6th, 2014

The current gold prices today for February of 2014 are $1256.00 per ounce – which is a dramatic downfall compared to this time last year where gold was valued at $1677.00 per ounce. This turbulent market has investors scrabbling. With the gold market pegged to the USD which is starting to lose its stability due to the lack of a sound fiscal policy by the US government, no wonder people are buying gold!

However, this was not always the case. In 2010 gold began to rise in value. By the beginning of 2011, with this rise on the increase, gold was making headlines around the world. Two months later, the peak on prices was at $1519.30 and by the Monday of the 25th of April that same year, S&P announced to credit agencies downgraded the US government from stable to negative.

In that same year, very late in the year, gold would peak at a massive rate of $1900.30 per ounce. For anyone interested in selling gold, this would prove a perfect time to trade unwanted gold in for exchange of cash.

The current speculation by investors and those in the gold industry is that gold will continue to fall. There is talk that gold may drop even further and hit an all time drop in the market before the end of the year. This is a clear indication by the markets that no one is believing what the governments around the world are trying to push on the public that the recession is over.

Since the Obama administration decided to bail out the financial industry and not force them to help the general public, the US economy is not going to recover for some time. Since the massive debt was built up helping the rich, the poor will suffer even longer and there are no more funds to help them.

Gold always has and always will be an indicator on how well the economic policies of the US government and the other major economies are doing. If record highs in the gold market were at their optimum, the people of the world would know their governments are not deploying a sound fiscal policy. It really is time for a change and not the change Obama did, which was for the worse.

The direction of 2014, for gold investors does not look in it’s finest year. Every time the so called experts predict the worlds’ economy is mending, there seems to be another disaster that negatively influences the markets. As we all know, when the markets are unsettled, the price of gold rises.

Unfortunately we have been listening to this same rhetoric for over 2 years now. The private sector is doing what it can to help the economy, but the federal government has done nothing but sink the country deeper in debt.

One thing we do know for certain is that a lot of investors take the gold market very seriously. We’ve also learned that many gold investors, especially those relatively new to the game, are making some very common and deadly mistakes. Here are those most common mistakes and how you can avoid them.

Mistake 1 – Unrealistic Short-Term Expectations

Probably the most common gold buying mistakes that we see from new investors center around their expectations for their investments. Gold is a long term investment, not a short-term gainer. Sure, your investment today might gain $50 tomorrow as gold jumps for some reason, but most gains are slow and even over time. At the very least, gold will always gain at inflation’s pace, even if the economy is otherwise perfect. At best, it can skyrocket in a relatively short amount of time. Those jumps, however, are rarely overnight and take time.

Mistake 2 – Overpaying Premiums

Gold’s spot price is not the same as what you’ll pay to purchase bullion. Most people who purchase physical gold coins – usually from a well-known mint. The premium you pay will depend upon the mint as well as the handler (seller’s) markup. If you’re investing as part of a financial portfolio and not as a collector, then don’t overpay the premium just to get a “good mint.” Standard “rounds” like the American Eagle and Canadian Leaf are lower-cost and just as accepted amongst gold investors as the Credit Suisse.

Mistake 3 – Discounting Ownership of Physical Commodity

Many investors only invest in one kind of gold, often ETFs or futures. That is only one type of gold and is not guaranteed against market crashes. Physical gold (whether stored by yourself or someone else) is one of the best ways to solidify a portfolio.

Mistake 4 – Numismatics as Your Only Choice

Numismatic coins are nice and can be nostalgic for many investors, but they are not the same as .999 fine rounds. Most of their value is in their collect-ability – something that fluctuates wildly and is more market-dependent than simple gold value. IF collectors can’t afford to keep collecting, the market dries up. New finds in the same series or type of coin may also drive down values unexpectedly.

Mistake 5 – Nuggets and jewellery

The largest problem with owning pure gold nuggets or gold jewellery is that its value is a matter of opinion. They can be a great part of an investment portfolio, but by themselves they are some of the least portable options for gold investing. The value of jewellery is dependent on what someone is willing to pay for it and whether it can be tested for its actual gold content. Nuggets are similar, though not as difficult.

Avoiding these five mistakes and keeping a diverse, rounded, and thoughtful portfolio of gold to fit with the rest of your investment goals is the key to maximising both the returns you can expect over time and the security of your finances.

Khodorkovsky Prosecution scares Western Investment

Monday, June 6th, 2005

The conviction and sentencing of Mikhail Khodorkovsky, Russia’s wealthiest oligarch, for embezzlement and tax evasion has some foreign companies cancelling plans to invest in Russian and those already established there have started withdrawing their capital to the tune of $8 billion last year.
Its clear that President Putin has put economics before politics and is willing to see out the international medias outcry of Mikhail Khodorkovsky’s Kangaroo court.Oil is too much of a hard currency earner , especially in these recent years for a President with a proven nationalistic philosophy to allow it to be in the hands of Russian businessmen , particularly those who have supported opposition to Mr.Putin.
Some analysts argue that Putin acted against Mr.Khodorkovsky because of his active support to opposition of President Putin, or because he wore a turtle neck jumper (and not the regulation tie and collar) to a meeting with the President and his advisors but its more probable that Mr.Khodorkovsky knew that he and his company Yukon were a target for the Russian Governmnet from the outset and in fact garnered his support for the opposition because of this fact.
Anyway, the economic benefits outweigh Russia political costs and so expect liitle encouragement for Big Businesses in the short term but Russia will likely initiate reform again when economic prosperity in the country has stabilised. Related Articles: theIndependent

MG Rovers China Connection

Tuesday, April 19th, 2005

It’s Communism, but not as we know it
By Richard Seamon

The debacle surrounding the demise of Britain’s last volume car-maker, MG Rover appears also to have signalled the death of communism.

20 years ago, the thought of a white knight in the form of a Chinese car-maker riding to a western company’s aid just wouldn’t have been entertained and not only on ideological levels, either. Chinese corporations just didn’t exist and the thought of one with any financial muscle to flex would have been laughable. How things have changed.

The mere fact that China now has the capability to manufacture quality objects of desire is astonishing to most of us raised reading news of the abuses of the cultural revolution of the 60s. MG Rover aren’t the first to have sought assistance in the orient, either. Since October 2003, BMW have manufactured and sold over 10000 3 and 5 series there and if some of the internet polling companies are to be believed, these will be on sale at a dealership near you soon. Ironically, BMW once owned Rover.

But what is most disturbing about the Shanghai Automotive Industry Corporation (SAIC) involvement in the MG Rover affair, is that the Chinese appear to have completely lost any sense of social responsibility; surely one of the most appealing aspects of any socio-political system predicated on the needs of the working population.

They’ve sat back, watched the west at work and absorbed some of capitalism’s less desirable practices with no attempt made at all in dressing them up and passing them off as communism with a twist as has been done until now.

By pulling out at the last moment, SAIC made it untenable for MG Rover to continue as a going concern with no option but to slip into administration. With it went the jobs and aspirations of 6000 employees and countless others dependent on the company for survival. What scared them off apart from the fact that the company was shedding £25 million a month? The £400 million pension provision black hole appears to be the favourite; they’d already secured rights to the famous K-Series engine and the functional 25 and high-end 75 series models, and there’s profit potential in those.

But their throwing off of the communist cloak didn’t stop there. There’s now going to be that most deplorable and upsetting of capitalist obsessions: the cherry-pick. As the Rover plant at Longbridge in England’s West Midlands is mothballed, the vultures will circle. And it won’t surprise me if the biggest and most voracious bird will be SAIC, hoping to make some valuable pickings to stick alongside what it’s already got in its corporate crop.

And if that isn’t backdoor asset stripping, something we all believed was the now completely unacceptable face of capitalism after the predatory acquisitional antics of the “Wall Street” era, then I’m a Chinaman.

Consumers forced to take loans to consolidate debt.

Wednesday, April 13th, 2005

By Sharon Jacobsen
April 13th, 2005

According to Sainsbury’s Bank, debt consolidation is predicted to be the top reason for borrowers to up personal loans this year.

Forecasts indicate that almost 1.5 million Brits will borrow nearly £12 billion purely to be able to pay down their existing debts.The figures are comparable to the US and other developed countries.

Companies offering to clear you credit cards and other small loans by bundling them into easy to manage monthly payment seem to be popping up all over the country. And their advertising is persuasive.

That it makes sense to re-finance certain debts by taking up cheaper loans isn’t being questioned but people are being fooled into believing that something’s actually “being cleared”. It isn’t. What’s really happening is the movement of debt from one place to another. That few institutions are involved doesn’t mean anything’s gone away.

Interest rates on consolidation loans are often “variable”. Where does that leave the borrower? With an uncertain future without any real indication of what kind of interest he’ll be expected to pay, that’s where. These loans are often long term – how else could they drastically reduce those monthly payments? – so likely to prove expensive in the long term. And as if to add insult to injury, the loan will be probably be secure on the family home meaning your home is at risk if you do not keep up repayments.

While the consumer is seduced into believing these credit institutions are helping them, all they’re really doing is stuffing their pockets on the back of our overspending. Regardless of your credit history, a company’s out there waiting to “help” you. There’s no risk for them as long as they have property as collateral but the risk to the consumer is high – very high!

In our society where capitalism rules supreme and most people are still trying to keep up with the Jones’s, it’s hardly surprising that credit card debts re-accumulate after they’ve been transferred to a consolidation loan. Our want, want, want mentality keeps us in financial deep water while the credit companies smile greedily.

Consolidation loans have their place but only if the borrower truly wants to get out of debt. The loan should be for a short a period as possible and definitely not secured on property unless there’s no doubt repayments can be made even if a loss of work should incur. See also securing home loans. And to make sure things don’t go from bad to worse, any cleared credit cards should be returned to the issuing bank with instructions to close the account.