Monthly Archives: April 2011

What Do You Really Know About Modern Bullion?

Numismatists talk about Modern Bullion all the time – but how much do you actually know about this term?

We’ve written about this subject before, and today we’d like to share the history and definition of modern bullion with you here.

If you want to see the Gainesville Coins collection of modern bullion offerings, please visit our website!

Modern Bullion

Pamp Suisse 1 Kilo Gold Bar

In 1933, the Emergency Banking Relief Act allowed President Roosevelt to implement the confiscation of all privately owned gold in the United States in exchange for paper money. This resulted in deflation of the dollar and a spike in gold value, as the government proceeded to aid troubled bullion banks and replenish the gold reserves at Fort Knox. From then onward, Americans were only permitted ownership of numismatic coins that were valued by their currency denomination, condition, mint marks, dates, and rarity, rather than by their gold composition. It was not until December 31, 1974 that the Gold Statement of Policy lifted the ban and Congress reinstated Americans’ right to buy and sell bullion.

The term bullion refers to precious metals in bulk, which are traded on the commodity markets. A bullion coin is not used for everyday commercial purposes, but instead kept for investment. Most times, it is minted by a nation’s government. The distinction between bullion coins and normal currency is that a bullion coin is valued by its physical make-up – the mass, composition, and purity of the precious metals it contains – rather than its monetary denomination or face-value. As a result, bullion coins are valued significantly higher than normal currency.

2011 1oz Gold Buffalo

When minting a coin, governments add numismatic value to a coin’s bullion value, while also endorsing its purity. The purity of bullions vary from issue to issue; however 99.9% purity is customary. 100% bullion coins do not exist, as absolute purity of metals in this form is not possible.

While gold bullion and silver bullion are the most common metals, palladium and platinum bullion bars and coins are available for interested investors. The rarest of all precious metals is platinum, and of the four, gold ranks second highest in rarity, followed by palladium, and finally silver.

At Gainesville Coins you can purchase all types of bullion – platinum, palladium, gold and silver, from the American Platinum Eagle and Palladium Canadian Maple Leaf, to the Perth Australia Gold Bar and even the Beijing 2008 Olympic Silver Coin Program.

Visit our website at Gainesvillecoins.com to view and buy modern bullion or call 813.482.9300 to speak with one of our bullion brokers.

Ask the Gold and Silver Chick!

Hi, Gainesville Coin readers! Thanks for stopping by.

Here is this week’s question:

Do you think we’re being setup for a collapse of the gold silver pricing? The IMF today announced that China will outpace us in 5 short years. We know the IMF is readying the new Global Currency. Do you think the currency will be backed by Gold and Silver?

Great question! Here’s what the Gold and Silver Chick’s has to say:

Yes, I saw that the IMF announced that China will outpace the US – and we all know that last week the University of Texas Investment Management Co. took delivery of almost $1 billion in gold bullion and is storing the gold bars in NY.  To technically answer your question (do we think the “new currency” will be backed by gold and silver”) is technically  out of the scope of this website;  that answer leans toward a more political view/answer than what we want to cover here.  But I can tell you this… gold and silver has been considered “money”  since the beginning of time, and have been around as long as The Bible. It is anyone’s guess how all this will play out with the dollar. But as I like to say… Trust God for everything, trust the government for nothing, and trust gold and silver for everything in between.”  Hope this helps to answer your question!

Ask the Gold and Silver Chick!

Gainesville Coins recently received this question on our Facebook page, and want to post The Gold and Silver Chick’s response here so everyone can see it. Keep your questions coming!

This week’s question:

“Should my main focus be on silver coins or bullion?”

The Gold & Silver Chick says:

To be clear: you are asking about bulk bullion vs modern coin bullion. Bullion can be used to describe modern coins in 1oz increments such as modern bullion…Canadian maple leafs, silver eagles, Austrian philharmonics, etc. And then there is bulk bullion, ie 100oz silver bars, 10oz gold bullion.
If you have a large amount of dollars that you are wanting to put into gold/silver then you might want to consider the bulk bullion to cut down on storage. Silver will use more storage room than gold. You should also be aware that as silver gets more popular, 100oz silver bars will start being counterfeited (usually made of lead), so always buy from a reputable dealer like Gainesville Coins.com.
If you have a smaller amount of dollars you are looking to move into gold and silver, I would recommend 1 oz coins; these will be easier to move and to barter. I would also recommend a 40%/60% ratio… 40% gold/ 60% silver. Hope that answers your question!
-The Gold and Silver Chick

A Golden Tipping Point: University of Texas Takes Delivery Of $1 Billion In Physical Gold

A Golden Tipping Point: University of Texas Takes Delivery
Of $1 Billion In Physical Gold

Tipping points are funny: for years, decades, even centuries, the conditions for an event to occur may be ripe yet nothing happens. Then, in an instant, a shift occurs, whether its is due a change in conventional wisdom, due to an exogenous event or due to something completely inexplicable. That event, colloquially called a black swan in recent years, changes the prevalent perception of reality in a moment. This past week, we were seeing the effect of a tipping point in process, with gold prices rising to new all time highs day after day, and the price of silver literally moving in a parabolic fashion. What was missing was the cause. We now know what it is: per Bloomberg: “The University of Texas Investment Management Co., the second-largest U.S. academic endowment, took delivery of almost $1 billion in gold bullion and is storing the bars in a New York vault, according to the fund’s board.” And so, the game theory of a nearly 100 year old system of monetary exchange has seen its first defector, but most certainly not last. With an entity as large as the University of Texas calling the bluff of the Comex, the Chairman, and fiat in general in roughly that order, virtually every other asset manager is now sure to follow, considering there is not nearly enough physical gold to satisfy all paper gold in existence by a factor of about 100x. The proverbial Nash equilibrium has just been broken.

Further reading:
http://www.bloomberg.com/news/2011-04-16/texas-university-takes-cue-from-kyle-bass-to-hold-1-billion-in-gold-bars.html
http://buysellgoldprices.com/2011/04/18/university-of-texas-takes-delivery-of-1-billion-in-gold-bullion