Mike Fuljenz's Blog

Numismatic News & Precious Metals Market Commentary

Beware of “Stupid Statements” About Gold, Cautions Veteran Dealer Mike Fuljenz

“With gold in the news these days, you hear more and more uninformed commentators saying increasingly silly things about a market they don’t really understand and have never studied,” cautioned veteran gold and rare coin dealerMichael R. Fuljenz in his weekly precious metals market commentary issued today, October 12, 2010.

Fuljenz, President of Universal Coin & Bullion, Ltd. (www.universalcoin.com) said gold’s “bullish trend is strongly in place due to the dollar’s rapid decline to most other currencies,” and gave recent examples of what he labeled “stupid statements about gold in the mass media.” Here are three of them.

One television critic said, “After all, you can’t spend gold at the grocery stores.” Fuljenz noted: Can you spend stock certificates in a store, or Certificates of Deposit? (Don’t forget the penalty for early withdrawal.) Can you trade dirt (“real estate”) for goods in a store? Nearly everything we own — stocks, bonds, CDs, real estate and commodities, including gold — must first be exchanged for cash in order to qualify as a “medium of exchange” in a normal store or other retail operation.

A stock analyst said, “Gold is clearly a ‘bubble’ market, ready to pop.” Fuljenz noted: Historically, bubbles are based on greed, the “greater fool” theory of selling a rapidly rising investment in order to make a quick killing. Most gold investors are buy-and-hold savers (hoarders), who are buying gold based on fear for the global economy, not greed to make money quickly. As John Roque said to CNBC’s Jim Cramer in late September, gold is generally 1.5 times the S&P 500, which is now at 1165, making a fair gold price $1,750. In 1980, gold was six times the S&P 500.

The CPM Group issued a statement claiming, “If gold were only used for industrial and ornamental use, its price would be $600.” Fuljenz noted: That’s like saying if gold weren’t known as money in every major society for the last 6,000 years, it wouldn’t cost so much to fill the cavities in our teeth. Gold’s price is not solely based on jewelry or industrial applications. It is based on its role as “shadow currency” in a world that is devaluing the intrinsic value of all paper currencies, since printing is a “no-cost” solution.

The entire Metals Market Commentary issued every Tuesday by Fuljenz is available free online atwww.universalcoin.com/buying-gold/metals-market-commentary.html.

Fuljenz is a respected, award-winning numismatic book author and newsletter writer, receiving nearly three dozen awards since 1986 from the Numismatic Literary Guild, a nonprofit organization that annually recognizes outstanding journalism on the diverse subject of money from ancient to modern. He also was recently honored for his expert assistance in an on-going series of investigative “seller beware” stories about traveling gold buyers in five Southeastern states. One of the so-called “hotel buyers” offered only $60 for a rare U.S. gold coin actually valued by independent experts at $10,000. Fuljenz provided the coin for the news media investigation.

For additional information, contact Mike Fuljenz at Universal Coin & Bullion at (800) 459-2646.

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