Every day, my email inbox is littered with urgent notices and important warnings. They’re all trying to convince me of an impending monetary collapse and devaluation of the United States dollar. Consequently, every one of these messages comes from people who either sell gold and silver, or are sponsored by people who sell gold and silver.
I began to wonder, is our currency really in such terrible shape? Are we indeed headed for a collapse? Do these people really know something I don’t? Asking these questions drove me to conduct some unscientific, real life research.
People from all over the world have turned to me for financial guidance, especially people wanting to protect what they have worked so hard for over the years. I needed to know without a shadow of doubt what the true value of their gold is, because of the respect I have for them and also to ensure my guidance was built upon facts.
The first thing I did was call some gold dealers and ask, “How much can I buy an ounce of gold for today?” One dealer told me I could come into the store and purchase a one-ounce bar for $1,245, or a 22-karat “gold eagle” cold for $1,271. He further stated that the gold coin would be much better to have when the dollar dies, because it would be easier to sell.
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The day I made these calls was September 30, 2014. The spot price (what an ounce of gold sells for on the open market) for an ounce of gold was $1,208. The dealer price was $37 per ounce more than the open market price for the one-ounce bar. The golden eagle coin was $63 more than the spot price for an ounce of gold.
When someone says, “I’ll be able to sell my gold when the dollar dies,” my question is: What would you sell it for? Would you sell your gold coin for in exchange for U.S. dollars, which have supposedly just died? Something just isn’t adding up. So I thought, why not call the people most of us would reach out to in the case of an immediate economic crisis that would prevent access to cash.
My next calls were to local gold and silver buyers and pawn shops. I was shocked to learn that there was an enormous variance between what the same gold costs to buy, and what someone is willing to pay for it. While the spot price for gold was still at $1,208 per ounce, the buyers were only willing to pay $1,098 per ounce.
If I were to buy an ounce of gold and sell it while the spot price was exactly the same, I would lose $173, or 13.6 percent.
The gold and silver buyers were going to buy my gold eagle coin and melt it down. That collectible, which was sold to me as the premier coin to own because of its demand, was to have the same fate as a broken earring. I continued my quest to better understand why so many people are drawn to this unregulated industry that seems to prey on the fear of its patrons.