By Debbie Bradley
Wall Street is
shaking from the fall of Lehman's and the
Federal Reserve's $85 billion bailout of
American International Group.
And when the market gets shaky, that's when
people like to get their hands on hard assets
like gold and silver.
"When the government takes AIG and bails them
out that means they're going to have to print
more paper dollars and infuse more money into
their system and it sends a very, very bad
message," said Larry Goldberg of Goldberg Coins
People are losing confidence, he said.
"I think it's looking more and more like hard
metals and hard assets are going to be the
winner," Goldberg said.
"Now I think is the right time to start buying
But there is one problem. Bullion coins are in
"Nobody has any large quantities of gold,"
Goldberg said. "I don't have people calling me
wanting to liquidate their gold positions.
People in the Beverly Hills area sold when gold
hit $800, $900 even $1,000 earlier this year."
And because gold is scarce, premiums are high,
$40 or $50 an ounce over spot price, he noted.
So where is gold headed? Could it hit $2,000 an
ounce by year's end?
"That's not good for the country, but that could
absolutely happen," Goldberg said.
It's his contention that the government has been
bringing down the price of oil, gold, silver and
other hard metals. It was just a matter of time
before the bottom fell out, Goldberg said.
"It happened a lot quicker than I anticipated,"
he said. "I was positive it was going to happen
two months from now, after the elections, but
the handwriting is on the wall."
Already this year 11 federally insured banks and
thrifts have failed, compared to three at this
time last year.
"I think at some point people are going to wake
up and realize that we're in really bad shape,"
he said. "We're not in good shape."
For Marc Watts, owner of Gaithersburg Coin
Exchange, silver is particularly popular.
"Premiums are sky high and availability is nil
on most material," Watts said.
In fact premiums are the highest he's seen in 40
years of business.
"Availability is scarce in physical silver. It
just isn't available," Watts said.
As a result, his company produced 100,000 one
ounce generic rounds to sell.
"The last time we made our own rounds was in the
middle '80s," he said.
Why the popularity of silver?
"Silver is more affordable, it's a viable
product and a lot of people think it's more bang
for the buck for them," Watts said. "Percentage
wise, I think it's a better play."
As for the metals market in general, Watts
thinks it's trying to find a bottom.
"I think the market was over bought on the way
up and I think it was over sold on the down
side. It probably belongs in the middle some
where," he said.
Watts recalled that gold started to break out at
about $670 an ounce and silver at about $11.20.
"I think there's going to be the devil to pay
when it turns around and starts to go the other
way," Watts said. "A lot of people are waiting
to get on the band wagon. When people think
they've missed the boat they will all try to get
through the door at the same time."
It looks like the uptick has begun. On Sept. 17,
right after the AIG bailout, gold shot up $70 in
one day to $846, the largest percentage hike
since 1999. Silver climbed $1.17 in one day to
$11.64, the largest percentage hike since 1979.
"The dollar is collapsing and I think other
currencies will too," Goldberg said. "If they
all collapse it will be back to hard precious
metals, hard assets, and that's probably going
to be the winner."