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The Bret Leifer Rare Coin Letter
Summer 2009 NEWSLETTER
Investment-Quality Rare Coins

Be Prepared

Americans still continue their love affair with the paper dollar. They have become very used to the old greenback. Seeing George Washington’s face gives them a mistaken sense of security, perpetuating the government’s charade that the U.S. dollar still holds its value. While government has a vested interest in ensuring the paper dollar’s longevity, the rest of the world is eager to see the U.S. dollar be replaced by another currency. Who is fooling who? There should be a tear streaming down Washington’s face signifying his sadness of the dollar’s lost value. Does the phrase “full faith and credit of the United States government” make you feel secure? Do you trust the paper? Or would you rather trust the gold?

No one can redo their past mistakes. This is especially true when it comes to investments. Although we all have to live with our mistakes, we can move on, making wiser, more informed decisions in the present to guarantee that our future will be more secure. You have to get smart--smart enough to protect yourself from a weaker currency.

We think that this gold/inflation/world falling apart situation will continue to escalate at an increasing pace in the next 5-10 years. There is a lot of deflation around, and deflationary forces could keep deflation alive for awhile. It is a very good time for all of us to re-arrange our assets. There is still time to save ourselves from ourselves, and from those bumbling idiots in Washington.

We are in a deflationary environment, but it won’t last forever. In an interview on CNBC on October 29, 2008, Bill Gross of PIMCO fame said, “There will be an inflationary event in a couple of years.” When the reset happens, you better own some gold coins.

It’s always a smart idea to have the ultimate life preserver by owning legally protected gold coins. This kind of catastrophe insurance policy is a necessity for survival in these unstable financial times. We think gold is cheap under $1,000 an ounce. In addition, history teaches us about the possibility of gold confiscation. The government did this during the last depressionary cycle under executive order of the President issued on April 5, 1933. This makes us think that it is highly possible they will do it again. The climate is exactly the same-- their backs are to the wall, and they might like to keep gold out of the public’s hands. In addition, it is very important to understand that the climate is different now. Other countries have economic power AND Russia and China possess gold. If our government were to confiscate our gold bullion, we would give Russia and China a huge financial boost.

We tell people that if you want to own bullion, it should be in 90% silver coins. Old circulated 90% silver coins seem to be the best bullion value and they are currency. During the late 1970’s, there was a gas station owner in Florida who filled people’s tanks as long as they paid with silver coins. We think that will probably happen again.

We also like the pre 1933, certified $10 and $20 gold pieces in virtually all grades. We think this is the best and perhaps the safest form of gold to own. The “very rare coins” are either for collectors or for those who want the possibility of adding more numismatic kick to their holdings. In the past 10 years, clients who have purchased the very rare, early dated, pre 1829 numismatic coins have done extremely well. Most of these coins have tripled. But, you say, so has gold. I guess if you triple your money it doesn’t matter how you do it-- unless the government wants to take it from you.

Jim Sinclair believes gold will advance by November 9th, 2009, on its way to $1650 the ounce.  I think gold will reach $2,000-2,400 the ounce by 2016.

Personally, I think that coin collecting will always be a legal activity. I have collected coins my whole life. [it has provided me with much fun] My clients are educated collectors, not gold hoarders. Governments frown on gold hoarders, and these hoarders may be dealt with differently. We shall see.

In an article written August 20, 2009, in Numismatic News, Paul Green wrote, “It should be remembered that prior to 1933, it was just your private financial business to hoard gold coins. Keeping this secret was solely a security issue. After the gold recall order, hoarding gold coins was considered illegal, lessening the possibility that a hoarder would even tell family members.”

Gold is money. When governments fold, gold endures. It has been around for thousands of years and will be around for thousands more. It is the only real money. Paper money is only a promise by the government and, as the economy continues to rupture, promises evaporate.

You must government-proof your gold portfolio! “Real money will outperform man-made money all the time,” said Richard Russell. “These are tough economic times.”

Since coin grading is a subjective process, there is a risk in acquiring coins that have not been independently graded by one of the leading grading firms. You can be assured that our numismatic portfolios only include coins that have been graded by the top two grading companies. In addition, all coins must pass our in-house muster.

People ask me all the time about the relationship between the price of gold and the price of numismatic coins. Will the value of my coins go up the same amount when the gold market takes off; or conversely, will the value of my coins go down when the price of gold drops? The simple answer is that coins can go up even when the price of gold goes down. They usually move together, but not always. Demand sets the price.

Remember:

Whether you are looking to own one important magnificent coin or you are building a world class collection (and everything in between), we can assist you in your endeavor.

Politicians are always trying to convince you of things that are not true. They do this with great zeal and warmth. They are basically unable to ever tell the truth.

About Bret Leifer

Best Regards,
Bret Leifer

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