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Gold Suppression Institution #4: The Mainstream Media

Mainstream TV News

Whether it's FOX News or CNN, conservative or liberal, the engines of mass media are fueled by the revenue from their advertisers. And just like investment banks, the media depends on your continued support of corporations.

Whether these corporations provide a good service or strong returns on your investment matters little, so long as you continue to funnel your hard-earned money into their coffers.

Now, before you start to take sides on conservative vs. liberal media, let me point out that I believe both sides care less about their respective doctrines and more about advertising revenue.

For example, consider the FOX Broadcasting Company. FOX News has, of course, a very conservative voice with commentators like Bill O'Reilly and Glenn Beck.

But at the same time, FOX airs television programing that is anything but conservative, including some of the most unapologetically vulgar shows on television, like the popular Family Guy as well as some raunchy reality shows. The television programs on FOX are so outrageous that the company is frequently fined by the FCC for violating the nation's indecency laws.

My whole point here is that the mainstream media cares less about dogma and more about advertising revenue, which can only continue to stream in as long as corporations do well.

Of course, you'll never hear any of this from the well-compensated talking heads you'll see on the old boob tube. But buying gold may preserve your wealth, even if it takes money out of the media's pocket.

Gold Suppression Institution #5: Corporate America

Corporate America Flag

As you've probably surmised by now, corporate America is also heavily vested in the strength of the dollar. As the dollar weakens, the values of their stocks plummet. And as inflation takes hold, consumers are less and less likely to purchase goods produced and sold by our nation's biggest companies.

Every ounce of gold you buy means hundreds of dollars lost, either by manufacturers, by retailers, or by banks that would have otherwise received the cash deposit.

Once again, you sidestep the liabilities associated with making speculative investments in their securities or blowing your money on their goods. In the process, you retain and grow your wealth, but cause them to grow weaker.

You better believe the rich executives have gold in their own portfolios. But, once again, you'll never hear them make the suggestion to you. There's just too much for them to lose.

Gold Suppression Institution #3: The IRS

The IRS Building in Washington DC

Our favorite government entity is also one of the most vulnerable to loss of revenue when gold is bought and sold.

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Notoriously hard to tax, gold is one of those things that the auditors hate seeing on income statements because of the problems associated with establishing a basis and the issues of measurable gains made at a sale. It's just too easy to lie about. The bottom line is, when trading gold privately, it's impossible for the IRS — or anyone for that matter — to know exactly how much you bought or sold the bullion for without your honestly reporting it.

The difficulties with accurately evaluating gold bullion, coins, and jewelry create a host of problems for people who need to deal in decimal places and precise figures.

In fact, the IRS has never issued a public guidance on the question of how gold is to be valued, at face or market value. This lack of specificity on their part led to a landmark loss in Nevada Federal court for a case involving 9 defendants whom the IRS tried to convict on tax evasion and other charges. Gold makes it far to easy for individual investors to legally conceal the extent of their wealth and tax liability. The IRS, as a result, has a much easier time maximizing the rate at which they can tax you when you keep your money in cash or securities.

Conclusion

Gold has a long-running history as a safety net during times of financial difficulty, a method of preserving and actually growing wealth as other sectors in the economy go into decline. It's a see-saw battle that's been going on since antiquity. Unfortunately, the two sides of the see-saw remain in perpetual conflict as investors have to make either one choice or another.

Right now, that see-saw is clearly swinging in the direction against business and industry. While certain biased sources will tell you otherwise, the choice really is pretty simple. You can either fight the see-saw and lose what you've earned, or use the mechanism to your advantage and gain while most everyone else watches their savings decline in value.

I am satisfied to wish everyone else the best of luck in seeking a better store of value in fiat currencies. I, however, will be owning gold.

Good Investing,

Alex Koyfman
Contributing Editor, Gold World

P.S. With a gold resource worth 63 times more than its market cap, this junior gold stock is getting ready to pay off big time. This tiny $0.34 stock could make it's first move over $2.00 in short order. The whole story is laid out for you here.

While today's market offers many ways to invest in gold, current economic conditions set a few gold investments apart from the rest. With this in mind, Greg McCoach and the Gold World team bring you the three best ways to invest in gold.

Investment #1: Gold Bullion

Physically owning the metal is the most direct and traditional method of investing in gold. In some countries, gold bullion can be bought and sold at major banks. In most regions, however, bullion dealers provide the services necessary to purchase physical gold.

Gold bullion is generally sold in two main forms, bars and coins.

Gold bars are available in various weights, generally ranging from one ounce to one kilogram. There are approximately 100 active gold refiners around the world whose bars have earned “good delivery” status from one or more of the associations and exchanges. Johnson Matthey, Pamp Suisse, and Credit Suisse are among the most popular.

Gold coins are another way to invest in physical gold.  Priced according to their weight and purity, coins often carry a slightly higher premium than gold bars. Among the most popular are the American Gold Eagle, American Gold Buffalo, Canadian Gold Maple Leaf, Australian Gold Nugget, South African Krugerrand, Chinese Gold Panda, and Austrian Gold Philharmonic. All of these coins contain one troy ounce of gold— except the American Gold Eagle, which is only 91.67% pure gold.

Both gold bars and gold coins are priced according to their weight and purity, but they always carry a premium above spot gold prices. We recommend investing in gold bars because the premiums are always lower than coins.

Investment #2: Gold ETFs (Exchange Traded Funds)

If you're not comfortable owning and storing the physical metal, gold Exchange-Traded Funds (ETFs) are your next-best bet.

Gold ETFs are special types of exchange-traded funds that track the spot price of gold and are traded on major stock exchanges such as New York, Paris, Zurich, Tokyo, and London.

The main drawback is the management fee charged by the issuing company. On average, a commission of 0.4% is charged for trading in gold ETFs, in addition to an annual storage fee.

U.S.-based transactions are a notable exception, where most brokers charge only a small fraction of this commission rate. Annual expenses such as storage, insurance, and management fees are charged by selling a small amount of the gold represented by each certificate— a process that gradually diminishes the value in each certificate. In some countries, gold ETFs represent a way to avoid the sales tax or VAT which would apply to physical gold coins and bars.

In the United States, revenue from the sale of a gold ETF is treated as a sale of the underlying commodity. Thus, it's taxed at the 28% capital gains rate rather than the 15% long-term capital gains rate for non-collectibles.

Investment #3: Gold Production Stocks

These do not represent gold at all, but rather are shares in gold mining companies.

If the gold price rises, the profits of the gold mining company could be expected to rise. As a result, the share price may rise. However, there are many factors to take into account, and a rise in the price of gold will not always lead to a rise in the price of a share.

Unlike gold bullion, which is regarded as a safe haven asset, unhedged gold shares and funds are considered to be higher risk, more volatile investments. This instability is a result of the inherent leverage in the mining sector.

For example, if you own a share in a gold mine where the costs of production are $250 per ounce, and the price of gold is $750, the mine's profit margin will be $500. A 10% increase in spot gold prices to $825 per ounce will push that margin up to $575, which actually represents a 15% increase in the mine's profitability and a potential 15% increase in the share price. Conversely, a 10% fall in spot gold prices to $675 will decrease that margin to $425, which actually represents a 15% drop in the mine's profitability and a potential 15% decrease in the share price. The amplification of gold mining profits during periods of rising prices can cause a gold rush in mining exploration.

In order to reduce this volatility, many gold mining companies hedge the gold price up to 18 months in advance. This provides the mining company and investor with less exposure to short-term gold price fluctuations, but reduces potential returns when the gold price is rising.

Good Investing,

Greg McCoach and Gold World Staff
Contributing Editor, Gold World

P.S. With a gold resource worth 63 times more than its market cap, this junior gold stock is getting ready to pay off big time. This tiny $0.34 stock could make it's first move over $2.00 in short order. The whole story is laid out for you here.

In fact, the words for "silver" and "money" are the same in at least 14 different languages.

As an investment, silver remains one of our favorite vehicles for wealth accumulation. However, there are several different ways to participate and profit from the ongoing silver bull market.

Investors must decide between silver bars. . . coins. . . ETFs. . . ETNs. . . stocks. . . certificates. . . pooled accounts. . . forwards. . . options. . . futures. . .

The list goes on and on.

It can get very complicated, and investors can easily become overwhelmed by the intricacies of the more complex investment products.

So, we've whittled down the docket of silver investment options to come up with the top ways to invest in the silver market today.

The 3 Best Ways to Invest in Silver

Investment #1: Silver Bullion

The simplest and most traditional way to invest in silver is to own the physical metal. Although in some countries silver bullion can be bought and sold over the counter at major banks, a more common method today is buying online through approved vendors.

Silver bullion is generally sold in two forms: bars and coins.

Silver bars vary in weight from around one ounce to over 1000 ounces. There are approximately 100 active silver refiners around the world whose bars have earned “good delivery” status from one or more of the associations and exchanges. Well-known brands include Engelhard and Johnson Matthey.

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Silver coins are another popular way to invest in silver bullion. Many countries, including the United States, Canada, Austria, and Mexico, mint official legal tender silver coins with .999 purity.

Both silver bars and silver coins are priced according to their weight and purity, but they always carry a premium above spot silver prices. We recommend investing in silver bars because the premiums are always lower than coins.

Investment #2: Silver Exchange-Traded Funds (ETFs)

Next in line are silver Exchange-Traded Funds, or silver ETFs. Instead of owning the metal outright, silver can be bought in the form of a security on some of the world's major stock exchanges.

Silver ETFs track silver's spot price and can be traded much like any other security. The drawback here, however, is the cost of ownership. With issuing companies applying management fees to the certificate, the certificate's value diminishes over time as the silver represented is sold off in small quantities.

In the United States, revenue from the sale of a silver ETF is treated as a sale of the underlying commodity. Thus, it's taxed at the 28% capital gains rate rather than the 15% long-term capital gains rate for non-collectibles.

Investment #3: Silver Production Stocks

Least direct of all are investments in the companies that pull the metal from the ground. Because mining companies that mine silver usually mine other metals alongside it, the share price of such an outfit is rarely dependent on the price of silver alone.

Another factor to consider is the process of leveraging. Because cost of production and cost of product can vary, profit margins — the main driving force behind share value — will exhibit wider fluctuation patterns than the price of the metal alone. A 10% spike in the price of silver may well lead to a 15-20% gain in the mining company's shares. Conversely, a drop in value will have a similarly magnified effect in the opposite direction.

As with any company, non-market factors such as management decisions will also play a role in the growth or decline of your investment. As a more speculative approach, buying shares can yield the biggest gains, but can also result in the more sudden losses.

Good Investing,

Greg McCoach and the Gold World team

P.S. With a gold resource worth 63 times more than its market cap, this junior gold stock is getting ready to pay off big time. This tiny $0.34 stock could make it's first move over $2.00 in short order. The whole story is laid out for you here.

According to new data from the Federal Deposit Insurance Corp., there are 26 firms with more than a fifth of their loans 90 days overdue or not accruing interest as of June 30. Three reported almost half of their loans weren't being paid.

Firms range in size from Frontier Bank in Everett in Washington, with $3.98 billion in assets, to Gordon Bank in Gordon in Georgia, with $35 million in assets. Six of the banks are in Florida and five in Illinois.

These banks are among the most vulnerable of a larger group of lenders whose failures the FDIC said could cost $100 billion by 2013.

A total of 95 banks have failed so far this year at the fastest pace in almost two decades. These failures have drawn the balance of FDIC's deposit insurance fund to $0. In a frantic effort to raise funds, the agency proposed last week that financial firms prepay three years of premiums, which would add $45 billion of reserves.

The cost of this year's failures to the FDIC equals 25% of the banks' assets, according to agency data. Applying the same ratio to the $14.1 billion of assets held by the 26 lenders with 20% of their loans more than 90 days overdue means the FDIC could face additional losses of $3.5 billion.

In total, the FDIC counts 416 firms on its confidential list of "problem" lenders at mid-year, signaling that more bank failures and losses going forward.

Good Investing,

Global economic and investment uncertainty is rapidly increasing silver's appeal as a precious metal. As a result, silver is quickly becoming the investment of choice for those who recognize its traditional role as a safe haven asset.

While industrial and fabrication demand for silver has recently been impacted by the lower demand for the goods it is used in, an increase in silver investment demand can be expected to continue in the near term.

For investors, this means increasing silver prices and market valuations for the companies that mine the white metal.

Below is a list of five small silver stocks that are expecting to increase silver production this year.

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Five Small Silver Stocks Increasing Production
September 2009

Great Panther Resources (TSX: GPR)
Share Price: $0.90
Market Cap: $77.5 million

 

Fortuna Silver is a small production and development company with two main mineral assets: the Caylloma Mine and San Jose Project. At the Caylloma Silver-Lead-Zinc Mine, silver production increased 79% last year to 860,000 ounces. This year, the firm predicts an increase in production — to 1.6 million ounces. Fortuna is still developing the San Jose Silver-Gold Project. The company expects to begin construction of the mine next year and begin silver production in 2011. The San Jose Mine is expected to yield 3.5 million ounces of silver-equivalent annually, bringing Fortuna's total silver production to 5.5 million ounces.

 

Endeavour Silver (AMEX: EXK)
Share Price: $2.75
Market Cap: $142 million

 

Endeavour Silver is a rapidly-growing production firm with two high-grade silver-gold mines in Mexico. The company has ramped up silver output seven-fold in its first four years of production to 2.3 million ounces in 2008. This year, Endeavour forecasts another 17% increase to 2.7 million ounces. The company hopes to reach production capacity of 4.5 million ounces in coming years.

 

First Majestic Silver (TSX: FR)
Share Price: $2.60
Market Cap: $215 million

 

First Majestic is building a senior silver producing mining company with a focus on Mexico. The company currently owns three producing silver mines that yielded 3.7 million ounces in 2008. Although production won't be as high as the company expected earlier this year, First Majestic is still planning to increase production by 22% to 4.5 million ounces.

Good Investing,

Luke Burgess
Managing Editor, Gold World

P.S. With a gold resource worth 63 times more than its market cap, this junior gold stock is getting ready to pay off big time. This tiny $0.34 stock could make it's first move over $2.00 in short order. The whole story is laid out for you here.

But due to falling demand in key markets, many firms have slashed spending budgets and halted growth in output. These include major gold producers like Barrick Gold, GoldCorp, and Newmont Mining — all of which are expecting flat or declining output this year.

A handful of smaller companies, however, have endured the harsh sting of the global economic downturn and are increasing gold production levels in 2009. Below is a brief list of five Canadian gold stocks that are still expecting an increase production this year.

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5 Canadian Gold Stocks Increasing Prodution
September 2009

Kinross Gold (TSX: K, NYSE: KGC)
Share Price: $22.90
Market Cap: $15.9 billion

Kinross is mining gold from 11 operations on three continents — a total 45.6 million ounces of gold reserves. In 2008, the company produced 1.8 million gold ounces. This year, they expect production to increase as much as 33% to 2.4 million ounces.

Agnico-Eagle Mines (TSX: AEM, NYSE: AEM)
Share Price: $68.40
Market Cap: $10.7 billion

Agnico-Eagle Mines is an international gold producer with 18.1 million ounces of reserves. The company increased quarterly gold production by 43% to 119,000 ounces. For the year, Agnico-Eagle believes it can more than double its 2008 gold production.

Eldorado Gold (TSX: ELD, NYSE: EGO)
Share Price: $11.80
Market Cap: $4.4 billion

With 7.6 million ounces of gold reserves, Eldorado Gold is a Canadian-based gold miner active in exploration and development in Brazil, China, Greece, Turkey, and surrounding regions. Last year, output reached 309,000 ounces of gold. This year, the company believes gold production will increase 7% to 330,000. By 2013, the goal is to produce in excess of 800,000 ounces of gold annually.

Yamana Gold (TSX: YRI, NYSE: AUY)
Share Price: $11.00
Market Cap: $8.1 billion

Yamana has six core gold mining operations in North and South America that contain 19.4 million gold reserve ounces. In the past 12 months, Yamana has ramped up gold output by 29% to 244,000 ounces. In total, the company expects to increase gold production to 1.1 million ounces this year, a 39% increase over 2008 levels.

Alamos Gold (TSX: AGI, NYSE: ALG)
Share Price:
Market Cap:

Alamos Gold is an intermediate gold producer focused on its Mexican Mulatos Mine, which has 2.0 million ounces of gold reserves. In 2008, the company produced 151,000 ounces of gold. This year, they expect total gold production to slightly increase to 160,000. By 2011, Alamos expects production to double to 300,000 gold ounces.

 

Gold companies with growing production and revenue have a better chance at survival in today's turbulent economy.

These five survivors have already proven their ability to weather the storm of worldwide economic turmoil, while increasing gold production. And with gold prices now rising over $1,000 an ounce and higher, these are just a few stocks poised for explosive growth.

Today's survivors will be tomorrow's leaders.

Good Investing,

Luke Burgess
Managing Editor, Gold World

P.S. With a gold resource worth 63 times more than its market cap, this junior gold stock is getting ready to pay off big time. This tiny $0.34 stock could make it's first move over $2.00 in short order. The whole story is laid out for you here.

But you can still squeeze in the door.

It's already been a hell of a ride. . .

After sustained growth from $250/oz in 2001, gold prices have been stuck between the $700 - $1,000 level for almost 24 full months. But after a brief near-term pullback (and probably your last, best time to buy under $1,000), I expect gold prices to move higher. . . much higher. . .

Probably to the $1,250 level at first, then well over $2,500 an ounce.

After that, there's no telling how high gold prices will eventually climb.

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Over $5000/oz?

$10,000/oz?

No one knows for sure, but one thing is clear. . .

Patient gold investors are about to sit back and watch their portfolios safely balloon in value over the next several months. And it's not too late to join them. Here's what I mean. . .

Weakness in Jewelry and Industrial Demand Keeps Gold Prices Low

Total world gold demand fell 9% in 2Q 2009 from levels one year prior, equivalent to a 6% decline — $21.3 billion in dollar terms.

This decline was mainly attributable to weakness in jewelry and industrial demand, which dropped 22% and 21%, respectively.

These sectors are very important to gold's demand fundamentals. They accounted for an average 84% of total demand between 2004 and 2007.

As a result of the global recession, however, jewelry and industrial demand only accounted for 69% of total demand in 2008.

Continuing this trend, gold demand for jewelry and industry has accounted for only 53% of total world demand during the first half of this year.

The steep decline for gold demand from jewelry is no real surprise.

The second quarter scenario of relatively high gold prices, at a time of severe global economic difficulty, contributed widely to the decline in jewelry sales.

The reduction in demand for gold jewelry was a global story with just one exception: China.

A Far East Glimmer of Hope for Gold Demand

In stark contrast to the overall 22% decline, Chinese gold jewelry demand increased by 6% — equivalent to a 9% increase in dollar terms, to $2.15 billion.

The increase in Chinese gold jewelry demand is largely attributable to healthy rates of economic growth, stability in the local currency, and a raft of government measures aimed at mitigating the impact of the global downturn.

Last week, I mentioned that we could see China overtake India in gold demand on a sustained basis within the next 10 years. This could happen in as few as five years.

And there will be tremendous investment opportunities associated with this shift.

In fact, I'm looking at several new Chinese gold stocks for my portfolio right now.

With a unique resilience to the pressures of the global economic slowdown, China is rapidly becoming one of my favorite gold mining regions.

Demand is soaring. Meanwhile, domestic gold production will never be able to keep up. As a result, we'll likely see an explosion in local gold prices skyrocketing.

Expect to see rising gold demand in China contribute to the market size of Chinese gold producers. I'm currently scrutinizing companies that are producing gold in China with significant output and long-life mines.

Good Investing,

Greg McCoach
Editor, Gold World
Investment Director, The Mining Speculator and The Insider Alert

Editor's Note:  With a gold resource worth 63 times more than its market cap, this junior gold stock is getting ready to pay off big time. This tiny $0.34 stock could make it's first move over $2.00 in short order. The whole story is laid out for you here.

Driven by aggressive industrial policy and backed by the hard-working hands of over 1.3 billion citizens, China's economic doctrine can be summed up in one word: volume.

And they consume with the same voracity as they produce.

So when the Chinese take a national interest in gold, investors should pay close attention.

China Gold Demand

On the strength of their expanding economy (which grew a better-than-expected 7.9% in the second quarter of this year), China's national demand for gold increased 11.4% to 89.6 tonnes, compared to the same period of last year; equivalent to a 14.7% increase in dollar terms, or $2.66 billion.

Meanwhile, demand for gold across the rest of the world (excluding China), declined 18.0% to 480.1 tonnes during the same period, equivalent to a 15.6% decrease in dollar terms.

In fact, demand figures from the first half of this year suggest that China has overtaken India as the world's largest gold consumer.

During the first two quarters of 2009, consumer demand for gold in China totaled 194.8 tonnes, equivalent to 18.7% of world total demand. In the same period, Indian demand for gold totaled 126.7 tonnes, equivalent to 12.1% of the world's total demand.  Take a look:

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While it may be a bit premature to expect Chinese gold demand to outpace Indian demand for the entire year, the gap between the two countries is narrowing. And one could easily see China overtake India in gold demand on a sustained basis within the next 10 years, perhaps even within the next five years.

Although this trend may have little overall impact on gold prices in the near future — due mainly to China's own domestic gold production satisfying most of its internal demand — there may be implications in the not-too-distant future.

With the Chinese juggernaut continuing its rampage, even through the darkest moments of one of the toughest recessions in history, it is only a matter of time before Chinese gold production simply cannot keep up with the country's own demand, despite accelerated output.

This imbalance, coupled with the more abstract element of speculation, should have a magnified effect on the gold market across both hemispheres.

Expect to see a strong correlation between overall growth in the Chinese economy and gold prices in the years to come.

Good Investing,

Greg McCoach
Editor, Gold World
Investment Director, Mining Speculator, and the Insider Alert

P.S.  I haven't been this excited in a long time. You see, in three weeks, we're going to find out if one tiny mining outfit in Canada struck THE JACKPOT! Judging from the rich formations surrounding the area, dozens of geologists already agree that this find could be the best thing to happen in the gold exploration business in 50 years! I'm rapidly putting together a full report on the entire development, and it should be arriving in your email inbox early next week. You don't want to miss this one.

In China, however, near-term recovery is a reality.

Real estate, automobile, and industrial sales have all rebounded, driving stocks on the Shanghai exchange up as much as 85% for the year.

In fact, the acceleration of China's comeback has been so strong the World Bank recently increased its estimate for the country's GDP growth this year from 6.5% to 7.2%.

All of this makes China an alluring prospect for investors again. Especially when you consider. . .

China's Gold Investment Potential

In the mid-1990s, the Chinese government revolutionized the country's gold industry.

Lawmakers began reforms that encouraged small gold producers to consolidate and, more importantly, allowed foreign companies to form joint ventures with Chinese companies.

It was a brilliant move.

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Foreign companies — mainly from the United States and Canada — brought modern mineral exploration techniques, management practices, financial controls, and industrial, environmental and safety standards.

The single most important asset foreign companies brought the Chinese gold industry, however, was money.

As foreign investment capital gushed into China, the number of projects skyrocketed, leading to new gold discoveries.

As a result, China's total gold production has steadily increased 7.4% annually and 66.9% since 1999. And in 2007, China became the world's largest gold producer, overtaking South Africa, which held the title as top gold producer for over 100 years.  Take a look:

Gold production in China continues to rise.

In the first half of this year, Chinese gold production has increased 13.5% year-on-year to 146.51 tonnes, worth almost $5 billion at current gold prices.

Further growth in Chinese gold production is forecast for the rest of 2009. Estimates suggest China's total gold output for 2009 will near 300 tonnes, solidifying the country's position as the world's largest producer:

China's Gold Reserves

Despite a significant increase in production over the past several years, China is still a very "gold poor" country when considering the country's gold reserves.

China controls the seventh largest gold reserve in the world with 1,054 tonnes. But these reserves only represent 1.8% of the nation's total foreign reserves. Compare this to the United States, which holds 8,133 tonnes of gold, representing 78.3% of its total foreign reserves.

Also, with a population of 1.33 billion, the world's most populous country only holds 0.0280 ounces of gold in its reserves for every Chinese citizen. Compare this again to the United States, which holds 0.9436 ounces of gold in its foreign reserves for every American citizen.

China is, however, rapidly increasing her gold reserves.

Since 2003, the country has increased its reserves of gold by 76%. And with all the talk about diversifying from the American dollar, it is likely that China will continue increasing her gold reserves going forward.

The future is China. By 2050, it's estimated that China will overtake the U.S. as the biggest economy in the world. I recommend keeping a close eye on China and Chinese gold stocks.

There are several new Chinese gold stocks that I am currently investigating. I will keep you updated on my findings in upcoming issues of Gold World.

Good Investing,

Greg McCoach
Contributing Editor, Gold World
Investment Director, Mining Speculator

When James McBrien woke up on February 15, 1823, he didn't know that he was about to write a major chapter in this story.

McBrien, an Assistant Surveyor with the Department of Land, had a relatively humdrum assignment on this day: conduct a survey of a road along the Fish River between the small towns of Rydal and Bathurst in New South Wales, Australia.

While studying the road, McBrien saw a curious yellow glitter in the river. He immediately knew what it was: gold.

McBrien recorded in his field book the following note: “At E. (end of survey line) 1 chain 50 links to river and marked gum tree. At this point I found numerous particles of gold convenient to river.”

McBrien's find became the first verified gold discovery in Australia.

But while he was certainly pleased, early gold discoveries in Australia were kept quiet by the authorities.

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Those who found gold kept the knowledge to themselves. And for good reason. . .

Many feared a gold rush would plunge the largely convict population into chaos and lawlessness. Farmers also wanted to protect their sheepruns and cattle lands from any undesirables coming in search of gold.

Others simply didn’t want to share the potential wealth.

Unfortunately for these folks, the discovery of gold can only be kept under wraps for so long.

This fact became clear in 1851, when the legendary gold prospector Edward Hargraves publicized major gold discoveries near the area where McBrien first recorded finding the yellow metal 30 years earlier.

On a piece of the Empire newspaper, Hargraves wrote, “Gold discovered at Lewis Ponds Creek county of Dathus New South Wales on the 12th day of February, 1851.” The original memo can be seen below:

As a result, Hargraves is credited with starting the nineteenth-century Australian gold rush, which helped shape the country as one of the world's leading gold producers.

Gold Production in Australia Today

Australia is currently the fourth-largest gold producer in the world. But its role as a leader is slipping. . .

In 2008, Australian annual gold production fell 7.5% compared to the previous year. The island country yielded approximately 227.5 tonnes (7.3 million ounces) of gold — its lowest output since 1989.

Annual gold production has steadily fallen over the past few years, as well. Last year, Australian gold production was 9.4% lower than in 2006, and 13.5% lower compared to 2005:

Despite the drop in production over the past few years, however, the value of the gold produced was higher, due to increasing prices during the bull market.

In 2008, Australia's annual gold production was worth $6.0 billion — up from $5.4 billion in 2007.

Even though the value of Australia's gold production has increased, the country still needs to halt the decline in output.

So in response to the need for production expansion, the Victoria state government sponsored a three-year $9 million government study. . .

The results were recently made public.

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Stake Your Claim in Australia's Latest 70 Million Ounce Gold Discovery

The new study revealed huge unexploited deposits across south-east Australia, with some ore-bearing rocks located just 100 meters below the surface.

State geologists used new survey techniques to create a three-dimensional model of the land, complete with geochemical and geophysical data.

The findings?

Over 70 million ounces could be extracted with modern mining techniques northwest of Melbourne.

At today's prices, these 70 million ounces of gold would be worth $67 billion.

In addition to this resource, geologists have identified other areas which may hold even more gold.

The two survey areas identified as having a high potential for gold deposits are the Melbourne Zone (north-west from Melbourne to Shepparton), and the Gold Undercover Zone, located near Swan Hill to around Horsham.

Western Australia is responsible for 75% of the country's gold production and hosts approximately two-thirds of Australia's total gold resources. A mere 10 operations account for more than half of the gold produced in Western Australia. Queensland and Northern Territories are the other major producers. But there is little gold production currently in Victoria or New South Wales.

The only major gold producer in South Australia is BHP Billiton's Olympic Dam Mine which, apart from producing copper and uranium, produces gold as a byproduct.

The new study will help the mining industry examine the risks and focus efforts on regions more likely to yield returns.

With a +70-million-ounce gold potential, there will certainly be many interested parties. For investors, there are a handful of small companies with land holdings in the area. These companies are likely to show serious gains as they expand to fill a new and aggressive market.

We'll keep you updated on our findings in upcoming issues of Gold World. 

Good Investing,

Luke Burgess
Managing Editor, Gold World
Investment Director, Hard Money Millionaire

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In fact, silver prices have consistently outperformed gold during bull markets — doubling, tripling, even quadrupling the price of the precious yellow metal. So it should go without saying that a well-diversified precious metal portfolio includes silver.

One of the most popular ways to invest in silver are bullion coins, the cheapest and most direct way to own silver.

The retail market offers a variety of silver coins that will maximize profit. But investors are urged to exercise caution when considering some bullion coins. Here's why. . .

All bullion coins — gold and silver — have a premium included in their price. This premium is an additional cost over spot prices that covers manufacturing, distribution, and administration costs incurred by the mint or refiner in making the coin.

The result is paying over silver's spot price.

For those coins classified as "legal tender," or those with collectible or numismatic value, the premium is higher still.

A 1-ounce American Silver Eagle, which has a face value of $1, has a much higher premium than a 1-ounce privately-minted, non-legal tender silver bullion coin in part because of its legal tender status.

As a silver investors, however, we aren't concerned with a coin's legal tender status because— let's face it, what kind of investor would care if their 1-ounce, 99.9% pure silver coin, whose silver value stands at around $14 today, will be accepted at the local store in exchange for a dollar soda?

The same goes for numismatic coins, whose value is not solely dependent on the metal from which they're minted, but rather from their rarity and collectability.

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How to Buy the Cheapest Silver Coins

Silver investors care about two things: the value of the metal today, and its prospects for tomorrow.

And with the U.S. dollar losing more might every day, the value of raw silver has never been in greater demand.

For investors like us, it has never been more important to understand how to avoid costly premiums that add nothing to the value of the commodity you're trying to acquire when you buy silver coins.

Take a look at the following premium rates for these popular bullion coins, which have "legal tender" status.

The percentages listed below represent the average premium you'd pay right now above the value of the raw metal alone:

• American Silver Eagle — 21%
• Canadian Silver Maple Leaf — 15%
• Austrian Silver Vienna Philharmonic — 16%

For investors seeking only to benefit from owning the metal, paying this 'cost to play' is counterproductive, to say the least.

The cheapest silver bullion coins are privately minted.

Lacking the status of legal tender, and with little to no collector's value to speak of, these bullion coins maximize the purchasing power of your dollars.

Here are a few to consider and their average premiums right now:

• Pan-American Silver — 8%
• NWT Mint Silver Bullion — 8%
• Sunshine Silver Rounds — 6%

Whether you decide to go with these or with another brand of privately-minted bullion coin, remember to shop around for the lowest premium. Armed with this information, you'll guarantee yourself the most silver for your buck.

Good Investing,

Alex Koyfman
Contributing Editor, Gold World

P.S. Even though silver is expected to outperform most precious metals, you can still haul in hefty gains with gold. In fact, there's a new investment vehicle that gives its holders 200% the daily return of gold. That means when gold goes up 1%, you get 2%. Or when gold goes up 10%, you get 20. Just like clockwork — every day, every hour. To learn more about this remarkable yet little-known investment, just click here.

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From Gold World's Gold and Guns blog. . .

Geithner Urges Congress to Raise Federal Debt Limit
U.S. Treasury Seeks 7.4% Increase to Debt Ceiling

U.S. Treasury Secretary Timothy Geithner wants to take the country even deeper into debt.

In a letter to U.S. lawmakers on Friday, Geithner urged Congress to raise the legal limit on the nation's credit card.

The amount the government may borrow is currently limited by law to $12.1 trillion, a cap that has been raised several times since the nation slipped into recession in December 2007. But Geithner says that it is "critically important" that Congress raise the country's credit limit in the next two months, as the current debt limit could be reached as early mid-October.

Geithner didn't request a specific increase in the letter. But according to a report in the Washington Post, Treasury officials are expected to ask Congress to raise the debt cap to $13 trillion.

"It is critically important that Congress act before the limit is reached so that citizens and investors here and around the world can remain confident that the United States will always meet its obligations," Geithner said.

According to brillig.com, the U.S. national public debt is already $11.675 trillion, and increases by $3.91 billion per day.

Meanwhile, the U.S. deficit is on track to exceed $1.8 trillion, a post-war record, compared with the size of the overall economy. The Congressional Budget Office has projected the policies laid out in Obama's first budget would require an additional $9 trillion in borrowing over the next decade.

The massive size of this debt spells disaster for the long-term value of the U.S. dollar. As a result, we continue to be extremely bullish on gold and silver.

Luke Burgess
Managing Editor, Gold World

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U.S. Treasury Secretary Timothy Geithner wants to take the country even deeper into debt.

In a letter to U.S. lawmakers on Friday, Geithner urged Congress to raise the legal limit on the nation's credit card.

The amount the government may borrow is currently limited by law to $12.1 trillion, a cap that has been raised several times since the nation slipped into recession in December 2007. But Geithner says that it is "critically important" that Congress raise the country's credit limit in the next two months as the current debt limit could be reached as early mid-October.

Geithner didn't request a specific increase in the letter. But according to a report in the Washington Post, Treasury officials are expected to ask Congress to raise the debt cap to $13 trillion.

"It is critically important that Congress act before the limit is reached so that citizens and investors here and around the world can remain confident that the United States will always meet its obligations," Mr. Geithner said.

According to brillig.com, the U.S. national public debt is already $11.675 trillion and increases by $3.91 billion per day.

Meanwhile, the U.S. deficit is on track to exceed $1.8 trillion, a postwar record compared with the size of the overall economy. The Congressional Budget Office has projected that the policies laid out in Obama's first budget would require an additional $9 trillion in borrowing over the next decade.

The massive size of this debt spells disaster for the long-term value of the US dollar. As a result, we continue to be extremely bullish on gold and silver.

Luke Burgess
Managing Editor, Gold World

The gold stock market is now dependent on a new breakout for precious metals prices. And in order for precious metal stocks to disconnect from the global financial turmoil, gold and silver prices will need to make some pretty big moves.

In the case of gold, I believe the yellow metal would need to move over $1,100 an ounce to force this disconnect from general market activity. In the case of silver, I am looking for a breakout in excess of $23 an ounce.

So, the question is: when will this next wave hit?

Gold was up pretty big this week. But I don't see the big breakout occurring until sometime in the fall when a confluence of factors appears. In the meantime, I expect to see a sideways trading pattern for the next six weeks or so before things start to heat up again.

I continue to believe with all that is happening in the United States and worldwide, higher gold and silver prices are going to rule the day. This would dictate for us to stay on course with gold stocks and not fret too much about what happens over the summer.

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On the other hand, it's always important to pay attention to any short-term profit situations and cash up some on any opportunity to do so.

As I tell subscribers of my Mining Speculator service, if you find yourself with a position that has doubled from where you bought it, you should take 50% off the table and let the rest run to see what can happen. In this market, look for any short-term profit situations and pay yourself back whenever you can.

For the balance of the summer, I am personally looking for gold companies with the aggressive drill programs to come up with the results we need for higher share prices. Until we get breakout gold prices, the best we can hope for is a set of stellar drill results.

When the breakout does occur, the gold stock market could really take off. For now, the best time to add shares will be sometime in the next few weeks.

Big money is not made with the masses — it is made by the few who saw early on what was happening and did something about it. It is made by those not afraid to go against the grain and see incredible opportunity where others can't even see their hand in front of their own face.

The greatest investment opportunities are always during times of great crisis. Precious metal stocks, in my opinion, continue to represent one of the top prospects for making big chunks of money while others lament.

As the gold market kicks back into gear, I believe we will make up any lost ground quickly — especially if you have properly pruned your portfolio and added the right mix of companies that the market is looking for.

Good Investing,

Greg McCoach
Editor, Gold World
Investment Director, Mining Speculator

Gold and silver prices rose to 2-month highs today after a US jobless report boosted sentiment in precious-metals trading.

The US Labor Department reported that first-time claims for state unemployment benefits declined by 38,000 to 550,000 last week. The news helped push gold for October delivery to a high of $972.70 an ounce, its highest level in 8 weeks. Silver also gained on the news pushing over $15 an ounce since mid-June.

While we remain bullish in the mid- to long-term, gold prices may experience a pullback as investors take profits in the short-term.

In other precious metals, both platinum was last seen down about $15 to $1,278 an ounce, meeting strong resistance at the $1,300 level. Palladium was also down almost $6 after hitting a 10-month high of $278.80.

Meanwhile, the US dollar slightly recovered after hitting its lowest level since September 2008. The US Dollar Index, a measure of the dollar's value against a basket of six foreign currencies, was down to a low of 77.428.

Luke Burgess
Managing Editor, Gold World

But in the short-term, investors may need continued patience.

Over the past few weeks, the price of gold has been bouncing between $900 and $950 an ounce. And, following a brief visit to the higher end of that range, gold could once again slip below the $900 level. Here's why. . .

The demand for physical gold from the jewelry, industrial, and dental sectors has significantly fallen.

Official figures from GFMS, the world's top authority on gold supply and demand, showed a 24% drop in gold demand from the jewelry sector during the first quarter, compared to the same period of last year. GFMS data also showed a 31% drop in gold demand from the industrial and dental sector for the same period, compared to the previous year. Global gold demand figures for the second quarter of 2009 will be reported around this time next month.

Gold demand from the jewelry, industrial, and dental sectors will likely remain weak in the short-term, considering the relatively high price of gold, a weak global economy, high volatility in the market, and the seasonal lull, which is typically experienced in the summer months.

Meanwhile, there is a fairly large long position on the Comex gold futures market, which may be significantly reduced in size over the next few weeks, as speculators continue to move back into equities. U.S. stocks rallied yesterday, sending the Dow Jones, NASDAQ, and S&P 500 to their highest levels of the year.     

I'm not convinced, however, that there is much hope for a real recovery in the economy. Sure there's plenty of spin in the mainstream financial media, whose job it is to support their advertisers. But the real situation remains pretty dire.

The U.S. government is projecting a $1.84 trillion deficit for this fiscal year that ends September 30. Meanwhile, national public debt just crossed $11.6 trillion — and is growing by almost $4 billion per day.

Where will the government get the money to pay back this enormous debt and balance the budget?

Nobody knows.

The U.S. federal government claims to hold 8,133 tonnes of gold in reserves. At current prices of about $950 an ounce, this gold reserve is worth $272.5 billion. That's only about 2% of the national public debt, which doesn't factor in other finacial obligations like Social Security and government-sponsored healthcare, and is estimated to cost up to an additional $60-$65 trillion in the future.

If the government wanted to pay off the national public debt with the gold reserves that the Fed claims they have, it would have to sell each ounce for $40,580.

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Government insiders knows just how dire the situation is, even if their voice is suppressed by the mainstream media. Director of the US Congressional Budget Office Douglas Elmendorf recently wrote in his blog:

So for now, we'll probably see gold move lower in the short-term. However, it's important not to lose sight of the big picture, which continues to be very bullish for gold.

The gold market is becoming increasingly dependent on investment demand. This is something that we've been expecting for quite some time.

As we've discussed before, the lives of gold bull markets play out in three main stages, which generally overlap:

Stage One: Currency Devaluation
Stage Two: Growing Investment Demand
Stage Three: Speculative Mania Buying

So far in today's gold bull market, we've seen strong evidence of the first two stages.

A dramatic drop in the value of the U.S. dollar against other world currencies has lifted gold prices over the past eight years. This devaluation is evident in the 42% drop of the U.S. Dollar Index, a measure of the dollar's value against six world currencies, between the summer of 2001 and spring 2008. The dollar rallied between the summer of 2008 and spring of this year, as foreign investors bought the greenback as an alternative to their own less stable currencies in the global recession. However, due to macroeconomic issues, such as the massive debt of the United States, the dollar seems destine for continued devaluation, which will continue to be positive for gold prices.

In the second stage of a bull market, gold prices continue to grow, due to increasing investment demand. Attracted by the gains of the first stage, speculators begin to buy gold as an investment. . . which further snowballs the price of gold.

Figures from GFMS show that identifiable investment demand increased 229% between 2003 and 2008.

Continuing this trend, gold investment demand continued to boom in the first quarter of this year, reflecting a desire for a safe haven from the U.S. dollar and other paper assets. Gold investment demand reached a historic high of almost 600 tonnes during the first quarter of 2009 — a whopping 248% increase compared to the same period a year earlier. In dollar terms, this represented a net inflow of $17.4 billion, up from $5.1 billion (or 42%) a year earlier.

GFMS Executive Chairman Philip Klapwijk wrote in a recent report, "Looking at the second half of 2009, investment demand, and especially its western elements, which includes activity in ETFs, futures and the OTC market, is expected to remain the driving force behind gold price movements."

The independent consultancy group predicts identifiable gold investment will exceed 1,500 tonnes by the end of this year. This estimate would represent a 36% increase over identifiable gold investment demand in 2008.

Investment demand will be the driving force that will push gold much higher over the next several months. As I mentioned, global gold demand figures for the second quarter of 2009 will be reported by GFMS around this time next month.

In the meantime, it's important to keep our eye on the prize. Don't get disheartened by another pullback in gold prices. Rather, use any pullbacks to add to or establish new gold positions. If gold does in fact slip below $900, we recommend buying every ounce you can afford.

Good Investing,

Luke Burgess
Managing Editor, Gold World
Investment Director, Hard Money Millionaire

P.S. The most powerful governments, central banks, and investment groups in the world are still holding their gold reserves in anticipation of a significant rally in prices. This puts a virtual lock on Greg McCoach's latest gold investment recommendation. . . which yields two times the profits made by gold. In other words, every time gold goes up 1%, you're paid 2%. . . every time gold goes up 10%, you're paid 20%. To read more on how you can profit from Greg's new investment vehicle, just click here.

The bottom line was this... every dollar you invest in gold is a dollar you don't invest in one of their preferred investment vehicles. . . whether it be stocks, mutual funds, or the US dollar. In the eyes of these institutions, investments in physical gold mean lost commissions and lower profits.

Today we'll look at some of the myths and misconceptions these same institutions want you to believe, along with the down-to-earth realities that will put your mind to rest about the unique benefits of owning gold.

Gold Myth #1: Stocks always outperform gold

Fact: This is a misrepresentation popularized by institutions whose job it is to sell you stocks for commission, regardless of whether you see gains. But the truth is gold has increased by as much as almost 3,000% since the US abandoned the gold standard and the metal was allowed to trade freely on the open market in 1971. Meanwhile, the Dow Jones Industrial Average has only increased by about 900% since that time. Even at the top of the market, when the Dow Jones was over 14,000, the index had only gained 1,500%.

Gold Myth #2: Gold is a risky investment

Fact: Gold is the opposite of risky. In fact, it's one of the safest investments you can make. And that's simply because gold can never be considered as a liability. Companies can go fall to zero.

Of course, every investment carries some degree of risk. The price of gold is subject to supply/demand fundamentals, currency fluctuations, government and central bank actions, etc. But the value of physical gold can't disappear in the middle of the night with a crooked investment manager or in the wake of a collapsing government.

Gold Myth #3: Gold is a poor hedge against inflation

Fact: Gold is actually one of the best hedges against inflation. Consider this. . . In 1971, the factory sticker price for a Mustang Boss 351, Ford's final muscle car masterpiece, was $5,198. If you decided to hold onto your cash and buy a car today, your $5,200 would only make for a good down payment. The lowest MSRP of any vehicle sold in the US today is about $11,000—and that's for a tiny plastic death trap. But say that you bought gold instead of holding cash. At the time, $5,200 would have also bought you about 150 ounces of gold. Those same 150 ounces of gold are now worth over $140,000 at today's gold prices. With that kind of money, you could buy a brand new, fully loaded BMW M6. . . plus have an extra $20,000 leftover to put towards gas.

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Gold Myth #4: Gold ETFs or gold mining stocks are a better investment than bullion

Fact: This is another myth touted by institutions interested only in commission. It's true that gold ETFs and gold mining stocks are a slightly more convenient way to invest in gold. But as I mentioned in Gold Myth #2, funds can become defunct and companies can go belly-up.

It's also important to note that while gold ETFs do represent shares of the physical commodity, they end up costing you more in the long run because of annual storage fees. Owning and holding physical gold in your house costs you nothing.

Gold Myth #5: Physical gold is illiquid

Fact: It may not be accepted by most vendors in lieu of cash, but the liquidity of gold has increased significantly over the past few decades thanks to the large number of brokers streamlining the process of buying and selling. Today's brokers have made trading gold as easy and attractive as possible by offering nearly instant payments and guaranteed sales prices.

An easy way to significantly increase the liquidity of your physical gold investments is to buy small coins and bars that are minted by a government or well-known refiner. You can purchase gold coins as small as 1/10 of an ounce, and you can buy gold bars weighing as little as small as 1 gram. These small gold coins and bars offer higher marketability than their larger cousins simply because they are much easier for private individuals to afford.

Conclusion

With its reputation for value stability and long-term growth spanning most of recorded human history, gold remains a popular and viable method of preserving and growing wealth during economic downturns as well as periods of prosperity, even today.

Those that will have you believe otherwise argue against gold ownership out of a purely pecuniary interest. Take hold of your future today and make your decisions based on objective fact, not self-interested fiction.

Good Investing,

Alex Koyfman
Contributing Editor, Gold World

P.S. With a gold resource worth 63 times more than its market cap, this junior gold stock is getting ready to pay off big time. This tiny $0.34 stock could make it's first move over $2.00 in short order. The whole story is laid out for you here.

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From Gold World's Gold and Guns blog...

Swiss Banks Running Out of Storage Space for Gold
Bleak Economic Outlook Rapidly Fills Bank Vaults

Gold Stock of the National Bank in Bern

Swiss news website 20 Minuten Online reports that the country's banks are quickly running out of secure storage space for gold bullion owned by investors and institutions. Concerns over inflation, the global economic downturn, and the success of gold ETFs has rapidly filled Switzerland's bank vaults with bullion

Several weeks ago, the 139-year-old Zürcher Kantonalbank reported that it was forced to relocate some of its stored silver bullion to another site to make room for gold. More recently, another Swiss investment banker was quoted in 20 Minuten Online saying, "We have the need to store more gold for our clients, but are finding it difficult to find secure storage facilities."

Many US-based gold ETFs have recently seen a relatively small decline in gold holdings. New York's SPDR Gold Trust, for example, has sold over 34 tonnes of gold in the last four weeks, equal to almost 3.3% of its total holdings. Meanwhile, the Swiss ZKB Physical Gold ETF and Julius Baer Gold ETF has increased its holdings by 2.8% and 4.8%, respectively.

Luke Burgess
Managing Editor, Gold World

Swiss news website 20 Minuten Online reports that the country's banks are quickly running out of secure storage space for gold bullion owned by investors and institutions. Concerns over inflation, the global economic downturn, and the success of gold ETFs has rapidly filled Switzerland's bank vaults with bullion.

Several weeks ago, the 139-year-old Zürcher Kantonalbank reported that it was forced to relocate some of its stored silver bullion to another site to make room for gold. More recently, another Swiss investment banker was quoted by 20 Minuten Online saying, "We have the need to store more gold for our clients, but are finding it difficult to find secure storage facilities."

Many US-based gold ETFs have recently seen a relatively small decline in gold holdings. New York's SPDR Gold Trust, for example, has sold over 34 tonnes of gold in the last four weeks, equal to almost 3.3% of its total holdings. Meanwhile, the Swiss ZKB Physical Gold ETF and Julius Baer Gold ETF has increased its holdings by 2.8% and 4.8%, respectively.

Luke Burgess
Managing Editor, Gold World

Gold for August delivery hit a five-week high in overnight trading as a weaker US dollar and higher crude oil prices boosted the metal’s appeal as an alternative investment and hedge against inflation.

Bullion for immediate delivery gained as much as $16.40, or 1.7%, to $953.90 an ounce, the highest since June 12. The metal, which climbed 2.7% last week, was trading at $952.60 by 9:00 a.m. EST.

Crude oil also found strength in the London market gaining as much as $1.53, or 2.7%, to $65.90 per barrel. This is the highest level for oil since July 6.

Meanwhile, the US dollar fell sharply against most major currencies on speculation that this week's European and US economic reports will show the global recession is easing, sapping demand for the greenback as a refuge. The US Dollar Index, a measure of value of the dollar against a basket of six major world currencies, dropped to a near seven-week low, dow 0.7% to 78.925.

In other precious metals, silver climbed as much as 2.6% to $13.75 an ounce while platinum put on 1.1% to $1189.90 an ounce and palladium gained 1.4% to 254.50 an ounce.

Luke Burgess
Managing Editor, Gold World

The US dollar hit a six-week low today as investors moved further away from the troubled currency.

The US Dollar Index, a measure of the greenback's value relative to a basket of six foreign currencies, dropped as much as 0.4% to 79.285 before recovering this afternoon.

Major news outlets cited an increase in risk appetite as the reason for the dollar's drop. But they failed to mention the $1.84 trillion US government deficit that is projected for this fiscal year that ends September 30^th or the ballooning $11.5 trillion national public debt, which grows by almost $4 billion a day.

Meanwhile, gold took a breather from a three day rally that pushed the yellow metal as much as 3.3% higher since the beginning of the week. At last look, gold for August delivery stood at $935.90 an ounce.

In other precious metals, silver was up 0.7% to $13.295 an ounce this afternoon. Silver prices have gained as much at 5.7% this week. Platinum prices have also increased as much as 6.7% while palladium was up as much as 7.9% this week. Platinum stood at $1,169.50 an ounce while palladium prices were last seen at $249.50 an ounce.

Energy prices also edged higher this afternoon. Crude oil for August delivery touched the week's high above $62 per barrel while natural gas was trading at 3.585 at last look.

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Gold.

Why? Because, simply put, these Goliaths have a great deal to lose. You might call it Gold's Great Suppression.

You see, their best chance to stay at the helm of power relies on your continued faith in the value of the US dollar.

To pull off this trick, they must divert your attention away from the one asset that holds true inherent value — gold.

They use lies and deceit to depict gold as an archaic investment and label gold investors as "paranoid extremists."

Gold is now the target of a global smear campaign, orchestrated by some of the most influential organizations in power today. In this two-part special report, we'll take a look at six major institutions that don't want you to own gold... and discuss the reasons why.

Gold Suppression Institution #1: Investment Banks

JP Morgan Chase Headquarters in New York

Investment banks profit from commissions on issuing and selling equity and debt securities in the capital markets. So, they naturally have a vested interest in steering investment money away from physical gold ownership and toward the securities they sell.

Sure, an investment bank may recommend buying a gold ETF or some other gold-related paper investment, but that's only because they'll get a percent of the trade. Your broker will never tell you to pull your investment capital out of stocks and put it into physical gold.

Truth is, investment banks and brokerage firms are like casinos. It doesn't matter whether you make money in the market or lose it, the house always wins. So, at the end of the day, there is little incentive to provide sound advice — just as long as you continue to trade on it.

There is nothing scarier to firms like JP Morgan, Goldman Sachs, and Morgan Stanley than a mad rush of investment in physical gold. Every dollar used to invest in gold is a dollar not used to invest in securities, with commissions lost every step of the way. But to you, the private investor in a time of economic crisis, this is a direct conflict of interest that cannot be ignored.

Gold Suppression Institution #2: The United States Government

Front of the White House

When investors return to owning gold as a store of value, they literally take sides in a war of doctrines — the US government's backing the dollar's value is on one side, and the undeniable value of gold is on the other.

Every time somebody buys gold, the dollar feels it. This may not be a direct causative link, but it may as well be. Since the dollar was taken off the gold standard, our paper currency forever lost the true source of its strength: the inherent value carried by gold and silver.

The US federal government lives and breathes by the dollar. With inflation corroding the greenback at an unprecedented rate, the last thing they want is their citizens' defecting back to gold. For you, however, it's a choice between losing the wealth you worked for or sticking around and going down with the ship.

Gold Suppression Institution #3: The Federal Reserve

Close Up of the Federal Reserve Building in Washington DC

It should be clear by now that anything or anybody with a vested interest in the dollar will not take kindly to your owning gold, even if you're doing it solely to protect your wealth. Armed with this incontrovertible fact, it should come as no surprise that the Federal Reserve, the central banking system of the US, an all-encompassing, often mysterious entity charged with the task of issuing new money, has perhaps the most to lose from people switching over to gold as a value-holding asset.

Since the dollar is their main reason for existing, the Federal Reserve needs you to carry their dollars much like a body needs its red blood cells to carry oxygen. Without your using the dollars they create, not only is their main product devalued, but also their grasp on the nation's financial infrastructure is compromised, eventually causing them to wither.

By owning gold, you are essentially freeing yourself of the hold the Federal Reserve maintains over everything and everyone. But this choice isn't one you should be making out of the desire to be free of bureaucratic control. It's the clear choice at a time when the Fed's only product is a proven failure.

Since the Federal Reserve, unlike any other enterprise subject to consumer-driven market conditions, will never issue a recall of their defective dollars, your only choice is to move your wealth into a more stable asset like gold, whether they like it or not.

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Gold Suppression Institution #4: The Mainstream Media

Mainstream TV News

Whether it's FOX News or CNN, conservative or liberal, the engines of mass media are fueled by the revenue from their advertisers. And just like investment banks, the media depends on your continued support of corporations.

Whether these corporations provide a good service or strong returns on your investment matters little, so long as you continue to funnel your hard-earned money into their coffers.

Now, before you start to take sides on conservative vs. liberal media, let me point out that I believe both sides care less about their respective doctrines and more about advertising revenue.

For example, consider the FOX Broadcasting Company. FOX News has, of course, a very conservative voice with commentators like Bill O'Reilly and Glenn Beck.

But at the same time, FOX airs television programing that is anything but conservative, including some of the most unapologetically vulgar shows on television, like the popular Family Guy as well as some raunchy reality shows. The television programs on FOX are so outrageous that the company is frequently fined by the FCC for violating the nation's indecency laws.

My whole point here is that the mainstream media cares less about dogma and more about advertising revenue, which can only continue to stream in as long as corporations do well.

Of course, you'll never hear any of this from the well-compensated talking heads you'll see on the old boob tube. But buying gold may preserve your wealth, even if it takes money out of the media's pocket.

Gold Suppression Institution #5: Corporate America

Corporate America Flag

As you've probably surmised by now, corporate America is also heavily vested in the strength of the dollar. As the dollar weakens, the values of their stocks plummet. And as inflation takes hold, consumers are less and less likely to purchase goods produced and sold by our nation's biggest companies.

Every ounce of gold you buy means hundreds of dollars lost, either by manufacturers, by retailers, or by banks that would have otherwise received the cash deposit.

Once again, you sidestep the liabilities associated with making speculative investments in their securities or blowing your money on their goods. In the process, you retain and grow your wealth, but cause them to grow weaker.

You better believe the rich executives have gold in their own portfolios. But, once again, you'll never hear them make the suggestion to you. There's just too much for them to lose.

Gold Suppression Institution #6: The IRS

The IRS Building in Washington DC

Our favorite government entity is also one of the most vulnerable to loss of revenue when gold is bought and sold.

Notoriously hard to tax, gold is one of those things that the auditors hate seeing on income statements because of the problems associated with establishing a basis and the issues of measurable gains made at a sale. It's just too easy to lie about. The bottom line is, when trading gold privately, it's impossible for the IRS — or anyone for that matter — to know exactly how much you bought or sold the bullion for without your honestly reporting it.

The difficulties with accurately evaluating gold bullion, coins, and jewelry create a host of problems for people who need to deal in decimal places and precise figures.

In fact, the IRS has never issued a public guidance on the question of how gold is to be valued, at face or market value. This lack of specificity on their part led to a landmark loss in Nevada Federal court for a case involving 9 defendants whom the IRS tried to convict on tax evasion and other charges. Gold makes it far to easy for individual investors to legally conceal the extent of their wealth and tax liability. The IRS, as a result, has a much easier time maximizing the rate at which they can tax you when you keep your money in cash or securities.

Conclusion

Gold has a long-running history as a safety net during times of financial difficulty, a method of preserving and actually growing wealth as other sectors in the economy go into decline. It's a see-saw battle that's been going on since antiquity. Unfortunately, the two sides of the see-saw remain in perpetual conflict as investors have to make either one choice or another.

Right now, that see-saw is clearly swinging in the direction against business and industry. While certain biased sources will tell you otherwise, the choice really is pretty simple. You can either fight the see-saw and lose what you've earned, or use the mechanism to your advantage and gain while most everyone else watches their savings decline in value.

I am satisfied to wish everyone else the best of luck in seeking a better store of value in fiat currencies. I, however, will be owning gold.

Good Investing,

Alex Koyfman
Contributing Editor, Gold World

Publisher's Note: With a gold resource worth 63 times more than its market cap, this junior gold stock is getting ready to pay off big time. This tiny $0.34 stock could make it's first move over $2.00 in short order. The whole story is laid out for you here.