Best of Jim Cook

THIS YEAR WILL BE WORSE THAN LAST

By James R. Cook          

                                                                                                                                                           

SILVER

 We don’t know the future, but we do know the things that didn’t work in the past. Most of the economic policies adopted by the U.S. have failed when tried elsewhere. There’s an eerie similarity between what’s happening today and the events in 18th century France that ruined their money and economy. There’s also a deadly parallel in this country between today and 1930.

That’s why silver or gold make good sense these days. They hold value in a monetary crisis. In the past they rose and protected those that held them when events reached extremes. That’s why we have always pushed the same advice. Keep 10% of your net worth in silver or gold.

We especially like silver. Lately the price has moved on what appears to be tightness in the physical supply. Look at some of the many reasons to own silver:

1. Silver has strong demand by industry.
2. People around the world hoard and desire silver.
3. Silver is in short supply.
4. The price is historically cheap.
5. The downside appears limited.
6. Silver is used in everything electrical.
7. It’s primarily a byproduct of other types of mining.
8. It’s historically a monetary metal.
9. Financial companies have sold it short and must buy it back.
10. Most of the great silver deposits are exhausted.
11. People flock to silver in a crisis.
12. Most of the silver ever mined is used up and gone.
13. The cost of mining silver is twice what it’s been selling for.
14. Silver has a history of dramatic price rises.
15. A lot of silver has been leased and must be repaid.
16. Silver is so crucial to industry it must be purchased at any price.
17. Most of the silver that people currently own will only be sold at much higher prices.
18. It takes five years to ramp up silver mining production.
19. Silver has more useful properties than any other metal.
20. Public interest in silver is growing.

Search as you may, no story carries as many positives as does silver. Last year we sent out over one and a half million mailers spreading the word about silver. Now there’s every indication of tightness in the physical market. Lease rates are high and rising. Silver analyst Ted Butler will bring you up to date on the latest market factors in our next newsletter. For now he sees the potential for a price breakout. He claims that only the most outrageous manipulation by Wall Street brokers and banks can weaken the silver price. He urges people to buy silver now.

SILVER OFFER

 From 1916 until 1947 the U.S. mint struck the Walking Liberty Half Dollar for general circulation. These were 90% silver coins and were considered to be one of the most beautiful coin designs ever minted. In fact, the new U.S. Silver Eagle first struck by the U.S. mint in 1986 adopted the exact design of the “Walking Liberty” for the new Eagle.

In 1948, the Franklin Half replaced the “Walkers” as they are called. However, these coins could still be found in circulating coinage up until 1964 when they completely disappeared. Subsequently, a number of these coins have been melted down and used up by industry.

We have $1,000 face value bags of Walking Liberty Half Dollars available now. There are two thousand coins in a bag. The silver content weighs 715 troy ounces. Most of the dates in these bags are from the 1930s and 1940s. The bags have been combed through to remove any culls or slicks (heavily worn coins). The coins in these bags are those that you often see sold on television or in the newspaper at double or triple what we charge. A bag currently sells for $5,875.00, but the price can fluctuate.

Individually these old silver coins sell for much higher prices and, in the Red Book coin guide, some sell for double what we charge. Grades range from Good to Very Fine. These are coins that people like to collect and put into date sets or rolls. In other words, with these coin bags you’re buying silver with a small premium for the old U.S. collector pieces. As these coins become harder to get the premium can easily grow. Bags of the scarce Walking Liberty Half Dollars in uncirculatedcondition sell for $56,000 each.

This represents an excellent method of capitalizing on the potential increase in silver prices. You have historical old U.S. silver coinage that refiners want to buy and melt down, and you have collectors who want these coins individually for coin sets. Today the biggest demand is coming from silver investors who are buying up these bags. That’s why we don’t have unlimited quantities of Walking Liberty coin bags. But we do have a small supply of bags and we urge you to get a few while they are still available and still seem cheap. Call us today at 1-800-328-1860 and order now.

P.S. Despite what you hear in the media, the economic indicators show no solid evidence that the economy has launched a recovery for 2002. Profits remain in a disastrous fall, capital investment has gone net negative, when depreciation is figured in. The level of corporate debt staggers the mind, while balance sheets are weak. Net savings by businesses and consumers has virtually disappeared while delinquencies and bankruptcies are rising sharply. Long-term rates are stuck at the high end and the likelihood of a credit crunch grows by the day. There is not even a remote possibility of a recovery now.

Meanwhile, stocks are massively overvalued and have no solid foundation for improvement. The overleveraging is insane and the derivatives risk profound. The dollar stays grossly overvalued, while foreign indebtedness and the trade deficit reach painfully high levels. Such imbalances and economic maladjustments, the world has never seen.

Going forward there can only be disappointment. The markets will not react favorably to the news ahead. Forewarned is forearmed. As the great economist Kurt Richebacher points out, “Downside risks remain overwhelming. For the time being, the markets are buoyed by trust in the predicted, imminent V-shaped U.S. economic recovery. Its failure to materialize will come as a tremendous shock to everybody with shattering effects for all segments of the financial markets – stock, bonds and the dollar.”

Investment Rarities Incorporated has prepared this material for your private use. Although the information in this publication has been obtained from sources which Investment Rarities Incorporated believes to be reliable, we do not guarantee its accuracy and such information may be incomplete or condensed. All opinions expressed in this publication are those of Investment Rarities Incorporated and are subject to change without notice. Predictions or projections can be wrong and financial advice can prove to be unprofitable. Gold and silver can go up or down in value. Gold, Silver and coins are not necessarily a medium appropriate for every individual. All rights reserved. ã 2002 Investment Rarities Incorporated