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How many of you have ever held a gold coin in your hand?  How many of you have ever held a Silver Eagle in your hand?  Have you even held a gold Buffalo or a Morgan Silver Dollar?  How many of your friends have ever seen or held a gold or silver coin or bar in their hand?  Has your wife or husband, or your children?
Until you actually touch and examine gold and silver coins it is difficult to understand what makes them so desirable.  They are miniature works of art in the world’s most sought after precious metals. They have captivated man’s imagination for thousands of years.  Emperors and kings had their portraits engraved on the front of gold and silver coins.  The design on the face of a Twenty Dollar gold piece, minted after 1906 was by one of America’s most famous sculptors, Augustus St-Gaudens.  The coin, whose design can still be found on the face of the current Gold Eagle series of coins, is referred to as a Saint or Saint-Gaudens.  It is considered the most beautiful gold coin design ever created.  Its design has survived more than 100 years.  Do you own any?

Pictured above is the original Saint-Gaudens design, a 1907 “high relief” marvel whose “Lady Liberty” and “American Eagle” jump up from the face of the coin in bold three dimensional relief. These are among the most prized of all gold coins and it was the only gold coin with this kind of high relief design.  Beautiful to behold it was, but it quickly fell out of favor with the bankers because they would topple over if stacked.  The design was quickly replaced with what became the standard design, a much flatter and non-high-relief coin.

I assure you, if you ever held one in your hand you would want to keep it.  They are still available in uncirculated condition and will set you back $20,000, plus or minus depending on the grade.

Another favorite – no, make that “classic” design is the Morgan Silver Dollar.

The Morgan Dollar is a silver United States dollar coin. The dollars were minted from 1878 to 1904 and again for one more year in 1921. The Morgan Dollar is named after its designer, George T. Morgan, who designed the obverse and reverse of the coin. Morgan’s monogram appears near Lady Liberty’s neck on the obverse. The dollar was authorized by the Bland-Allison Act of 1878.

Every now and then, a “toned” Morgan Dollar shows up.  These were coins that sat for years, undisturbed, in an original bag of 1000 coins, in a high humidity environment, often in San Francisco (with an “S” mint mark) and over time, the sulphur content of the cloth bag caused the face of the coins in contact with the bag to oxidize.  The colors can range from gold to purple to red to a rainbow.  Yes, our old gold and silver coins are pieces of art.

If you are a music lover and follow “the blues,” you have heard the often used phrase “the Eagle flies on Friday.” A Twenty Dollar gold piece, either the Saint-Guadens or the earlier series called the Liberty, is called a Double Eagle.  It weighs in at just under one ounce of gold.  The half ounce gold coin is called an Eagle.

One hundred years ago or more, people would work all week for a single ten dollar gold coin, an Eagle.  On Friday, after toiling all week at work, off they would go to get drunk at their local bar or saloon.  The gold coin would not last long – creating the lyric “The Eagle flies on Friday.

Last week in Vancouver, we were charged $18 a drink!  Yesteryear’s ten dollar gold Eagle is today’s hundred dollar bill.  Actually, it’s less.  One hundred dollars today is worth about $2 or $3 from the early 1900s.

I am always writing about gold and silver but I have to remind myself that many of our readers are not familiar with the coins we talk about or their history.  You can collect gold and silver coins or you can hoard them.  You can buy numismatic coins or bullion coins and bars.  The difference is that the numismatic coins, like those pictured above, have a value ABOVE that of their precious metal content.  Bullion coins, on the other hand, are worth a bit over the “spot” prices that I quote at the beginning of this daily.

There should be room in every gold and silver portfolio for a few pieces of history like the Saints and Morgans but only after a base of bullion coins or bars is established.  Remember, the winner is the one with the biggest pile of coins.  It’s all about number of ounces, not a few rare and expensive coins.

Recently, Richard Russell defined what “real wealth” is.  According to Russell, real wealth is 3000 ounces of gold.  Note, he did not put a dollar figure on this.  Just ounces.  If the price of gold hits $10,000 or if it plunges to $800 it matters not.  It gold falls, everything else will fall even faster.  It will retain buying power.  If the price rises it will also retain buying power.  He is pointing out that one will always be able to get by at a very high level with 3000 ounces of gold, regardless of the current price.

If I am correct, and gold tops $2,000 next year, then 3000 ounces will be worth $6,000,000.  If gold hits $5,000 than 3000 ounces will be worth $15,000,000.  If gold drops to $800, 3000 ounces will still be worth $2,400,000, and that will be in a deflationary-great depression and its buying power will be spectacular.  Think in terms of ounces, not in terms of dollars.

Down $10.10 to $1172.00

This is what I call a golden gift to you.  This is a buying opportunity, financed by a few large Wall Street bullion banks.  They are dumping contracts to pull down the price.  No sane investor will continue to sell into a falling market.  You don’t make money that way.  This waterfall downdraft is engineered to force the “longs” out of the Comex gold market.  Since their trades are, to the largest part, governed by computer algorithms which are mindless and sell at certain pre-programmed steps, gold is dumped for no reason other than an algorithm decided it was time to sell.  No one is overseeing the trade and saying “wait a minute?  Nothing has changed.  The Fed is committed to further destroying the dollar with a soon-to-be-announced QE2 – that’s quantitative easing, not the Queen Elizabeth II.  The time to buy gold has honestly never been more important.  Use dips, like today’s to accumulate more ounces and use it as an opportunity to rid yourself of paper backed-by-nothing-but-debt dollars. Thank the crooks on Wall Street for subsidizing your gold purchase!

Gold is still holding well above its 200 day moving average (the red line).  It is doing just fine.  Don’t let nonsense like  Tuesday’s pull back confuse you.  The bull market is alive and well.

Believe in Jim Sinclair.  Gold will top $1,650 early next year!  You can take that one to the bank!