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What to do with your Forex profits?

Discussion in 'Forex Articles' started by 3BlackCrows, Jan 13, 2008.

  1. 3BlackCrows

    3BlackCrows Corporal

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    No matter where you turn these days, everyone seems to be talking about recession this and housing bust that....

    The main questions on everyones lips is:

    1. Are we headed for a global recession?
    2. If so, how long will it last?

    The answers may not be too encouraging.

    I believe we are headed for a major recession but not because of the reasons many people think.

    All you have to do is look at the value of the US dollar to see what I mean.

    I'm not talking about a USD/XXX crossrate here either but the actual spending power of the dollar.

    Since the early part of the 20th century the US dollar has been on a steady decline to where it is now worth roughly 4 cents today (that's not a typo).

    The reasons for this are twofold:

    1. Government handed over the responsibility of coining and regulating money with the formation of the Federal Reserve in 1913

    2. The Gold Standard was scrapped in the 1970's

    1. The Federal Reserve is anything but Federal. It's an illegal corporation formed by wealthy bankers ( JPMorgan, Rockefellers et al) in order to control and enslave an entire world and make a killing doing it.

    As with anything, the more produced, the less it's value becomes and it's no different with Fiat (paper) money. Only now the chickens a really coming home to roost - chickens that will make the great depression look like a quail egg in comparison.

    You might of heard recently that the Fed has been cutting rates and working their printers overtime to the tune of billions of dollars overnite in order to inject liquidity, stimulate the economy and save the greedy Investment Banks that created this whole mess in the first place.

    All that this is doing is not only delaying the inevitable but continually eroding the value of the dollar even quicker than it had been before (Can anyone say Zimbabwe?)

    The future seems to be divided into 2 groups: The very lower class and the very upper class elites - no middle class.

    2. Here's a question for you. If you have a $1,2,5 or $10 note in your wallet, take it out and look at it. My question is, What is that note backed by?

    The short, truthful answer is nothing. It may as well be Monopoly money.

    Many moons ago the money that was printed on paper was in fact a reciept redeemable for Gold. You could go into any bank, present this receipt in exchange for the equivalent amount of Gold.

    As Gold was a finitely scarce resource, you could be sure that no matter what point of time you were in, your money was worth something.

    Not anymore.

    A group of braniacs sold the idea of getting rid of the Gold Standard which backed all money. Their argument was that the economy was nowhere near the dizzying heights it should be. Getting rid of the Gold Standard would allow markets to be more efficient and build a truly mighty economy.

    So this standard was scrapped which has made the present situation all the more alarming.

    You see, all of those numbers on your bank statement, mortgage, even your brokerage account are just that - numbers. Worth absolutely nothing.

    Which brings me to the point of the title of this thread - What to do with your Forex profits.

    The profits you make should ideally be routed to Gold, Silver or any valuble and finite commodity.

    At the end of 2000 Gold was roughly $265 per ounce. As of writing, it has touched $900 per ounce for the first time in history with plenty more upside to come.

    For example from November til the end of December of last year it was in a textbook uptrend pennant formation. The day it broke the pennant, it was worth $830 per ounce.

    If you had invested at the $800 support level late last year, every ounce you bought would have gained over 10%. That's in less than a month.

    Maybe though $900 is a bit too rich for you. That's where silver comes in:

    Again, from November til December last year Silver was in a slight downtrend ranging from $15.50 - $14.00 an ounce. The day it broke the downtrend (12/6) it was worth $14.62. This was a signal to buy.

    Price then hovered up but came back down as buyers remorse set in however it never fully broke support of $14.00. If you kept buying in the following days of the 1st signal (it's called dollar cost averaging), price would have come up to your initial buy point just 6 days later.

    As of writing, Silver is now worth approx $16.50 per ounce. That's also a nearly 10% gain in one month.

    It looks like this bull trend will continue as the big money swaps their risk from Fiat (paper) money and more risky assets to the timeproven value of Gold and Silver.
    Do not take Futures Contracts however unless you have the means of picking up the physical commodity behind the contract - otherwise your profit will be just useless paper money.

    Instead look up your nearest Mint and start buying.

    If you enjoyed this article and would like to receive more along with free Technical Analysis of the Eur,Gbp,Chf,Jpy and Cad pairs, shoot me a private message containing your name and email or email me: droich@xtra.co.nz and introduce yourself
     
  2. Pharaoh

    Pharaoh Colonel

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    No one knows when the next recession will hit, or how bad it will be. Although I don't think a full meltdown will happen for awhile yet, it is always a good idea to begin preparations early and to hedge your bets. Having some precious metals on hand is a good way to cover yourself in the (hopefully unlikely) event of a sudden currency devaluation/collapse.

    As long as you are stocking up on metals, securing a decent supply of water and a few weeks worth of non-perishable food items is also a good idea, even in good economic times. There are plenty of people in Florida and Louisiana who wish they'd had a bit more in their pantries after some of the bigger storms, and no amount of gold or silver would have gotten them something to eat at certain points after the storms first rolled through.

    So, assuming one already has the food and water situation in hand, where are good, reliable places to acquire gold and silver without paying too high of a premium above the official price per ounce/gram?
     
  3. 3BlackCrows

    3BlackCrows Corporal

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    Try New Zealand Mint (Google it or type it as an address into your browser)

    There is a wealth of information on their website.

    The benefits of buying from NZMint include:

    1. .9999% purity

    It was the first to adopt the .9999 standard for gold coin purity

    The purest precious metals you can find anywhere as American Golden Eagles and South African Kruggerand are not certified completely pure.

    This is an advantage for NZ residents as the purity of NZMint bullion is GST exempt (12.5% tax) whereas with other products you pay GST.

    2. Payment acceptable in $NZD, $USD or $AUD

    When ordering you simply ring them with the quantity you are after and they wil quote you a live spot price. If you agree with the price you will need to confirm this by requesting a contract. The contract will state the agreed price, quantity ordered, applicable shipping costs.

    Shipping is to your door and the charges are $30 for either Gold (per $40,000 purchased) or Silver (Silver is per 5Kg).

    3. Allocated Storage Program

    Your Gold can be stored in NZMint's own storage vaults and safes for 2% of the value per year. All of your precious metals are fully insured.

    4. No commission

    They do not charge any commissions however you will be paying the margin at the time of purchase plus you will pay a premium on top of this but it is only to cover manufacturing and processing costs.

    Administrator Please Note: I am not in anyway affiliated with NZMInt or its products. This post was only for educational purposes - Please don't remove. Thanks
     
  4. Pharaoh

    Pharaoh Colonel

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    Thanks for the info!

    Why do I have a bad feeling that shipping to the US might cost just a tiny bit more? Also, they only accept payment via wire transfer. Domestic wire transfers aren't too bad, but international ones can get a little extreme at times.


    OK, now we know where all of our Kiwi friends get their precious metals. Does anyone have a good source for other areas of the world?
     
  5. 3BlackCrows

    3BlackCrows Corporal

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    It doesn't hurt to send them a quick inquiry to find out.

    Who knows, perhaps they make enough on production fees to offset the shipping so it may be all worked into the price.

    To put it into perspective, $40,000 sounds like a lot of Gold but is really just under 40 coins.

    Also by the time you figure in the fees for storing the stuff and finding a suitable location, it may all work out even.

    It maybe wise to take thier self storage offer up if you buy at the right time as you only need gold to increase in value 3% for your storage costs to be offset.

    Also remember that other bullion sellers may charge a commission and hike the spreads to squeeze more dollars out of you. These hidden charges may reduce any gains made from lower freight fees

    You're right, International Bank Wires can be costly but at the same time, if I was too overly concerned about that side of things, I would have never deposited money into my brokerage account! The truth is, I wanted in and was willing to pay the fee because of the bigger picture I saw. BUT, I did months of due dilligence first and weighed up all the options which is why I'm happy to pay a commission per round turn and pay for charts compatible with the quotes.

    It's the same reason why people continue to get scammed by brokers - they are looking for the lowest pip spread possible with no commissions and are blind to anything else. They end up getting requoted, stop hunted and at worst can't withdraw their funds.

    It's the same where precious metals are concerned. It's a business, and you have business expenses like every other business and if structured properly, you could possibly claim those expenses back as tax deductions.

    Also would you rather have Gold in it's purest from? or a hybrid of gold and other assorted worthless metals?

    I understand where you are coming from as the saying ''Pennywise and Pound foolish'' comes to mind but if you focus too much on the pennies, you'll miss out on the pounds.

    I'm sure there are vast swathes of reputable bullion dealers in the states, all it takes is a bit of Googling, forum crawling and due dilligence.
     
    #5 3BlackCrows, Jan 19, 2008
    Last edited: Jan 19, 2008

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