As I write this, the states are broke, the government is printing money around the clock, and there is spreading turmoil in the Middle East, which has already toppled regimes in Egypt and is threatening one in Libya. With problems already erupting in Bahrain and Yemen there is speculation the unrest will spread to many other countries in the region.

It seems the people are awakening and finding they deserve more than the meager existence they have known up to the present, working in low paying jobs to supply oil to rich countries scattered across the globe. In our present oil dependent state, we see any changes in the Middle East as a threat to our supply. The old regimes have served us well during the past years and we feel comfortable with them. Oil prices have been relatively stable, keeping gas prices at a comfortable level.

Most thinking people in America are wondering, “How is this going to affect us?” As oil prices rise, the cost of gas goes up taking the cost of living with it and further increasing unemployment. Companies are forced to spend more money on operating expenses and ultimately have to scale down with fewer employees. This is definitely slowing down the economic recovery and could result much worse future conditions.

A relatively large faction of the American population has lost faith in dollar values, and those who can afford to have opted to buy precious metals, especially gold and silver. As world conditions worsen, it is quite likely that spot prices of the metals will continue to rise. Currently, gold has reached a record high price and silver is within $13 of the record of $50 set during the early 1980’s.

Although the news is bad, in general, the green “buy lights” should be turning on for collectors interested in buying gold and silver coins and metals. Although many potential buyers see the current prices as a reason to stop buying and wait for future prices to be lower, many may look back from a year into the future and see the current prices as a passed opportunity. All indicators point to further increases, and coins and metals purchased today could prove to be very lucrative investments.

There are basically two options to consider when buying gold and silver: One entails buying certificates from a holding company and letting them keep the metal in their vaults. The other is to buy the coins or metals and keep it in our possession. Of the two, I most definitely favor the second, as many holding firms in the past have been known to issue more certificates for gold and silver than they can cover. Perhaps, the only good reason for choosing the second is avoiding the problems of loss from theft and natural disasters. Regardless, I would rent a bank box or purchase a home safe.

In regards to the choice of what to buy, I personally favor old U.S. gold coins and the modern gold commemoratives minted since 1982. These are fun to collect and can be formed into meaningful collections with beautiful designs commemorating some of the most historical events. Most of the gold coins included are in either $5 or $10 denominations and are struck on .900 fine gold planchets. The gold weight is approximately one quarter ounce for the $5 and one half ounce for the $10. This is much better than investing in 12 or 14 karat scrap which is drastically reduced by gold buyers. The coins are 22 karat gold leaving little room for price discounts due to impurity.

The other option, old U.S. gold coins, are fun to collect and study. Many, because of extremely low mintages, have a numismatic value which often exceeds the intrinsic metal prices. This is good in that a rare $20 gold piece will be valued higher than the spot gold equivalent and will continue to maintain this price if gold values drop. However, when buying old gold, it is important to remember that the two lowest denominations, the $1 and $2 1/2 pieces are little affected by gold prices because of the relatively small amounts they contain. Still, I am a history nut and like to read and think of a time in the past when a U.S. dollar was worth its weight in gold!

The third option and probably the best is to buy the mint issued gold and silver bullion rounds. In contrast to the gold, the silver is only issued by the ounce. During my discussion concerning the purchase of old gold, I did not recommend old silver because it is often discounted because of weight lost to excessive wear. However, the Silver Eagles did not circulate and are traded at the one ounce weight stamped on them. Moreover, there are some keys with the Eagle series and they are put together in sets by collectors, giving them a numismatic premium in the higher certified grades. They have been minted continuously since 1986 and a complete set makes an attractive and impressive display.

As did the bullion silver, the bullion gold Eagle program began in 1986, but instead of just one type the coin program included a 1/10, 1/4, and 1/2, as well as the 1 ounce piece. This created a wide price range, making it economically possible for more people to own the coins. This has been a very successful program and, as with the Silver Eagles, the gold coins are included in many coin collections and there are some very scarce dates to look for. Both groups of coins present classic designs, Saint Gaudens on the gold and the Walking Liberty on the silver. Also, both programs include special issues for collectors in proof and burnished formats.

Summing up, the news in North Africa is bad and prices of practically everything are going up, but on the positive side the coins and metals we own will most certainly increase in value and hopefully help to shield us against the inflationary spiral. Heaven forbid that the country should fall, as some people predict, and we will have to use our gold and silver for bartering purposes. - Weeks