The most popular stocks are falling at a disturbing rate. Netflix’s (NFLX) stock was at $700 a share in 2021, now it sits in the low 200s. Meta Platforms (FB), the new name for Facebook, stood at $376 in November and is now under $200. Many meme stocks are down 70 to 80% and fund redemptions haven’t even begun yet. Don’t let those 401(k) and IRA statements lose too much value before you decide to do something about it. Cash is a losing investment unless it’s for living expenses or emergencies. The Japanese Yen is being devalued. This is important because all other fiat currencies will follow eventually. Bonds have lost trillions in the last few months. Interest rates are rising dramatically as the behind the curve Fed tries to unwind the big mess they created. Rising interest rates are starting to hurt bloated real estate values. Inflation is not going away.
As investors look for places to hide, the hiding places are becoming fewer and fewer. Gold is up 6% year to date and at one point was up over 10%. Physical gold is not a get-rich scheme but has a long track record of holding your buying power and providing wealth preservation. As a case can be made that the price of gold is as cheap today as it was in the 1970s if we consider all of the money that has and will be printed. The US dollar and all fiat currencies will be devalued dramatically. One gold product worth considering for wealth preservation is the American Eagle Gold Proof coin. This bullion coin is truly in a class by itself.
The American Eagle Gold Proof Coin is the “Rolls Royce” of bullion
The Gold American Eagle was introduced in 1986 and was an instant success. Remember bullion coins are based on the purity of the gold and the weight. Proof coins are an enhanced version of the bullion coin. Proof means it has been triple stamped and has an ultra-glossy finish. The American Eagle Gold Proof coin comes with a certificate of authenticity in a beautiful velvet box. These coins are produced by the US Mint at West Point. The presentation is in a class of its own.
The composition of the Proof Eagle is 91.67% gold, 3% silver, and copper. Proof Gold American Eagles are sold as individual coins in 1oz, ½ oz, ¼, and 1/10 oz sizes. However, many investors the limited US Mint releases of 2-coin and 4-coin sets. The sets are comprised of various sizes which include the one-ounce coin, the one-half-ounce coin, the one-quarter-ounce coin, and the one-tenth-ounce coin. In a good gold market, these sets have appreciated at a higher rate than the gold price itself. Because they can appreciate significantly more and make far less of the Proof Eagles versus regular bullion Gold Eagles, they cost more to own and frequently fetch much more than the gold price when they are liquidated by clients.
The Gold Bullion Coin Act of 1985
On December 17, 1985, the Gold Bullion Coin Act was passed into law. This Public Law 99-185 by the 99th Congress made the ownership of US gold coins by investors legal again. Remember in 1933 President Roosevelt made the ownership of gold coins illegal by Executive Order 6102. Executive Order 6102 is an executive order signed on April 5, 1933, by US President Franklin D. Roosevelt forbidding the hoarding of gold coin, gold bullion, and gold certificates within the continental United States.
The Proof Gold American Eagle coin was one of the coins that gained instant success along with the bullion Gold Eagle in brilliant uncirculated condition. The front of the coin according to Public Law 99-185 would contain a picture of Lady Liberty depicted by Augustus Saint-Gaudens, the word LIBERTY and the year of mintage. This has remained constant since 1986. From 1986 to 2021, the reverse of the coin contains the words UNITED STATES OF AMERICA, E PLURIBUS UNUM (One out of many), and IN GOD WE TRUST. The American Eagle picture on the back was done by sculptor Miley Busiek. The new American Eagle on the back from 2021 is done by Renata Gordon and Jennie Norris. In either case, the American Eagle Gold Proof coin remains in a bullion class all by itself.
Proof Gold American Eagles can be owned in different ways
Section 408(m)(3)(A) of the IRC (Internal Revenue Code) lists exactly what types of coins are eligible to be held in a retirement account. Gold and other precious metals allowed in a retirement account have been around since 1997 with the passing of the Taxpayer Relief Act. The Proof Gold American Eagle has been a popular choice in Gold IRAs. As we stated before the Gold Proof Eagle has the potential and track record of being a coin that will appreciate more than regular bullion coins in a good gold market. We are seeing that now as investors are paying more to buy this coin and getting more for it when they are liquidated. Proof American Eagle Gold coins are limited in quantity and supply is tight. These coins in a class by themselves can be found in many Gold IRAs for those with a longer time horizon. These proof coins can also represent some tax benefits when doing IRA distributions, but as always consult your accountant.
Proof Gold American Eagles can also be purchased with non-qualified type accounts. Many clients are liquidating some stock and bond positions and moving those funds into Proof American Eagle sets and individual one-ounce proof coins. This can be done by personal check, cash, cashier’s check, and bank wire. When you are talking about a legacy and a nest egg that has taken decades to accumulate, it makes sense that an investor should consider a product that is in a class by itself. It is always a good idea to be diversified within the gold products you own as well.
Whatever precious metal products you are considering at this time, wealth preservation is paramount in this market atmosphere. There is so much that can go wrong with the financial system. There is so much that people don’t understand. There is so much that our political leaders don’t comprehend. There is so much debt and leverage in the system. Wealth preservation, diversification, and a safe place to hide are a necessity to survive the upcoming financial crisis. Physical gold is a lifeboat. Investors need to approach gold as the lifeboat for your sinking dollar and paper portfolio.
