Dollar coins at the Department of the Treasury, United States Mint in Philadelphia

US Federal Reserve Bank of Richmond is sitting on $1 billion in gold dollar coins it says the American public has little interest in using.

According to two reporters who visited the facility where the coins are kept, in Baltimore, Md., and offer up a report about the stash of funds that the American public doesn’t care for, Meanwhile, even as the coins gather dust, American taxpayers are paying top dollar (as it were) to store the surplus–and even to increase it.

The surplus of dollar coins is due in part to 2005 legislation introduced by then-Delaware GOP Rep. Mike Castle. In an effort to get the American public to adopt the coinage, Castle’s bill mandated that the U.S. Mint produce coins commemorating every U.S. president (we’re currently up to number 18, Ulysses S. Grant). In order to win broader support for the measure, Castle also agreed that 20 percent of the coins minted under the new bill would still feature the coin’s previous figurehead, famed Native American figure Sacagawea.

And while casting money isn’t the same as having it around to fund programs, switching Americans over to dollar coins has been sold as a money saving strategy–coins have a longer shelf life than bills, and according to a 2011 GAO report, converting to coins would save the government $5.5 billion over the next 30 years. However, that profit margin is largely made up of the difference between how much the coins cost to manufacture and the price at which they are then sold to the public, NPR notes–and the Federal Reserve has largely dismissed the case for dollar coins as a net gain for the government, noting that these kind of savings are not likely to translate into benefits to the larger economy.

Despite Castle’s good intentions, the effort to get Americans to embrace dollar coins seems to be a failure. As NPR reports, the Federal Reserve’s own report to Congress last year noted that three-fourths of all Americans are still resistant to the idea of a dollar coin. “The argument is about 50 years too late,” anthropologist Jack Weatherford told NPR. “Coins have rapidly become less and less important in our society—like paper money itself is becoming less and less important.”

Writing in the Financial Times, Zoellick called for a “Bretton Woods II” system of floating currencies as a successor to the Bretton Woods fixed-exchange rate regime that broke down in the early 1970s.

The former U.S. trade representative, who served in several Republican administrations, said such a move “is likely to need to involve the dollar, the euro, the yen, the pound and (a yuan) that moves toward internationalization and then an open capital account.

“The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values,” he added.

Analysts were cautious. “Going forward that would be something that we could look toward, but it’s not going to happen within a short period of time,” said Ong Yi Ling, analyst at Phillip Futures in Singapore, adding that gold prices barely reacted to the comments.

Gold briefly hit a record high of $1,398.35 an ounce in early trade on Monday on concerns of a continued weakening dollar trend after the U.S. Federal Reserve last week acted to resume buying Treasuries.

SUMMIT ACRIMONY?

That policy has fed acrimony among leading economies in the Group of 20 in the run-up to their summit in Seoul on Wednesday and Thursday.

China and Germany, major exporting nations, have both decried the Fed’s quantitative easing — effectively printing money — which is weakening the dollar.

Investors are pumping dollars into emerging markets in search of higher yields, and the potentially destabilizing impact of this, along with big current account deficits and surpluses as well as China’s reluctance to let the yuan appreciate faster, are set to dominate the G20 debate.

France, which takes over the G20 chair after this week’s summit, says it plans to work on a new international monetary system to bring greater currency stability.

Beijing’s central bank chief has suggested an alternative monetary system based on using the International Monetary Fund’s Special Drawing Rights, a notional unit of value based on a basket of major currencies, instead of the dollar as the sole global reserve currency.

Zoellick was a senior official in the U.S. Treasury at the time of the 1985 Plaza and 1987 Louvre Accords on rebalancing currencies among major industrialized nations. He noted that that phase of currency coordination helped launch the Uruguay Round of world trade liberalization negotiations.

While his opinion article in the Financial Times did not represent either U.S. or World Bank policy, it may reflect a greater openness in Washington than in the last two decades to some form of international currency cooperation.

“The dollar is losing its relevance especially with the emergence of Asia economies, so a more neutral benchmark may be required. Gold, amid all the recent uncertainty, is proving its worth,” said ANZ’s senior commodity analyst Mark Pervan.

Gold retreated to around $1,390 an ounce by 1000 GMT as speculators booked profits.

Zoellick said a new monetary system would take time to develop and should be part of a package approach including possible changes in IMF rules to review capital as well as current account policies, and linking IMF monetary assessments to World Trade Organization obligations.

The dollar rose sharply on Monday as unwinding of dollar short positions that began with solid U.S. jobs data snowballed, pushing down the euro to its lowest level since the Fed embarked on fresh easing last week.

Gold Prices

The US economy exited recession in June 2009, the National Bureau of Economic Research said Monday, making it official that the downturn was the longest in more than half a century. More than eight million jobs were lost in the slump that was triggered by dodgy Wall Street mortgage investments.

Even though economists may say that the recession officially ended last year, obviously for the millions of people who are still out of work, people who have seen their home values decline, people who are struggling to pay the bills day to day, it’s still very real for them.

Unlike many countries where a recession is defined as two consecutive quarters of shrinking growth domestic product, in the United States it is determined by a seven-member NBER panel.

Today, like most commodities, the price of gold is driven by supply and demand as well as speculation. However unlike most other commodities, hoarding (saving) and disposal plays a larger role in affecting its price than its consumption. Most of the gold ever mined still exists in accessible form, such as bullion and mass-produced jewelry, with little value over its fine weight — and is thus potentially able to come back onto the gold market for the right price.

Central banks and the International Monetary Fund play an important role in the gold price. The ten year Washington Agreement on Gold (WAG), which dates from September 1999, limited gold sales by its members (Europe, United States, Japan, Australia, Bank for International Settlements and the International Monetary Fund) to less than 500 tonnes a year. European central banks, such as the Bank of England and Swiss National Bank, were key sellers of gold over this period. In 2009, this agreement was extended for a further five years, but with a smaller annual sales limit of 400 tonnes.

Although central banks do not generally announce gold purchases in advance, some, such as Russia, have expressed interest in growing their gold reserves again as of late 2005. In early 2006, China, which only holds 1.3% of its reserves in gold, announced that it was looking for ways to improve the returns on its official reserves. Some bulls hope that this signals that China might reposition more of its holdings into gold in line with other Central Banks. India has recently purchased over 200 tons of gold which has led to a surge in prices.

The price of gold is also affected by various well-documented mechanisms of artificial price suppression, arising from fractional-reserve banking and naked short selling in gold, and particularly involving the London Bullion Market Association, the United States Federal Reserve System, and the banks HSBC and JPMorgan Chase. Gold market observers have noted for many years that the price of gold tends to fall artificially at the start of New York trading.

Gold is an attractive place for investors to put their money in uncertain times, as it’s money that retains its value. The U.S. dollar has also been considered a safe haven, but as headline risks from the BP oil spill, Greece labor strikes and Spain’s debt issues continue to scare traders, hard assets become more attractive than paper currencies.

Gold prices have continued to rise despite the lack of inflation data in the U.S. which indicates that its general fear and headline risk not inflation that’s triggering gold’s move. Wednesday’s core producer price index rose 0.2% and Thursday’s core consumer price rose 0.1%, both in line with expectations.

Analysts expect gold prices to continue to increase further and recovery as a double digit price move to the upside could trigger profit taking.

“As ever in the short term, anything could happen, but given the continuing degree of sovereign risk, gold is more likely to move higher than lower, making it a best investment” says one analyst. “$1,300/oz remains possible over the summer despite the traditionally negative summer season.”

It is recommended to preserve Cord Blood as a type of biological insurance as these stem cells can be a life saver at a later stage. Check out the complete list of dieseases cured by cord blood.Our baby’s cord blood may offer a lifetime of protection:

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• Potential to treat conditions that have no cure today – like juvenile diabetes and brain injury.
• Ready availability of a treatment method using Cord Blood when needed, and faster treatment is always better.

Some families have more defined risk factors, but most families bank for the security of knowing the health benefits that stem cells may someday offer their children, themselves, or other family members.

Is it the right time to invest in Cord Blood Preservation?

Recently Cord Blood America in Las Vegas has received lot of news coverage and is traded publically since 2003.

CBAI, moving toward achieving its goal of becoming a globally dominant stem cell storage company, recently signed a deal licensing its umbilical cord blood technology to AXM Pharma Inc., a China pharmaceutical and nutraceutical company.

Cord Blood America is located at Las Vegas and currently is the largest cryogenic storage in the world. Currently US, Russia, China, Japan, and Europe are the leaders in Cryogenic technology.

Cryogenic pertains to liquefied gases, ie, helium, nitrogen, CO2, which are all inert and extremely cold, ie. -270 deg. Celsius. Others are reactive, LP, Hydrogen.

Information from Guide of Stem Cell Technology

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For many investors chasing these gold mines will end up in a nightmare. There are many hurdles, before they actually start producing gold. Economic feasibility is the main concern. Getting the permission from Government agencies and environmentalists are another major hurdles. In short, even if they managed to find Good quantity of gold, the actual production may be years away. In the mean time, your stake will be substantially reduced by further share issues.

The best way to reduce your risk: Focus on junior miners that are within a year of production. And understand the lifecycle of small mining stocks before you invest.

• Idea and exploration. This is “wing and a prayer” territory, where you’re betting an upstart company with no assets in the ground, some cash in the bank and a fistful of geologic analysis will unearth a mountain of gold. Most flame out; some persist for years, perpetually drilling and fund-raising, while diluting existing shareholders. These risky crapshoots have little to do with gold prices.Some firms do find gold, which brings investors running. In 2006, Aurelian Resources announced what some labeled a “bonanza” in Ecuador. Shares that traded earlier that year for 13 cents soared to more than C$3 on the announcement, even as gold prices slumped. The shares eventually went above C$10 a share, even though it was years from production.
• Discovery and feasibility. This marks the period when a miner determines the costs of building a mine and mitigating environmental concerns necessary to secure permits. It is rife with delays and disappointments that undermine share prices.Consider Aurelian, again. An Ecuadoran decree in April 2008 shut down all mining operations, and Aurelian’s shares collapsed to less than C$4. (Kinross Gold later bought Aurelian for C$8.20 a share to gain access to the gold deposit.)Or consider NovaGold Resources, a junior miner that in late 2007 suspended construction of a massive gold and copper mine in Canada because revised cost estimates — some C$3 billion more than projected — made the project uneconomic.

  Shares fell more than 50% in a day to less than C$10. Today it hovers near C$6.

• Production. A few companies make it to the point at which they’re mining gold in quantity. Red Back Mining first started producing gold in its West African mines in the fall of 2005, with the shares then at about C$2. The cash flow provided a floor for the stock price, and the shares have pushed higher as production increased and as Red Back brought another mine into production. Today the stock trades near C$20.Many juniors in production end up getting acquired. Canada’s Wheaton River Minerals for years traded between C$0.50 and C$3, and was producing more than 500,000 ounces of gold annually when, in late 2004, it agreed to an all-stock merger with mining giant Goldcorp. The merger valued the junior miner at C$4.29. Goldcorp’s share price has more than doubled since, and that C$4.29 share is now worth about C$10.The lesson here: Junior miners that haven’t reached the production stage aren’t really a play on gold. They’re a far-out-of-the-money call option that a particular company will be able to navigate all the various regulatory and operational hurdles and actually produce the yellow metal.

If you’re going to gamble on the juniors, put the odds in your favor. Focus on those generally within a year of production. They’ve got gold in the ground, they’ve passed regulatory and financial hurdles and have determined they can build a mine profitabl.

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Gold Bars

India has bought 200 tons of gold from the International Monetary Fund at $1,045 an ounce, which is close to a recent record high of $1,070. The entire transaction is worth almost $7 billion. 

The move is seen as a way for India’s central bank to move some of its capital away from investments in the dollar. 

The IMF may sell another 200 tons of gold in the relatively near future and most experts expect that the buyer will be China, which has foreign currency reserves of $2 trillion and might like to have its own hedge against the value of the American buck. 

India is being explicit in its concern about the long-term value of the dollar. One senior official of the central bank there told The Wall Street Journal, “It makes sense to buy gold as it will appreciate more than the U.S. dollar.” 

The equity markets may stay volatile as the global economic recovery stays uncertain, giving central banks and investors another reason to move to gold as a “safe haven”.

  The transition to the commodity may drive down the dollar’s value even further, which could help U.S. exporters, but that is bound to increase the concern that the dollar is no longer the most important exchange currency.

The dollar fell after a newspaper report – later denied – said that Gulf nations wished to replace the greenback as the main oil currency. The rise in metal prices lifted shares in mining firms.

Mining stocks were among the biggest risers on the UK’s main FTSE 100 share index, with Fresnillo adding 10% and both Kazakhmys and Vedanta up 9%.

Concern about the possibility of higher inflation in the US as its economy recovers was another factor in lowering the price of the dollar, further boosting the appeal of gold. The last time the spot price of gold hit a new high was in March 2008, when it reached $1,032.80 an ounce.

Price of gold could rise still further towards the end of the year if the dollar remained weak. The price of gold is also typically strong in the October to December period because of the higher demand for jewellery in the run-up to Christmas and the Indian festival of Diwali.

Demand for gold is currently strong in India, and Indian communities around the world ahead of the festival of lights, which this year falls on 17 October. This is because gold jewellery is typically given as presents.

Growing number of private investors were buying the precious metal as a haven against both instability in the financial markets and fears over inflation.

“The bottom line is that after Northern Rock and the wider crisis in the financial markets, more and more people really started to move into gold,” he said. “Gold is a physical investment, they own it outright, so they are not exposed to any bank’s financial survival.

“Now a lot of investors are buying gold because they are concerned about the impact of higher inflation – they are fearful about how much governments are borrowing, and how much money central banks such as the Bank of England are putting into the economy.”

It is predicted  that gold prices will continue to rise, but does caution that it can be a volatile commodity.

Other precious metals also saw their prices rise on Tuesday, with silver up 3% to $17.11 an ounce, and platinum adding 0.9% to $1,305 an ounce. The price of copper was up 2.4% to $6,060 a tonne.

• The U.S. dollar is weakening. That makes the metal, typically denominated in dollars, cheaper to buy in other currencies. (Euro-denominated investors think gold still looks cheap.) Gold traditionally rallies as the dollar falls.
• Inflation fears. Only a few months ago, Bernanke was openly fretting about the possibility of higher inflation – and saying the Fed’s bias was toward tightening rates. Yet he has cut rates dramatically to lessen the credit crunch resulting from a meltdown in mortgage-based securities. Needless to say, the Fed’s action was inflationary. And gold is an excellent inflation hedge.
• The emergence of China and India. A flourishing middle class in both emerging giants is increasing the demand for gold. (Jewelry fabrication was up more than 50% in India alone last year.) People everywhere like gold watches, gold coins, and gold wedding bands.
• Supply constraints. Around the world, discovery rates are falling. Mines are being depleted and mining companies are producing lower grade base metals.
• Geopolitical instability. There are plenty of hotspots around the world today. But gold is viewed as a safe haven during times of political or economic calamity. (That’s one good reason we own it in our Oxford Anti-Terror Portfolio.
• The trend is your friend. Good traders know better than to fight the broad trend in an asset class – and clearly gold is on the rise right now. So it looks like an excellent time to own gold. But how?

Safe Ways to Invest In Gold

The physical metal – especially in the form of bullion or numismatic coins – is lovely to behold. But keeping a large quantity of the metal at hand is risky. If you store it safely, there are costs associated with that, too. Market Vectors is linked to the AMEX Gold Miners Index and owns all of the world’s leading gold and silver mining companies. That means you can capture the performance of the entire sector in a single, well-diversified investment.

As a result, many investors are turning to the safety and convenience of exchange-traded funds or ETFs. Two examples are StreetTRACKS Gold Shares (NYSE: GLD) and iShares Comex Gold Trust (AMEX: IAU). These funds hold, store and insure the physical metal. But the ETFs trade like stocks so they offer easy liquidity. (Both have relatively low expenses of .4% a year.)

The tax impact of these funds may surprise you, however. If you sell a gold ETF for a long-term gain, you won’t owe the bargain 15% tax rate you’d owe on a stock. You’d owe 28% on that gain. That’s because gold ETFs are taxed like collectibles, which have special rules.

Another alternative is to own gold shares in an ETF. Why? Historically, gold stock moves are three to five times as much (up or down) as the price of the metal itself.

That’s because gold-price movements create larger moves in the profitability of mining companies, due to their largely fixed costs.

Market Vectors Gold Miners (AMEX: GDX) are good choices.

The annual expense ratio is one half of one percent. The shares can be margined or sold short – and there are options available for traders who prefer to play gold more aggressively. The top 10 holdings include Newmont, Freeport McMoran, Barrick Gold, AngloGold, Harmony Gold, Kinross, Yamana, Gold Fields, and Agnico.

Don’t overdo it, of course. Gold is volatile and often trades unpredictably in the short term.  But the long-term trend is already in place. And there appears to be plenty of upside ahead.