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Prediction: Gold will rise in

For the 28th consecutive year, I’ve brought out the crystal ball to offer you a window to the future. For the next couple of minutes, you can check out my scorecard from last year and see what I believe the future holds.

Predicting the future is what newsletter writers, pundits and seers do for a living. For the past 43 years, I had the best part-time job, ever: writing this “Under the Glass” column dedicated to covering the entire numismatic field. Last year, I did a “Seer” column with a number of predictions about the coin market and some other things of interest to our community.


In looking through my clips, the first reference I can find to this line of work is an article that I wrote on these pages in May 1971, entitled “The unmasking of a seer.” It was never a regular feature of this column, though I did it from time to time, but starting around 1980, I regularly did a feature once each year for the other periodical magazine.

Historically, I’ve spent a lot of time in the “Seer business” when it comes to market analysis. I’ve always, for example, predicted the price of gold, silver, platinum with varied degrees of success. The same is also true of my famous predictions for 1881–S silver dollars in MS–65 condition, something I view as a bellwether of the marketplace as a whole.

Less accurate is my plea for Indian Head cents to be given their fair recognition and representative pricing. (Okay, finding a 1906 Indian Head cent in pocket change in 1960 changed my life – and yours).
As my own life has changed and evolved, I became an elected official serving first as mayor of my community (fourth-largest in New Jersey’s largest county, Bergen) for seven years, and subsequently during the past six years as a county commissioner or supervisor known as a Freeholder.

My interest in politics went from local concerns to national predictions and some very close calls on presidential races in this century (mostly accurate but finally off by only a couple of electoral votes).
So, for the 28th consecutive year, I’ve brought out the Ganz Crystal Ball to offer you a window to the future. For the next couple of minutes, you can check out my scorecard in the seer business from last year – a respectable .650 average – compare it with some whoppers from years past, and see what I believe the future holds.

When I quote my seer record – it usually is 50 percent or better – I am reminded that great players like Ty Cobb (.367 lifetime batting average) couldn’t master his craft six times or more in 10 chances. May being a seer isn’t so bad after all.

As many readers know, in real life I am a lawyer, so take a lawyer’s cautionary note: everything that I write should be viewed with a grain of salt. My track record in predicting precious metal prices is pretty dismal – though not this year – zoo monkeys tossing darts might do as well. But on some compelling hobby and other issues, my overall track record borders on the semi-skilled. Recently it has been better than in years past.

No one has suggested I give up my day job as a lawyer and local political figure (except for the local voters who voted for the other guy in the 2005 mayor contest). (I didn’t predict it, but I was re-elected this past November as a Freeholder, obtaining a record 171,000 votes).

This seer business is actually tough and takes a lot of research, twice. The first is the datum necessary to read the tea leaves of the future; the other is checking on what happened in the past. Both are time consuming, but also a lot of fun. I hope you enjoy the Swami’s musings as much as the seer enjoys writing them.

In gearing up for this year’s article, I drew on a 2006 visit Kathy and I made to the Oracle at Delphi. That journey was incredible and took us around 120 miles North of Athens – three hours by tour bus. I can almost imagine the soft glow of the Oracle. Sit back now and let’s predict 2009:

1. Gold. Spot as of this writing is $802. My belief is that the compelling market realities will cause a shift of more than 17 percent in the next 12 months (by December 2009); that is, gold will rise above $938.
All of the traditional rules seem to be broken, but gold is an asset of last resort and in tough economic times like these, is traditional storehouse of value should be a winner. We’ll see.

2. Silver. Silver is now $10.16, or half of what it was (more or less) in March. Silver has industrial and commercial uses, and my guess is that this inexpensive metal has a run up of at least 25 percent during the year. So that there is no misunderstanding, that means that silver will exceed $12.70 during the year.

My real target is higher, but I can afford to play it safe. That means I can tell you I really think that silver will go above $15 an ounce, but who can argue with someone who says a 25 percent return on investment is what’s being predicted at a minimum.

3. Platinum. Today, spot price for platinum is $827; it has fallen $1,400 in the course of just a couple of months. Since one of the major industrial uses of platinum is for catalytic converters for automobiles – a pollution impediment – I look at the debacle concerning Ford, Chrysler and GM and say platinum is going to stay depressed but will move $50 an ounce to $877 or more this coming year.

As a percentage, this is a little more than 6 percent – but look at other vehicles for return and see how it compares. Platinum isn’t a bad bet.

4. Next Mint director. My vote goes to Reed Hawn, the Texas collector and political activist. Ed Moy, current director, has a five-year statutory term, but it is likely that he will depart in the spring. It won’t even take the president’s request; it will happen on a much lower level.

Many other directors with long term Senate appointments have had to interrupt their tenure to move on. Among them, William Brett (1954-1961), who left when JFK took office; Eva B. Adams, director 1961-1969, who left shortly after Nixon took office (and the Philadelphia Mint opened); and Mary Brooks, who succeeded her (1969-1977), who departed as Jimmy Carter took office.

Then came Stella Hackel Sims (1977-1981), who departed as Ronald Reagan entered, and Jay Johnson, appointed by President Clinton in May 2000 and departed mid-2001 as George Bush nominated his Mint heads.

5. End of the cent. The economy, stupid! The powers that be are going to look at saving a few bucks and in the end are going to decide that in these economic times, symbols do matter, and the cent will be safe, again, for a little while at least.

6. Mint will produce less. A large number of cents and other denominations aren’t in circulation. About $10.5 billion, or $93.75 per household, is sitting idle, according to Coinstar, which hosts coin-counting kiosks in grocery stores, banks and other locations.

Bet those coins continue to get turned in at record rates; that inevitably means that the Mint will be producing fewer coins.

7. ANA politics. Presidential contest this year is between Clifford Mishler and Patty Finner, both of Iola, Wisconsin. It’s a small town – I lived there once (1973-74)– and this is one instance where there may be some real campaigning (perhaps at the new Crystal Café). My prediction of the end result: Mishler, in a close race.

8. Coin market. It will hold its own against the national economic trend and change upward by more than 5 percent. Compare that to the Dow, Standard and Poors or even farmland.

9. 1881-S bellwether silver dollar. Priced now on Dennis Baker’s NumisMedia MS-65 at $185, the price will go over $200 in 2009. That’s a modest 8 percent. In 2006 it was valued at $152. It’s simply time.

Well, that’s it for this year. See how these predictions work out by checking out these pages same time next year.

How the Seer did with predictions for 2008

1. Political predictions. First, California will retain the traditional winner-takes-all electoral block. The Democrats will take the White House in a close (state-by-state votes for electoral vote) contest, widespread popular vote. No Supreme Court challenge this time. My guess is 391-157.

California kept it, Dems won, vote was 365 to 173. Three full points!

2. Gold is on the way to $1,000 an ounce and will reach it in November, 2007 and December, 2008, a 13 month window. But once $800 an ounce was breached, my crystal ball says a run on $1,000 is likely. As this is written (Thanksgiving, 2007) gold’s price is $803 an ounce. That’s a 24 percent increase. Watch for it.

Gold briefly topped $1,000 on March 17. Bingo. 1 point.

3. Silver, now at $14.66, will rise to $16 or more in the next 13 months.

Silver did hit $16 and then some, topping out at $21 on March 17th. I am starting to look like I have a real crystal ball.

4. Watch for platinum to rise to over $1,600 an ounce in the next 13 months.

Platinum went to over $2,300 an ounce on March 4 and stayed above $1,000 until early September. It was a nice ride.

5. Congress is going to try and give up on – or abdicate– its constitutional responsibilities in setting weight, size and composition of the nation’s coinage – but will retain rights to name the coin and define its design. Oddly, it will pit Ds versus Rs – with the Democrats willing to sign rights over to the Mint, in evident violation of Article I, Section 8 of the federal constitution – which gives Congress non-relegable power over the nation’s coin and currency.

They tried but the bill, H.R. 5512, made it in early May in the House, but could not pass the Senate. Half a point.

6. Watch for hearings and a vote on elimination of the cent and the nickel – on the faulty logic that it costs more than a cent to produce the 1-cent coin and nearly a dime to produce a nickel, when overhead is added in.

Woulda, shoulda, coulda, mighta, nope. The Mint will back a compositional change – they’ve expected it for a while – but the Seer notes that they also favor giving administrative authority to make the change.

7. Law suits and administrative hearings are likely to occur over the use of the word “Mint” in 2008, now that regulations have been issued to clarify that in the U.S. Mint’s view, no one but they or another lawful government facility can use the word “Mint” in advertising.

The Mint has trademark status on the phrase “U.S. Mint” and a host of other product names including “U.S. Mint Proof Set”, “UNcirculated set”, and so forth. Watch for (1) the law suit an (2) the suit to cancel the trademarks on the basis that they are longstanding generic names that have lapsed with common usage.