The Investment U E-Letter: Issue # 371
Monday, September 20, 2004

Camino Coins and Financial Catastrophe Insurance
By Dr. Steve Sjuggerud, Chairman, Investment U

“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation.” Alan Greenspan, in 1966

Q: When is catastrophe insurance the cheapest?

A: When you haven’t had a catastrophe for a very long time…

And that’s where we are today.

We haven’t had major financial crisis in the U.S. since the S&L crisis / recession just as we entered the 1990s. With no crisis for over a decade now, one investment has fallen by about 70% from its 1989 peak. Right now, it’s dirt cheap.

This investment has had three major bull markets since the 1970s… up 348%, 1,195%, and 665%.

The catastrophe insurance is historic coins and gold coins in particular.

Dinner With One of the All-Time Greats: Burt Blumert of Camino Coins

Last Monday, I had dinner with Burt Blumert in Burlingame, CA, just outside of San Francisco. And Tuesday, I visited his nearby office. Burt is one of the savviest coin dealers I’ve ever met – he’s been doing it for decades, too.

Burt opened Camino Coin in 1959. There are few with as much experience as Burt when it comes to gold and coins.

Based on Burt’s lifetime of experience, and his excellent track record of treating thousands of my readers very well, Burt is one of my recommended coin dealers. I was giving a speech in San Francisco last week, so I flew in the night before to have dinner and catch up with Burt.

My friend Rick also joined us for dinner. Rick is a 35-year old successful businessman. Probably like most 35-year old businessmen, Rick has a nice house, and is building a nice nest egg through his retirement accounts. Also probably like most 35-year old successful businessmen, Rick has never considered having gold or gold coins as part of his investments. Rick, in fact, has never even seen a gold coin, like a Saint-Gaudens.

So I thought this dinner could be interesting… Here we have a man in his 80s who lives for gold and liberty, and a man in his 30s who has spent very little time considering either…

After dinner, I asked Rick what struck him the most about Burt. Here’s what he learned from dinner with the legendary Mr. Blumert…

What’s Really Behind the Paper Dollar

Throughout almost all of American history, money was worth something of intrinsic value: gold And gold has had intrinsic value and has been used as money for centuries.

Gold has many characteristics that make it a fairly decent store of value. Under the gold standard that we operated on in the past, for every dollar in circulation, our government held the equivalent amount of gold to “back” that dollar. The system made some sense, as the government couldn’t just print paper money at will. It had to have gold to back it.

Now we are off the gold standard. We have been off the gold standard for just about all of Rick’s lifetime. Until last week, he’d never questioned the value of a dollar – that piece of paper in his pocket, and that pile of (electronic) paper in his bank account. Now, after just one evening talking with Bert, he understands that that a paper dollar is an empty promise. It is backed by absolutely nothing.

And while he trusts in that dollar (he has had no reason not to trust it in his lifetime), he now understands what he’s piling up has no intrinsic value.

The Best Place to Find Intrinsic Value – And a 100% Return

Rick has been “trained” as most 35-year olds have, that in order to increase your returns and reduce your risk, you need to diversify spread your eggs around. Still, Rick, like most 35-year olds, probably has too much exposure to the stock market, and no exposure to gold coins (or gold of any kind).

It wouldn’t surprise me, knowing what he knows now, if Rick took some of his money out of stocks and bought some gold coins.

By doing so, he knows that he’ll be holding a portion of his wealth in a form with intrinsic value. Not to mention, he’ll be buying gold coins at one of the cheapest times in history, where he could see a 100% return on his investment in the next five years.

No wonder Rick made plans to stop by Burt’s Camino Coin the next morning and have a look into holding 5% or more of his investment dollars in gold-related investments, namely gold coins

I urge you to do the same as Rick. Learn as much as you can. Get to know my recommended coin dealers, Burt Blumert and Van Simmons. And consider diversifying a bit of your wealth into gold coins. I think in a few years time, you’ll be very glad you did.

Today’s IU Cribsheet

• To learn more about this Camino Coins, you can contact the dealers I recommend in my newsletter, Burt Blumert (burtblumert@comcast.net) and Van Simmons (info@davidhall.com) I would also recommend you visit http://www.pcgs.com and read their free “Coin Guide”
• And for some good background, read Coin Collecting for Dummies (it is more for collectors than investors, but it’s good).

Good investing,

Steve

Related Articles:

• Interview with Van Simmons: How to Make Some Coin with Undervalued Coins
• Coin Investing: How an Investment in Rare Collectible Coins Offers Both Diversity and Profits
• How To Buy Gold Coins: Own fantastic 100-year-old “Brilliant Uncirculated” Gold Coinsat 5% or Less Over Melt Value

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