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A Tribute To Michael J. Kosares

An Archive of Timeless Analysis and Commentary

On September 7, 2023, Michael J. Kosares, owner and founder of USAGOLD, lost his multi-year battle with cancer. He was 75 years old.

Despite countless professional accolades over the course of fifty years of dedication and devotion to the precious metals business, he was never one to boast, nor one to seek out acknowledgement or praise. For him, true success came in a well written article - one he deemed 'had what it took' to make a lasting impact, not necessarily just for our company, but for our industry as a whole, for our colleagues, for our clients, for our subscribers and site visitors, and for really anyone and everyone who took an interest in precious metals and encountered his work.

He was an unwavering and tireless advocate for gold and silver ownership throughout his career, educating generations of investors on the merits of owning physical metals as a means to preserve and protect their wealth during turbulent economic times. From his hardcopy newsletter, 'News & Views’, to three editions of his educational treatise, 'The ABC’s of Gold Investing,’ to volumes of original content delivered via our website over the past 25 years, he spent five decades on the vanguard of gold market news, analysis, and commentary

A truly gifted writer, he made economics accessible, displaying again and again a remarkable ability to simplify even the most complex subjects for his readers. He would take on vast and complicated financial topics, distill them down to the salient points, weave in an interesting history lesson, and top it all off with a bit of clever humor - leaving his readers not only informed and enlightened, but truly entertained.

The following is a hand-picked collection of some of his most impactful work over the past 15 years. Not only is the educational content timeless, but each article is fascinating to read with the added benefit of hindsight, and a deeper understanding of the macro-economic circumstances of when it was originally written.

We invite you to spend time at these pages and enjoy the work of one of the industry’s all-time great thinkers – Michael J. Kosares.

Note: In 2009, USAGOLD commissioned Ed Stein, the highly regarded and nationally renowned editorial cartoonist for the Rocky Mountain News, to compose a series of original financial cartoons. The cumulative result came to be known as ‘The Wit and Wisdom of Ed Stein’ - and arguably the greatest collection of gold-centered financial cartoons ever curated. These commissions are interspersed throughout this page.

Extraordinary popular delusions or the madness of machines

Counter-intuitive forces are at work in the gold market. Europe is moving toward dissolution – erratically to be sure but inevitably nevertheless. Intuition tells us that gold should be moving higher under the circumstances, after all, we are talking about the beginning phases of a major currency, and perhaps economic, collapse.

Gold’s Century

The question becomes whether or not an investment that has performed so well in the past is likely to perform equally well in the future. Though nothing in the world of finance and economics is certain, we rest the bullish case for gold on the understanding that none of the economic and financial system problems that created a positive price environment for gold over the last nearly nineteen years have been removed from consideration. In fact, a case could be made that they have only intensified – and dangerously so.

Bridging the ‘Fourth Turning’ with Gold

The Fourth Turning – the influential work by William Strauss and Neil Howe published in 1997 – uncannily predicted much of what has happened in America over the past twenty years. “The next Fourth Turning,” the authors predicted, “is due to begin shortly after the new millennium, midway through the Oh-Oh decade. Around the year 2005, a sudden spark will catalyze a Crisis mood. Remnants of the old social order will disintegrate. Political and economic trust will implode. Real hardship will beset the land, with severe distress that could involve questions of class, race, nation, and empire.”

A telephone call from an old client and friend

I had the happy occasion recently of receiving a telephone call from an old client and friend – a physician safely retired near the sea and alongside one of the South’s oldest golf clubs. It was good to hear from this student of the markets – one of life’s steady and thoughtful practitioners. Back at the turn of the century, Doc foresaw much of what would happen economically in the United States and purchased what he considered enough gold to see him through it.

How 4000 Roman coins found buried in a Swiss orchard reinforce gold ownership today

In 1700 years, not much has changed. Since 1971, when the United States detached the dollar from gold and ushered in the era of fiat money, the dollar has lost 83% of its purchasing power. The 1971 dollar is now worth 17¢. Gold in the meanwhile has risen from $35/oz. then to roughly the $1300 level today (with a stop at $1900/oz in 2011.) Over the long run, gold in the modern era has maintained its purchasing power as it did in Roman times, while the dollar, like the denarius, has been steadily debased. So it is by the circuitous route just taken, you now know why 4000 Roman coins recently found buried in a Swiss orchard reinforce gold ownership today.

News & Views: Special Advisory January 2021

In 2021, we will come to a dubious milestone – the fiat money system’s golden anniversary. Pandemic aside, the continuing inability of the U.S. federal government to come to grips with its fiscal problems during those fifty years largely explains the enduring, some would say stubborn, presence of gold in millions of investment portfolios around the world – including now those of central banks, financial institutions and hedge, pension and sovereign wealth funds. Until such time as fiscal rectitude takes hold in the halls of Congress – an unlikely proposition any time soon – present gold owners are likely to hold tight and new owners are likely to continue joining their ranks. In the end, contemporary gold owners, by and large, do not own gold to become wealthy, but to protect the wealth they already have.

cartoon of a hedge fund manager on the phone telling a client to buy gold

cartoon showing the tangle of the federal government getting financial aid to the economy

King Ibn Saud’s 35,000 British sovereign gold coins

Had Ibn Saud known that he was sitting on a pool of oil so massive that it would make Saudi Arabia one of the most important pieces of real estate in the world, he might have asked for more. To this day, Persian Gulf royalty become squeamish whenever it appears the value of its oil is being diminished by the over-production of paper currency, hence a continued, well-known attachment to the yellow metal.

Past few days a fractal event for the gold market. . . .

On April 19th, over $3 billion in paper gold was sold in the London over-the-counter market dropping the gold price by $14 per ounce in a matter of minutes. Just as quickly, the cries of foul play rose among gold punditry across the internet. Just before the “hit,” gold was trading in the $1286 range. It plunged to $1272. Since this morning’s AM London Fix, gold has been in recovery mode and it is now trading again in the $1286 range. Except for those who took the drop as a buying opportunity, these events will be seen essentially as a sound and fury signifying nothing. At the same time, quietly the notion of gold’s indestructibility has been reinforced – not so much with respect to its physical qualities, but with the place it occupies in the minds of investors across the globe. The recovery today in a certain sense is a fractal event in both amplitude and duration – a hint of a greater manifestation that might be coming down the road in the not too distant future.

Comment: Will Basel 3 boost gold and silver prices?

Several clients have contacted us with questions on the new Basel 3 accords implementation. This analysis from Patrick Heller, published originally at Numismatic News, is a compelling and very readable interpretation of Basel 3's potential impact on the precious metals market – in fact, the most clearly written we have seen thus far on this complicated subject matter. It is difficult to know if the Basel Committee on Banking Supervision will implement the accord, particularly when one considers, as Heller points out, the negative impact it is likely to have on some large and influential international financial institutions. At the same time, one would think that by now, its net effects on the banking industry would be well understood and factored into the equation. We are still a month away from implementation, we caution, and anything could happen. Heller, as you are about to read, believes that its implementation would have a significant impact on gold and silver prices. We recall the signing of the Central Bank Agreement in 1999 and the subsequent impact it had on the market. Many analysts credit the signing of that agreement, which limited central banks’ sales and leasing of gold, with laying the groundwork for its secular bull market beginning a few years later. Whether or not Basel 3 will have the same impact remains to be seen, but the implications, as Heller describes them, are intriguing.

Comment: Charles DeGaulle’s “Criterion” Speech

Charles DeGaulle’s “Criterion” speech remains perhaps the most eloquent short discourse ever delivered on gold’s historical role as the final arbiter of value. In 1965, when these words were first uttered at the Palais de l’Élysée, DeGaulle’s intent was to explain why France and other European countries believed it necessary to convert their dollar holdings to gold and have the bullion delivered within European borders for safekeeping. Were the French president alive today to witness the growth of American trade imbalances, their translation to U.S. sovereign debt and gold’s coincident price performance, he certainly would have felt a sense of vindication. Following DeGaulle’s original example, millions around the world from that era forward have owned gold as a standard of reliability – a “criterion” as he put it – against which “no currency can compare.”

Comment: A Layman’s Guide to Golden Guidelines for Wise Money Management

There is an old saying that not all that glitters is gold — as in the gold coins many of you have held in your hands. There is another kind of gold that inhabits the practical wisdom of the ages. In today’s “go-get-’em,” “read-it-and-forget-it” world of everyday web browsing, it can be a challenge to separate the run of the mill from the meaningful. It is with that thought in mind we offer this compendium of the rules and laws of finance and investment by long-time market analyst R.E. McMaster. Formerly the writer/editor of the widely-circulated The Reaper newsletter, McMaster is known for his occasional forays into the realm of economic philosophy and history. I think you will agree with me that these skillfully condensed descriptions are indeed meaningful — a wellspring of knowledge worth reading, re-reading and passing along to friends and family, especially the kids and grandkids.

What is George Soros up to in the gold market?

Nick Laird at sharelynx.com developed a chart for USAGOLD supporting the theory that if gold is in a “bubble,’ it is, as Soros suggests, in the beginning stages (See page one). As you can see, gold would need to reach nearly $3500 per ounce -- about 14 times its $260/ounce starting point -- to match the stock market mania that ended in 2000. For those who understand the longer term nature of market trends, like mr. Soros and his colleagues in the hedge fund business, gold probably looks very attractive as it enters into the second leg of the current bull market.

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Comment: Golden Slumbers

“In a later interview with the Financial Times [early 2012], Kenneth Rogoff reveals that “one of the reasons that Carmen Reinhart and I hit it off, is that we are both incredibly cynical about governments.” Though I cannot vouch for the contents of Mr. Rogoff’s investment portfolio, such cynicism, it has been my experience, more often than not beats a path to gold’s door. Reinhart and Rogoff end the preface to the book with this prediction: ‘Unfortunately even before the ink is dry on this book, the answer will be clear enough. We hope that the weight of evidence in this book will give future policy makers and investors a bit more pause before next they declare, ‘This time is different.’ It almost never is.”

Queen Elizabeth Checks Out Bank of England Gold Room

Back in 2008, when the financial system was on the verge of breakdown, Queen Elizabeth asked a now famous question during a visit to the London School of Economics: "Why didn't anyone see this coming?"

The answer she got left something to be desired, so apparently she decided to give it another try yesterday during a visit to the Bank of England's gold vault. Sujit Kapadia, a member of the BoE's Financial Services Committee responded by likening the 2008 crisis to an earthquake saying it was difficult to predict. He also mentioned that "people thought markets were efficient, people thought regulation wasn't necessary."

Mounting Derivatives Danger and Gold

Four large American banks have a combined derivatives exposure of of more than $220 trillion -- that's trillion, not billion. JP Morgan leads the pack at over $70 trillion. Citibank ranks second at $52 trillion; Bank of America, third at $50 trillion; and Goldman Sachs, fourth at $44 trillion.

The Dawn of a New Gold Market

We have now entered a new era. In effect, more than 26,000 tonnes of official gold (about 28,000 tonnes of countries covered by or associated with the agreement less 2,000 tonnes of permitted sales) has been taken out of the market, in the sense that there is no question of any of this being available either as a result of sales or lending. Much of the price falls over the last three years have been due to the fear that at least some of this official sector gold would come onto the market, a fear that has now been removed.

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How to prepare your portfolio for the coming global realignment

In this wide-ranging interview conducted by Peak Prosperity's Chris Martenson, currency expert and author James Rickards offers much clarity and some welcome grounding in what has become a very confusing and unpredictable market environment. Fed policymakers, he says, "think they are dialing a thermostat up and down, but they're actually playing with a nuclear reactor -- and they could melt the whole thing down." Rickards speculates on gold's role in the coming global realignment and the price levels necessary to restore lost confidence in the financial system.

The most important gold market event since 1999

Central banks continued to buy gold; net purchases recorded during the [first quarter, 2012] amounted to 80.8 tonnes, accounting for around 7% of global gold demand. Central banks from a diverse group of countries added to the overall holdings of the official sector, with a number of banks making sizable purchases. Diversification requirements and growth in foreign exchange reserves of a number of countries point towards a continuation of this trend.

21st Century Gold

A general malaise grips the world economy. Investors today accumulate gold as a defense against some future Black Monday on Wall Street, a general bank or currency collapse, a 1930s-style economic depression, or a sudden and virulent inflation – the very same threats investors hedged with their gold purchases from 2001 forward. The charts you are about to review encompass that past, but in a certain sense, they might also project the future. Why? Simply because the concerns just listed have not been effectively addressed. The outcome remains uncertain, and as long as that is the case, gold will remain under accumulation and the fundamental impetus to its 21st century secular bull market will remain intact.

Should I buy a gold ETF? Why gold coins and bullion are the better option for most investors.

You decide that the time has come to include gold in your investment portfolio. You contact your investment advisor and he or she puts you into a gold ETF. Did you do the right thing? In this article, which originally appeared at Forbes magazine, Olivier Garret tells why gold coins and bullion owned outright are the better option.

The Gold Owners' Guide to the Rest of the Decade: How to protect and build your wealth through gold and silver ownership

My abiding concern, and everyone's in my view, should be getting across the bridge between the great crisis and the new golden age with a minimum of damage. Between now and then, fortunes will be lost, small and great alike. Markets will reel. The economy will face extreme danger. For nation states around the world the Great Crisis will become the Great Test.

New Cyprus-style EU bail-in plan signals risks to depositors
Quiet accumulation of gold coins likely to gather pace

A European Union plan to curtail bailouts will put bank stock and bond holders at risk in the event of a failure as well as large corporate and private depositors with accounts over 100,000 euros. These bail-in measures, approved Wednesday by Europe's finance ministers, are sure to change the way investors look at banks both from an investment point of view and in the way they are operated and governed. Though the European Parliament and individual EU governments must approve the deal, the plan should serve as warning on both sides of the Atlantic as to how policy-makers in governments and central banks now view responsibility for bailing out poorly run and failing banks.

News & Views: Gold Bullion, Historic Coins Lead 2004 Investment Pack

It’s a matter of trust. We trust that the dollar exhibits the same purchasing power when spent as it did when earned. We work, earn, save, and invest never realizing that this sacred trust has been consistently broken by a long string of federal government administrations beginning with Woodrow Wilson’s in 1913 and. continuing on even today during the presidency of George W. Bush. In fact, ever since the Federal Reserve Bank of the United States was founded in 1913, the dollar has been consistently debased with little or no pause in the process. The 1913 dollar is now worth 5.3¢. The 1940 dollar is now worth 10¢. The 1960 dollar is now worth 16¢. The 1970 dollar is now worth 23¢. Even the 1990 dollar, when Americans were told repeatedly that inflation was for the most part a thing of past economies and no longer a real concern, is now worth only 71¢.

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The Gold Owner's Guide to 2014

Since the beginning of gold's bull market in the early 2000s, we have recommended an unambiguous course of action: Own the physical metal -- fully paid for and stored nearby -- then sit back and watch the show.

Disturbing Trends:
Is Now the Right Time for Gold?

For one, the government fiscal and trade deficits did intensify as predicted until the phrase ‘twin deficits’ became part of the daily financial vernacular. The decline of the dollar did “prove to be the most dangerous and devastating disturbing trend for the average American investor and the one most directly linked to a bull market in gold.” And the strong dollar policy did become “a thing of the past” right down to Alan Greenspan’s apparent and very public abandonment of it in his Congressional testimony of February 11, 2004.

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Gold’s secular bull market: Past, present & future

Gold is not simply an investment vehicle. It is a also a savings instrument and a form of wealth insurance. As such, the argument goes, it cannot and should not be analyzed along the lines of a stock or the stock market as a whole. Since gold is essentially a kind of money by which investor-citizens hope to counter negative economic trends, many owners are likely to retain ownership as a lifetime estate hedge, particularly if the conditions that necessitated the hedge remain unresolved. Central banks and hedge funds accumulating physical gold, for example, often point to global economic uncertainties and the unreliability of national currencies as their incentive. That would suggest that they will retain their gold holdings as long as these problems remain a threat.

Will the Shanghai Fix 'fix' the gold market? China takes a seat at the gold pricing table

John Maynard Keynes once remarked that "A debtor nation does not love its creditor, and it is fruitless to expect feelings of good will." In the case of the financial arrangement between China and the West including the United States, I might add that the opposite is also true, particularly when that creditor thinks its debtor might be in over its head. Each, though, has learned to live with the other in this complicated and intricate web of debt and money, interlocking national balance sheets and intertwined commercial interests we call the international markets. To not do so is to act against one's own national interest.

Reflections in a Golden Eye: Rejection, repatriation and redemption in the gold market

The gap between the "political" deficits and the "real" deficits remains a constant source of irritation among economic conservatives. For fiscal year 2014, the political deficit, played up by the press, was $483 billion – the politicians' feel good number. Here's the reality: On October 1, 2013, the beginning of the federal government’s fiscal year, the national debt stood at $16.747 trillion. By the end of the federal government's fiscal year, September 31, 2014, it was $17.824 trillion. In reality, the federal government added $1.077 trillion, not $483 billion, to the national debt. The inability of the Beltway to confront the budget deficit reality is at the basis of its inability to deal with it.

The Shanghai stock crash and China gold demand

Typically stock market crashes inspire gold demand. In the case of China, where the government and central bank encourage citizen gold ownership as a matter of public policy, that lesson could become enshrined in the national psyche. The important consideration for investors elsewhere around the globe is what effect even stronger gold demand from China will have on the gold price both now and in the future.

Bernanke’s conundrum: What it might mean for gold

“Central banks sold a record amount of US Treasury debt last week and bond funds suffered the biggest investor withdrawals on record as global markets shuddered at the prospect of the US Federal Reserve ending its quantitative easing program.”

Gold a safe harbor on an ocean of excess reserves

It has been an enduring mystery to many why the enormous amount of money created by the Federal Reserve in the wake of the 2008 crisis never translated to a general price inflation. After all, as Milton Friedman lectured us, "inflation is always and everywhere a monetary phenomena." So why didn't the enormous amount of money created by the Fed during its quantitative easing program – some $3.5 trillion added to the bank reserve credit – launch double-digit price inflation, or worse?

Blinded by the Money Illusion

The Federal Reserve has gone to great lengths to emphasize that any liquidation of its assets would be gradual and conducted with a keen sense of how such operations might affect the stock and bond markets. Still, no one knows for certain how the markets will be affected once the process actually begins.

When markets go bump in the night

We should not be surprised that the long-standing troubles at Deutsche Bank would appear to be coming to a head now. For global financial centers, October is often the cruellest month – a time when stock markets and whole economies have been known to go bump in the night. The Panic of 1907, the Crash of '29, Black Monday 1987, the Friday the 13th crash 1989, the Asia Crisis of 1997, the downturn of 2002 and the launch to bear market in 2007 – all took place in the month of October.

USAGOLD has been helping investors make informed decisions on precious metals ownership for over 50 years.

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Product title

A Tribute To Michael J. Kosares

An Archive of Timeless Analysis and Commentary

Extraordinary popular delusions or the madness of machines

Gold’s Century

Bridging the ‘Fourth Turning’ with Gold

A telephone call from an old client and friend

How 4000 Roman coins found buried in a Swiss orchard reinforce gold ownership today

News & Views: Special Advisory January 2021

King Ibn Saud’s 35,000 British sovereign gold coins

Past few days a fractal event for the gold market. . . .

Comment: Will Basel 3 boost gold and silver prices?

Comment: Charles DeGaulle’s “Criterion” Speech

Comment: A Layman’s Guide to Golden Guidelines for Wise Money Management

What is George Soros up to in the gold market?

Comment: Golden Slumbers

Queen Elizabeth Checks Out Bank of England Gold Room

Mounting Derivatives Danger and Gold

The Dawn of a New Gold Market

How to prepare your portfolio for the coming global realignment

The most important gold market event since 1999

21st Century Gold

Should I buy a gold ETF? Why gold coins and bullion are the better option for most investors.

The Gold Owners' Guide to the Rest of the Decade: How to protect and build your wealth through gold and silver ownership

New Cyprus-style EU bail-in plan signals risks to depositorsQuiet accumulation of gold coins likely to gather pace

News & Views: Gold Bullion, Historic Coins Lead 2004 Investment Pack

The Gold Owner's Guide to 2014

Disturbing Trends:Is Now the Right Time for Gold?

Gold’s secular bull market: Past, present & future

Will the Shanghai Fix 'fix' the gold market? China takes a seat at the gold pricing table

Reflections in a Golden Eye: Rejection, repatriation and redemption in the gold market

The Shanghai stock crash and China gold demand

Bernanke’s conundrum: What it might mean for gold

Gold a safe harbor on an ocean of excess reserves

Blinded by the Money Illusion

When markets go bump in the night

New Cyprus-style EU bail-in plan signals risks to depositors
Quiet accumulation of gold coins likely to gather pace

Disturbing Trends:
Is Now the Right Time for Gold?