Wexford Capital Management, whose Principal was a registered investment advisor from 1985 to 2005, prides itself on offering investment products at very competitive prices over the Internet.  We have reduced our overhead by using this electronic medium, and we intend to pass on the majority of those savings to you, our valued clients.  We charge a 1.1% commission or mark-up over our cost from our wholesalers on Gold Bullion products, a 1.7% commission on Silver Bullion products, and a 1.5% commission on Palladium and Platinum Bullion Products, both coins and bars.  Minimum order size, per invoice, is currently $10,000 on both sales and buy-backs.

Listed below are representative prices for the Bullion Coin and Bar products that WCM is currently recommending to clients based on portability, refined purity, market liquidity/ acceptance, and existing premiums over melt.  As one can observe, these total premiums over melt or weight-adjusted spot prices are approximately 45% to 20% below that of most coin or bullion dealer offerings.  Reduced transactions costs always benefit the investor from the outset.

With both U.S. credit and equity markets exhibiting stressed and overvalued conditions, it is a prudent investor who searches for avenues to diversify his/her portfolio into tangible, hard assets, such as precious metals, that  possess the following characteristics:

1.  Negative or weak correlation to price movements in the financial markets, especially the stock market.

2.  A millenniums-old medium of exchange or monetary unit that does not represent any government's liability or ability to repay; confidence in issuing entity is 100% due to ability to assay precious metals for purity.

3.  Reasonable portability should the need arise for transfer during a time of crisis; shipping and handling costs not the detriment suggested by the financial press.

4.  Well-established intermediaries exist for long-term storage and insurance if holdings do not fit in safe deposit boxes or secluded sites controlled by investor.

5.  An asset class that was in a bear market for over 22 years, that was oversold, disdained by Wall Street, and now exhibits signs of physical accumulation while breaking out to new multi-year highs.

6.  Excellent liquidity with bullion markets trading continuously around the globe 23 hours per day and with no determination of market value required by investor upon resale.

7.  An asset that central banks will increasingly use to shore up confidence in sagging fiat currencies as excessive monetary and fiscal policies cause major paper money devaluations going forward.

8.  An asset that has retained its purchasing power during both inflations and deflations, a key characteristic in a time of domestic Dollar devaluation.

Broker's Note, Year's End 2009 (December 31, 2009):  

2009 merely represented a postponement of the eventual DEPRESSIONARY effects of the most massive collapse in the Tens of Trillions of Dollars of Debt Instruments that the world has ever seen.  This COLLAPSE, which had its First Panic Phase in October, 2008, has yet to be resolved with the major commercial banks of the United States insolvent and technically bankrupt IF NOT for the abandonment of Generally Accepted Accounting Standards (GAAP).  Trillions of Dollars of Toxic Assets remain on the books of U.S. and global banks and both the global economy and financial system will not be able to heal until those grossly overvalued "assets" are written down to their real market-clearing values and sick banks are allowed to fail.  Additional debt implosions are in store for 2010, commercial real estate being one of them, not to mention few signs of any recovery in residential real estate prices.

It should also be noted, for the record, that the U.S. Government has now become technically bankrupt by 2008's and 2009's massive creation of some $13 Trillion in additional U.S. Obligations.  Terms associated with the United States such as "Leading Economic Power" and "Reserve Currency Status" will cease as adjectives in a once U.S.-centric world.  

No sovereign currency will be trusted by citizens not to be debased by their domestic governments and Central Banks in order to attempt to shield citizens and systems from the devastating Depression unfolding before us.  The efforts by virtually all governments to re-liquefy the global economy and financial system will be met with failure as we have entered the Loss of Confidence Phase in this historic, Depressionary Cycle.  Lenders will not lend, and Borrowers cannot or will not borrow at this stage of the cycle.  The U.S. and Global Economies are on an accelerating decline path that cannot be slowed or stopped with Quantitative Easing by the world's Central Banks or Sovereign Governments.  The purported "Green Shoots Recovery of mid-2009" is a mere temporary respite to a much greater retracement period well in progress.  The essential economic and financial system restructuring must be allowed to run its natural course with bad assets being flushed out, or the depth and length of this current "malaise" will be much greater on both counts.

The upcoming year, 2010, will see another record surge in Gold and Silver buying by retail investors as the financial and economic landscapes re-enter "Instability Mode, Phase II" (even with reduced precious metals supplies and higher "delivered premiums").  Printing money and buying our own sovereign debt to solve systemic financial and economic system crises will do little to re-instill Investor and Consumer Confidence, but will eventually collapse the credit standing of all U.S. Obligations, past and present.  Artificially cheap borrowing rates for the U.S. Treasury will no longer be possible as 2010 unfolds, and the Pay-the-Piper of higher interest rates that always accompanies debased creditworthiness and inflationary fiscal & monetary policies will land squarely on the U.S. doorstep.  Stock investors are destined to be whipsawed into acute negative territory for the 3rd or 4th time over the last pitiful decade for equity "returns".   Stock investors have made basically nothing over the last decade if they were lucky, while the S&P 500 provided a Total Return of Minus 9%; i.e., investors "paid" to be in stocks!  Bond investors will fare no better as interest rates rise globally during 2010.

Throughout the history of man, gold and silver have been the Currencies of Last Resort when fiat, government-created domestic currencies have experienced severe devaluations and the inevitable loss of confidence.  U.S. Government officials effectively decided in late 2008 and throughout 2009 based upon their zero-rate-money flooding, diverse bail-out, and proliferate spending actions on an unprecedented scale, that it will be impossible for our country to fulfill its humongous debt obligations now approaching some $106 Trillion including the mandated entitlements of Social Security and MediCare.  Devaluation/ Debasement of the Currency of the Realm, the U.S. Dollar, is the only way out of our fiscal and financial system morasses in their unenlightened views.  They have yet to be correct on virtually any action taken to date.  They have actually dug us deeper into a depressionary "hole"; if they would only put away the shovel.

WCM's 2009 price forecast for Gold was actually very, very close (much better than Greenspan and Bernanke economic forecasts!) :  the Gold target of $1,255 was nearly breached by late November's $1,217 intra-day high, what is a mere $38 amongst compatriots.  WCM's 2009 price forecast for Silver of $23.85 was forgetful of the relative ease of Comex insiders to whipsaw this thinner market with an intra-day high of "only" $19.18 per ounce; however, silver soared 57.5% by year-end 2009, handily outpacing gold's 26.9% advance, an outperformance this bullion broker feels will continue in the months and years ahead.

For the last 9 years, both Gold and Silver have almost QUADRUPLED IN VALUE, up some 287% on average.

FOR 2010, Wexford Capital Management sees price targets for Gold of $1,495 per ounce and for Silver of $29.65 during the year.  No guarantees, of course, but conditions on January 1, 2010 are worse than on January 1, 2009, I don't care what the talking heads on CNN / MSNBC and in Washington are telling us!!!


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Prudent investments in precious metals today are indeed, as in every other major turning point in history, very cheap insurance against the economic and financial collapse in the monumental adjustment period we currently find ourselves within.  No economic or financial system in the history of man can withstand an evaporation of $10's Trillions of purported "assets" without seismic consequences to the surrounding societal structures.

When the Powers That Are forestall the inevitable re-balancing / adjustment process through ultra-cheap money first from Alan Greenspan and now Ben Bernanke, and persistent/$Trillion Bail-Out Guarantees/Bail-Outs from the U.S. Treasury & Congress, the net result is an inevitably more dire one for the constituents for whom they act.   Hundreds of years of history support my perspective and conclusion.  "This Time Is Different" will not rewrite the lessons of such historical precedent in human history.

It will not be business as usual in the years ahead, PERIOD.    A severe recession followed by an inevitable Depression with widespread debt repudiation are already in progress for all with a pulse to see.  He who fails to act will be financially devastated along with the coffers of the country.

Buy a prudent allocation of precious metals and take physical possession.  The traditional allocation of 10% to 15% of investment assets is now obsolete due to the enormity of the Tens of $Trillions of Global Debt and Equity that will evaporate in the years ahead.  PHYSICAL GOLD, SILVER, PALLADIUM, AND PLATINUM are no one else's liability, unless you acquire them in paper, "promise-to-deliver" instruments.  Have you or your accountant audited the operations and financial statements of those that offer or provide you with precious metals' electronic, paper instruments or certificates, even the untested ETF's?

THE ONLY WAY TO AVOID BEING DEVASTATED FINANCIALLY DUE TO THE RAPIDLY UNFOLDING financial and economic depression IN 2010 IS TO INVEST DEFENSIVELY IN TANGIBLE ASSETS in physical form.  ALL FINANCIAL AND PAPER ASSETS MUST BE ANALYZED WITH A FINE-TOOTH COMB GOING FORWARD TO DETERMINE THEIR ABILITY TO RETURN PRINCIPAL UPON DEMAND.  TRUST ONLY THAT WHICH YOU CAN CONFIRM WITH YOUR OWN EYES.

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