Tangible Assets Updated
By Thomas G. Cloud - March 19, 2002

In beginning my annual update on tangible assets, I would like to discuss briefly the changes that have occurred in the key investments we follow since our update of 2001. That update can still be found on our web page under the "Market Update" icon.

Over the past twelve months, the DOW has risen 3%. The NASDAQ has dropped 3% and the S&P 500 is down 1.2%. It is amazing that the NASDAQ soared 45% between September 21, 2001 and January 4, 2002; yet, for the past twelve months (since the date of my last tangible asset update), the NASDAQ is still down. During that same time period, gold has increased 12%, silver has increased 2%, while platinum has fallen 12%.

The key element that continues to impact gold is the lack of confidence in the American stock market and the problems with deposit insurance in Japan. In the March 18th issue of the Wall Street Journal, an article appeared entitled, "Will Greenspan Put a Blanket Over the Rally?" During the past 12 months, the FED slashed its short-term interest rate to 1.75% from 6.5% and injected over 9% of freshly created money into the banking system. That made mortgage rates plummet - leaving consumers and investors with more money to spend. That injection of money is now causing many experts to predict that Greenspan will turn off the money faucet. With the economy looking like it is coming out of a recession this quarter and with inflation increasing in every sector, the stock market could be in for another shock similar to March of 2001 when the NASDAQ dropped 6.3%, the DOW 4.1% and the S&P 4.3%. Even Jeremy Siegel, Professor of Finance, Wharton School of Economics and author of Stocks for the Long Run, is concerned about a bear market due to the lid he feels Greenspan has placed on the market.

Additionally, the money pouring out of U.S. securities and stocks and also bank accounts in Japan is accelerating as the April 1st deadline for unlimited insurance on deposits is nearing. To learn more about this, please listen to my radio show by going to Turamali.com and hitting the icon titled "radio show". If you prefer, you can visit our web site and read my last two market updates that discuss the situation in Japan and how that may impact gold for the foreseeable future.

GOLD
There are many factors that have impacted gold's rise over the past twelve months. The GATA lawsuit against the United States Federal Reserve and Treasury continues to drive the possibility that gold will escalate much quicker into higher levels throughout the remainder of 2002. GATA believes they have drawn a fair judge and that the proof they hold that the government manipulated gold and intervened in the market seems to be overwhelming. Visit www.gata.org or join the mailing list at groups.yahoo.com/group/gata. The hard information is quite alarming that this suit proves conclusively that our Treasury and Federal Reserve sold gold without public knowledge or the knowledge of Congress. This news will not disappear and will drive gold prices upward for the mid and long-term. Couple that with the money that is shifting to gold in Japan and also the area that no one is talking about. That is the area that Americans have finally increased their gold purchases for the first time since the 1980's. As the stock market remains "iffy" at best, investors are looking for safety and diversification. I believe more and more money will move into gold over the balance of 2002 and beyond.

The other factor that many believe will drive gold upward is the falling dollar. The dollar has been so strong for so long, but now that trend is changing. Other factors impacting the outlook for gold are the growing strength of the EURO and the possibility that England will join the European community. While there have been no new developments on the EURO being backed partially by gold, this is a factor that should be watched as well.

I continue to believe every portfolio should have gold coins both in one-ounce coins as well as fractional coins that could be used for barter. Barter coins carry lower premiums now than they did during Y2K, so they are excellent choices for your portfolio at this time.

SILVER
A year ago, I was somewhat pessimistic about silver. Yet, it has gained 2% over the past year. Silver remains in a tug of war between industrial uses going down and the fear of inflation sending silver higher. Silver has always been the common man's inflation hedge because it is more affordable than gold or platinum. If you are holding silver at this point, Turamali recommends that you continue to hold it. A year ago, we recommended exchanging and many of you did and have been rewarded with a 10%-plus profit. Our offer remains in tact. If you are interested in exchanging silver for gold, we will handle the exchange at no fee to us.

If you want to acquire silver, I recommend junk silver or silver rounds as the most cost efficient way to own silver.

PLATINUM
This month marks the three-year anniversary for the buy signal we issued for platinum at $340 per ounce. Platinum today is at $501 per ounce and has been as high as $650 per ounce going back to late 2000. With platinum at $500 per ounce, we feel it is a neutral investment. The trump card to watch for platinum continues to be the potential surge of Japanese and other investors from South Africa and Europe moving in to platinum as a hedge. With the economy still officially in a recession, a move into platinum at this level would certainly be risky. While Turamali, Inc. is not recommending that you sell, we are watching this market very carefully. Long term, I continue to believe that $1,000 per ounce is a very reasonable target. However, I am expecting quite a few ups and downs in between. The recommended way to own platinum is one-ounce coins (i.e., American Platinum Eagle, Canadian Platinum Maple Leaf, and Australian Platinum Koala).

DIAMONDS
The major news here is the continuing privatization of DeBeers, which ended up costing double the projection for the original leveraged buy-out. Couple this with the tragedy of September 11th and the concern over the US recession and diamond demand and prices fell for the second time in a decade. DeBeers has cut their rough distribution over the last four months to firm up prices. Diamonds for jewelry are excellent buys currently and are highly recommended if you are looking for an engagement stone or earrings. From the investment side, Turamali, Inc. continues to believe that colored diamonds will continue to flourish over the next decade. When purchasing colored diamonds, be sure to get a GIA lab certificate to insure the stone's color. If you are interested in learning more about colored diamonds, please don't hesitate to call us toll free at (800) 247-2812.

COLORED GEMSTONES
This particular product market has become very fragmented. Commercial quality goods have dropped in price due to the recession and the events of September 11th. Gems that are not particularly rare, but are readily available can be purchased at prices that I consider to be below normal wholesale to a dealer. On the other hand, very rare stones have increased in value between 10% to 20% over the past year. Even with the negative publicity about tanzanite that initially came out in the Wall Street Journal concerning a possible link to Al Qaeda, which has not proven to be correct according to the US State Department, we have seen strong upward moves in both price and demand in the following colored stones: top quality tanzanite, Nigerian blue tourmaline, Spessertine garnet from Nigeria, tsavorite, large yellow sapphires, red spinel, and large topaz.

When buying a gemstone for the potential of appreciation, Turamali recommends you continue to buy museum quality stones or at least the very best end of the material available. This is indeed a perfect time to continue to build a gemstone portfolio, as the better stones are available at reasonable prices.

Lastly, museum quality stones are still an excellent option for donations to museums. These can help offset tax gains if you hold the gemstones for a year and a day before donation. If you need more information on this possibility, give me a call at (800) 247-2812.

HISTORICAL DOCUMENTS
This particular tangibles area has been impacted the most by our slowing economy and the events of September 11th. This has generally been a domestic market. Therefore, demand from other countries does not drive demand. This is good and bad news for both collectors and investors. We are beginning to see important material hitting the market (i.e., handwritten letters from Stonewall Jackson, Jeb Stuart, and Robert E. Lee that are Civil War dated). It has been several years since we have been able to find any war-dated letters by these important generals. Also, please visit our website to see a photo of five of our Presidents that is also very rare. This can be found under our special inventory icon.

As is the case with the diamond and colored stone market, the really rare material is available at reasonable prices and should be added by those seeking stability and diversification within his portfolio.

RARE COINS
This e-mail update should be considered are our official "buy signal" to purchase rare coins. Last month I mentioned that there were many developments in the rare coin area that we felt would impact rare coins for the next several years. We discussed the development of Blanchard and Company of New Orleans. They have turned their marketing attention to rare coins. They have hundreds of thousands of names and many, many good marketers who are promoting rare coins. Seldom a day goes by that I don't get a call to compare prices. Even with our 5% mark-up, you could quickly be in a profit position if you acquire rare coins from us. Most rare coin firms charge between 15% and 40%. Their marketing will only help drive rare coin prices further. As you may recall, rare coins fell dramatically in 1991 after several Wall Street firms created partnerships designed to acquire extremely rare coins. With the drop that followed (i.e., as much as 70% to 80%), it left rare coins dramatically undervalued. Our buy signal includes gold rare coins that are either PCGS or NGC graded. For generic coins, we continue to recommend ISI lab in addition to PCGS and NGC.

To specify, our buy signal covers rare gold coins with a MS-61 or greater. For select coins, it may be MS-63 or MS64 or greater. The buy signal does not include silver type coins or silver commemorative coins. To discuss this exciting opportunity or to determine specific pricing, please call me at (800) 247-2812.

CLOSING REMARKS
Don't forget that our offices are now always closed on Wednesdays. That doesn't mean we are not reachable! Just leave us a message on our voice mail and we will return your call promptly on Thursday. Please remember to leave the time zone you are calling from so that we don't call you back too early.

As always, if you have any questions concerning any of the product areas discussed above, please don't hesitate to call.