Gold Coin Prices Could Rise as US Debt Grows

March 11, 2010 – While the Greek sovereign debt crisis continues, gold coin investors are monitoring the conditions in the United States. Similarities between the two heavily-indebted countries have some analysts concerned that problems are coming for the US and they are suggesting increased gold investment.

Greece has come to the position of default due to a debt to GNP that is 113 percent; the US is currently at 87 percent and poised to reach 100 percent during the next fiscal budget. In addition, both countries are heavily in debt to other nations; nearly all of Greece’s national debt is held by other countries and private foreign investors, and the US has nearly 50 percent of its $13 trillion held by countries like China and Japan.

According to former Federal Reserve Chairman Alan Greenspan, this situation can not go on very long. "Not indefinitely," suggests Greenspan. "History tells us that great powers when they've gotten into very significant fiscal problems have ceased to be great powers."

The current practice of low interest rates and stimulus being implemented by Fed Chairman Ben Bernanke to rouse the economy is creating the potential for inflation. Says analyst Jim Willie CB, “Quantitative Easing is the euphemism for grotesque monetary inflation and organized ruin of currencies.”

This inflation has the potential of creating higher gold coin prices; devaluing of currency during inflation generally causes an increase in gold prices. Chartered Market technician Daniel Bruno is predicting gold prices as high as $1,400 per ounce this year.

"Unless we do things dramatically different, including strengthening our investments, the 21st century will belong to China and India," suggests Norman Augustine, the former CEO of Lockheed Martin. With the potential of rising debts and inflation, gold coin prices are likely to grow as well, as people look for secure investments to protect their wealth.

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Kevin Johnson

Senior Staff Writer - GoldCoin.net