Buy Gold Coins

November 03, 2010 – It seems like every day some pundit raises a red flag warning us about the perils of investing in gold coins. The threat, as many see it, is that the gold market is losing its status as a commodity and becoming ever more investor driven. Perhaps, but that doesn’t make it unwise to buy gold coins.

In fact, most such reports acknowledge that an investment driven gold market will experience continued strong growth until currencies are brought under tight control and pessimism over the global condition turns to faith in a growing world economy. But we are not even heading in that direction.

Governments today are under enormous pressure to create jobs, tempting them to take shortcuts to economic growth. The most common policy, which is part of our strategy as well, is to devalue currency. Weaker currencies drop the price of domestic products in foreign markets, boosting exports and stimulating production. However, when everybody tries to do that at the same time a currency war becomes inevitable.

Then, in response to the threat of a flood of cheap imports nations start putting up trade barriers, which quickly snowballs into a global trade war. Such a situation played an instrumental role in the Great Depression and history is now poised to repeat itself.

Political and social conditions have always had a strong influence on the gold market because throughout history the metal has preserved wealth through the darkest of times. In that gold has always been less of a commodity than a financial vehicle. That the market is now attracting managers of large hedge and retirement funds signals only a retreat from questionable traditional investments to the security of gold.

Investors in gold coins can only benefit as the market becomes increasingly investment driven.

Kevin Johnson

Senior Staff Writer – GoldCoin.net