After the bottom of the mini-correction has pretty well established and gold coins are fairly stable, it’s important to draw some attention to the way markets are going.

December 27, 2011 – After the bottom of the mini-correction has pretty well established and gold coins are fairly stable, it’s important to draw some attention to the way markets are going. It’s very rare in history to experience as many market indicators flashing red as we are seeing right now. This is not a prophesy of doom, as I believe markets have pretty well been managed into decoupling from reality. For all we know, they can continue managing chaos until eternity, but the real value of gold coins in the face of such emergent and explosive disasters will continue to grow.

So, if we were to look at the list of pressing issues confronting the world markets today, we would start with Europe. Measures taken to keep Southern European countries in a stable state of solvency have failed and Northern Europeans countries are no longer willing to finance the politically unpopular bailouts. Foreign countries, such as Brazil and China, have sent Europe packing. Recent disagreements at the European Summit in Brussels have revealed major rifts between European leaders and nations and the crisis literally threatens to undermine the validity of the currency, the Euro.

Meanwhile, stagnation continues in the United States as less than 500 homes worth more than $750,000 have sold in the past four months. Unemployment is already rising before the end of the holiday season, and market targets for the holiday shopping boost have missed by a mile, making 2011 one of the worst years for US consumers in history.

2011 is also notable because in the first six months of the year more derivatives, the financial instrument responsible for taking the world to the edge of the abyss, were created than at any other time in history. There are now over $707 trillion worth of Over the Counter derivatives in existence, $100 trillion more than this time last year, which literally threaten the validity of the markets.

Fiscal policies put forth recently by the Federal Reserve, the Bank of Switzerland, the Bank of England, the Bank of Japan, and several other central banks has demonstrated just how serious the global system remains. On November 30, the central banks agreed to lower the swap rate of US dollars, possibly, according to Forbes, following the near-failure of a major European bank. This action made borrowing between banks ridiculously easy, sparking a concern that a further credit crunch would have already taken place without the measure and may still be in the works.

The value of gold coins in such a market is difficult to determine precisely. Gold is certainly undervalued right now considering its position as a tangible commodity in a paper market on fire. The reasons to buy gold are very easy to see. When the dust settles, and it’s all ash, gold coins will still be here and will still be shining.

Kevin Johnson

Senior Staff Writer – GoldCoin.net