When considering the price of gold coins, one must also consider the value of gold coins.

February 13, 2012 - When considering the price of gold co…oins, one must also consider the value of gold coins. It is no secret that there are several very serious economic problems afoot that threaten, by some accounts, the very basis of our entire financial system. The current eruptions of protest in violence in Greece, long forecast as inevitable, are just an example of how, why, and when our interwoven economic system will suffer in the future when the Greek default problem comes to fruition. Based on the math, the Greek default is a certainty, and this week that became more apparent as investors are now arguing how Greece should default and private lenders got an upper hand over government lenders in the decision, which is a bad thing for Greece.

When a default happens, everything attached to that default is immediately affected. The reason MF Global is so important to investors, to Americans, and to the world is because the firm’s failure was due to exposure with bad European sovereign debt. This illustrates that even a centuries old American banking institution with a former Governor for a CEO is vulnerable to the economic problems in Europe, though it is far across the ocean and hedges should have been in place to protect the bank’s customers. While they have yet to be compensated after six months, the $1.2 billion worth of customer funds that went “missing” following the collapse have been reported found, though “inaccessible.” None of those customers whose funds are “missing” after MF Global declared bankruptcy following a bad bet on European sovereign debt they made by commingling their customer’s money.

The point of this narration is that banks have been very irresponsible in the use of their clients’ funds and these banks are heavily exposed to the problems emanating out of Europe. In the event of a major European sovereign debt crisis, as we’re seeing unfold in Greece, the bank’s customers suffer first and most. The bank is too big to suffer. Customer’s funds go missing, the bank declares bankruptcy.

In this kind of investing atmosphere, the value of gold coins is most apparent as a safe, consumer-held store of wealth that will retain value in utterly insane economies. If those clients of MF Global had been in possession of physical gold as a store and accumulator of their wealth, they would be able to hold it in their hand today. The bank is most able to use the money you store with it, change its value, package up your debt, and sell all when you give the bank your assets. When you take your assets out of the bank, convert them into gold and silver, and store them by your own accord, you have taken your power back from the banks that have been abusing you. Banks have no power over the gold and silver you yourself hold and that is the real value and power of gold coin.

Kevin Johnson

Senior Staff Writer – GoldCoin.net