The price of gold coins has seen a 25% year to date increase commensurate with a steadily evaporating value in the US dollar.

November 15, 2011 – The price of gold coins has seen a 25% year to date increase commensurate with a steadily evaporating value in the US dollar. Fiscal stimulus and monetary policy in the US has brought about low interest rates that are no reward for savers. Recently, a report surfaced in Britain that revealed savers have experience a loss of $43 billion since the crisis began through the erosion of the value of their money. This is made more striking when we consider that Britain has not experienced anywhere near the amount of stimulus and intervention that we have in the United States.

Low interest rates would be bad enough for savers who deposit their money in banks. Forbes, however, just released a report that MF Global may have used customer funds in a $6.3 billion bad bet on European sovereign debt. That might be acceptable if the bets these banks were making were paying out. Of course, savers would never see any of that money, but at least they wouldn’t be punished for simply depositing their money in a bank. Much like the real estate bets of a few years ago, any bet on European debt that didn’t predict disaster is imploding right now and savers are footing the bill.

Shockingly, this policy was made not only possible but legal through a CFTC ruling. The ruling states that the investment of customer funds in instruments will not be prevented or prevent the retaining of interest of profits.

The effect of this policy is clear in that it will continue to erode the savings of hard working Americans. Beyond low interest rates and negative real interest rates, Americans who deposit money in banks now have to worry about the banker’s legal bets.

The price of gold coins reflects Americans desire to preserve their wealth and their unwillingness to cooperate with bad monetary policy. Historically, gold is the best store of wealth on the planet. A banker can’t dilute your gold with a balance sheet the same way he can dilute the purchasing power of a paper currency and more and more people are seeing and appreciating that difference now. As banks continue to lose their customers money and gold continues to perform admirably well, savers will increasingly be buying gold.

Kevin Johnson

Senior Staff Writer – GoldCoin.net