If the world has learned anything from 2008, and sometimes one wonders, it is that paper has no value next to a gold coin.

December 21, 2011 – If the world has learned anything from 2008, and sometimes one wonders, it is that paper has no value next to a gold coin. It is amazing that the world could be led to the brink of an economic abyss and literally forget the folly that brought us there. Derivatives, a financial term which means, “valueless,” are not only still allowed by law, they have increased in popularity more in this year than any other.

There are now $707 trillion worth of valueless derivatives in existence. That is the equivalent of the entire gross domestic product of the planet for 11.2 years. That’s a whole lot of paper. Currently, several economic and political crises threaten the extraordinarily fragile economies of the world. Fitch is now reporting that it will downgrade seven European nations. Britain, that mighty empire upon which the sun never set, has a debt-to-GDP ratio of over 900 percent. It is a very precarious situation.

As such, the policies of printing money literally cannot stop. Ben Bernanke, once he turned the printing presses on, pretty much ensured they would keep going. This is not hyperbole. The Federal Reserve has officially announced it will keep interest rates low indefinitely. That means endlessly. The effect of such a drastic monetary measure is a reverse incentive to owning dollars. Each dollar you own that is sitting in an account inactive is actually losing value by the day due to Federal Reserve policies.

The value inherent in gold, under these circumstances, is many times enhanced. It’s difficult to guess exactly where gold will go in price or when, but we can make very good estimations based on data. Currently, the price is down 15 percent on the month and many analysts are incorrectly talking about the market reversing. Gold has been in a bull market for 11 years and has had three corrections of 20 percent in those 11 years. The fundamentals are the same. It will correct upward and will continue to rise.

In addition, the more derivatives that are created in the financial sector as a means of keeping it alive, the more notional value is added to gold. All that money out there allocated to inherently worthless things reflects back on the best tangible commodity in existence, gold. You can’t debase a currency without strengthening gold, and that’s how we know the value of gold coins can be trusted more than any paper currency.

Kevin Johnson

Senior Staff Writer – GoldCoin.net