Don’t Wait For The Curtain To Rise Before Buying Gold Coins

Thanks to the persistence of the bubble hoax, gold coins remain one of the most enticing investments you can make today.

The hoax has taken on a life of its own, much the same as the flap over President Obama’s nationality. Repeated ad nauseum, the bubble myth has taken on the air of truth. A recent CNBC straw poll of the man on the street reveals how the propaganda has affected our perception of gold coin investment.

As reported by Eric McWhinnie in the Wall Street Cheat Sheet, CNBC asked people if they would rather have $600 cash, one share of Apple stock, an iPad 2 or one-third ounce of gold. At the time all were essentially of equal value.

The share of Apple and the iPad came out the big winners. The stock, of course, has distinct potential for growth but the iPad is just a thing that will depreciate quickly over time. Coming in third was the cash, likely due to immediate needs. Gold came in dead last, chosen by just one respondent.

The same sentiment has been reflected in declining gold coin sales at both the Australian and US mints. Big money is also still shy of buying gold. As a result the net global holding of gold has risen very little over the past two decades, remaining at an insignificant fraction of 1%.

Such puny holdings could never inflate a bubble. It takes massive interest on the part of America’s household investors to make that happen, much like the dot-com stampede of the 1990s and the credit driven housing craze that blew up in 2008.

Bubbles form when big money fans smoldering gamblers’ fever into flames. With passion running high individual investors flood the market. The bubble bursts only after the market saturates. Big money, of course, bails out just in time, its pockets bulging with cash fleeced from the unsuspecting public.

The curtain has yet to go up on that scene, but its time is coming. It would be a huge mistake to wait until it rises before you start buying gold coins.

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