Gold Coin Prices To Rise On US Debt Concern

February 8, 2010 – The dollar has experienced jump in value recently as concern rises over the growing debt in a number of European countries. Portugal, Ireland, Italy, Greece and Spain have all been in the news due to their debt vs. GDP percentages. Gold coin prices are likely to be next in line to profit as the United States’ debt vs. GDP woes come back into international focus.

Debt to GDP is a metric used by economists to interpret the financial stability of a country, comparing the amount of held debt to the gross domestic product. This number has raised concern in the five European countries considered to be the most unstable; the fiscal weakness of these countries has been the impetus for recent gains by the US dollar. The bad news for the US is that it is likely to be the next on the list; the current debt to GDP numbers for the US are at 350%, placing it among the countries considered most vulnerable now.

The question for many investors should be what such a problem means for them; the answer is that they should look to invest in gold bullion coins or other forms of physical gold. The fundamental danger of high debt is deflation; this occurs when debt failure combines with inflation and the United States is on the verge of such a crisis with the Federal Reserve considering interest rate hikes to curb inflation and Congress trying to raise the debt ceiling to avoid default on debt payments.

Deflation destroys currency values. While the price of gold is in correction, a good strategy would be to buy gold coins or bullion bars to shift holdings away from the dollar. As analysts predict much higher gold prices, holding this metal could be an excellent way to protect and grow wealth during these unstable times. 

Kevin Johnson

Senior Staff Writer –

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