Few Americans truly understand the value of gold coins in the current economic system.

February 22, 2012 – Few Americans truly understand the value of gold coins in the current economic system. It’s true that gold has been on a decade-long bull run with a 600 percent gain, but why is that and what does that mean? We know that the world is experiencing economic problems and reacting to them in ways we have never before seen in all of human history. But how do we make sense of that in such a way as to benefit our daily lives and increase our paycheck?

We have all heard of Quantitative Easing. That’s the Federal Reserve’s main form of fiscal stimulus to keep the economy moving through these difficult times. Quantitative Easing is really fancy terminology for printing money. It is inflation, or increasing the amount of money in supply to bolster the health of the economy in the short to mid-term. For the most part, one could say that this policy of the Federal Reserve has been partially successful as we still have an economy and it is still operating on some level.

But the value of gold coins tells a different story. Recall that gold is valued fairly consistently as a scarce metal with only so much available for purchase on the open market and only so much coming to market from mining and other sources on a daily basis. This makes gold one of the most stable commodities in existence. Oil, for instance, changes rates relative to discovery, wars, and embargoes, among other things.

And gold is also a store of value, much as we perceive the US dollar to be a store of value. The difference between the two is that the Federal Reserve can and does initiate programs of purposefully changing the value of the US dollar, thereby changing its status as a store of value. When they are flooding the market with dollars, the dollars in your wallet necessarily buy less, meaning that the policy of the Federal Reserve affects you directly and dramatically in a fashion that would infuriate you if it was any more direct.

Gold cannot be diluted in the same way. If you bought gold ten years ago, five years ago, or one year ago, you have all the value you put into that purchase and then some. You have taken ownership of your wealth. The Federal Reserve cannot steal the gold out from under you even as you hold it. They cannot create gold. Therefore, gold is the ultimate form of taking action. This is the true value of gold coins.

Kevin Johnson

Senior Staff Writer –

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