WHITHER THE PRICE OF GOLD

Whither the Price of Gold?


There is a link between collector gold coins and the price of bullion gold.  It constitutes only a part of the price of a rare gold coin, but a part that can not be ignored.  As the bullion price of gold rises, a general awareness of the desirability of gold permeates the public consciousness, 

So what makes the price of gold rise?

The answer is simple but quite misunderstood:POLITICAL INTSTABILITY and a loss of CONFIDENCE IN FINANCIAL AND GOVERNMENT INSTITUTIONS.

Many people think the gold price is linked to commodity prices in general, precious metals prices in particular , other currencies in inverse ratios.  All that is true around the edges.

But gold is and has always been a hedge against instability.

Why? Because it has a 5000 year track record of holding its value over time.  Nothing else can compete with that.  So when people really begin to lose confidence is the institutions that provide stability, they return to hording gold.

I would suggest that we are in a period of collapsing stability.  We are in a period where the very people in charge the institutions that provide stability are  expending all the energy in challenging, abusing, and destroying those institutions.

Not just here.  But around the world.

And consider this, the United is the most stable country in the world, and our stability is crumbling by the day.

Political instability is obvious.  Financial instability less so.  BUT With the US debt climbing over 22 Trillion dollars and rising at an alarming rate while over 70 precent of all Corporate debt is rated only one level above junk, and US household debt at a record 13 trillion dollars, it would only take a sudden modest rise in interest rates to cause a massive financial collapse. 

Meanwhile Global debt has reached 250 trillion which is about 350 percent of global GDP.

Now imagine how the general public will react to a crisis considering the absolute vaccuum of confidence in the current political regime?

Imagine.

That is where the price of gold is headed.