Precious Metal Coins: Investment without a promise to pay

As gold continues to make strides as an investment alternative to currency, its historical war time legacy as a safe harbor against troubled economies is becoming more and more evident. The misunderstanding of gold, including the time to buy is now over, are of little value to a gold coin or silver coin investment facts.

Precious Metals cannot be inflated by printing more of it.  It is for this reason why it is sought after as an alternative currency today. Precious metal cannot be devalued by government decree and unlike printed currencies it is a store of value which does not depend on anybody’s promise to pay.

Gold and silver are assets which are no one else’s liability. Bonds and bank deposits are promises to repay money borrowed from the investor. Even Gold and Silver ETF’s are not always backed by enough underlying gold and silver to support the full market value of the ETF. The value of this printed category of investments relies on the fact that they are promises to repay money borrowed. Paper investments depend on the investor’s belief this promise will be fulfilled.

As hyperinflation, junk bonds and most recently Bernard Madoff’s promise to pay demonstrates these promises are questionable and can lose value quickly. Precious metals do not reside in this questionable space.  A piece of gold is not dependent on a financial system.  Its value has 5,000 years of humanity and history backing its sustainable worth.

New to our vaults and we believe to have great potential for increasing in value in these modern times is the Australia 2010 Dreaming Series. These modern world precious metal coins come in gold, silver and platinum in various weights. As with all of our world coins, we hand pick these gold coins, silver coins and platinum coins because we believe they will have the best possible investment outcome over time.

Remember, there are no guarantees about whether or not a coin or any collectible, material thing or instrument in any asset class including collectible coins as an asset class will increase in value. www.coinmerc.com

Is Impending Inflation a Reason to Seek Precious Metal?

The US dollar remains down against the euro and other currencies as of the end of November. A direct response to this has been increasing activity to buy gold as a hedge. The question: Is this recent gold run a short term bet or is the weakening dollar going to be followed by inflation? The worst of both worlds.

The most prominent hedge funds have shorted long-term US treasuries and are longing oil – an inflationary red flag signal. Other notable hedgies are betting on higher interest rates and are doing so with constant maturity swaps and other financial tools which underline encroaching US inflation. Still others are betting on gold –  make that inflation – such as Paulson & Co’s 4+ billion dollar investment in gold related funds. 

Some critics have used 'hyperinflation' to define the future financial landscape if federal spending continues. And impending inflation could be catalyzed if congress passes the current administration’s proposed Consumer Financial Protection Act. Under the guise of addressing the causes of a global financial crisis, this bill would impose regulation on small and large business and bring free markets more and more under Washington’s control when the credit default swaps, and sub-prime load problems that have hampered financial markets were likely government sponsored policies to begin with. See WSJ 11/27/09, Lack of Candor and the AIG Bailout.

What is for sure is the demand for gold will continue to increase as a reserve currency as opposed to a commodity. Federal printing presses are working overtime to pour more money into the system in the form of bail outs, stimulus and war efforts.  Demand for gold will likely outpace supply.

New to our vaults, and we believe a safe haven for a declining dollar, the Australia 2009 $200 Koala High Relief 1oz Gold Proof Coin. Remember, there are no guarantees about whether or not a coin or any collectible, material thing or instrument in any asset class will increase in value and past performance of a coin’s return is Not indicative of future results.

Predicting the Value of Modern World Coins

Market forces working toward rare modern world coins are collectability, precious metal trading value, and value of the dollar as well as others including the mintage. Understanding these market forces enables investors and collectors alike to understand and predict the value of coins. Predicting the moving landscape of these forces collectively is the process for a collector’s investment success.

One of the greatest and often unpredictable forces of a coins availability and subsequent market price is collectability. Trends in coins collectability point at historic events, sets, mintages, and themes. Traditional collectable themes include cars to animals, minis to tigers. Shipping today is the just released Perth Mint 2010 Year of the Tiger Gold Proof and Silver Proof. The collectability of these coins is high. The mintage is low. And the quality is excellent.