Why Buy Gold?

WHY BUY GOLD?

FreeInvestmentGuideThe answer to this question is deceptively simple: gold ownership provides a safe haven in times of great uncertainty. Since antiquity humans have valued gold because of its beauty, its rarity and its malleability (it can be formed into jewelry or coins). Together with silver it has withstood the test of history as a major medium of exchange and, unlike paper currency, it cannot be indefinitely replicated. Paper currency as well as stocks, bonds and other forms of financial instruments represent a “claim” on wealth and not wealth itself. Thus, during periods of inflation, one’s “wealth” (in terms of dollars) may only appear to be growing and may actually be diminishing if those dollar-based assets do not keep pace with the cost of living. And, unfortunately, government statistics on the cost of living have been highly suspect over the past decade or so.

From all indications the 2nd decade of the 21st century is going to be one of great financial insecurity at best, and one of cataclysmic upheaval at worst. And the answer to this, as far as the major western powers are concerned, is to print money: dollars in the case of the U.S.; euros in the case of the E.U.; SDR’s (Special Drawing Rights) in the case of the IMF. Stock markets are unstable, European bonds are risky and while U.S. treasuries are temporarily a safe haven, the same cannot be said for those of our states and municipalities. And the bursting of the real estate “bubble” (not only in the U.S. but in many other countries as well) makes the case for precious metals even more compelling.

If the physical ownership of gold bullion (as coins or bars) makes sense from an historical perspective, the ownership of rare (or numismatic) coins makes even more sense if one wants to insulate oneself from the ups and downs of the spot gold market. An updated study by Prof. Ray Lombra of Penn State which compared the performance of various investment vehicles over the past three decades demonstrated that rare U.S. gold coins have outperformed every other major asset class during that time. Lombra’s study indicated that even during periods where the spot price of gold went down, profits were still being made with many rare coins, making them an even better hedge against inflation than bullion.

If you want to buy gold, or buy silver, sell gold or sell silver in San Diego or anywhere in the continental US you need to stop by or give Pacific Coin Exchange a call today!

If you would like our opinion of just which rare gold coins to own, please speak to one of our advisors at Pacific Coin Exchange in North County San Diego – 1-877-917-5266.

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