The South African gold Krugerrand turned 50 this year, and with higher demand for physical gold, analysts expect sales levels not seen since the 1980s.
Rand Refinery marketing executive head Richard Collocott spoke to reporters at the facility last week to celebrate the Krugerrand’s golden anniversary.
Increased demand for gold has supported sales of the gold bullion Krugerrands and this year is predicted to yield the highest sales since the 1980s, with an expected 15% to 20% increase on the 1.1-million ounces of the coins sold in 2016.”
Gold is money. That’s one of the main reasons you want to own gold.
Gold possesses all of the characteristics of money Aristotle listed 2,000 years ago. The philosopher said sound money must be durable, portable, divisible, and have intrinsic value. You can check off all four of these characteristics for gold. You can also add a fifth characteristic to Aristotle’s list. Sound money cannot be easily manipulated by central bankers – i.e. created out of thin air. That’s why the yellow metal has held its value over time while fiat currencies have fallen in value.
But a chemistry professor at University College London said there is an even more elemental reason gold is money.
Imagine the financial chaos that would ensue if there was a widespread, long-term, power grid failure. Business would literally halt.
Stop and think for a moment about how dependent the financial system is on computers. Banking, stock and bond trading, and the vast majority of our day-to-day transactions, rely on computer networks. Many people don’t even use cash anymore. Everything is digital. We even have wholly digital currencies like Bitcoin.
We take these computer systems for granted. In reality, they put us at considerable financial risk. This vulnerability is another reason you should buy gold.
In a recent column published by the Daily Reckoning, Jim Rickards offered three reasons why you should buy gold.
- Tight supply.
- Geopolitical tensions.
- Federal Reserve policy.
American household debt hit an all-time high in the second quarter of 2017, with increases in every major category, from credit cards, to student loans, to mortgages.
When central banks manipulate interest rates, they disrupt normal patterns of savings and investment. They pump up economic bubbles that ultimately pop and kick off economic crashes. We saw this vividly in the 2008 financial crisis. Low interest rates, along with government policies, encouraged unsustainable investment in housing. When the bubble popped, it nearly brought the entire economy down with it.
There is another problem with central bank interest rate tinkering that exacerbates bubbles.
It hides inherent risk.
With interest rates still at extremely low levels, what will central bankers do when the next recession comes along?
Just take those interest rates negative.
London and New York dominate gold trading, but some analysts think Hong Kong may soon become a more significant player. Its success could solidify China’s place in the world gold market, strengthen the yuan, and shift more economic power from west to east.
Last May, Hong Kong Exchanges and Clearing (HKEx) announced plans to launch gold futures contracts.
Bridgewater Associates founder Ray Dalio said investors should buy gold.
Bridgewater manages about $160 billion in assets according to its website, and ranks as the worlds largest hedge fund.
In a LinkedIn post, Dalio wrote, “prospective risks are now rising and do not appear appropriately priced in.” He specifically cited geopolitical tensions, especially the war of words between North Korea and the United states, and the looming deadline for Congress to raise the debt ceiling.
Whomever runs social media for the Federal Reserve learned a tough lesson about the cruelty of the internet this week.
The Fed’s Facebook page got wickedly trolled after the central bank posted a simple warning about potential scams.
The post seemed innocent enough. The Fed simply wanted to warn people about scammers sending out emails that claim to be from the Fed.
