Bullion Gold coins and Bullion Silver coins primary purpose is to provide a means for investors to invest in the underlying metal.

Bullion Gold coins and Bullion Silver coins, as opposed to paper assets, value is a function of the effort required to prospect, mine and refine the gold or silver. This is why Gold coins provide a safe haven from inflation and an alternative to investing in fiat currency’s that central banks can debase by printing as much paper money as required.

Gold and silver bullion coins provide an ideal investment vehicle for the private investor to invest in gold and silver bullion as they can be purchased in a variety sizes, which make them affordable to buy and sell in small quantities.

Bullion coins are typically sold at the spot metal price plus a small percentage to cover manufacture and marketing, which explains why smaller denomination bullion coins are more expensive.

Government legal tender coins are internationally recognized, making authentication and selling easier.
Why Should I Invest in Gold and Silver Bullion Coins

• Gold coins and silver coins have been used as currency for thousands of years.
• Gold coins provide a safe haven from inflation.
• Gold coins and silver coins have intrinsic value and as such will never be wiped out by hyper inflation or a collapse in the stock market.
• Gold and silver bullion coins provide diversification to any portfolio.
• Capital gains tax is not applied when you sell your investment.
• An investment in gold coins or silver coins are a hedge against political or economic uncertainty.

Why Have Bullion Gold Coins and Bullion Silver Coins Increased in Value

Since the end of the second world war the American dollar has been the primary currency used in international trade.

USA’s balance of payments deficit is so strong and irreversible, that we must accept that at some future date there will be a run against the dollar. Probably, the kind of disorderly run that precipitates a global financial crisis.” - Dr. Paul Samuelson in 2005, Nobel Prize winner in Economics

Today’s economic climate is similar in many respects to Wiemar Germany in the 1920’s when the government issued more and more currency creating more and more debt which lead international investors to flee the currency, requiring more money to be printed by the cental bankers. This vicious cycle resulted in hyper inflation and the devaluing all paper assets.

Fiat currency crisis.

Fiat currency is money that has been printed by a government. The value or relative strength of any fiat currency is proportional to the perceived value or confidence the international currency markets have in the the currency. Politicians have no restraints on the amount of money they can print. For Politicians whose job security depends on it ability to keep the voting public happy, printing money provides a pain free short term solution.

As the American current account deficit increases, foreign investors are being asked to contribute more to sustain the worlds international reserve currency, weakening the dollar resulting in the need to print more dollar which will inevitably lead to run away inflation.

Fiat currency only has value because the ruling government declares the currency to have value. Fiat currency has no intrinsic value, one ten rand note can be printed as cheaply as a 100 rand note. Gold and Silver bullion, as opposed to paper assets, have intrinsic value.

Gold Bullion Coins and Silver Bullion Coins Vs Numismatic Coins

Numismatic coins are valued according to their scarcity, condition and age. The value of the numismatic or collectors coin is not a function of the bullion content.

Numismatic or rare coins will therefore not increase in value proportionally to the gold price and may even decrease in value as in tough economic times investors may be forced to sell, increasing the supply and reducing the value. Numismatic coins are also harder to sell as you are limited to a small pool of collectors vs a larger community of bullion investors.

Investors worried about inflation, a weak dollar and wanting to preserve the value of their money want the most bullion for their money.

Other Methods of Investing in Gold and Silver

• ETF’s – Exchange traded funds.
• Futures and Options
• Gold Mining Shares

Investing in gold mining companies is a lot riskier than buying physical gold bullion and silver bullion coins but may produce greater returns in an economic crisis where energy costs are falling due to slower international growth and margins on gold are increasing due to a higher gold price.

Is Gold In a Bubble

Gold bullion has increase by almost 100 % since it’s peak in mid 2008 before the start of the current economic crisis yet gold mining stocks have only increased about 20 %. If gold was in a bubble gold mining stocks would be outperforming gold bullion due to all the speculative money that would flow into the gold mining industry.