To meet an unprecedented demand from savers looking for a haven for their cash, it has been announced that the Royal Mint has been forced to double their production of gold coins. It appears that the output for gold coins in the second quarter of 2009 in terms of weight was 16,910 ounces, up from 8,030 in the same period last year.

Overall output for the first half of 2009 overall was more than 45,000 ounces, up an amazing 86% on the same period for 2008.

As has been the case throughout history, collectors are snapping up the newly minted gold coinage, because it is one of the easiest and most straightforward ways to place their money directly in gold.

Gold has been traditionally regarded as a safe haven in times of financial turbulence. Since the outset of this recent crisis, and even for several years preceding it, gold has consistently risen in value. Currently it is valued at around $950 an ounce and has even made the $1,000 an ounce mark a few times over the last few years. However analysts predict that as long as the dollar continues to devalue and there is general uncertainty in the global financial markets, the price of gold will continue to rise and could eventually reach as high as $2.000 an ounce.

During the past decade, gold trading patterns have shown that prices will rise for a term of around six to nine months, and then stabilise or even fall back a little before rising again.

Many financial analysts state that gold is the ultimate currency, performing best when economies are at extremes, whether inflationary or deflationary.
One fact that is generally accepted is that if the quantitative easing program in both sides of the Atlantic does go wrong then the value of money relative to real assets will dwindle, and double figure inflation is a very real possibility.

Even if the recovery does sustain itself people holding should be still be in a stronger position than those who invested in currency.

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Tags: Coins, Currencies, Currency, Gold, Royal Mint

Why is the dollar strengthening with the huge bailouts that Bernanke and Paulson, both stunned rabbits in this credit tsunami, have fought so hard for? The answer lies in the flight to safety of US treasuries as emerging economies, until recently thought to be safe from the credit crunch, feel the effects the growing storm.

A stampede into dollars has lifted the world’s reserve currency to a two-year high versus the euro and a five-year high on the pound. The dollar is up some 18 percent since July on a trade-weighted basis against a basket of currencies.

But….and this is a big but…there is some unwelcomed side effect to the strength of the USD. The first is that the earnings season we are in is expected to bring about a whole raft of companies reporting that the currency is hurting exports which will be reflected in 4^th quarter results. This is likely to trigger a chain reaction of analyst’s downgrades and send stock markets down even further as investors are trapped in yet another wave of forced liquidation.

Not only that, but the USD should be a virtual basket case right now as the US teeters on the brink of actual bankruptcy…a direction first highlighted by the Comptroller of Currencies at the IMF in 2003 when he openly said that the US should be bankrupted by its huge twin deficits within 10 years…deficits that have deteriorated markedly since then.

So when all the safe haven money flows out of the USD like an unstoppable tide once people understand that the USD, as is, is unsustainable in the long term, the collapse could be nothing short of earth shattering. Make no mistake, the dollar strength is short lived and will reverse, probably violently…but many currencies will topple before then as the flow of capital knocks over currencies like dominoes, before landing back on Asian shores. Once that happens, it will signal the biggest economic boom ever seen in the region…and we will all bow before our new masters.

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Tags: Bernanke and Paulson, Comptroller, Currencies, Dollars, IMF, Liquidation, Stock Markets, USD