Gold Exchanges Are Not Collapsing
Posted by Adam King on January 31, 2010
Now is still a good time to head down to the gold exchange. Banks are still collapsing and the economy may not be revving up any time soon. Gold is still the traditional refuge in times of economic hardship and devaluation of currency and a certified gold exchange offers gold bullion and certified rare gold coins for medium and long term investment. In the last ten years, gold bullion has quadrupled in value while the stock market has crashed, the housing bubble deflated, and the dollar lost value. With ongoing economic difficulties it could well be that the next ten years will as good to gold as the last ten.
An example of the ongoing instability of Americans banking system follows. There is a North Carolina bank that managed not to delve too heavily into sub prime loans and still has lots of cash. They are busy buying up West Coast banks that collapse. According to the Federal Deposit Insurance Corporation (FDIC), First Citizens (of North Carolina) just acquired First Regional Bank of Los Angeles. The transaction cost the FDIC Insurance Fund $1.86 Billion. Recent bank collapses, including this one, come to $5.53 Billion.
According to the FDIC 180 US banks have collapsed since 2007. The FDIC expects to use up $100 Billion in its Insurance Fund through 2013 in paying depositors because of bank collapses. The agency will be increasing its staff from 7,010 to 8,563 in order to cope with the worst continuing financial crisis since the Great Depression.
On top of the steady decline of the dollar in recent years, even bank accounts denominated in dollars are not secure. This is why many investors buy gold bullion and rare gold coins. These investments tend to hold their value while the currency falls. No one with physical gold needs the FDIC to come and bail them out and neither does the gold exchange where they bought it.
Stewart Lawson
Senior Staff Writer – Certified Gold Exchange
Categories:
US Gold Market
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