Investment Grade
Rare Gold Coins:
Your Strongest Hedge
Against Inflation
Historically the Strongest Hedge Against Inflation
Only Treasuries, gold bullion and investment grade rare coins have escaped the selling panic that has gripped the markets. At a time when T-Bills returned 3% and gold 4%, a broad-based index of rare gold produced returns of more than 20%. Historically, these coins have produced the best returns (see Lombra Report) and are, by a large margin, the strongest hedge against inflation.
Fed is Printing Money at an Unprecedented Rate
Over the past year, the federal government has committed trillions of dollars to the U.S. economy. Confronted with a collapsing economy and a dysfunctional financial system, the Fed has vastly expanded its balance sheet, essentially creating money out of thin air. These massive injections of cash by the Fed will, inevitably, cause rampant inflation, a falling dollar and a rising gold price.
Above is a chart that shows the printing of money by the Federal Reserve dating back to the early 1900's. If you follow the chart to when the credit crisis begins in 2008, the line goes straight up to astronomical levels - how can anyone make the argument that inflation is not coming?
Inflation Rate vs. Price of Gold
Inflation Drives Investment Grade Gold Profit Potential
While the U.S. economy is not yet in an inflationary cycle, it is on the way due the massive deficit spending on the U.S. economic bailout. The chart above shows the dramatic relationship between inflation and the price of gold - when inflation was at a high in 1979 (figure A), gold was at it’s all time high. Since mid-2001 inflation began a steady climb to modest levels that has impacted the price of gold. (Figure B). In 2009, inflation has fallen to a low and yet gold is very strong due to other macro-economic factors. With the coming inflation due to massive deficit spending, spot gold should make a major leap in price to $1,500 levels or more.
Investment Grade Gold vs. Price of Gold
Why Investment Grade Gold?
Investment Grade Rare Gold coins like MS63 and 64 Saint Gaudens often mimic the movements of the spot price of gold. When gold is trading up, Saints trade up, and vice versa. The one major difference is that when gold begins moving up, Investment Grade Gold coins usually trade at higher multiples during the same time frame. As evidenced by the chart above, once gold starts a significant run, Saints significantly outperform gold prices. Now is the time to get into Investment Grade Gold in order to protect and grow your wealth during the coming inflationary period.
