The Connection Between Coins and Inflation.

Investors understand that whenever inflation is let out of its cage, hard assets can be used to tame it.

In extreme cases, holders of paper will fight to purchase literally any asset that they can lay their hands upon. I remember the story my grandmother told me when young. She was born in Hamburg, and grew up their. As a child, she was sent to the store with a wicker basket full of money. she was robbed, and the money was tipped on the floor and the basket stolen.

Another story she told us, was when she went to the market to find all food stuffs gone, and the shelves virtually empty. The only thing that she was able to purchase where cardboard collars; (Remember the days when shirts had detachable collars?) Concerned that her parents would be furious she delayed going home, but when she finally arrived, they were not angry, but happy. They were happy that she had managed to get something, anything, for the worthless paper.

Although very extreme, these examples highlight how money can become worthless, and any asset, anything that can be traded is preferable to cash.

Consider the example of the nearly 18 percent inflation between 1976 and 1980, when gold shot from $185 to $850 an ounce…which was a 360 percent increase.

During that time, collectibles such as investment rare coins went absolutely stratospheric, pushing the rare coin index (CU 3000) up an amazing 1000 percent. Back then, Investors were as preoccupied with tangibles and collectibles as they have been with stocks in the 90’s.

Like the late 70’s, inflation is creeping up now, too. According to a recent USA article, published on the front page of the Money Section, it say’s…“If you own bank cds or money market mutual funds, you could be losing money, after inflation, for the first time in seven years.”

Not that an inflationary setting is a necessary prerequisite for investment rare coins to prosper, but inflation-countering is one of the many powerful reasons why hard assets should be an essential part of any portfolio.

Think of it this way: however high gold rises, solely in response to rising inflation, investment rare coins will rise that much higher.

Stability, Security and Profit can be added to you investment portfolio through diversification with Investment Rare Coins.

~ by sigrarcoinvault on May 2, 2008.