The Global Financial Crisis continues on and we tend to notice growing uncertainty among financial experts on where the world is going. One point they appear to agree on is, nevertheless, that those buying gold coins, will be positioned strongly when fiat paper currencies crash. That is, here’s a new golden rule: he who holds the gold, rules.
Historically, a nation that persuades its population to hold actual gold by buying gold coins and itself hold sufficient in reserve to support its currency, will experience stability and growing wealth. The model of King Charles Robert who reigned in Hungary 1310 -1342, is a case in point. At the time when he ascended to the throne, Hungary was separated politically, socially and economically however due to his vision, King Robert re-directed Hungary into a financial & economic success-story.
Towards the late 1200’s and early 1300’s gold seams had been discovered, in the east of Hungary. In past history, monarchs would normally move landowners off their property where gold was found and have it extracted by slaves and it would automatically become the property of the King. But, King Robert set a radical, international precedent by enabling the landowners to remain and employed workers to mine it. From the gold that was mined, the landowners were allowed to keep one-third, while the other two-thirds was placed into the Treasury. In 1325 the King then released his 23.75 carat gold florin and with its release, he effectively restrained inflation and ushered in the Hungarian Gold Age. The florins rapidly grew to be the primary currency of central Europe for the following 200 years and so began not only the recovery of Hungary but additionally the growing wealth of Europe.
The re-organization of the currency and of the whole fiscal arrangement very much contributed to enhance the treasury and effectively affirmed King Robert’s belief that if his citizens were wealthy, then Hungary would be wealthy. Notably, he was the first world ruler who did not have his own figure printed on a coin and the first ruler not to debase by adding lesser metals with the gold, which invites inflation.
With the success of such reform, one wonders if the struggling nations can learn from Hungary at present. China is now the world’s largest buyer of gold and has not only repealed its bans prohibiting its people from owning the valuable metal but has in addition activated a program encouraging them to invest by buying gold coins and other forms.
The difficulty is, though, that currently, there is less than a single ounce of gold on top of the ground per person on the planet and supply is diminishing. Global production has been dropping around one million ounces every year since the beginning of this decade. Provided that this is accurate, as well as China’s growing demand that now outstrips India, the current price of gold at almost $1200 an ounce, may in fact, be cheap. Buying gold coins right now could be a wise investment!
Have lessons in Zimbabwe or Hungary been learnt? Buying gold coins that are of certified weight and purity, that are preferably, privately owned (as opposed to being obtained via a Mint), marked as a religious collectible and numbered, will position anybody in good stead for future financial security.