Thursday, April 8, 2010

Greece Borrowing and Gold

Gold: The New Currency

The finance minister of Greece announced today that the country will continue to borrow, even at the high interest rates which have increased of costs of attaining capital. It generates the question of how all of this will affect the price of gold, the yen, and the U.S. dollar.

Investors are again losing any faith that is left in the country, and are very unsure as to weather Greece will be able to pay off its huge debt, which are about to become due very soon.

What the sovereign debt crisis of Greece has revealed in relationship to gold, the yen and the U.S. dollar is that gold is increasingly becoming thought of as a form of currency by a growing number of people, which is the reason you see it moving in tandem with the U.S. dollar and yen on some days people are looking for a safe haven for their money.

That means there is a lack of faith in all paper currencies at this time, and while the dollar and yen will continue to be considered to be a relatively safe place for people to place their money, gold is growing in influence, and for many, is by far the safest place to put their money in economic times like these.

The Greek debt crisis has brought this to the surface for all to see.

Gold: The New Currency

No comments: