Gold Coins, Bullion Sales Go `Gangbusters’ as AIG and Lehman Fall

September 19, 2008 by · 2 Comments
Filed under: Economic News 

Bloomberg reported a huge increase in the purchases of physical gold and silver bullion. The matches with my own research in calling a number of bullion dealers that have confirmed a significant increase in sales and a limited availability to delivery on the spot and is creating a 2-6 week delay for delivery on anything except the smallest order (under 10 ounces). After these unprecedented moves by the U.S. federal government in the market to prevent a financial crisis which normally would happen in a free-market system. With this uncertainty on the direction this serious situation is going to take people are taking too the time-test haven for wealth since the dawn of modern civilization….GOLD.

The biggest question I have is will this be inflationary with this huge increase of liquidity in a program to buy these “toxic financial products”. I have a worry that they are going to allow these credit-default swaps or CDS that are unregulated and also unbacked so this could create a situation where we have a huge increase in the U.S. dollar monetary base which will lead to price inflation unless we somehow have growth for the same amount during the same period which seems highly unlikely.

News Piece:

While TV camera crews staked out American International Group Inc.’s Wall Street headquarters following its takeover by the U.S. government, Jules Karp was quietly trading gold coins in “unbelievable” numbers from his basement dealership across the street.

Karp, 61, has traded physical gold, including one-ounce Canadian Maple Leafs, American Eagles and South African Krugerrands, since 1974. Demand has “hit a crescendo,” he said yesterday while an assistant prepared the special packages used to send gold coins to a growing list of mail-order customers.

Investors are being driven to the relative safety of gold as global equities plummet following the federal takeover of AIG, the largest U.S. insurer by assets, and the bankruptcy of Lehman Brothers Holdings Inc., once the fourth-largest U.S. securities firm. Amid the fallout yesterday, Goldman Sachs Group Inc. and Morgan Stanley, the biggest U.S. securities firms, plunged the most ever in New York trading.

“People are panicking right now,” said Karp, who also sources coins for the clients of Wall Street’s largest banks. “They’re afraid for their money.”

The interest in bullion appears widespread. Gold sales to new clients at Blanchard & Co., the largest U.S. precious-metal retailer, have jumped more than sixfold in the past three days as investors responded to the financial turmoil.

“People are looking for answers,” said David Beahm, a vice president at New Orleans-based Blanchard. “People want to protect their wealth and their assets, and gold is the best way for them to do that.”

Gold Skyrockets

The purchases by retail investors mirrored trading yesterday on the New York Mercantile Exchange’s Comex division, where gold gained the most in almost nine years. Suppliers of coins and bullion have been struggling to keep pace with the surge in demand from investors.

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2 Responses to “Gold Coins, Bullion Sales Go `Gangbusters’ as AIG and Lehman Fall”
  1. da best. Keep it going! Thank you

  2. Schedule says:

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