February 16, 2010 – As Eurozone leader suggest spending cuts and new taxes to the struggling Greek government, the ongoing sovereign debt crisis is pushing more investors to buy gold. Giving Greece a one month deadline to bring down its deficit from a stunning 12.7% of its economic output to a more manageable level, the other 15 countries in the Union forcing the country to take charge of its own problems.
These developments are adding an extra burden on Greece, which is confronted with an issue of integrity as well, as the European Commission demand explanation by the end of February how since 2001 it used currency swaps to make its debt limits look lower. "We do want to restore credibility," Greek Finance Minister George Papaconstantinou said. "We have enough trouble as it is convincing people that our numbers are real."
The conditions in Greece are worse, but reflect similar problems in countries like Spain, England, Italy and the United States. These problems result in weakening currencies, and typically cause a growing interest to buy gold as people look to get out of the fiat currencies and into a more stable investment. For this reason, gold prices have begun to rally, suggesting now as a good time for increased gold investment.
As investors see the problems in various economies worldwide, they are beginning to move to buy gold. Analysts are suggesting that gold prices are ready to rise and investors who increase their holdings in the metal stand to benefit should prices in fact climb.
Steven Martin
Senior Gold Specialist - Buy-Gold.org
