Wednesday, October 21, 2009

Harrods of London Selling Investment Gold

Is this the wave of the future? An upscale London department store has now started offering investment grade gold for sale. the Daily Telegraph reports as follows on Harrods of London, a store with an international reputation.

"LONDON luxury goods department store Harrods is moving into the precious metals market with the launch of a service to sell investment-grade gold bullion bars and coins to customers.

Malcolm McLean, general manager of Harrods Bank, told Reuters overnight that the company saw a gap in the market for a well-known retailer to enter the increasingly high-profile gold market.

"We have been very conscious of the fact that there has been an ever increasing amount of interest in the gold market, and in buying investment gold," he said.

"We became very conscious that there is no well-recognised name out there which the general public can turn to and say, I know that name, I trust it, I want to buy from them."

"That is not to say there are not reputable dealers out there - we know there are," he said. "But they don't carry the brand that we do."

Since Monday, Harrods has been selling Swiss-sourced investment grade bars and coins including sovereigns, South African Krugerrands and American Eagles, from the Harrods Bank premises on London's upscale Brompton Road."

Until relatively recently in history, the world's currencies were tied to precious metals. In 1971, former US President Richard Nixon took the US dollar completely off the gold standard, leaving the United States with a fiat currency. A fiat currency is a currency with no backing at all other than "trust me". What assurance do holders of dollars or any other currency have that the currency will not later be printed in some higher quantity? There is none, really. It is for this reason that concrete physical commodities are looking better to those who are fearful that today's dollar that is hard to come by will later be vastly diminished in value. Indeed the Chinese have been buying copper in what some believe is a part of a multifaceted strategy of sidestepping the volatility of fiat currencies.

Before the election, the Democrats were telling us to hurry and approve massive emergency spending to avoid an economic collapse. Unemployment continues to inch up to levels not seen in decades with no relief in site. When communist China tells us that they are fearful of the future of the US dollar, it is time to wake up. There is no transparency surrounding the supply of US dollars. It is beyond the reach of the voters and beyond the reach of Congress.

Perhaps it would be wise for Americans to consider silver and gold as part of their savings strategy. It would be good to see a return to currencies that are backed at least in part by precious metals. The best possible role for government is to create the climate in which citizens are free to generate solutions to the nation's problems. Printing more and more money with no end in sight and no plausible explanation of its value leads nowhere. Old fashioned currency backed by precious metals is plain common sense. It is an idea whose time has come. Sphere: Related Content

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