Muenze Oesterreich AG, the Austrian mint that makes the best-selling gold coin in Europe and Japan, said sales have fallen 80 percent this year, reports Bloomberg.
“We’re getting back to business as usual rather than the hectic, panic demand we’ve seen over the last couple of years,” Vienna-based Marketing Director Kerry Tattersall said late yesterday in an interview with Bloomberg.
“There’s no more upward surge in gold price to titillate buyers,” said Mr. Tattersall, who retires this year after more than two decades with the mint. “A lot of people feel more relaxed about the economic crisis.” For the whole of 2010, Tattersall said he expects the mint’s sales to fall to 2006 levels, without providing figures. Austria’s mint says it supplies about a fifth of the global gold-coin market and makes about half of all gold coins sold in Euro.
What's really going on is that there are fewer dollars and euros around to buy gold coins. I repeat, it is a myth that gld performs well during a recession.depression.
"I repeat, it is a myth that gold performs well during a recession.depression."
ReplyDeleteUnless you have a loss of confidence in the currency triggered by an outright debt default or the more sinister "quantitative easing" and money printing "bailouts".
The deflation is the calm before the storm and I look at it as an opportunity to scoop up some more gold on the cheap.
It is not only a myth that gold behaves bad during economic depression-recessions, it is above all bad understanding of what money is.
ReplyDeleteRecessions/depressions are usually deflationary (stagflations are less usual). During the Great Depression (and previous recessions) when the USA was in the gold standar, deflation meant tha money was worth more, and because money was gold, it meant gold was worth more. Now the legal tender is not gold, but goverment paper. Therefore when there is deflation now, gov. paper is worth more and the price of gold in gov paper goes down.
Different type of money, different reactions.
That said, in the 2008 deflationary crash gold was what handeled the dollar (gov paper) rise better than anything else. Petrol collapsed, the stock market collapsed, commodities took a big hit, etc... Gold went down but was what holded better.
It's not nice to aggravate gold bugs; somewhat akin to drawing cartoons of one's prophet.
ReplyDeleteI believe "gold bugs" will be around a lot longer than "paper bugs".
ReplyDelete