Dealer gold one option in light of interest rate uncertainty
Friday, January 29, 2010
Gold coins are a good investment amid current economic uncertainty.
- By John March
A top Federal Reserve official is reminding financial institutions that higher interest rates will be coming eventually, despite the recent decision to keep them at or near zero in light of ongoing economic conditions.
In a recent speech in Arlington, Virginia, Fed Vice Chairman Donald Kohn urged financial institutions to have “sound practices” to deal with the risks they could face from an eventual increase in interest rates, since this could affect their profits and the cost of borrowing and lending activities.
Kohn warned that some institutions could be tempted to take on greater interest rate risks to compensate for losses in their loan portfolios or simply remain distracted from other problems such as credit issues.
“The usual uncertainty about changes in policy interest rates is compounded by uncertainties related to the possible special effects of the historically low level of interest rates in the current recession,” said Kohn.
Some economists have suggested that the Fed may wait until 2011 to raise rates, although this will depend heavily on the pace of the economic recovery and other factors such as inflation and whether signs of a double dip recession begin to emerge.
With little certainty having returned to financial markets, many investors are likely to continue eyeing gold as a safe option.
John March is the Chief Technical Officer for the Superior Gold Group, his financial insights on precious metals are sought after by Gold & Silver Dealers globally.
If you have any questions about how to buy gold coins, and want to learn how to grow your portfolio call 888.374.4032 or write to askjohn@gold101.com.
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