How to Invest in Sovereign Gold Bonds Now No one should wonder at the dimensions of the current global financial crisis if keeping in mind what triggered it: the failing credits granted in huge numbers by the strongest banks in the world, the American ones, and the fact they were denominated in US dollars, the former strongest currency in the world, all the other major currencies being backed by it. No one should wonder either that this crisis led to banks' bankruptcies and immense national debts, likely to lead to sovereign defaults, or to a significant depreciation of the currencies involved.
To the extent the assets of the banks affected are larger, the possibility of a failing national currency and of the investment in sovereign gold bonds default is greater. The best example is that of Iceland, which, by attempting to bail out its banks in 2008, provoked in fact the crash of its stock market and the collapse of its currency, needing to be bailed out itself as a country. Another example is Ireland, with its sovereign debt being 41% of GDP and bank assets a stunning 800% of GDP. Could it save its banks, without ending in sovereign default, given that foreign investors would sell immediately their bonds, exerting further pressure on interest rates and causing as such the depreciation of currency? Now, of course, Ireland or Greece for that matter, whose bonds are denominated in Euro, could pay eventually their debts, but, on the other hand, they are not able to print more money by themselves, and, on the other, they could affect the value of the Euro and, as such, the fate of other countries in the Euro zone.
Even the Swiss government could be obliged to bail out its private banks, like Iceland or the US before. The central bank took some 40 billion dollars from the Federal Reserve in order to get rid of the bad assets held by the Swiss private banks, denominated in American dollars. This shows how the American mortgage crisis was able to become a problem even for Switzerland, the safest financial center in the world.
And it also shows the magnitude of the financial troubles the entire world is being confronted with these days. If countries like US, Japan or UK are deeply in debt and likely candidates for sovereign default in case their bond markets are to crash following the increase in interest rates and the continuous weakening of their currencies, investors may as well look otherwise when there is still time and buy Sovereign Gold Bonds in India.
Sovereign Gold Bonds investment on the other hand, came out successfully from the virtual collapse of the bank empire. Investment in government bonds themselves turned to it as to a
providential panacea, buying as much as they could, this shows how strong its position is. When there is no trust in currencies, the trust in gold increases. Besides proving historically its stability and reliability as an asset, in times of financial turmoil, when banks - the very foundation of finances - are stumbling or just disappearing - gold remains the only asset with a sure purchasing power and the only investment in Sovereign Gold Bonds likely to bring you high returns, instead of leading you to bankruptcy as bank assets would. Unlike the shaking bank assets, its price is rapidly and constantly increasing, and that's why buying sovereign gold bonds in india, coins or jewelry as soon as you can would be the wisest decision, in the conditions in which experts say it may hit even $10,000 an ounce.