Thursday, May 27, 2010

Panicky Greeks Paying Over $1,700 Per Ounce For Physical Gold

Hoard of ancient gold coins

Image via Wikipedia

By Patrick A. Heller

The fear running through the Greek populace is that the nation’s government may default on some of its debts.

Since 1965, the Greek government has imposed restrictions on trading British Sovereign gold coins (gold content .2354 oz).  Despite those restrictions, the Bank of Greece reports that it is selling an average of more than 700 coins per day to worried Greeks.

In the first four months of 2010, the Greek central bank sold more than 50,000 sovereigns at its main downtown Athens office.  Bank officials estimate that at least 100,000 other coins changed hands on the black market.  The Bank of Greece has received as much as $409 per coin, which works out to a price of more than $1,700 per ounce of gold!  Prices paid on the black market are reckoned to be even higher.  A popular spot for street vendors to sell their coins is near the Athens Stock Exchange.  There the traders wait for citizens to bring payments received from unloading their paper assets like stocks and bonds.

The US government and some state governments such as California are in financial straits as bad as or even worse than Greece.  How long will it take before American buyers will have to wait in lines to pay outrageous premiums for what are now bullion-priced gold and silver coins?  More than one analyst thinks those days will come within a few months or sooner.

Panicky Greeks Paying Over $1,700 Per Ounce For Physical Gold

Reblog this post [with Zemanta]