Rare Coins Better Than Gold as Inflation Hedge

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As investors' concerns about inflation become more acute, they increasingly turn to inflation hedges such as gold. However, some sophisticated investors realize that rare coins have, historically, been a much better hedge against inflation than gold has been - twice as good, in fact.

Economic analysts at Blanchard and Company, America's largest precious metals and rare coin investment firm, say recent statistics regarding rising producer prices and inflationary Federal Reserve practices will continue to negatively impact consumers and that investors seeking a safe haven for their assets should consider rare coins and gold, as history has shown them to generate the greatest returns during times of uncertainty...

Since the credit crisis erupted almost a year ago, Doyle says, the Fed has been trying to lower interest rates - exactly the wrong thing to do if inflation is your principal concern - and the latest fall in the dollar further complicates the job of the Federal Reserve as it tries to bolster the economy at the same time that it fights inflation. . .

As investors' concerns about inflation become more acute, they increasingly turn to inflation hedges such as gold. However, some sophisticated investors realize that rare coins have, historically, been a much better hedge against inflation than gold has been - twice as good, in fact.

"The correlation of the return on coins with inflation over the last 29 years is well above that of other assets considered, and nearly two times that of gold; thus, the contention that gold is a better hedge against inflation than rare coins is not supported by the data," writes Raymond E. Lombra, Ph.D., in The Investment Performance of Rare U.S. Coins, an independent study prepared for the Joint Committee on Taxation of the U.S. House and Senate for the period of January 1979 through December 2007.

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