KBGold

There is a genuine concern that higher levels of national debt can cause inflation. If debt becomes too high, there may be insufficient investors to buy the government securities (the way of financing the debt).

Note California's Bond sales being pulled today because of lack of interest.

Therefore, the government may be tempted (or forced) to fill the shortfall in revenue by printing money (what countries actually do today). Printing money and increasing the money supply, will lead to inflation.

The problem with inflation, is that it devalues the value of bonds, people will sell bonds, leading to higher interest rates on bonds and higher debt interest payments. If investors see inflation is getting out of control, people will not want to hold bonds.

Foreign investors will sell their securities and this will cause a devaluation in the currency. Investors will look for security and gold has always been a safe harbour.

The hyperinflation of Germany in 1922-23 was caused by the government printing money to finance reparation payments to the allies.

If you think it is time for you to invest in Gold watch this video to see how to choose small or large quantities. (as small as a gram)

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