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End of the Euro?
May 14, 2010

Europeans are suddenly buying gold like crazy. The precious metal is setting records that are rippling through the coin market. The euro is sinking like a rock.

What’s this?

Just two year’s ago all the pundits were anointing the euro as the coming currency that was going to knock the U.S. dollar out of its role as the world’s reserve currency. Now it is the Federal Reserve lending massive numbers of dollars to help the Europeans shore up their financial position.

Pundits are saying the euro could fall to $1 (it peaked at $1.60) or even cease to exist as Germany and the other stronger European states try to save what they can.

Does this mean that the next truism of recent punditry to go is China and its super economic status?

The country has been hoarding commodities. This has helped keep their prices up.

There are many parallels between this, the worst recession since the Great Depression, and the Great Depression itself.

But one thing is different. Then it was commodity prices that fell first, followed by the stock market and the runs on the banks occurred.

This time we started with the stock market, which was followed by runs on the banks.

Commodities have swooned a bit but many are still at or near record highs.

Will commodities continue to defy the historical parallels? The answer will influence where the U.S. coin market goes from here.

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About the Author
David C. Harper has been a coin collector since 1963. He joined the Krause Publications editorial staff in 1978 and is currently editor of Numismatic News and World Coin News. He also edits two books annually, North American Coins & Prices and Coin Digest. He is the author of the Class of '63 column that runs each week in Numismatic News. His first bylined numismatic article appeared in the June 1971 issue of Coins Magazine and his various Krause Publications assignments included a stint as editor of the magazine 1980-1983. Harper received a bachelor of science degree from the University of Wisconsin-Oshkosh in 1977. He had a double major of journalism and economics.

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