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Egypt: To Gold or Not To Gold

Categories: Middle East & North Africa, North America, Egypt, U.S.A., Economics & Business, International Relations

It seems that the financial crisis rocking the US markets is hurting people everywhere – even the daily decisions of laymen and people who do not own businesses.

Zeinobia wrote here [1] about how some people have decided to withdraw their money from foreign banks here in Egypt, and invest this money in buying gold.

She explained:

The ministers and officials are appearing here and there to calm the people down saying that our economy is fine and that we got a great opportunity to attract the Gulf capital money escaping from Wall Street !!Anyhow let the officials say whatever they want ,it seems that the implications of the Bailout and the nationalization of banks across the U.S and the Europe have their impact here in Egypt. I read news and I also heard from relatives and people who work in Egyptian banks that Egyptian clients are withdrawing their money from the foreign banks especially Citibank. The problem that they do not deposit in any other national or Arab bank ,they take the money and buy Gold.
Egyptian people are used to buy Gold whenever there is an economic crisis .It is a custom, gold is more secure through time ,it does not lose its value so rapidly like money.

I think we need financial and economic experts to study such a phenomenon, and its effect on banks, and the country's economy as a whole.