When Gold Was a Lifesaver—Literally
November 13, 2009 by Michael Checkan
Gold protects wealth. This lesson isn’t new. But even I had to learn it the hard way.
Back in 1975 I was a senior officer with the world’s oldest and largest dealer in precious metals and foreign currencies, Deak-Perera. I learned this lesson firsthand and it forever taught me about the importance of the “barbaric relic”… gold!
Deak-Perera was one of the few financial institutions in the United States with a combined expertise in precious metals, foreign currencies and international banking. As a result of this knowledge the company was invited by the State Department in April 1975 to assist the South Vietnamese refugees that were pouring into the U.S. as Saigon fell. The company became the exclusive “moneychanger” for all five of the Vietnamese refugee camps.
You may recall that, as of Jan. 1, 1975, Americans could once again legally own gold bullion. It had been illegal to own gold since 1933, when President Roosevelt took the U.S. off the gold standard and ordered all privately held gold coins and bullion be surrendered to the government.
Unaccustomed as we were to handling displaced persons, it was nonetheless clear that even the most prominent of these refugees would be arriving at the camps with little more than the clothes on their backs and whatever valuables they could carry. And who knew just how valuable some of their belongings would be?
Only one thing was certain: They wouldn’t be drawing checks on their local banks. All banks in Vietnam had been taken over by the communists, along with the rest of the economy. At the time, the cruel joke was Vietnam was a true “cash-and-carry economy.” If you had the cash, you got to carry off anything you wanted.
A Day that Changed My Life
May 1975 found me at Eglin Air Force Base, Fla., one of the five refugee camps. I will never forget my experience with two families in particular. The experience is burned into my mind forever.
A middle-aged man, trim and well-spoken, was wearing what had once been an expensively tailored suit. He obviously cared deeply for his bedraggled family. He had been a businessman in Vietnam. In fact, I was later to learn, he had been a very successful banker. But now all his family’s wealth was in the small dingy canvas bag that he was hanging onto for dear life.
Even through all the adversity he and his family had recently experienced, there was still a glimmer of hope in his eyes. Despite losing his job, his home and his country, he still wore a relieved expression whenever he gazed upon that canvas bag. It was his key to a new life in a new country. It was, quite literally, a golden anchor.
Gently, carefully, he poured the contents of the bag onto the table in front of me. There, gleaming in the sun, was an enormous collection of golden taels. For those of you who are not familiar with taels, they are a form of gold bullion indigenous to Southeast Asia. Each tael was 1.2 ounces (37.5 grams) of .9999 pure gold. They looked like tiny wafers—thin sheets of gold, delicately wrapped in paper.
It was Deak-Perera’s job to buy the gold taels from the refugees, and, with the proceeds, issue traveler’s checks.
A Lifetime of Savings, Now Worthless
Further back in line there was another refugee who was less fortunate than the banker carrying the golden taels. Much like the banker, he was a successful businessman before he and his family were uprooted by war.
He approached my table with two suitcases in hand. Like his countryman with the taels, he had worked very hard, saved extremely well and carried all his worldly wealth in those satchels.
But there was one major difference. His wealth was in the form of piasters, the currency of the Republic of Vietnam. These were paper promises of a government that no longer existed. I had to tell this man his piasters were worthless. They would not buy anything—not even a Coke or a pack of cigarettes—in his new country.
Can you imagine toiling and saving for a lifetime for two suitcases filled with worthless currency?
Sad to say, other formerly valuable pieces of paper were now worthless as well. One was the Military Payment Certificates (MPC), issued by the U.S. military. Each one carried the likeness of a famous Hollywood movie star. Now they would not buy admission to a show.
Other items, even valuable diamonds, jade and loose gems, were hard to exchange on the spot for a fair price. Only gold had an immediate market at a fair price.
Before that day I always knew that precious metals were an important asset. But, after looking into the eyes of these two men and their families, I knew firsthand the value of gold and other precious metals. Gold holds its value when nothing else will.
Does gold in 2010 offer the same peace of mind and protection to Americans that it has through 5,000 years of history? Absolutely!
As an American, there are many threats to your hard-earned wealth. The most insidious is not military in nature. It is the weakening of the U.S. dollar.
In the past year these mounting costs exceeded our government’s revenue by more than $1.4 trillion. Meanwhile, the Federal Reserve loaned or guaranteed another $2 trillion. How will this debt ever be repaid? The only politically acceptable solution is to print more money. But creating more dollars means, inevitably, that each one is worth less. The dollar is being devalued right in front of our eyes.
Get Ready for Fireworks in the Gold Market
My friend Doug Casey likes to say that the price of gold is not only going to the moon, it’s going to several planets beyond.
When this happens… when gold prices double from where they are now and continue rising… when the dollar falls into the abyss… which would you rather own? Which do you think will better protect your life’s work?
Would you rather be holding two suitcases full of worthless U.S. paper? Or a canvas sack full of gold?
I’m going to choose the latter. I hope you will, too.
If you’d like to know about the safest, most secure way I’ve found to own gold, let me tell you about the Perth Mint Certificate program.
It’s one I helped develop 12 years ago, and it comes with the most rock-solid guarantee you’ll find anywhere. In case you’re not familiar with it, the Perth Mint is wholly owned by the Government of Western Australia. It has been storing and dealing in precious metals for more than a century.
The Perth Mint is the only depository operating today that can offer you a comprehensive storage and trading program, with the unconditional written guarantee of one of Australia’s wealthiest states. In addition, all precious metals stored at the Perth Mint, including your metals lodged under this program, are insured (at the Perth Mint’s cost) by Lloyds of London.
When we designed this storage program, we wanted to make sure it was SAFE. That is, that it offered Security, Affordability, Flexibility and Exclusivity. The Perth Mint Certificate Program has our highest endorsement on all counts.
Purchasing gold or other precious metals through the Perth Mint Certificate Program requires an initial investment of $10,000 or more. Sale amounts or additional purchases must be for $5,000 or more. There is no additional cost for unallocated storage; the one-time administrative fee is a very reasonable $50 per certificate.
When you are ready to dispose of some or all of your holdings, the Perth Mint will arrange to purchase them back from you at the then-current market price. Or you can take delivery of your holdings at the Mint or via insured delivery to most any location in the world.
To learn more about how the Perth Mint Certificate Program can help you find a safe haven for some of your assets in an increasingly troubled world, please contact my company, Asset Strategies International. You may email us at email@example.com, or call us at 1-800-831-0007 or 301-881-8600.
Please let us know how we can help you achieve your financial goals.
Asset Strategies International