Liberty Coin Service

Broadcast 11/23/2011 on WILS-1320 AM

Click here to get to the broadcast in mp3 format.

Announcer:

Welcome to another edition of Things You “Know” That Just Aren’t So, And Important News You Need To Know presented by Patrick A. Heller, owner of Liberty Coin Service and Premier Coins & Collectibles in Lansing and Delta Township.  Take it away Pat.

Heller:

Good morning.  We all deserve a break to focus on something positive.  The world’s financial problems and catastrophes will continue, whether or not I cover them.   I will get back to some of them next week.  This week, however, I think it is worth giving thanks for the blessings that physical gold and silver bring to the lives of those who own it.

Once humans outgrow infancy, change becomes somewhat uncomfortable.  We are fearful about change in a world where the values of just about all paper currencies are declining, and there are major defaults and unexpected bankruptcies.  Physical gold and silver have a track record of stable value going back thousands of years.  An ounce of physical gold or silver from a thousand years ago is still worth an ounce of gold or silver from a century past, or an ounce of gold or silver today.  They will continue to be worth an ounce of gold or silver in the future.

Some critics knock owning physical gold and silver because it does not pay dividends or interest.  But, if you look at the track record over the past decade, both metals have a consistent record of appreciation far higher than almost every paper currency, stock, or bond.  Like other assets, there are times when gold and silver underperform the market.  We are not at that stage of the market now.  I don’t expect precious metals to peak for at least a few years.

The basic blessing of owning physical gold and silver is that it provides insurance against the calamities that might affect paper assets that you own.  When the financial crisis hit the Far East in 1997, Indonesians who only owned paper currency were virtually wiped out.  Citizens of Indonesia who happened to own gold saw their standard of living barely affected.

Beyond the financial protection, let me share three stories that demonstrate other blessings of owing physical precious metals.

The first story goes back to 1940, as the German army overran The Netherlands.  A Jewish family took flight, using the gold coins stored in a cookie jar in the kitchen.  The hoard was large enough that it was able to secure the freedom of a many members of the extended family, who gained refuge in Great Britain, South America, Mexico, and the US.  A few years ago, I bought the residual of this hoard from one of the descendants who lived in Mexico City.  Even then, the remaining hoard was so large that the seller was able to receive a six-figure payment.

The next story involves refugees from South Vietnam, Cambodia, and Laos in the 1970s.  After Cambodia and Laos fell and the American military pulled out of South Vietnam in, 1975, the new regimes imprisoned or killed large numbers of the residents of the three nations.  For the past three decades I have talked with numerous refugees from that part of the world.  Invariably, I ask if it took payments of gold to win their escape from their homelands.  Every single one has confirmed that gold was used in at least one part of their family’s journey to freedom, whether it was bribing government officials, paying for passage to be smuggled out of the country, or for other purposes.  US-born Americans might be surprised to know that one of the first assets acquired by Southeast Asian refugees once they reached our soil is more gold and silver.  Just because many of us would regard the American homeland as “safe” doesn’t mean that there will never come a time when it might be necessary to flee this regime.

The final story comes from the mid-1980s.  A non-profit organization in California had offended a county official to such a degree that it was raided by the police one morning.  Everyone on the premises was arrested and all the computers, cash, and accounting records on the premises were seized.  It happened that the organization’s vice president had not arrived by the time of the police raid.  It also happened that the entity had recently received a donation of 5 1-ounce gold Krugerrands, which were sitting in a safe deposit box until a decision could be made about what to do with them.  One of those arrested was able to call the vice president.  This official went to the safe deposit box to withdraw the Krugerrands to use them to pay for an attorney’s retainer.  

With competent legal assistance, none of those who were arrested were ever charged with any crime.  The organization won every lawsuit over this matter except for one of the suits seeking recovery of legal expenses.  At the next election, the county official was soundly booted out of office.

This week, as you count your blessings at Thanksgiving, be thankful for the benefits you are enjoying from the physical gold and silver that you own.  And have a Happy Thanksgiving.

That’s it for today.  Tune in next week for more “Things you ‘know’ that just aren’t so, and important news you need to know.”  I’m Patrick A. Heller, owner of Liberty Coin Service in Lansing and Premier Coins & Collectibles in Delta Township.  Thank you for listening.