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Archive for June, 2010

Worlds largest gold coin sold

Monday, June 28th, 2010

worlds largest gold coinThe worlds largest gold coin, the $1,000,000 Canadian Gold Maple Leaf was sold in Austria’s prestigious Dorotheum  auction house on Friday 25th June for over 4 times its face value  at  the Friday gold spot price fetching €3.27million (£2.68 or $4.02).  The coin had been on display in a Vienna museum as part of its coin display, lent by an Austrian Investment group AvW who went into insolvency after the owner and CEO was arrested on suspicion of fraud and breaches of trust. The auction was ordered by the administrators and was acquired immediately through a written bid by a Spanish gold trading company Oro Direct based in Madrid. They now join an exclusive club of owners of the five coins produced including Queen Elizabeth, whose face is on the coin, unidentified investors in Dubai and another so reclusive that their whereabouts is unknown.

The coin weighs 100Kg of 99.999 percent pure gold, the purest on the market, and is 53cm (21 Inches) in diameter and 3 cm thick.  The coin was struck by the Royal Canadian Mint to gain entry into the Guinness book of records for the world’s largest gold coin. The record was previously held by the Austrian Mint who produced fifteen €100,000 coins weighing 31.1kg (1000 troy ounces) to celebrate the 15th anniversary of their world famous Philharmonics coin.

The Royal Canadian Mint says it takes about 6 weeks to make each one of these huge coins, which are made through an extremely high quality casting process. The real reason they made these coins was to draw attention to the new “Five 9s” standard of purity for the regular Maple Leaf issues and the record was secondary The RCM is proud to be able to offer the “finest and purest gold coins in the world.” In fact, it was the RCM that set the “Four 9s” standard back in 1982, which many countries who issue gold bullion coins have caught up with, costing the RCM market share.

Whilst undoubtedly the coins were produced as a form of extremely expensive marketing and spectacle appeal they have been an extremely good investment as when launched in May 2007 the gold spot was around $660 and to day that has risen to around $1250 and as the coin weighs 3215 troy ounces I make that a profit of around £1.9 million in 3 years.  Over a period of financial crisis where the stock market dropped dramatically and  traditional saving cannot beat inflation the coin has done very well indeed, hammering home the message to preserve some of your wealth in gold.

Maurice Hall

The Gold Train

Wednesday, June 16th, 2010

The Gold Train is a mystery emanating from WWII but the almost mythical  status developed because of the secrecy particularly in the USA. In reality it is story of horror, mass murder, theft and greed not revealed until Bill Clinton created the Presidential Advisory Commission on Holocaust Assets in the United States and had become a symbol of all that was lost by Holocaust victims

We begin in Hungary where prior to the war almost one fifth of the population was Jewish and had been integrated into the countries fabric. The government was increasingly sympathetic to fascism and gradually tightened laws against the Jews eventually the Arrow Cross party became the fascist government of Hungary. As the war went badly for Germany things got worse and with the Soviet Army only 100 miles from the border Hitler launched an invasion of Hungary in March 1944.

Until 1944 the Hungarian government had not cooperated with the Nazi but this all changed as the facist dominated government were eager and willing to collaborate and the SS saw the opportunity to continue their work of mass murder to solve the Jewish problem. Consequently the estimated population of 800,000 Jews were forced to hand overall of their valuables to government official including gems, gold, jewelry, gold coins, silver, wedding rings in fact anything of value. With typical efficiency everything was bagged, boxed and identified with receipt given to the owners.

After handing over their valuables the majority of Jews at a rate reaching 12,000 per day were shipped off to the concentration camps of Auschwitz-Birkenau where most never survived.  Meanwhile the Hungarian authorities resorted all the confiscated valuables into categories destroying the identification of the original owners but the inventory was fairly exact.

Gold Train

Car from the Gold Train

By December 1944 the Red Army were on the outskirts of Budapest and a decision was made to evacuate the Jewish booty and this was supervised by a Hungarian Árpád Toldi, the commissioner of Jewish affairs appointed by the SS. The valuables, estimated at around $5 billion in today’s terms, were packed into  a 42 car freight train that was designated for Germany. As the train moved slowly westwards through Hungary and Austria. Toldi bought off bands of marauding troops with small batches of loot but large amounts of gold and precious stones were off loaded into  trucks along the route and stories of Nazi gold  springing up all along the route ensured the  “Gold Train”  became one of the many myths of Nazi treasure.

However, the majority of the loot ended up in allied hands. Toldi  had two trucks loaded with valuables and they headed towards the French zone where they were seized by French troops at St. Anton. According to a report written by the Central Board of Jews in Hungary and referring to available reports at the time the trucks seized by French troops contained:

31    cases of gold

2        case of gold coins

3        cases of gold watches

8        cases of brilliants

2        cases of selected brilliants and Pearls

The French returned these valuable to Hungary but they did not reach the hands of any remaining owners or relations, but were mostly were stolen by the communists.

The Gold Train eventually fell into the hands of the United States Army nesr the town of Werfen in Austria in May 1945 and according to the Central board contained the following:

10              45kg cases of gold

1                100kg cases of gold coins

18              35kg case of gold jewels

32              30-60kg cases of gold watches

1560          cases of silver of different weights

1                case of silver bricks

1                trunk of currencies and brilliants

100            artistic picture

3000          Persian carpets

2                wagons of mixed valuable

Gold train guard

American soldiers guarding the gold train

The Central Board of Jews and the Hungarian government were aware that the majority of the contents were in American custody and passionate pleas for them to return the valuables to Hungary, where they could be returned to their rightful owners or surviving family members, were continually ignored. Despite the clear country of origin ownership,  Americans decide that the contents were  ownerless property and that it should be sold for the benefit of non-repatriable  refugees who could be accessed through the International Refugee Organization (IRO). It is a matter of fact that some of the property from the train ended in the possession of high ranking US Army officers but the majority was sold off through US Army exchange stores in Europe and the remainder auctioned off in New York in 1948  with proceeds going to the IRO.  Approximately 200 paintings seized from the train should have been returned to Hungary but they came into possession of the Austrian government and disappeared to this day they have not surfaced.

As a result of Bill Clinton’s creation and subsequent freedom of information in 2001, there was a lawsuit against the United States government. This was filed by Hungarian Holocaust survivors in a Florida district Federal Court for the government’s mishandling of the assets on the Hungarian Gold Train. In 2005, the government reached a settlement worth $25.5 million. The money was allocated for distribution to various Jewish social service agencies for the benefit of Holocaust survivors. Hungarian Jewish survivors did not receive any money directly so justice was not seen to be done.

gold train toldi

Árpád Toldi

There was gold, gold coin, jewelry and precious stone that did not end up in allied hands, spirited away by Toldi during the long  journey and the amount returned to Hungary, from the French. that was stolen by the communists and ended up in Russian hands.  The trail has disappeared  leaving many unanswered questions, the most important of which where is the gold now ?.

Toldi himself tried to enter Switzerland with a convoy of trucks but was turned away at the border. After hiding for some time in the French zone he gave himself up to the French authorities and led them to some bags of precious stones.  After a few months detention he was released and then disappeared. It is rumored that he lived under the protection of high ranking French officials but not substantiated.

This is a terrible story where thousands of people lost their lives and their wealth. Could it happen today, unlikely, but less unlikely is a family losing its wealth through crisis.   If a family were to put aside some of its wealth in the form of tangible assets in a safe haven, such as well documented vault in a stable country such as Switzerland, then there is a strong chance of surviving that crisis

Maurice Hall

Bordeaux 2009 Vintage

Thursday, June 10th, 2010

I was listening to a programme on BBC Radio which is always an informative station and my ears pricked up on a discussion on the 2009 Bordeaux vintage which is reputed to be the best in 60 years.  I like wine very much but the grand Grands Crus of Bordeaux which have long catered for the discerning tastes of the elite in the western world are beyond my means. However, I thought it would be an interesting to understand why the wines are so great and if I had a rush of blood to the head and splashed out, what would be the best value for money. To my surprise there was little in the way of comparison of the various producers but a great deal on the destination of the very best of French wine

petrusFrom the baroque tasting room of Chateau Mouton Rothschild, to the grand hall of the Union des Grands Crus, Chinese delegations declared their intent to siphon off huge quantities of first growths, the very best wines.  The price of the first growths are likely to cost £4000 per 12 bottle case and even as high as £1000 per bottle.  According to the Chinese importers money does not seem to be a problem and Lafite-Rothschild is said to be the tipple of choice for the Chinese industrialist.  Private companies are soaring and property values are rising fast so people have a lot of money.

You may wonder why I am writing about wine on a blog whose main interest is gold. Whilst critics were in raptures with the top wines from Haut-Brion, Margaux and Latour it seems to matter little to the Chinese consumer who are reported to glug their wine or dilute even the most expensive bottles with lemonade. The reason is one of economics, no longer do these famous vintages end up in the cellars of the rich in the western world and particularly recession hit America; but they have become prestigious gifts amongst Chinese business people.

Throughout history, all great powers have their day Egyptian, Greek, Roman. More recently countries such as Spain, France, and Great Britain all had periods of unrivalled power. Today, the United States still reigns as the world’s sole superpower but it is on the brink and is being credibly challenged by rising powers in Asia, India and more importantly China who have designs on world financial dominance. It is a process that will have huge implications for investors over the coming years. It is no surprise India is the greatest consumer of gold and China the largest producer.

The balance of power is swinging eastwards. First the West exported industrial plant to Asia leading to investment in technology in the East which coupled with a cheap workforce produced a number of startups. Their cost effectiveness captured markets normally supplied from the West and eventually western domestic markets were flooded by cheaper imports leading to a decline in the manufacturing base and vast trade deficits. Now we find our selves in a situation where we are even being financed by the East. Iconic UK brands MG and Jaguar are Chinese owned and the new Californian bullet train was not only funded by money borrowed from China but built by a Chinese company.

Sovereign debt is threatening the fabric of western society and dragging down our currencies. It reminiscent of the 1930s as austerity measures have been running in Ireland fore some time, problems in Greece and Spain have lead to strikes and a general strike is threatened in Italy. Portugal is in the same mould as Spain and Italy, later additions to the EU from former Eastern Europe are in great difficulty particularly Hungary, France has to tighten its belt and Germany is in a domestic struggle over the Euro. Outside the Euro zone, the UK debt is of a greater GDP of all but Spain and its only because our repayment has a longer time span that we are not in quite the same mess as Greece. If the June budget does not show sufficient promise to bring down our deficit our triple –A rating maybe under threat.

So how does the American superpower stand?. The economy is the country’s top concern, with persistently high unemployment the greatest threat the public sees. Eight of 10 Americans rate joblessness a high risk to the economy in the next two years, outranking the federal budget deficit, which is cited by 7 of 10. An increase in taxes is named as a high risk by almost 6 of 10. Fewer than 1 in 3 Americans think the economy will improve in the next six months….Only 32 percent of poll respondents believe the country is headed in the right direction, down from 40 percent who said so in September.” (Bloomberg).

The U.S. debt will top $13.6 trillion this year and climb to an estimated $19.6 trillion by 2015, according to a Treasury Department report to Congress. ( Reuter 8th June). Economic contraction will continue with record numbers of foreclosures, personal bankruptcies, the highest rate of unemployment with millions more jobs to be lost as purse strings tighten.

Going back to the origination of this theme if Chinese businessmen can afford to mix lemonade with £1000 bottles of Bordeaux to impress friends and associates then there truly has been a swing to the East and that is where the demand for Gold will be driven. Currently the USD is the reserve currency but as power is being challenged so is the dollar as  both Russia and China are pushing for alternatives where gold may play a part.

Read the china Gold Report on this blog

Maurice Hall

India’s Golden Age

Wednesday, June 2nd, 2010

Every culture or civilisation has a period termed its “golden age” and for India that was between the fourth and sixth century, the Gupta dynasty which covered most of modern India. The Guptas were prolific minters of gold coins and some of great beauty. The coins were named the dinara after the Roman denarius aureus– a reflection of Indian trading contacts with the West and the export of Roman coinage as bullion to India. However they were not a copy of Roman coins but completely Idianised and closely followed the concept of a universal monarch or ideal ruler. The original coins adopted the standard Roman weight of 8 grams but this was not very acceptable so the Guptas minted coins in a standard Indian weight called Suvarna around 9.2 grams. It must me remembered at this time the three world powers were the Roman Empire , the Byzantine Empire from  modern day Iran and the third the Indian Empire under the Guptas

We are at a period of time where religion in India was at a crossroads and the Guptas  were said to be responsible for patronizing a new temple based religion recognized as Hinduism. However, Kamuragupta  ( AD415-455) still practiced ancient Vedic rituals

Kgupta horse obv

Commemorating King Kumaragupta's horse sacrifice

Normally gold coins would feature the king or ruler on the obverse of the coin but this coin of King Kumaragupta I features a magnificent tethered stallion ordained with banners and ribbons. It symbolises the ashvamedha ( horse sacrifice) the Vedic ritual of legitimizing the conquests of a honourable and pious king. The reverse features the queen with ritual instruments for the ceremony. The Sanskrit around the rim says “King Kamuragupta the supreme lord who has conquered his enemies”

The Ashvamedha could only be conducted by a king. Its object was the acquisition of power and glory, the sovereignty over neighbouring provinces, and general prosperity of the kingdom. This was immensely expensive and is usually only performed once in  a Kings life time.

The horse to be sacrificed must be a stallion, and it is ritually purified and the sacrificer whisper mantras into its ear. The horse is then set loose towards the North-East, to roam around wherever it chooses, for the period of one year. Anyone who should stop the horse is ritually cursed, and a dog is killed symbolic of the punishment for the sinners. If the horse wanders into neighbouring provinces hostile to the sacrificer, they must be subjugated. The wandering horse is attended by a hundred young men, sons of princes or high court officials, charged with guarding the horse from all dangers and inconvenience but manly to stop it mating thus keeping it pure.

Kgupta rev

Reverse with the queen and ceremonial instruments

After the return of the horse, more ceremonies are performed. It is and bathed and anointed with ghee by the chief queen and two other royal consorts. The chief queen anoints the fore-quarters, and the others the barrel and the hind-quarters. They also embellish the horse’s head, neck, and tail with golden ornaments.  The king performs the sacrifice with a golden Knife. It concludes with the eulogy “May this Steed bring us all-sustaining riches, wealth in good kine, good horses, manly offspring”

First Indian Coins

Based on the available evidence today, it appears that the concept coins as means of trading (money), was developed by three different civilizations independently and almost simultaneously. Coins were seen in Asia minor, India and China in 6th century BC. Most historians agree that the first coins of world were issued by Greeks living in Lydia and Ionia around 650 BC using Electrum a natural alloy of gold and silver . However some historians have suggested that coins were minted in India as long ago as the 8th Century BC.

What is beyond doubt that the first coins of India were minted just before 5th century BC in central India. Archaeological evidence confirms that the Indians were minting coins between 5th to 6th century BC. Coins are also mentioned  in ancient literature from 500 BC.

The Indians love of gold continues to this day as the world number one consumer of the precious metal.

Maurice Hall

FRANCAIS ESPANOL ITALIANO CHINESE

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Thoughts
"For a mountaineer, the important things are the effort, the posture and the muscles. The rope that holds him serves no purpose when everything works but it gives him a sense of security. In the same way, all gold does is ensure confidence; it's a safe haven."