France’s loss of the triple A rating sharpens the focus on what needs to be done to avoid the Eurozone’s crisis deepening further. What happens in France in the immediate as well as the long term future is therefore of concern to those outside France as well as those within. This week it was made clear that through increased IMF funding, the UK is likely to be contributing to the bail out funds, although the UK remains committed to countries not currencies. Of particular concern to English readers is the likely reaction in France to the required social reforms. And of course the flight into gold helps strengthen the hand of the wise investor.

The loss of the triple A is only one of the superficial symptoms of the trends of 2012. The economic crisis continues to deepen, which may well cause the price of gold to climb more quickly than envisaged, but not initially.

The consequences for the economy…

This is not due to having been warned of the possibility of such a loss. Since October last year, the agency Moody had been holding the sword of Damocles over Gallic heads.
The downgrading of the French credit rating from AAA to AA by the credit rating agency Standard & Poor’s has far graver consequences than would be implied by the speeches of leaders who wish to give reassurances, a mere few months ahead of the elections.

The interest rates at which France borrows and which are already twice as high as those of Germany will increase, to cover the risk of default. The first direct impact on the economy is the flight of investors and thus a fall in the CAC 40 index.
And for individuals
Higher interest rates on mortgages, tax hikes, diminished access to credit… the French will have to curb their spending. All the large companies in which the State has a stake (EDF, GDF, France Telecom, Renault, SNCF…) will see their financing costs increase, which inevitably will impact the expenditure of individuals, not to mention the degradation of public services.

Is the A lost forever?

Of course, France can regain its triple A, but how soon and, especially, at what cost?
The corporate VAT plan is only a tiny initiative when viewed in the light of the catastrophic impact of such a downgrading. According to Norbert Gaillard, consultant at the World Bank, France can only recover its AAA at the expense of important social reforms and “a drastic reduction in public expenditure”. Flexibility of the job market for greater competitiveness, extending the period of contributions to pension funds, elimination of the 35 hour working week… Are the French ready to give up their social gains whilst increasing their daily expenditure? Working more and earning less money?

The consequences for gold

As soon as the credit rating of a country is downgraded, the cautious markets fall, demand for gold increases and hence its price. Initially, the need of banks for liquidity can result in a massive withdrawal following the resale of credit and a fall in the price of gold on the markets, as has been already more or less the case since December. One should therefore take the opportunity to strengthen one’s position on gold and buy now because the secondary effect once the selling off stops will see: gold reach new highs this year breaking the $2000 an ounce barrier and beyond.

Fools or Gold?

Once the dominoes of Debt start to tumble the skies the limit but more importantly, when states fail, currencies collapse or sovereign debt strangles everyday life, where would you rather have your “money”?
In a tangible precious asset with perennial true value?
Or tied up in the worldwide web of debt derivatives, Special Purpose Entities (SPEs) and untraceable off-ledger accounts?

The choice is simple, give your money to the crooks you’ve been conditioned to trust with blind faith and risk losing everything or buy something solid that you own and trust yourself to manage it properly?

It’s what they call a no-brainer!

The twentieth century saw in both extreme (Nazism/Communism) and mild (the European-style welfare state) forms the strange phenomenon of governments repeatedly taking against their own peoples – in the name of the people. No longer was an independent citizenry to be trusted to look after itself, educate its children, defend its homes and families, and generally stand on its own feet: the munificent state was to do all that, and the end result is bankruptcy. And evasion: the bankrupt states of Europe are not prepared to be honest about where state intervention leads, even though the lessons have been spelled out twice in the twentieth century in draconian form: Nazi Germany and the Soviet Union.

As the eurocrisis deepens, measures antipathetic to savings are being mooted across the continent, involving amongst other things bans on the purchase of gold over certain amounts and bans on cash transactions. Any attempt by savers to convert increasingly worthless cash into solid investments like gold are to be thwarted, raising fears that a Franklin D. Roosevelt style confiscation of privately owned gold may be on the horizon.

Certainly measures proposed or drafted into law in the last quarter of 2011, in Italy, France and Austria, give cause for concern: in Austria there is a restriction on the purchase of more than 15,000 euros’ worth of gold; in France, all metal sales over 450 euros must be paid for by credit card or bank transfer; in Italy it is proposed to ban all cash transactions over (the figures vary) 300, 1,000 or 5,000 euros. The effect of these measures would be to render all significant purchases of precious metals recorded and therefore traceable to their owners.

It has been claimed that the various reasons for these measures are an attempt to rein in credit, to comply with U.S. requests for assistance in combating money laundering, or to help prevent the theft of ordinary metals: in the case of the latter there have been widespread spates in recent months of the theft of metals from anything ranging from telephone poles to industrial plant. While these may all be true goals (whether the proposed remedies will work is another matter – it always is), there is the significant problem that nowhere are the precious metals excluded from the measures. Hence the fears of confiscation.
Gold is a safe haven competitor against fiat money; this may not cause problems when economies are genuinely booming (i.e. the boom is not fuelled by easy expansions of credit). Yet when the fiat money system is collapsing and inflation is rampant the idea that people may protect their assets and their pensions by converting their cash into gold becomes a serious “problem” for the state: savings are seen as a threat.

We have seen how Keynes thought “wealth accumulation” a vice (Austerity for you – privileges for Politicians, December 16th, 2011). He further mockingly remarked: “The duty of ‘saving’ became nine-tenths of virtue and the growth of the cake the object of true religion.” Reckless governments are hardly likely to admire or condone prudence in their peoples; whatever the ultimate reason for this, such an attitude on the part of the authorities will only widen the gap between the political elite, unable to admit the error of its ways, and nervous private citizens wondering whether they have a future.

Finally, savings based in fiat currencies or related to debt-ridden financial institutions have the possibility to fall to zero in a crisis. Savings based in physical assets that you own help protect to preserve your accumulated wealth as they retain worth through a crisis.

The best physical asset to own during a crisis is gold which has proved its perennial purchasing power for over 6000 years – no fiat currency has ever existed that long to compare it and no other asset can compete with the value retention of gold. After all Gold can never be worth zero – it has intrinsic value, it is relatively rare on the planet and it has always been revered as precious because it is and has chemical and physical properties unmatched by any other metal.

By Mark Rogers

While many players in the stock market decry gold because it brings nothing in, “it doesn’t work”, the yellow metal will soon become the currency of the Swiss stock exchange! A good way to make equity investments more attractive!

The Six Securities Services Company, specialized in the settlement and the delivery of equities, is totally innovating by offering payment of stock trading in gold: a world premiere.

Customers will soon be able to buy shares in Zurich and set in units of gold, the XAU (a unit of XAU equals one ounce of gold in US dollars). In order to pay their trading in XAU, investors must have an account in XAU with the SSS Company and that it is of course supplied.

This news provides opportunities as the introduction within weeks of quotation and trading of structured products negotiated in XAU.

Gold is back on the market as the currency exchange
We can consider several reasons for this initiative: in the current floating exchange rate system, the dollar is losing more value, from the urge to print, and the euro is endangered by the threat of Greek bankruptcy, the recapitalization of the banks and the likely printing of more paper money. As for the other hard currencies, like the Swiss Franc, they prevent their issuing country from exporting because they are too strong. So the central bankers do everything to prevent their currencies becoming too valuable and consequently a haven for Forex investors.

On the other hand investors bought a lot of gold in recent years. The gold fund is therefore to carry out the transactions XAU. But the other reason is that the market and the global monetary system being more uncertain than ever, they wisely invested in a wealth that would never lose its value : gold. It has become the new currency of trust. “We already have three foreign exchange settlements, gold is the new currency”, said the spokesman of Six Securities.

Evidence if need be is by becoming the currency of financial transactions gold does not only benefit from being a trend or a passage linked to the crisis. It should be seen as differently as the crisis and the lack of confidence in markets and economists is much deeper than it seems. Previously considered as “the currency of last resort”, gold became the official currency exchange. A sign that should worry everyone… except those with gold!

We are late July and it is time to look at the gold accounts for the first half of 2011! Hinde Capital Fund Management conducted a study in June 2011 entitled “A Golden Renaissance, Precious Metal Dynamics ” which confirms the upward trends in physical gold (but not in “paper gold”).
Another analysis conducted by Goldsphere Edmond from the Rothschild Fund also confirmed this rise in demand in countries with a strong geopolitical risk despite stagnant mining production.
We were expecting a correction in the Gold Trend this summer and yet just the opposite has happened.
The Eurozone and American debt crises have helped this push upwards which has not been this significant since the beginning of the century.
Gold has risen an average of 19% per year since 2001. It is now facing an unprecedented demand.
Since the United States imposed the dollar as the world’s reserve currency and then subsequently flooded the market with it to increase consumption, the dollar has been heavily devalued. Their ability to stifle the price of gold has waned and globally investors have sought to ditch large reserves of weakening dollars for something safer. These investors initially thought the Euro may be the path to take but they got it wrong again and are now flooding into the only sure refuge which is physical gold. It is incredible how so many of these high flying know-it alls seemed oblivious to the obvious risks in the Dollar and then the Euro. Do they really research their options or just deal over expensive meals and golf holidays. Could they not see the blatant crisi of Sovereign debt affecting the major economies of the world? One has to ask what they have been doing for the last ten years and how apparently well-informed intellects make such poor judgments? (Must be the constant intoxication of self-appreciation, greed, drugs and alcohol)

A steadily increasing demand since 2003

Particular strength can be found in emerging nations where the demand for gold is rising to the detriment of the Green-back: 12% for India and 21% for China. Also, Mexico has filled its coffers of 93 tons of gold in the 1st quarter of 2011. Asia accounts for 62% of the demand, some of it cultural such as in India, but also other countries now active in the market are seeking to catch up for lost time (private investment now allowed in China) but also because “Governments wish to increasingly diversify their foreign exchange reserves and to disinvest from the US dollar or other currencies in trouble” (Option Finance Agency, France).

Other sectors such as jewellery are also in high demand (+ 55%) despite the rise in the price of gold (+ 3.1%). For this first half of 2011, the demand increased overall by 25%.
The paradox is that the demand for investment is still low, which proves that the course gold has nothing to do with any speculative flows. Indeed, it is also estimated that there is a mass of net flows out of “paper gold” (such as ETFs) equivalent to 55 tonnes. Overall, investments in gold are less and less by speculators, which is positive for the gold price trend. The attraction of a safe haven and sure value during these difficult and uncertain times is populating the gold investment market with serious investors, both private and institutional. This is hardly surprising when one calculates the increasing risks attached to most other forms of investments (which are largely based on owning bits of paper and have proved catastrophic to large funds in recent years).

Physical gold, a healthy investment

This study also shows that despite a growing demand, mining production did not increase accordingly and in fact was virtually stagnant. Recent fears have also surfaced that South African mines will be closed by strike action.

Another surprising finding is that gold sold by individuals to be recycled is steadily declining. This shows that the masses wish to hold on to something of value and also that they are fed up with being ripped off by those crooks who run incessant TV ads.
Even in Greece and despite the crisis, gold plays its role as a life insurance and safe haven since it is often kept in the home. Despite the attractive gold prices Greeks will not sell that they already have and they are still likely to buy more as a protection for their future survival.
Finally, another unexpected discovery, physical gold investment is disconnected from gold shares (the gold shares represent only 1% of world market capitalization). This disconnection is partly explained by the increase in the costs of production for mining companies and the difficulties encountered by countries which are politically unstable (Burkina Faso, Côte d’Ivoire).

“Khrysos (Gold) is the child of Zeus, neither moth nor rust devoureth it; but man is devoured by this supreme possession” (Pindar, c. 522-422 BC).

Gold companies should eventually be seen as worthwhile value but for the moment it is physical gold that is benefiting from investment because it is a real, tangible asset that you own and not just a promise.

On Goldcoin.org we have always preferred physical gold to “paper gold” for many reasons, but if one were to cite a single reason it is that the providers/suppliers of  ETFs (Exchange Traded Fund) can fail themselves as a Company which means you lose everything as you do not own a specific piece or pieces of gold, they do. On the other hand, if all ETF holders asked to recover in physical form their investment in gold, it would be impossible because they have sold more ETFs than they have Gold– sound familiar? It is the equivalent of Fractional Reserve Banking but applied to gold because these providers work and think like banks – and we know where that type of mentality led us to!!
Unbelievable Shallow Arrogance
Finally, as we approach the eve of the US debt deadline it is worth paying note to the despicable behaviour of so called elected democratic representatives who would be chastised in primary school for the same childish squabbling. Worse still is listening to them speak as they grandstand before the world’s media playing out their silly games. They sound like caricatures from the Simpsons with their phony accents and voices and yet we are to believe these are the best the “greatest nation in the free world “has to offer – I pity regular Americans who are governed by such an inconsiderate bunch of self-interested marionettes. Here at Goldcoin.org we have previously discussed the true nature of these politocrats in “Conspiracy, Collusion and Con-men – Why don’t they want you to buy Gold?”

As they push ever closer to the deadline it seems that they actually want the US to default and let’s face it so should we all – it’s about time the Fed and the Financial giants got their come-uppance by losing everything so we could start again and hopefully with something better- honest would be a start. Their brinkmanship may just backfire as the markets decide to take them down anyway even if they agree!
We have previously referred to this in “Financial Meltdown and Black Swans – Myth or Reality?” .
Should the Dollar collapse, which is an increasing possibility even when they introduce QE3, Americans and the rest of us should prepare for hard times not yet witnessed by most of the generations alive.

To give you an insight we suggest  reading “The chaos of a currency collapse” and multiply the effects by millions!

The stage is set for the Chinese Yuan to take the place as the World’s Reserve currency and the American politicians are doing their best to make sure it happens!!

The strengthening demand for physical gold investment is no accident as more and more regular folk know they need to protect themselves before the chaos and crisis ahead.
Don’t miss the opportunity, buy some gold now as insurance against losing everything when the Wall St bell falls silent!

The worsening crisis in Greece has prompted savers to empty their bank accounts to exchange their Euros for Gold coins.
Concern is growing over the stability of the Greek banking system and of course the astronomic sovereign debt which is crushing Greece.
The Prime Minister George Papandreou may well have persuaded the parliamentarians to back further austerity measures and have won the vote from them but that will not change the resolve of the Greek people.
Greece would need 12% growth annually for at least 30 years to come anywhere near having the means to repay its debts.
How likely is that?
The Greek economy does not have the means to recover and the fact that they have secured the next gigantic loan from the EU and IMF changes little in real terms. This money will only payback the Banks’ debts and therefore not stay in Greece. Surely the only way to help the Greek economy is to inject some funding into it. The only winner in this situation is the Banks who’ll feed their greed for profits and the loan sharks of the IMF and EU who obviously take their cut of interest.
The losers are the Greek people who will still have an impossible sovereign debt blighting their future whilst falling below the poverty line from increased austerity.
On top of this the Government has agreed to prostitute the future of Greece to the lowest bidders who have the cash to buy whatever “good” state assets they have.

A decision that Greece will regret

Without a doubt this line of action will never save the Greek economy or start to rebuild some confidence for a decent future. Greece will stay in Debt for generations. The Greek people will never accept this and their strong protests are understandable. Headlines talk of a possible Greek default – Why? Greece has been bankrupt for over a year, since it first asked for a “bailout”.

The only route to recovery is to restructure the debts or simply declare the country bankrupt. This would be the best solution for the Greeks but of course they’re in a weak position and all recent decisions, including the political waffle and rhetoric, have been taken to secure the European banks that are hugely exposed to the Greek debt. Be under no illusion that the only reason for this action is to appease the power brokers that support the European Governments. The politicians including the Greek government don’t care one iota for the regular people of Greece and why would they because they are all sufficiently immune to the deepening crisis because their deep pockets are lined with personal wealth that removes them from harm’s way and any sense of reality or empathy with those suffering the effects.

The people’s retribution

The one way Greek people have of preserving and protecting their personal wealth is to opt out of the normal system and there is evidence that they have started to empty their bank accounts (maybe à la Cantona – see Eric Cantona’s French Revolution).
Firstly they are taking retribution on the Banks by weakening them and also showing their distrust for reckless, uncaring institutions.
Secondly they are storing their wealth in something tangible and much more reliable than invented currency which could devalue or collapse anytime – they are buying gold coins as they did during the Second World War because they know that this will maintain real value and purchasing power through the difficulties ahead.
Here is some evidence provided recently in the Financial Times by Kerin Hope

ATHENS — Greek citizens are emptying savings accounts and buying gold as they brace themselves for the possibility of a sovereign default and a run on the banks.

Pledges by socialist Prime Minister George Papandreou that his government would “save the country” have been widely discounted by the public. However, parliament gave him a vote of confidence late on Tuesday night. The socialists have a six-seat majority in the 300-member house.

Sales of gold coins have soared as savers seek a safer and fungible source of value.

“When the global financial crisis started, our sales of coins to investors overtook bullion for the first time,” said Harry Krinakis, at Sepheriades, a Greek precious metals trader. “Now the sales ratio has reached five to one.”

Tomas, a computer technician, has exchanged his euro savings for gold coins: “I keep them at home just like my grandmother did in the Second World War.”
Monthly bank withdrawals were running at E1.5 billion-E2 billion in the first quarter. Last year, depositors withdrew E30 billion, equivalent to 12.3 per cent of total savings, according to the central bank. Greek deposits worth an estimated E8 billion were transferred to banks in Cyprus in 2010. But the flow has dried up this year amid fears that Cypriot banks could suffer contagion.

Andreas, a supermarket manager, transferred the family savings to Munich earlier this year. “The Swiss banks aren’t interested unless you’ve got several hundred thousand euros,” he said.

“We can’t trust the politicians to get us out of this mess [and] have to protect our families,” said Sakis, a garage owner, at an anti-austerity protest in Athens’ Syntagma Square. “A bank collapse has got to be in the cards.” He added he had withdrawn his savings and placed them in a bank safe deposit box “for security. Who cares about interest right now?”

Others put their savings into land when prices fell after Greece’s first European Union-led rescue last year. Angelos, a software specialist, bought a neighbour’s olive grove. “I grabbed the opportunity,” he said.
“A year ago I wouldn’t have considered making such an old-fashioned investment.”

It is no accident that other European countries, particularly Germany and France, have experienced dramatically increased investment in gold coins during the last three months. In France investors own more gold than the Bank of France and transactions in coins have increased by 35% (source AuCoffre.com) since January. These countries have aan historical reference to gold coin investments and their benefits so it is no surprise to witness such an increase during periods of crisis. In fact one can determine the “temperature” of concern from this rising activity and people are seriously concerned about an impending crash on the horizon that will have global significance.

Countries like the UK are rather slow on the uptake and the gold investment market tends to be reserved for the extremely well-off and well-connected. What a shame so many people are misled by false information to detract them from participating or they are just ignorant of the facts.

Anyway their loss is someone else’s gain and come the day they will be left holding bits of paper good for burning while their European neighbours use their gold coins to pay for provisions and ultimately survival!

Remember that the signs of crisis were ignored by myopian political rhetoric pre-2008 leaving millions of ordinary folk open to its consequences. The signs of crisis have been with us ever since and still they pretend all will be well and their policies are “working”.

2008 was just the prelude and the worst is yet to arrive.
Be warned and be prepared or once again you will be hung out to dry!

An investment in gold is a survival kit for your future.

When it comes to gold for investment too many buyers pay little attention to the quality of coins at the time of purchase and all too often they realise the importance of this to their investment when it is too late, at the time of resale. In effect, at the moment you wish to sell your gold investment coins they briefly revert back to a numismatic object that will be evaluated and priced as such.

In other words “it’s a gold coin, a twenty franc Napoleon which I should be able to sell with a 20% premium during a period of crisis” quickly loses meaning if you haven’t taken the time before you bought it to verify the quality.

You see when trying to sell on gold coins to professional dealers they will be intractable about the coin quality. In fact they will know so much more than you that every little imperfection they can describe downgrades the value of your coin to them. They will use this to negotiate the price down by reducing or eliminating the premium you were expecting. Additionally they may only offer to buy your coin by its weight and relative gold content weight, minus their commission and a little extra because you have devalued the coin by “handling” it. Finally you will arrive at a price considerably less than you were expecting and certainly less than you’d worked out using the spot gold price or professional quotes for coins.

You may act surprised but then why would you be knowing that any investment in physical assets of such value requires or even demands that you do your homework on what you are buying and how it is assessed or valued. You would certainly need to consider the eventuality of resale and how that should be best done for the best price and at the profit for you – wouldn’t you?

Well gold is no different and you should familiarise yourself with the important factors to consider when procuring gold coins.

Obviously there are some coins that are so rare they demand an ever increasing price but this is solely based on its numismatic (collectible) value. That is to say an extremely rare coin is not as sensitive to a period of crisis or the ups and downs of the gold price but moreso its value is determined and measured by the availability (or lack of it) of other coins like it. An example we can use is the French 100 Franc Bazor which is highly sought after but very rare. Its price is very high (given its gold content alone) because there are very few left in the world. The price will rise in time for its “collectible” value but it is unlikely to double within 3 weeks which a 20 Franc Napoleon of good quality can because of its premium. Rare coins are also being looked at slightly differently in terms of taxation and whereas investment gold coins are exempt from VAT (Value Added Tax) throughout Europe, these rare coins are no longer automatically exempt.

What is the minimum quality of condition for coins still considered to have a premium?

Generally speaking a quality of “very fine (VF)” upwards, “extremely fine (EF)” and “mint state (MS)”  are considered as coin conditions that still enjoy the benefit of a premium. These are the types of coins you should consider for gold investment. Apart from some rarities, the qualities of condition “fine (F) and “very good (VG)” will be bought and sold for their gold content weight and often finish up in the smelting pot for recycling.

Coins declared as “uncirculated (UNC)” are basically new coins that have never been in circulation or were never meant to be circulated. These will have an elevated basic premium due to them being issued direct from the Mint or in some cases may be very rare. In both cases the elevated premium makes them less attractive as an investment because their premium differential is weak. The premium differential is the % difference between the premium associated with the coin during normal economic conditions and the premium it may rise to during a period of crisis. A high starting premium as with UNC coins means there is less room for growth. Many of these UNC coins will be of interest to pure numismatists ie. Collectible.

Things to avoid

Even once you have seen the table below you may not feel sure of what to look out for or feel capable to accurately judge a coins condition. It is exactly for this reason that we advise you to avoid buying coins from small ads, individuals or maybe through bid sites like eBay. It is hard enough to know which coins are in which condition but the photos you see are not necessarily going to help and who knows what a seller really knows about their product if you know even less! The trick is to buy from professional sources where you will find fully certificated, verified and referenced coins that are what they say they are. Coins which are professionally inspected and sealed in their packaging maintain their quality so they will still be as valuable when you come to selling them. If you were to keep your coins in a box , unpackaged, taking them out occasionally to admire them you are effectively damaging your own investment by downgrading their quality through handling. Of course that is the difference with gold coin investment and gold coin collecting. An investment produces maximum yield when its integrity is protected and the physical asset is in no way altered to undermine its value.

Please also note that it is the most worn side that determines the condition quality so be sure to look at both sides of any coin.

Be aware of over-shiny coins: these will have been cleaned using polish, chemicals or abrasion to buff up the look and hide imperfections. It is recommended to use a magnifying instrument to inspect any coin as the naked eye cannot always detect the craftsmanship of the precision engraving. These are a great indicator of condition as wear & tear erodes precious detail of the design. Naturally one should always check for the obvious dents and scratches caused by rough handling or shocks. Do not be swayed – these will affect the value of your coin because they affect its condition quality.

It’s also worth noting that some damage inflicted like scratches and dents may have removed gold from your coin. A simple test for this is to weigh your coin accurately on an electronic balance. A French 20 Franc Napoleon should weigh between 6.44 and 6.46g to be considered as valuable. Anything from 6.43g down should be left alone.

You will find some useful information in our glossary as well as some photos that may help you choose wisely.

Similarly we would suggest you browse through the Gold Coin buying guide from our friends at LinGold.com who have kindly let us provide this for you.

Below is a summary of the basic qualities associated with the gradings of  coin condition and some useful translations for those looking internationally.

Gold Coin Gradings

Brilliant Uncirculated (UNC) or “Fleur de Coin”(FDC) – A perfect coin ( no traces of use, handling, shocks, scratches) which has 100% of its design remaining and still has a full mint sheen. These coins as the name indicates have never been in circulation and are exactly as the moment they were struck. They are indeed rare because even uncirculated coins may have been transported together from the mint to a vault and therefore have tiny abrasions or scratches from the journey. A coin in this condition must be flawless. Their rarity means they are of more interest to Numismatists and their elevated basic premium means they are not considered as a logical investment.

In other countries this is referred to as

• USA: MS65
• France: Fleur de Coin (FDC)
• Germany : Stempelglanz (STG)
• Italy : Fior di Conio (FDC)
• Spain: Flor de Cuño (FDC)

Uncirculated (UNC) or Mint state (MS) – as implied these coins have never been in circulation and therefore have no visible traces of use, design erosion or scratching. However , they do not have the full mint sheen all over the coin which is usually due to transportation.  Some countries still consider these coins as FDC.

In other countries this is referred to as

• USA: MS63
• France: Splendide (SPL)
• Germany: Fast Stempelglanz
• Italy -
• Spain – SC

Extremely Fine (EF) – This is a condition of a coin that is almost perfect but which has had a little circulation and therefore will possess some small faults although often difficult to detect with the naked eye. Using a magnifying glass one can see some light scratches and some erosion of certain raised details such as hair, beards, moustaches, feathers that form the design. The mint sheen is missing and there may also be evidence of some little dents from transportation of coins.

In other countries this is referred to as

• USA: AU 65
• France: SUPERBE (SUP)
• Germany: Vorzüglich (VZ)
• Italy: Splendido (SPL)
• Spain: Extraordinariamente bien conservada (EBC)

Very Fine (VF) – A coin in this condition shows obvious signs that it has been in circulation but it still has a good appearance. The coin rim can be slightly worn but still apparent and the relief features of the design can appear “tired” but not worn away. The signs of use are visible but the coin srtill has an agreeable appearance. This type of condition is considered as an average “plus” state of conservation which still allows the coin to attract a premium to its value.

In other countries this is referred to as

• USA: XF 40
• France: Très Très Beau (TTB)
• Germany : Sehr Schön (SS)
• Italy Bellissimo (BB)
• Spain : Muy bien conservada (MBC)

Fine (F) - This condition indicates a coin that has been well circulated. Some of the engraving detail has started to flatten (ribbons, hair, inscriptions etc). The metal surface is dull or in some cases much too shiny because of polishing. Deep scratches are clearly visible as well as dents from impacts with some deformation of the engraving being apparent. This condition of coin can still be of interest to a numismatist but it no longer supports a premium and is therefore not recommended for investment which is better served by coins in the conditions above.

In other countries this is referred to as

• USA: F 15
• France: Très Beau (TB)
• Germany : Schön (S)
• Italy Molto bello (MB)
• Spain : Bien conservada+ (BC+)

Very Good (VG) – Even though these coins are considered “very good” they are nevertheless traded purely by weight. They are very worn coins which have a mediocre appearance and have been circulated a lot. We can still just about distinguish their designation but some details are completely worn away or missing. The rim detail, engraved relief features are all but indistinguishable and any images are no longer sharp. These coins inevitably find their way to the foundry for melting unless they happen to have numismatic significance. However, in the light of being investment coins they are to be avoided. One doesn’t know how much gold has been eroded, the weights can vary greatly and there is absolutely no premium attached to these coins.

In other countries this is referred to as

• USA: G6
• France: Beau (B)
• Germany : Sehr Gut Erhalten (SGE)
• Italy Bello (B)
• Spain : Bien conservada (BC)

This covers the principal gradings of coin conditions applicable to gold although one may also hear certain other terms used for « intermediate » grades such as ;

About Uncirculated (XF/UNC) which falls between Uncirculated and Extra Fine. It does not have an equivalence in every country and is therefore less used.

One may find various numbers attached to certain conditions particularly in France which allows grading within any given condition eg; SUP 55-62 which grades the “Superbe” from 55 to 66. However this should not be a concern for coin investors as the grading is a purely numismatic tool for specialists. The gold investment quality of all “Superbe” is the same as is their premium.

Finally there are even lower conditions such as “Good” and “Poor” but these are frankly of little interest to us because their condition is well below those required for investment and they are only good for the smelting pot!

Remember:

Gold Coins are an investment that you own!

They are not linked to Sovereign Debt like other investments.

You can buy them when you like.

You can sell them when you like.

Gold Coins have a better potential than Bullion because they have a dual leverage – Gold price and Premium.

Gold coins are transportable, great for liquidity and easy to resell.

Related articles include:

Half-Napoleon 10 Francs Gold Coins

The Premium on Gold Coins

Should I Buy 32 Krugerrands or a 1 Kg Gold Bar?

Krugerrand – The original Bullion Coin

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Paper money or Gold?

Gold Money, a currency of the past…. and the future?

Here at Goldcoin.org we have always been suspicious of the Politocrats, Bankers and Global fortunes that endlessly manipulate markets and misinform the masses through the mainstream media.

Let’s face it they all have one thing in common and one goal – looking after themselves by milking the masses to increase their own personal wealth.

Governments around the world tell their voters that they are “doing it for the country”, “thinking of the future, the families, the under-privileged etc. etc.”

They lie. The only interest a politician has is keeping the power, its privilege and saying whatever it takes to stay there.

In reality nothing ever changes even when the ruling party does because they’re all in it together. They talk of democracy yet if you are not born into privilege, educated with privilege and financed by the wealthiest (who you must subsequently appease with policies that suit them) you have no chance of ever approaching the dizzy heights of Government where you can begin to change things for the common good.

Even Obama, the charismatic President of Hope, had to bow to the rich lobby with backroom deals to ensure he got into the race for the top. Where does the money come from to organise the campaign needed? Unless you’re a multi-billionaire you have to play along. So where is the democracy? It’s always the same interests that pay the candidates bills therefore buying the White House and controlling policy.

Look at the British model – Cameron, Clegg, Osbourne etc. – all posh boys with a lifetimes supply of money, public school and Oxbridge education. Same before with Blair, Brown, Darling and the dark lord himself Mandlesson (the biggest hypocrite on the planet). What do any of these have in common with their voters apart from the same type of passport. How can they have the audacity to preach what is right for the country and “sharing the pain” of austerity when it will never affect their own privileged lives.

Have you ever met a poor politician?

Have you ever met a politician apart from Nelson Mandela who has experience of real life, who has known hardship and suffering?

The political class all over the world are the same – self-centred, greedy, hypocritical, power-hungry and serve themselves before thinking about their peoples or country.

Yet when they spout their prepared rhetoric they expect us to believe what they tell us, they even convince themselves that they know what they’re doing. They’re ready to take the credit at the hint of a success yet they remain completely unaccountable for all the failures and the misery they create. No such thing as performance related objectives and pay for them. How many failed politician end up as a well paid consultant, after dinner speaker or in the House of Lords like Prescott (Socialist in only the drivel from his mouth and very much Capitalist in his lifestyle, cars and bank account)!

The Rothchilds, Rockerfellers, Murdochs and other similarly rich and shady “families” control everything from Governments, Fiscal policy and of course the markets.

One particular example is the manipulation of the Gold markets. This has long been explored and proven by our friends at GATA and it is worth reading some of their factual proof at  http://www.gata.org/.

The Federal Reserve don’t want you to own Gold because they need you to borrow their printed bits of paper to make even more money for themselves. If they were a serious organisation would they have allowed a $14 Trillion + debt to run out of control? Would they be paying it off with bits of paper they keep printing (and therefore creating a devalued dollar by flooding the currency pool)?

In France, private investors hold more gold than the Bank of France and their affinity with the yellow precious metal goes back through history. The private investment in gold is continuing to increase as they arm themselves against this crisis. Eurozone sovereign debt issues are of great concern and people are taking no chances. The Greeks and Irish will default on their bailout packages and move to restructure. Portugal will follow.

The Euro will face a complete collapse or severe devaluation.

This is not a prediction but an eventuality. These three countries have no hope and no means to be able to cope with their debts and the austerity measures crippling their economies means growth is impossible. They face decades of misery, low standards of living and with inflation biting on daily necessities will soon be faced with civil unrest on an unprecedented scale.

However, a recent article by a prominent government adviser  in France shows the unscrupulous lengths they will go to. His name is Philippe Chalmin who is a Professor of Economics and sits on the Governments advisory committee. He gave a ridiculous outburst decrying and demeaning the value of Gold and called it “completely stupid”.

This from a country that survived WWII because of hidden gold.

This from a government puppet trying to put investors off the scent!

Similarly an article posted on the Marketwatch website by a Wall Street journalist, David Weidner, completely trivialises Gold. He should know better and his views are akin to a rabbit caught in the headlights!  You can see the detail via our friends at GATA here.

There is a stark contrast in the East where the Chinese are stocking up on gold. The Government, the Central Bank and private investors are actively being encouraged to buy. This shows intent to replace the weakening Dollar  by the Yuan as the world’s reserve currency and to back it in gold. The irony is that the biggest attack on the US Dollar is from The US Federal Reserve  by excessively printing bits of paper to buy off the US defecit.

The Establishment is petrified that people will ditch currency because Gold is a better protection against crisis and inflation – FACT.

The Establishment is petrified that people will stop investing in paper promises, stocks, shares, ETFs because they are all linked to debt and are vulnerable to collapse in a crisis – FACT.

The Establishment is petrified that they are losing control of the masses because we are not as stupid as they would wish and the real information flows freely and quickly via the net – FACT.

The Establishment is petrified that mere mortals like us are buying gold which leaves less for them and impinges on there “privileges” – FACT.

This is why don’t they want you to buy gold.

Greed, jealousy, protectionism, elitism.

Conspiracy and collusion by Con-men who seek to control everything.

So hit back and spit in their face

Buy what you want not what they tell you.

Beware of the mainstream media which is edited by those seeking to control.

Buying gold have never been so accessible and that scares them.

Buying gold protects your wealth against inflation and the effects of a crisis.

Central Banks, Governments and the Biggest fortunes in the world are all investing in huge quantities of Gold right now – do they know something you don’t?

Not now!

An unfettered pack of lies

When we tell young people that in 1986 we were naive enough to believe the authorities who told us that the radioactive cloud had stopped at the French border, you attract, and rightly so, a few sniggers and mocking smiles.

When I tell these young students that it will perhaps be their turn in 20 years time to be the object of derision by their own children, surprise quickly gives way to incredulity and a certain amount of concern.

Let’s look again at the facts. Facts have this annoying tendency to be difficult to change although…

On 14 March 2011, a terrible earthquake ravaged Japan, following by a devastating Tsunami. Among the areas affected was the Fukushima Daiichi Nuclear Power Plant composed of 6 reactors which have since been experiencing difficulty. Chernobyl only had a problem with 1 reactor. We can therefore summarise the situation as Russia 1, Japan 6.

Since 14 March, the information provided by the Japanese authorities has been very limited, perfectly controlled and little short of the communication methods we used to see in the former USSR.

Let’s recall the accident at the Swedish nuclear power plant in 2006. The operators almost lost the nuclear reactor in less than 30 minutes owing to a fault in the cooling circuit allied to an electricity power failure (which really takes the biscuit for a nuclear power plant which is supposed to produce electricity), which was in turn linked to maintenance work. The safety systems (to keep things simple the back-up generators) were simply not turned on. A catastrophe was assured in 30 minutes this being the time needed for the start of fusion within the core of the reactor according to the articles and the experts who were at the time in agreement about the seriousness of this incident. For 15 days, the cores of the nuclear reactors in Japan have no longer been truly cooled…..but of course this does not cause any problem.

There is smoke escaping on virtually a daily basis from one or other of the damaged reactors, but of course this does not pose any problem.

The drinking water in Tokyo is from time to time unfit for consumption but the next day when the shops have run out of bottled mineral water and the entire population can no longer be supplied…the water becomes drinkable again. The sad alternative is to either let the population drink irradiated water or to die of thirst.

In brief, this accident which is jeopardising the “survival” of nuclear reactors potentially risks being more serious than the accident at Chernobyl. As stated by the Japanese prime minister: “the situation at Fukushima is unpredictable”.

But let’s get back to our little retrospective. Check it out for yourselves by calling on your memory (you will see that this works well) or by searching the internet for all the podcasts for this period which are to a large extent still online).

On Tuesday 15 March the European Commissioner for energy stated that it is “the apocalypse”.

Financial markets across the planet are in free fall. The mega crash is fast approaching and it risks making the subprime crisis in 2008 seem like a mere trifle.

The next day, on Thursday 17, there was a great change in how information was broadcast and managed. A helicopter took off with some buckets of water to pour onto the smoking reactors “trusting to luck” (look back over the videos to understand the accuracy used).
Thanks to these wonderful images, the Press unanimously spoke with effect from Thursday of “Glimmers of hope at Fukushima “. The markets are rebounding, the main thing is safe (our money).
The Japanese can calmly go on exposing people to radiation.
Using the following link you can see around ten good definition aerial photographs of the various buildings at the Fukushima power plant. They are not very reassuring.

On Friday 18, some tankers from the Tokyo fire service also arrived to hose down the smouldering ruins which, I remind you, officially did not explode. In fact there were huge explosions witnessed by the entire planet, but they were not serious. Obvious they were just controlled degassing activities (hydrogen) which exploded but nothing to be alarmed about, the reactors are fine, honestly!. Thanks to this, the Press were unanimously able to lead with headlines such as “Encouraging Progress at Fukushima”!
I advise you to read the report entitled, “the Battle for Chernobyl” which provides an exhaustive clarification on the risks and challenges faced by the ex-Soviet empire in order to limit the extent of this nuclear catastrophe. It is important to note that hundreds of helicopters, thousands of armoured vehicles and more than 500,000 men were used to construct the sarcophagus around the damaged reactor. At Fukushima the problem is multiplied by six. How are they going to deal with it?

It is therefore certain at the time that I am writing these lines. We are faced with an unfettered pack of lies which we are forced to watch powerless as it unfolds. Except for the fact that the internet exists today and we have more chance to keep ourselves informed. We are experiencing a real Chernobyl 2 !!

Multiple under-estimated economic consequences

Is there any hope left? Doubtlessly there is, and being an optimist by nature, I want to believe that solutions can be found. Nevertheless, the official radioactive pollution is now spread over more than 100 km. Tokyo, the capital, is situated less than 250 m from the Fukushima nuclear plant. The entire North of Japan has been substantially affected, not to mention all the areas which have been wiped off the map by the double whammy of the earthquake and the tsunami.

The French government has just set up a special unit in order to plan as best as possible for the shortage of components which will certainly affect France starting from April leading to certain production stoppages and probably measures of technical unemployment in certain industries.

Apart from the losses in human lives, the cost of this double catastrophe (natural and nuclear) is far from being known and is certainly currently be played down. The last assessment talks about more than 28,000 who are dead or missing. There is more than 350,000 left without shelter in the North-east of Japan, 70,000 people have been evacuated within a 20 km radius around the plant. Between 20 and 30 km, 136,000 other people are waiting to be evaluated after being confined to their homes for more than 15 days.

Japan as the second largest economy in the World (or the third according to how China is classified) is a vital link for globalisation. Japan is heavily affected and faces a number of major challenges:

- A nuclear catastrophe which is absolutely not being overcome and which may eventually lead to a drama in the event of any worsening of the situation in one of the affected reactors.

- debt of more than 200% of GDP (by means of comparison, France has a debt ratio of around 80% to GDP whereas that of “bankrupt” Greece is 120%). At the time of the Kobe earthquake, the debt ratio of the Japanese state was only 85% of GDP (this was in 1995). The reconstruction effort risks leading to an unsustainable increase in this country’s debt which will speed it towards unprecedented economic difficulties. On 15 May 2010, the alarm bell was also sounded by the IMF and the rating agencies on the non-sustainability of Japanese short-term debt.

- Industry virtually at a standstill. The Japanese are the inventors of the Just in time methods which, even if they have convinced the World, demonstrate their limitations in the event of catastrophes. The consequence of the total absence of any stock is the halting of numerous production activities leading to massive shortages on supermarket shelves which still remain empty at the present time. No more water, less and less food, major power cuts which no longer make it possible to manage stocks of fresh or deep-frozen products.
With regard to the major international companies the example of aircraft manufacturer Boeing is striking with Japanese companies building 35% of some models of aircraft.

- A currency value which is spiralling upwards. The massive purchases of the Japanese yen and companies who are liquidating their overseas assets in order to repatriate them to cope with the National reconstruction effort have propelled the Yen towards an historical high. Added to the “natural” appreciation of the currency is major market speculation on fund repatriation forecasts.
The consequence is that a currency which is too strong triggers a significant decrease in exports, given that a brutal increase in the value of the currency cannot be offset by an increase in productivity especially in a country ravaged by a natural catastrophe of this size. Nevertheless, in the medium term and bearing in mind a expansionist monetary policy, the Yen should find a more acceptance exchange rate.

- Japan is a country with a very heavy population density. Many people but not many habitable spaces. On average, the price of real estate is the most expensive in the World. Banks therefore there have particularly large outstanding real estate loans. In the region of Fukushima, more than 70,000 people have already been evacuated. In Ukraine, next to Chernobyl, the town of Pripiat is still a ghost town 25 years after the explosion of the reactor. There the banks did not have any loans. There were only 45,000 inhabitants. What will become of bank debts in this case? How will the losses (because they are large) be managed? Might we again face a major international banking crisis as the extent of the Fukushima nuclear catastrophe appears? Imagine the extent of the impact on real estate debts in the event of the evaluation of Tokyo which houses 35 million people…..a situation which it is quite simply unimaginable from a financial perspective. The economic system could not cope, or would cope with great difficulty. Perhaps this is why the situation in Fukushima is no longer alarming after 17 March 2011.

- Japan is an aging country, whose current population of 127 million has been decreasing since 2005 and is set to be halved between now and the end of the century to reach 60 million inhabitants.
But how can these debts be repaid without economic and demographic growth, Mechanically and mathematically, the less the number of inhabitants the bigger the total debt per head of population.

- The Fukushima nuclear accident has revived the fear about nuclear power. In the United States, no nuclear reactor has been built since the accident at Three Mile Island in 1979. After Chernobyl, there has been no further development of any nuclear power plant in USSR, the same will be true of Japan after Fukushima. In German 7 reactors have already been halted because they were deemed to be too dangerous.
The only rapid and credible replacements for energy in the short-term are Gas and obviously Petrol whose prices might be propelled to highs in the coming weeks. Economist are agreed, however, that a barrel of petrol whose price exceeds 120 dollars leads the World economy into a recession. As at 4 April the price of a barrel of petrol was still rising and seemed to have sustainably settled at over 110 dollars.

Towards an acceleration of changes which are already being felt

It is therefore to be feared that all of the cumulated factors discussed present a global systemic risk to the global economy which might be hard to redress in the aftermath of Fukushima and the slow agony of this nuclear cataclysm being witnessed in Japan. Perhaps we are witnessing the premature disappearance of a Nation, of the slow dawn on a Empire.

You wanted to save money in the short-term despite the life of mankind, you will lose mankind and you will lose money because there is no wealth without mankind.

Indeed, even oysters risk deserting our New Year’s dinner tables. Affected and decimated by a mysterious illness, our producers have ordered spats from Japan in Sendau. Japanese producers are also lacking our oysters.

It is still not time to make the tally. Having said this, the Fukushima accident may well be the signing of the death warrant for the nuclear industry which is a dangerous industry and about which we neither know how to manage the dismantling work nor how to manage waste and whose costs are not taken into account in the operating prices for this energy which is more expensive than people think when all this indirect costs are included. This is not to mention the price to be paid in terms of a catastrophe which are quite simply unbearable both in financial terms as well as in human suffering. The “‘homo economicus ” will have to learn another form of sobriety.
From Peak Oil to the depleting of raw materials, from the challenges faced by agriculture in feeding our planet to the sharing of water (threatened resource) the World is changing.

The Japanese cataclysm will undoubtedly hasten these changes.

Translated from an article by Charles SANNAT

We have long since championed the benefits of investment in Gold coins because of their dual leverage – gold price and premium. We have also explained the concept of premium differential (elevated premium during a crisis – normal premium) and the potential of certain coins to have significant investment qualities because of their elevated differential.

Well the Half- Napoleon 10 Francs is one such coin which can have a premium differential of 80%. These coins can literally be worth almost twice their price in gold content because of their high premium. This makes them attractive gold investments and they are always in demand.

Innovative Gold Investment

We have previously talked about a World exclusive innovation by our friends at LinGold.com which is called the LinGold Savings Plan. This has made physical gold investment accessible to many more people and encourages saving – in gold bullion.

We already loved this concept but now they have taken it further.

They have now added a unique product to this Plan using the Half-Napoleon 10 Francs. They have taken a batch of 100 coins which equates to a pure gold content of 290g and then made sections available in 1g portions. These can be bought for €43 and kept as part of the LinGold Saving Plan (LSP) which offers vault storage free of charge.

This means that Members can now benefit from the premium differential of Half Napoleons as part of their LSP and without needing the means to buy coins outright.

All individual grams are uniquely coded and ownership certificates are provided.

Anti-inflation and anti-devaluation

Again the benefits of being able to save in physical gold bullion or gold coins is that you are protecting your wealth in the safest refuge against a crisis and notably the precious metal that allows you to protect the value of your wealth against inflation and the devaluation of currency.

History has confirmed this time and again – when crisis hits it is those people protected by durable, valuable assets that survive the best. Paper currency eventually becomes a worthless piece of paper, good for burning, but Gold has been and always will be the real measure of value.

Why? Because you cannot print more of it to suit your politics – and its properties and finite quantity will always bestow real worth on its owners.

To start saving in gold now and for further information visit LinGold.com.

I’m sure that we all believe that governments control the money supply especially in their own country and their own currency.

I’m sure that when we place our blind faith in the banks for loans, mortgages and everyday banking we trust that they will do their best for us and operate with upstanding principles to protect our assets.

I’m sure that those of us living in a free democracy believe our liberty and rights are being controlled by fairly elected governments representative of the people.

I’m sure that as you watch the daily news about unrest around the world you begin to sympathise with the poor oppressed peoples and hoping that soon they can have the same safe system bestowed upon them that we all apparently enjoy.

I’m sure that you would be horrified to learn that the controlling influence on the largest economy in the world and therefore an influence that stretches right around the world does not actually belong to the US government at all.

Despite its self-appointed name, the US Federal Reserve which controls Quantitative Easing, the printing of the US Dollar and US Economic Policy is actually a private company steeped in mystery with a special status completely outside the control of law.

You don’t believe it? Well just take a few minutes and watch the video for a quick insight into the real world of money laundering and absolute control.

Remaining ignorant could be bliss but then again if your livelihood and survival depends on it sometimes it’s better to be informed.

Disclose.tv – “the american dream” Video

You may now understand why your continued use and enslavement in paper assets is important to those who would seek to control.

When a crisis hits or the bubble bursts you will be left with nothing and no way of reclaiming a cent or a penny of your hard earned cash.

Do you think the politicians, bankers and enormous fortunes of the world will really care?

After all when was the last time you saw a poor politician or a poor banker?

When crisis strikes they remain the great untouched because they have the personal means and wealth to survive wars or economic disaster. They won’t feel hardship or hunger but you will.

During World War II many ordinary French families managed to survive the occupation because they had stashed a few gold Napoleon coins away which they could use to buy food. This is fact and is borne out by many a testimony from the time.

If the monetary system imploded or crashed and your Dollars, Euros, pounds or whatever became worthless, how would you survive?

Gold ownership is like a fire insurance for your personal wealth and is an investment in a physical entity that you own. When a crisis hits it has always proved to be vessel of value irrespective of the currency or era.

The logic for fire insurance is quite simple – should you buy it before or after the event?

Gold investment for the masses has never been encouraged because the Banks prefer you to believe in paper money which they can print, lend to you and make huge profits for themselves in the process.

It has never been in their interest to tempt you or advertise its qualities because they have been “stealing your gold” since money was invented.

In the Age of Austerity we find ourselves, not knowing whether currencies or countries may collapse at any time, what have you done to protect yourself from destitution and desolation?

Maybe you like taking chances and are hoping for the best but that may not be enough to survive and feed yourself.

Maybe you could plan ahead and maybe you should start now?

Remember, after the fire it is too late to buy insurance!

The European Union is facing an economic and political crisis that threatens the single currency, exposes greed, bureaucratic strangulation, unsustainable social welfare programmes, raises questions on protectionism and the very fabric of the free market. If that was not enough, the weakness of its leaders becomes apparent and two of the giants France and Germany support a different solution. There is a very English phrase “ to muddle through” and that is what European leaders have been doing and hope they can continue doing so as not to put emphasis on radical change that can upset the apple cart either internally or externally. Muddling through depends on growth.

The European Union is still the world’s largest economy supporting over 500 million people of diverse race, cultures and languages. However, the EU is facing both an economic and a political crisis as governments and companies cannot easily borrow money and the euro wobbles. Initially the weakness of the euro was shrugged off as speculation and Anglo-Saxon conspiracy, but the real problem is that social welfare in many countries is so protected and expensive that it is strangling the economies. Europe has to grow just to maintain its welfare systems and innovation just to pay for increasing old age pensions and unemployment is not inspirational. Of the 27 countries in the EU only Poland managed positive growth in 2009, while it is true that recently many have now turned positive, but it can only be described as mediocre. Outside of Europe the perception is that the protectionist policies for citizen welfare indicate that there is no longer the guts to tackle the problems. A sick Europe benefits nobody and arguably, were it healthy, then the worst of the global crisis would be over.

It is the courage of Europe’s leaders to initiate structural reform that comes into question. As Jean-Claude Juncker, prime minister of Luxembourg, said memorably in 2007-  “We all know what to do, but we don’t know how to get re-elected once we have done it.”  Many of Europe’s problems stem from election seeking misallocation of public spending with years of subsidizing powerful interest groups, increasing civil service payrolls, early retirement schemes, job protection and unemployment benefits. Between 2005 and 2030 the working-age population of the European Union will shrink by 20m, and the number of those over 65 will increase by 40m. In Belgium only 35% of citizens over the age of 55 work. It is almost impossible to sack a person in Spain, great for those in work but for the 40% youth unemployment that it generates, it is immoral.   European leaders underestimate the realism of the voters and proposals in the UK and Netherland to raise the retirement age to as high as 70 have met with moans but no angry protest.  In France, according to an opinion poll proposals to increase the retirement age were unjust and did produce the usual French protest, few disagree that the current state pension scheme faces insolvency.

The single market does not truly exist and the EU is almost a third less productive than its American counter parts in services, because countries hide behind national barriers and so do not gain full economies of scale. Anyone who has worked in a multi national industry knows how difficult it is to get policies implemented, products introduced or to comply with a European directive that has been interpreted 27 different ways into national law. No company with any sense would open a factory or an office in France, Italy and some other EU countries, where protectionist employment laws could kill that company. I personally know of a case where a multi national company was trying to tighten its purse strings to remain solvent and Italian law forced that company to increase the salary of Italian employees and maintain periodic pay rises. In desperate times protectionism has raised its head. In France with Mr. Sakozy suggesting that French cars for French drivers should not be made in former Eastern bloc countries and the EC had to intervene to stop Germany offering incentives to a consortium proposing to buy the failing Opel company, to keep the German factories open to the detriment of more cost effective plants elsewhere.

This crisis has the ability to pull countries closer together or pull them further The key is Germany where they are furious that they have to bail out other countries until they realize that they created the situation in the first place. Germany companies have done very well and the economy has grown with exports particularly to Greece where they have risen by 130% in the last 10 years. So how did Greece pay for these exports. with loans from German banks. Therefore, it is essential that they and the French to a lesser extent rally around the single currency as they are sat on a large amount of southern Europe sovereign debt. That has been the pattern the industrious north has done well but those around the Mediterranean have been affected by the sun leaving the idyllic life but unable to pay for it. Great for a holiday but not for life, in fact Greece has become the most obese in Europe where once they had one of the healthiest diets.

The alternative approach is to a number of separatist theories with retraction from the Euro or a North South divide where the super efficient North have a strong euro and the languid south another. Which would France join?

Practically what can EU leaders do and which direction can they take and what have they done so far?  To date there have been last gasp austerity measures that may well in the short term pacify the bond market but is a risky course of action. These measures will inevitably lead to a weakening growth rate and increased unemployment. The same arguments were the difference between Labour and the coalition in how to solve the UK’s financial problems where at least there is time as the UK’s debt has the longest due date of all in Europe. Now Spain, Greece and Portugal face a log hard struggle to rebalance their economies

Markets have lost faith in the euro and the hope was that the economies of the 16 countries that use the euro would converge. The struggle to regain creditability with markets has lead to a divergence on the course to be taken by Germany and France. Germany has gone for stricter rules and discipline on borrowing and spending, sanctioning governments who fail to toe the line to the extent of freezing funds for EU mega projects and suspension of voting rights. The French favour a system of redistribution from richer to poorer members with some fiscal and social harmonization.

Germany’s proposals are unworkable, the reaction to losing voting rights is unacceptable particularly to the former communist countries where there has been such hard work to lead to democracy. Stopping funding on EU mega products where they cross boarders could penalize other countries. To redistribute, as the French recommend, to save the euro would require an equally unacceptable step towards political union.

What is the likely outcome?. It is likely to be a  form of compromise with temporary rescue packages, informal and semi formal discussions and agreements – in other words a muddle through.

It is possible for the EU to agree and force through essential legislation when it is a matter of survival. A key demand to European business is an EU wide patent that has been stuck for years over the status given languages in Spain and Italy. On 1^st July the EC forced this through to be valid in all 27 countries. Another example of the power of the EU market is where Germany was told it could not spend taxpayer’s money to protect Opel jobs in Germany without the same support to other countries. It is possible that the people understand the need for a free market economy better than their leaders where in a recent pole 73% of Germans and 67% of French said they were better off in a free market. Interestingly a greater percentage than in the middle of the boom and greater than America. We have already mentioned the need to pay for pensions and the less than feared reaction to raising the pension age. In the countries brought to the brink of disaster, the civil unrest was much less than expected and dominated by public sector workers with safe jobs. The leaders should have courage as this crisis gives the excuses for radical reform and there are hints that citizens are prepared to take there medicine.

However, the best bet would be a muddle through and hope for the growth that is needed to sustain it. An opportunity lost.

Maurice Hall

In June our sister site (L’Or et l’Argent) has run a series of articles that follow the theme of a “house of cards” starting with Greece whose only resources, tourism and olive oil are not enough to lift them out of bankruptcy and a similar situation in Portugal. The next contagion is Spain, an economic giant in comparison, where unemployment is rife and debt would reach €225 billion in 2010. Although Spanish debt continues to grow, it remains lower than France which is the largest in the euro zone. Outside of the Euro Great Britain is cited as a contender for a “house of cards” following austerity measures announced at the budget and the marginalisation  of the GBP as we through national pride refused to join the eurozone.

This is an interesting take from a European prospective and draws attention to the two trains of thought in economic growth. The 2008 economic crisis still affects us today, we in the UK and most of the western world are in an era of fragility that needs to be stabilised. We could attempt to spend your way out of it as and stabilise growth before taking cost cutting measures as was the policy of the labour party or cut back immediately and risk stifling any growth. Meanwhile across the Atlantic Barack Obama seems to believe that the US can just spend their way out of it and print more dollars.

To me, if likened to a house hold, first you must recognise your debt and here in the UK we have gigantic debts to overcome, then you must take action. Spending on plastic has its day of reckoning and eventual you must cut your card in half, review expenditure and come up with a budget  that enables you to pay essential bills  and gradually repay your excesses with money saved. The economy of the country is no different, to improve your credit rating you cut wasteful spending, improve efficiency and live within means to gradually ease the sovereign debt. Austerity measures in the UK seems to have won respect in world markets as GBP has risen both against the Euro and the USD and the FTSE 100 has recovered to over 5100. More importantly the economy has grown marginally in the manufacturing section.

I have to say I have been pro Euro particularly when we could have joined in a position of strength but now I am in many ways glad we are still separate. Despite the Euro’s recent rally there is too much of a divide between the countries in the Euro zone, the efficient North and the chaotic South to the extent that the Germans would like to get out of the Euro as they feel they do not want to support the fragility of countries in crisis such as Greece, Spain, Portugal, Italy.

Do not the French and other eurozone countries recognize that the cost of pensions will drive many countries to bankruptcy. When many Europeans look at the UK, they scoff particularly at the raising of the pension age that is likely to reach 70 over a period of time.  There average ages of retirement age varies but in most countries people retire in their fifties and in Italy and France only 12%  are working beyond 60 years old.

Citizens should realise that there is a pensions time bomb with the average continental EU state pension equating to almost 60% of salary and with a much longer period of retirement, governments cannot afford it and it will drive many countries to bankruptcy.  A recent survey of 25 countries scored the UK highly and the affordability and sustainability of our pensions and France at the bottom. Those countries with such generous pensions and early retirement ages simply can no longer afford them and it will drive them to ruin. There needs to be a massive reformation, not only to increase working age  but to reduce the actual value, which would be so unpopular that one wonders if the their governments have the guts to take the action necessary.

In another time we should be screaming at our government at the unfairness of our pensions which are the lowest in Europe but with the aging population, the ratio of workers to pensions set to double and the current crisis we are in a stronger position to survive than our neighbours. Meanwhile proposals to raise the retirement age in France have typically been met with mass protests for what is a diminutive step to fight debt.

I am not suggesting by any means that there is reason for complacency in the UK situation and there is still danger of stalling economic growth as the cuts bite deeper but at least we have recognised the seriousness of sovereign debt while other bury their heads in the sand.

In the fragile countries of the eurozone, where sovereign debt could precipitate a financial collapse and even  in countries that fear the contagion, people are turning to gold as a protection and nowhere more so than in the strongest economy, Germany, where there is unprecedented investment in gold. In Britain we do not have a history with private individuals turning to  gold but rather we might buy a gold coin for commemorative purposes.  We are fortunate that we have so far not suffered hyper inflation, major currency devaluation or physical invasion so we do not hoard gold or in general even understand how gold can protect family wealth even though we have some of the best conditions in the world for gold investment. No VAT, no Capital Gains Tax on legal tender gold coins and up to 40% tax relief if we use gold within a Self Investment Pension Plan (SIPP). We need to save more to pay for our retirement and make wise investments, diversify our portfolios, utilise SIPPs and last but not least be aware of the potential of gold to protect our wealth.

Maurice Hall

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.

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

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.

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