Archive for February, 2010

China’s gold dilemma and strategy

Friday, February 26th, 2010

No country has changed so dramatically as China over the last decade as it has grown to challenge the USA as the World’s number one economy.  As we entered the last decade the US dollar was strong and recognised world wide as the “reserve currency”. In China, many people  refer to the dollar as mei jin, or “American gold.” so if a Chinese person tells you that he owes you 100 American gold, don’t expect a big fortune, because he’s planning to pay you $100.  Competiveness in many diverse products meant that countries in the western world were struggling for margin and seeking new ways of cutting production costs.  We were to see production moved from Western to Eastern Europe from America to Mexico, to take advantage of lower overheads but it eventually dawned that the cost savings to enable survival could only be made in the Far East. We started to see product coming in from Taiwan and then mainland China where there was an unlimited and cheap work force.

china gold resChina started the 21st Century with $166 billion in foreign reserves, today it  has the worlds largest foreign reserves at $2400 billion and is almost 31% of the worlds total reserves and nearly double the total held by G7 members.  During this period the US dollar has been devalued by 30% and the majority of China’s reserves are in dollar assets so it is not in their interest to see a collapse of the dollar. During this period China’s gold reserves rose from 404 tonnes to 1054 tonnes.

Chinese are quite concerned that the large U.S. government deficits will eventually lead to inflation, which will erode the purchasing power of the dollar denominated financial assets.  If they keep printing money to buy bonds it will also  lead to inflation, and after a year or two the dollar will take a hard fall. Most of their foreign reserves are in US bonds and are very difficult to change. The Yuan’s exchange rates are fixed by the Chinese authorities, this lack of convertibility keeps the Yuan low against the Dollar and avoids speculation on the currency.  Labour costs remain very low and prices remain competitive.  Making the Yuan fully convertible would be very harmful to the Chinese economy as anything to undermine the Dollar’s value would destroy all their investments and the value of the Dollars they hold. In a way, the US economy and Chinese economy are inextricably linked.  The main problem Chinese authorities have is a stock of up to  2000 billion “risky” Dollars and the dilemma they have is how to get out of this situation.  The currencies and proportions of foreign currencies held in reserve are a secret but in can be assumed that after the dollar will come the Euro and Yen.

The Chinese need to diversify and according to Cheng Siwei, former vice-chairman of the Standing Committee and now head of China’s green energy driving force. “Gold is definitely an alternative, but when we buy, the price goes up. We have to do it carefully so as not to stimulate the markets”. The comments suggest that China has become the driving force in the gold market and can be counted on to buy whenever there is a price dip, putting a floor under any correction.  So this is the second dilemma, China does not want to raise the price of gold, as happened when India bought 200 tonnes from the IMF late last year, but still needs to acquire gold. We are already in a situation where the total world mining production is around 2500 tonnes and it is estimated that demand far exceeds this, hence you cannot turn these days without seeing an advert to buy “old gold” in an attempt to make up the deficit.

If China had bought the IMF gold on offer, the signal this would have sent to the markets could have led to a huge gold price surge and a consequent devaluation of the dollar and, given China’s enormous dollar holdings, this doesn’t make economic sense.  Far rather buy the gold under the table from its own producers and hide it from the world at large until such a time it may be economically expedient to announce it.

china gold bars

A salesclerk shows a gold bar with the sign of the Tiger in a Beijing department store

Since 2003, Beijing has been buying most of the gold excavated and refined locally. It was a perfect strategy. No one in the international market became the wiser and the bill was paid in yuans. Today, China has more than 1,050 tonnes in its official vaults, up 75% in six years. Its gold reserves are now the fifth-largest among national central banks after the US, Germany, France and Italy. This insurance helped mandarins in Beijing sleep easier at night.

The Chinese people who have the highest savings rates in the world, have followed their governments lead and have been buying gold as an insurance policy and Beijing has begun actively encouraging people to invest up to 5% of their income in gold and silver. The result is that in 2009 it looks certain that China overtook India as the world’s largest gold consumer. Given China’s explosive growth, which has to be bringing ever more and more of its enormous population into the urban middle classes with ever increasing purchasing power, this ongoing rise in purchases by the Chinese public is likely to continue to expand.  There are no figures for 2009 but according to the China Gold Association it consumed 395.6 tonnes in 2008 and an estimate is that the demand would reach 420 tonnes in 2009.

In the long term China craves economic and financial power and would take the place of America if it could but it needs to free itself from the vast amount dollar asset it holds and arguably convert a substantial amount of these to gold. It wants to exchange those dollars for gold at the most favorable prices, so in the short term it does not want a high gold price nor does it want a weakened dollar as it needs to get best exchange rate for the dollars it holds. Most of the world’s gold is in private hands and not easily accessible so China’s option in the short term is to chip away quietly like an investor buying up small numbers of shares in a company before a takeover.  China for the third year running has been the world’s largest producer of gold, rising by over 11% to reach almost 314 tonnes in 2009, most of which has been sold for internal use. Also, China has pushed for an alternative reserve currency to the dollar as did Russia before them and the neutral successor is gold.

China  is playing  a political game and wants a near term low gold price to acquire its precious metal and a strong dollar to convert to other assets at the best price; but in the long term there can be no doubt that China actions will lead to a sustained increase in the price of gold.

Maurice Hall

Nazi gold – The history of Gold

Thursday, February 25th, 2010
nazi gold

An ingot of goldis part of a collection of gold stolen by the nazis

At their peak in 1949, the United States held half of all gold ever mined in history, almost 22000 tons.  Almost two decades earlier, as the world was struggling to drag itself out of the great depression, a new crisis was looming, a crisis that threatened the whole of civilisation.  Adolf Hitler came into power in a Germany that was still reeling from defeat in the First World War with its gold reserves empty and its currency valueless.  Having promised to return his country to glory, Hitler began to rebuild the Germanic Empire and for this he needed gold.  It is important to understand that in 1939 Germany’s gold reserves were not very large, worth around 200 million dollars and already allocated, mainly for constructing German war machines.  Furthermore, the country could no longer buy products manufactured abroad nor basic raw materials because of the low value of the Reichsmark.  The only remaining alternative was gold.

And so, little by little whilst moving through Europe, the German Army plundered the gold reserves of the nations they invaded.  In 1938 they took 30 million dollars worth of gold from Czechoslovakia and a further 85 million dollars from Poland.  In reality it all started with the Anschluss ( union of Austria and Germany  forced by Hitler in 1938) where the Austrians’ gold was taken then in 1939 they stole the Czech reserves before occupying Czechoslovakia.  At the beginning of the war, each time they took control of a country they plundered the gold.

Most of Hitler’s spoils were stored in the Reichsbank’s vaults in Berlin.  But the tide began to turn for this Reich which should have lasted a thousand years.  The intensive bombing carried out day and night by allied forces systematically destroyed Hitler’s war machine by hitting it right at its heart, that is to say by destroying industrial infrastructures themselves built from stolen gold.

On the 3rd of February 1945 more than 900 allied bombers unleashed nearly 23000 tons of explosives on Berlin.  The city was reduced to ashes and ruins and the Reichsbank was practically destroyed.  In February 1945, what was left of the Reichsbank’s gold reserves was probably loaded onto trucks by prisoners, probably French, and taken to Merkers in Southern Germany.

In the Spring of 1945, General Patton’s third army advanced on Germany like a juggernaut.  On the 4th of April it entered the town of Merkers.  Rumours were circulating about a secret shipment that had recently arrived from Berlin that had been concealed in a nearby potassium mine.  Out of sheer curiosity, several GI’s decided to go and investigate.  On leaving the elevator, eight hundred metres below, they came face to face with a huge steel door.  They sent a message to Patton, what should we do? Patton’s response: “Break down the door.”  As someone was just about ready to blow open the door, some genius realised that half a stick of dynamite would be enough to blow up the wall just next to it without having to worry about the vault.

In the room lay more than 7000 neatly stacked bags.  What the Americans found inside was so incredible that three of the most powerful men in the world had to see it with their own eyes.  George Patton, his superior Bradley as well as Eisenhower, Supreme Commander of the allied forces in Europe.  It was an extraordinary sight.  More than 8000 gold bars in the form of ingots, 2000 bags of gold coins: Reichsmarks, English sovereigns, Napoleons, American 20 dollar gold coins and hundreds of bags of gold from other countries.  Heading towards the back of the mine, Patton discovered a more sinister haul.

General Dwight D.Merkers sm

Eisenhower and Bradley examine suitcases of silverware, gold rings and teeth

The back of the room was full of goods stolen from victims of the concentration camps.  There was a pile of suitcases full of silverware, gold wedding rings and gold teeth.  Each bag, box or trunk had been carefully inventoried and stamped with a label marked Melmer.  Melmer was the German SS officer who went back and forth from the concentration camps to collect all he could such as gold teeth and gold wedding rings in order to take them to Berlin.  During the war he carried out 77 deliveries containing the fruits of his plunder.

Assets taken by Melmer amounted to more than one million US dollars.  Today this sum would exceed one billion, but this discovery was only the tip of the iceberg.  At the end of the war, the Germans had plundered around 580 million dollars worth of gold from the occupied countries.  Out of that, we estimate that 450 million dollars worth of gold was sent to Switzerland and other countries during the war.

In 1946, this gold was entrusted to an international commission in charge of calculating damages for the victims of the Holocaust.  The surplus was returned to an allied commission and redistributed to the nations from which it was stolen.  Europe was devastated and recovered painfully from the Second World War.  The United States became the richest country in history.  To reconstruct their economies, nations torn apart by war were forced to buy dollars.  Their method of payment remained gold.  As a result the United States gold reserves soared.

The largest quantity of this gold reserve is stored five levels below Manhattan in the Federal Reserve’s vaults.  At the time,  probably one quarter or one third of all gold extracted from mines could be found underneath the basements of Manhattan.  (read our article : the Federal Gold Reserve in New York)

With such a large quantity of gold, the dollar became the strongest currency in the world.  Countries settled their debts in dollars and governments could exchange their dollars for gold.  Following the example of the Besant and the Ducat, the dollar is the coldest hardest form of cash.

Maurice Hall

Small time prospectors’gold

Thursday, February 25th, 2010
small prospector

The painstaking work of small time prospectors

In the mountains of the Dominican Republic, Maria-Previda and her family excavate the gravel from a gold deposit, it is the most simple and traditional way of gold prospecting.  We wash the gravel and earth in a pan using a circular motion to remove fine sand and earth.  Gold deposits are heavier and therefore sink to the bottom.

But this ancestral method is painstaking and the results are uncertain. Here we collect gold deposits from the banks of the river.  In Brazil, nearly fifty tons of gold are collected each year by small time prospectors, we call them garimpeiros.

Timothy S Green, author of “The World of Gold” : “At least one million people alone try to survive by prospecting gold in a traditional way.  This remains a prosperous activity, around one hundred tons of gold or three million ounces, worth close to 140 million pounds are found each year in the world by small time prospectors.

Today’s work has only brought Maria-Previda and her family around seven hundredths of an ounce of gold worth less than £20.  But in 1848 a gold deposit like this one found in Californian rivers, provoked an outbreak of gold fever, it was the largest migration in history and created the wealth for a Nation.

Why not read our some of our other highly interesting articles:

The Californian Gold Rush

Alchemy damages the Amazon Basin

Alchemy damages the Amazon Basin

Thursday, February 25th, 2010

amazonBefore they even enter a gold mine, travellers are surprised by the logistical ability of the countries in the Amazon region to transport everything that is needed for the miners, from food through to petrol. Extracting about two hundred and fifty tonnes (and probably more) gold per year as chips, fine grains or nuggets, transporting the precious metal and its ingredients, fuel and mercury all represents a highly profitable business whether using dugout canoes, quads or small stunt planes. Attempts to protect the Amazon require the involvement of the region’s countries to implement campaigns, to ban  illegal mining and the use of mercury, but are faced with the complete hypocrisy of these countries’ representatives irrespective of whether it is Brazil, France, Surinam or Venezuela.

Why criticise the business when these same country representatives are using every available means to extend it, by a laissez-faire attitude, by turning a blind eye or even by their active involvement. Not only is the situation in the Amazon rain forest not improving but it is worsening to the point where you have to wonder if even the countries are profiting from its destruction. Part of the problem stems from how the gold is pulled from the ore. Across Brazil, thousands of garimpieros, itinerant gold miners, remove ore by washing a rock face with a high-pressure stream of water. The ore is then broken down in a hammer crusher, and the gold-bearing ore is sluiced with mercury in a process known as amalgamation. The amalgam is filtered manually and then retorted to release the mercury from the gold. The mercury vapor that results is distilled and reused, although a small fraction remains bound to the gold, to be released by the gold dealers during processing. The Brazilian Gold Rush began in 1980 when gold was discovered in Serra Palada in Palá state. Most of the incoming population (at least 250,000) worked for a low wage in very crowded, highly competitive gold mines with very lax environmental practices. Up to 9000 tons of mercury, used in the mining process, has been washed into the region’s rivers, along with huge quantities of sediment. The miners have also polluted the rivers with oil, litter and human sewage. All around the vicinity of the mines, vegetation, animals and settlements have been destroyed.

The profits to be made from providing transport are often as great as those to be made from mining. The town of Maripasoula in French Guyana controls an area the size of Belgium and gains a large part of its revenues from the gold. However, in Brazil, the transporters do not care as they send their goods to the other side of the river Oyapock, on the Guyana side, and wait for their commissions. The same occurs with Surinam, where the gold money ends up in bank vaults or on casino tables. Why bother saying that the gold helps the local population when everyone from Caracas to Cayenne, from Rio to Paramaribo, knows perfectly well that it provides no local benefit and is removed to foreign countries?  The gold leaves whilst the mercury penetrates into the Amazon basin. The alchemy is damaging for the forest and is affecting the human population particularly those who eat mercury contaminated fish.

Includes exerts from the book J’Aurai de l’Or by Olivier Weber. See video clip  curse for gold

Istanbul – Gold Report

Wednesday, February 24th, 2010

Gold Istanbul 2010 took place on 18-21 February, a cooperation with Jewellery Association of Istanbul and the TUYAP Fair, Convention and Congress Center is expected to see 20,000 people from 60 nations attend. It will showcase a wide array of gold rings, earrings, bracelets and watches, among other items, that reflect the latest design trends in the sector. Almost 400 firms from 15 countries are displaying their wares at Gold Istanbul 2010. Turkey’s jewellery market is estimated to be worth $7 billion (£4.6 billion).

Gold has always been an intrinsic part of Turkish and figures from the Turkish ministry of energy and natural resources suggested that the country’s gold production will rise to 38 tonnes by the end of 2010 compared with 11.1 tonnes in 2008. Whilst Gold Istanbul 2010 showcased the products, gold and jewellery have been traded and produced for hundreds of years in Istanbul’s gold market in the Grand Bazaar ( Kapali Çarsi or covered market), constructed between 1455 and 1461 and is largest in the world. Considerably more gold pours through this Bazaar in a year than the total held in the UK’s gold reserves.

Here is how it works, a report by Arnaud Blin for France3:

Ibull 1

Istanbul's gold market

8am. The banks are still closed.  However, one financial centre is already welcoming its first customers of which there are many.  Each year, 22 billion Euros pass through here, either through direct sales or via its exchange.

But there are no computers or luxurious offices here.  At the heart of Istanbul’s Grand Bazar, only a telephone is needed to buy and sell gold all over Turkey.

A merchant « It’s very stressful to be next to them, it’s not easy.  What’s more, we cannot live to be old in our bazar because of the stress.  But anyone who breathes the air of the bazar cannot live anywhere else afterwards. »


Sheets of gold sold to traders and transformed into jewellery in workshops

Gold galore, gold that is sold, bought and displayed.  In the largest covered market in the world, hundreds of items of jewellery sparkle like Aladdin’s lamps.  All of Turkey, all classes mixed together, have walked around here for more than five centuries.

A merchant: “It’s a tradition for us, we buy this gold to give away at weddings and circumcision ceremonies.  It depends on people’s wealth but I know people who buy 50000 dollars worth of gold for a wedding. It varies between 500 and 50000 dollars.  For our marriage, we received roughly 300 grams of gold, which is worth about 3000-4000 dollars today”

It depends on each individual’s desires, but generally in Turkey, the weight in grams is a lot more important than the beauty of the jewel.”

In the grand bazar, gold determines everything, even the sale or rental price of stores.

Ibul3A merchant: “For the bride, gold is a guaranteed resource if she gets divorced.  She can bury it and get it out again if necessary.  Gold never loses its value.  During times of war, paper money burnt or mice ate it.  It therefore lost its value but gold never lost its value.  Personally, I don’t have a bank account, I keep gold to hand and if a bank goes bankrupt I don’t have any problems.”

Few countries are so devoted to gold and not one has a place dedicated to it like the Grand Bazaar.  Before, it came from Sudan and Egypt.  Now it comes from South America and Russia.

A store with a visible front, has displays in flashy windows and trades out in the open.  But there is another type of store which is strictly forbidden to the general public, where secrecy and discretion are the golden rules.


Gold crafting in Istanbul

To gain access, you must pass through the door of warehouses where caravans on the Silk Route once went.  There, in these tiny workshops, merchants are giving way to artists.

Each year, more than 400 tons of gold pass through their fingers.  A third goes abroad making Turkey the second biggest exporter of worked gold in the world behind Italy.

A craftsman: “Each piece of jewellery has its own value.  We create very different pieces.  As such, each piece of jewellery has a place in my heart.  When I see a woman in the street, I look straight at her neck and her hands to see if she is wearing one of my pieces.”

An old Turkish proverb states that Istanbul is paved with gold.  In the 3000 workshops which surround the grand bazar, it is true that it permeates everywhere.

A craftsman: “I take the piece of jewellery that I am working on and I clean it well so that I don’t lose any of the dust.  We always have a brush in our hands to push the dust into our leather apron, because gold is precious’.  We don’t need to wash our shoes because there are grills on the floor which the dust slides through.


Processing gold dust

A collector of gold dust: “A whole sector has been developed around dust collection. Eight to ten companies take care of it.  They come, sweeping, picking up dust from the pipes and the buildings.  They then take it to refineries, burn it and finally recover the gold.  For each kilo of gold that we work on here, fifty to seventy grams leave as dust.

We process around three to four tons of dust per week.  We use old techniques and chemical products.  We process the dust from each customer separately.  This customer will have this dust and that customer that dust.  Therefore we can send each customer their ingots separately.  Today we processed a ton of dust and look at what we got: 90 grams of gold.  That’s pure gold.

Whilst the Turk’s attachment to gold remains as strong as ever, some things have changed.  By filling more and more windows, gold seems to have lost some of its magic.


The expertise for this meticulous work is being lost

A craftsman: “When I was little, jewellery was made differently, but now there is no master who knows his art.  There are no customers either who pay attention to this work.  In the past, the master carried out his work with the greatest of care.  Now it has to be finished as quickly as possible so that it can be sold as quickly as possible.”

You must have seen walking round here that there is tons of gold here and there, its a bit like the tip of an iceberg, in fact it’s just like that.»

830pm.  The doors of the Grand Bazaar close on one hundred tons of gold.  It’s the biggest vault in Turkey.

Transcription:  ABW for

Is man capable of giving up gold

Wednesday, February 24th, 2010

When Nixon broke the link between gold and the dollar the world did not stop turning.  The economy rebounded and prices dropped. There was a lot of dissatisfaction about price controls and other things.  However the economic recovery happened and the president was triumphantly re-elected.

Nixon however didn’t put an end to the love affair between gold and the Americans.  Gold had never been in such high demand for decorations or jewellery.  The link between man and this precious metal is seemingly not ready to break.


Gold contacts on computer chip

Gold still plays a central role in our daily lives.  This metal, which was discovered in Ancient times, is a key component of modern technology. It is an unalterable metal and an excellent conductor of electricity.  Each year the electronics industry uses 200 tons of gold. In this highly technological age, if you told an engineer or an electrician that they would have to do without gold they would explain to you that a large part of the IT, audiovisual and many more industries would have to stop, at least until an alternative to gold could be found.

Scientists themselves are looking at gold in a new light.  We know that its medicinal properties have been studied for a long time.  The Chinese are credited as being the first to use gold for medicinal purposes around 2000 BC.  It was not until the late 19th century or early 20th century that chemistry was used to design drugs containing gold.  The German bacteriologist and Nobel Prize winner, Robert Koch for example discovered that TB causing bacteria could be killed using a mixture of gold, aurous cyanide.


Pure gold inner ear insert

Before antibiotics were discovered, gold based drugs were an important weapon against disease.  Compounds containing gold are still used to treat certain forms of rheumatoid arthritis.  With current laboratory research, technicians are interested in manufacturing new soluble gold compounds to treat viral infections but there are also some soluble forms which are capable of killing cancerous cells which we have been able to test in recent years.  These products are not yet at the clinical experimentation stage and there is still a lot of work to be carried out on the chemistry of gold which is an active research area.  However, gold possesses a high degree of resistance to bacterial colonisation and because of this it is the material of choice for implants that are at risk of infection.

Further studies are underway to prepare for the next gold rush.  But this time, in space.  Rocks more than 4.5 billion years old, contain ten times the concentration of gold that can found in any mineral on earth and there are millions of rocks like that in space, in what are known as near earth asteroid belts and in the main asteroid belt.  For Jim Benson, there must be a way of collecting this extraterrestrial gold: “We could envisage launching a space rocket to one of these near earth asteroids between Earth and Mars and landing smoothly on it.  The first time we would certainly be able to take a sample and analyse it.  But on the next mission we might be able to bring back some of the rock or even use a space tug to bring a relatively small near earth metallic asteroid into the earth’s orbit where we could process it at a lower cost.  An incredible challenge but it will be possible not too far into the future.  Fortunes and empires could be built and I think for many generations to come.  Space offers infinite resources with no boundaries.”

If you believe Benson, one single asteroid could produce 80000 billion dollars worth of gold.  But like King Midas, who turned everything he touched to gold, when there is a considerable amount of gold to be had, the magic doesn’t work anymore, it’s finished, done.  And yet all throughout history the fascination in gold has never waned.  When the Romans found gold in Spain or when the Spanish carried out operations in Peru, all the gold that was discovered was used.  The discoveries of the 19th Century brought production levels to unimaginable levels, but gold has not lost its value.  We always want more.  The obsession with gold has been constant since the dawn of time.

Gold has pushed men and women to carry out the most extreme acts, of cruelty, bravery or beauty.  For thousands and thousands of years, owning gold has been of the utmost importance to become not only rich but also powerful.  Gold has survived all civilisations.  It was a central part of religion and the arts.  The economy of nations relied on gold, for better or for worse.  If one day we discretely gathered up all the gold of the USA, UK, Germany and France and we threw it into the sea, the economy would not stop.  Life would continue but in hard times we turn to gold.  Gold is something special.  It is not a product manufactured by man but by nature which is why we have confidence in it.  It is your insurance for a rainy day.  Gold is capable of surviving disasters.  Indestructible and universal, it has incomparable power.

Gold Sovereigns open doors

Tuesday, February 23rd, 2010

The British gold Sovereign has to be the most respected and secure gold coin ever issued. It has influenced important achievements in history, safeguarded any number of people and nationalities in all sorts of circumstance and has featured in comedy and fiction. Gold sovereigns were accepted as money and as payment throughout the world At the height of the British Empire they were so  powerful that they were  known as the army of St George, after the depiction of St George slaying the dragon which has been on the reverse  since 1817. The Sovereign helped create and strengthen the Empire.

WWII Survival kit

WWII Survival Kit

They have been nicknamed “the gold survival coin”. As early as 1916 Pilots were supplied with gold sovereigns (for which they had to sign a form before each flight) in packets of either 4, 6, 8, or 12, depending on the perceived dangers of the mission. During World War II American and British airman and SOE operatives carried a supply of sovereigns as they could be relied on to buy the way out of trouble,  irrespective of the country in which they found themselves in difficulty. With paper currencies fluctuating wildly, SOE commandos who raided the Nazi missile base at Peenemunde in the Second World War took gold sovereigns with them as means of persuasion if captured. This inspired Ian Fleming to write them into From Russia with Love, where Q gives James Bond a special briefcase containing hidden weaponry and 50 gold sovereigns secured in the lining.
More recently many armies have included sovereigns in the survival pack, both British and American airman and Special Services had sovereigns sown into their clothing to buy emergency food, shelter, safe passage or bargaining power if confronted by unfriendly forces. In 1991 the Ministry of Defence  purchase £1 million of gold sovereigns for use in the gulf war and sold those that were returned at very good profit some years later.

It was not only allied military who believed in the power of the sovereign but in history people as diverse as the Sikh freedom fighters in the 1920’s who were opposed to British rule in India made good use of the sovereign. They concealed the coins in a pouch in their throats  and used them to bribe their way out of Prison.  The son of a wealthy industrialist residing in Thessaloniki, Macedonia recalls how his family converted their entire wealth into 3000 gold sovereigns and hid them in door frames just before the German occupation. This allowed them to survive the war without starvation as did many of their friends who did the same, but others lost their entire fortune when left with bundles of worthless Greek currency.

dadsarmyMany of you may remember the well loved 1960s’ BBC TV series based on the Home Guard during WWII in the seaside town of Walmington.  In the episode entitled “Miser’s Hoard”,  private Fraser the local undertaker of Scottish decent, has his life saving of hundreds of sovereigns discovered. Captain Mainwaring, who’s day job is the bank manager trys to persuade him that he should put his fortune in safety but Frazer does not trust the bank. However, his fortune becomes known to the community and he has to try and bury it at night to avoid his spying neighbors.  He would never feel safe again and would always worry his wealth would be lost. Private Frazer’s catch phrase was “Doomed, we’re doomed”

So the sovereign is the worlds most respect and liquid gold coin from, Arab souks to Punjab mountains to occupied Europe. History has proved that in time of conflict your best safeguard would be to hold some gold sovereigns. Unlike paper money they can be neither burnt, shredded or destroyed by water and will retain their value whilst the paper currency can in many circumstances become worthless. However, as private Frazer discovered, if you keep  all or part of your wealth hidden, apart from the worry of discovery, it will always be subject to exposure and loss.  Our advise would be to store any significant quantity of gold in a secure vault under your control such as those provided by


Maurice Hall

Changing attitudes amoungst European Central Banks

Friday, February 19th, 2010

gold reserve is the gold held by a central bank or nation intended as a store of value and as a guarantee to redeem promises to pay depositors, note holders (e.g., paper money), or trading peers, or to secure a currency. Today, gold reserves are almost exclusively, albeit rarely, used in the settlement of international transactions

The Chinese, Indian and Russian and other central banks are buying gold. The Indian Government recently bought 200 tonnes from the IMF to support international commitments. This new trend for buying gold by the Asian, Brazilian and Middle Eastern central banks (who still have very little gold compared to their reserves in dollars) is a supporting factor for gold prices.  As for Occidental central banks, they are less and less inclined to get rid of a metal which could become part of a new world reserve currency as desired by Russia and China.

The table below shows the proportion of gold in the foreign exchange reserves of central banks and not the gold reserves ratio of the currency.  As the FED has very little foreign currency in its reserves, its gold stock seems considerable, but this stock of gold is only 1.6% of  the quantity of dollars in the money supply.

National Reserves December 2009

World gold reserves

Potential candidates for large gold purchases over the next few years are in the order they appear on the list: Japan, China, Russia, India  and Taiwan.

Astonishingly, in March, a European bank signed agreements with Washington II (with a sales quota of 500t per year) to buy gold! This is astonishing because since the beginning of the 1980’s, central European banks have not stopped liquidating their gold stocks which has had a heavy impact on the price of gold which dropped from $850 in 1980 to $256 in 2001.  Between 1999 and 2002 Gordon Brown then, Chancellor of the Exchequer, sold off 395 tonnes, 60% of the UK’s gold reserves, at rock bottom prices averaging $280 per ounce, about a quarter of its current value.

As for the USA, their gold reserves have remained virtually unchanged since 1980 and today are 8133 tonnes.  But doubts remain about the proportion of physical gold that would be available to control gold prices, as the gold may not longer physically exist in the reserves but is in paper form.

Fort knox

A year ago, the International Monetary Fund (IMF) announced that it would sell  off 403t from the 3217t that it had held for several years  in its reserves.  During the G20, the gold market was nervous due to speculation about possible additional sales by the IMF.  The IMF had simply stated that it would allocate the sale of these 403t of gold to help poor countries.  Subsequently the IMF sold 200 tonnes to India , 10 tonnes to Sri lank and 2 tonnes to Mauritius. That this announcement is part of a deliberate plan to curb the price of gold in these difficult times is clearly questionable.  But it will be impossible to counter market forces in the long term.  When the price of gold rose from $200 to $850 at the end of the 1970’s, the IMF sold 1600t of gold on the market without being able to stop the rise.  To these sales were added the sales of the USA who liquidated some of their gold stocks.

Today the central banks’ gold stocks are a lot lower and the state of the economy is in a lot more trouble than during the stagflation of the 1970’s.  The price of gold no longer has formidable adversaries who can curb its rise.  Instead it now has formidable allies in countries such as China and Russia!

Adapted from an article  by Léonard Sartoni first published in Q1 2009

Russian Gold Investment Coins -10 Rouble Chervonets and 50 Rouble “George the Victorious”

Friday, February 19th, 2010
Bank of Russia

Bank of Russia

Within its framework , the Bank of Russia issues commemorative coins made of precious and non precious metals as well as investment coins made of precious metals, which are distributed inside and outside the country. The Bank of Russia has been engaged in this work since its founding in 1992 (previously, in  1965 – 1991 commemorative and investment coins were issued by the State Bank of the USSR).

For the first time in 1996 Russian citizens were offered investment coins on domestic market, gold uncirculated Chervonets coins minted in 1975-1982 and the  silver “Sable” coin of 1995.  The Board of Directors of the Bank of Russia, declared on March 5, 2001, that the gold Chervonets and the silver “Sable” are legal tender in the territory of the Russian Federation.

To create conditions for gold coins to be used  as an independent instrument  for investment  the gold Chervonets, and a new 24 carat gold coin “George the Victorious” were relieved of VAT as declared in the Article 149 of the second part of the Tax Code of the Russian Federation.

The coins of the Bank of Russia are struck in the Moscow and St. Petersburg mints and have a high artistic standard and perfect striking quality. They are popular in Russia and abroad, some of them repeatedly took prizes in opinion polls  held by specialised foreign numismatic publications and organizations.

The Chervonet is gold coin that was issued both for circulation and as a trade or bullion coin. First minted in 1701 under Peter the Great. The origins of the word are derived from the word “Chervonny”, meaning in Russian literally “Red” but also “of a High Quality” and had gold composition of 0.986 and weighed 3.47 g.
The second issue was an attempt to strengthen Soviet economics with “hard” currency backed by the gold reserve but was not successful due to political reasons. These were larger and weighted 8.6 g. with a gold composition of 0.900
There was another attempt in 1925 to strike more Gold Chervonets coins, but it is believed that all but one were melted down.

From 1975 to 1982, the Soviet Union was issuing Chervonets gold coins, equal to 10 Roubles, using the old design but with the new dates in relatively modest amounts as a bullion coinage and is the only issue commonly found.

Russia Chervonets 1976 obv

Chervonets 1976 Obverse

Chervonets – in the center – the State Emblem of the RSFSR (the abbreviation for Russian Soviet Federative Socialist Republic): the shield surrounded by a wreath of ears and bearing the picture of hammer and sickle against the background of sunbeams; the inscriptions along the rim framed by a circle of dots: at the top – “ПРОЛЕТАРИИ ВСЕХ СТРАН СОЕДИНЯЙТЕСЬ!” (WORKERS OF THE WOPLD, UNITE!), at the bottom, under the State Emblem – “Р.С.Ф.С.Р” (R.S.F.S.R.).

Russia Chervonets 1976 rev

Chervonets 1976 Reverse

The picture of a peasant – sower against the background of a plough, the rising sun and factories. The inscriptions along the rim framed by a circle of dots: at the top – “ОДИН ЧЕРВОНЕЦ” (ONE CHERVONETS), at the bottom to the left – the year of issue (1975 – 1982).The edge is bearing the pressed inscription: “1 ЗОЛОТНИК 78,24 ДОЛИ ЧИСТОГО ЗОЛОТА” (1 ZOLOTNIK 78,24 PARTS OF PURE GOLD). The coins were struck by Moscow Mint (ММД) and Leningrad Mint (ЛМД).

50 roub G the V O_R

"George the Victorious" slaying the dragon

In February 2006 a new 24 carat gold investment coin featuring the Saint Georges the Victorious was introduced  by the Bank of Russia. This is very similar to the reverse of the British Sovereign and should prove popular in the UK.  So far 1,500,000 coins have been minted.

Obverse – in the centre – the Emblem of the Bank of Russia [the two-headed eagle with wings down, lower – the semicircular inscription – «БАНК РОССИИ» (BANK OF RUSSIA)] framed by a circle of dots and inscriptions along the rim: at the top – «ПЯТЬДЕСЯТ РУБЛЕЙ» (FIFTY RUBLES), at the bottom – the year of issue «2006», the letters to the left indicate the metal sign and the fineness, to the right – the fine metal content and the mint trade mark.

The Reverse  depicts the image of St. George the Victorious sitting on horseback and slaying a dragon.

Future Mintage

In 2010, the Bank of Russian are planning to issue 700,000  of the 50 rouble St George the Victorious coins, and in 2011 they plan to issue a new design 24 carat gold coin with the same specifications to commemorate the XXII th Winter Olympic Games – 2014 in Sochi.  This will be a 50 Rouble denomination coin and the planned mintage is 2,000,000. So Russia apart from being one of the major modern players in the world gold market is planning to be much more active in the bullion coin investment market.


Rouble spec

Russia has also produced in modest quantities commemorative gold coins in 10,25,50 and 100 Rouble denominations with themes of the Russian Ballet (most common) , the 22nd Olympiad in Moscow,  anniversary of the Russian State Russian featuring architecture, monuments and Leo Tolstoy

Maurice Hall

Hold on to gold- Protect your wealth

Thursday, February 18th, 2010

Having for the last decade worked for US companies the USD/Euro and USD/GBP exchange rates were crucial to European profitability. In 2001 we could not sell product at a margin that was sustainable to the business long term, as the Euro was worth only 85 US cents. The perceived salvation was to move production to China to reduce product costs, however that was still very marginally and in the IT industry consumer prices were tumbling. The real salvation was that USD dollar weakened and the Euro and the GBP strengthened, until the Euro almost doubled its 2001 exchange to $1.60 in 2008. Despite the continuing fall of retail prices the exchange rate ensured we kept our heads above water.

The following is extracted from an article by Dominic Frisby from Money Morning describes how we should not think of gold in the same way and become obsessed with the dollar spot price, but hone in on the gold Euro index, where gold now costs more than €800 an ounce and will be strong against the Euro as it struggles with the Greek crisis.

In early December, the euro was trading at all-time highs against the US dollar, somewhere north of $1.50. Across the continent, be it in Rome, Frankfurt or Paris, US nationals were seen to wince each time they reached into their wallets. Meanwhile German exporters grumbled about their lack of competitiveness.

Yet barely two months later, the euro has fallen by 10% or more. The sustainability of the currency has been called into question. Talk of the break-up of the eurozone is prevalent. And by Friday, short positions (people betting it will fall) against the euro on US futures exchanges had risen to $47.6 billion, the largest ever recorded net short position.

Greece makes up just 2.6% of the entire eurozone’s GDP. If it can threaten the currency and its banking system by running a 12.7% of GDP budget deficit, what damage might Spain do? She is running a marginally lower budget deficit of 11.2% of GDP. But she makes up almost 12% of the eurozone’s GDP – six times higher than Greece. Then there’s France (which makes up over 21% of eurozone GDP), looking positively prudent in comparison, with her deficit of ‘just’ 8.3% of GDP. Yet the eurozone deficit limit is supposed to be 3%!

Only Germany appears to be showing anything like fiscal sanity.

Hold on to gold – sterling’s turn for a fall will come

But those in the eurozone who bought gold will be happy. Gold had a huge day yesterday. It rose some $25. Yet it’s still almost $100 below its all-time dollar high of $1,216, recorded last December.

But if you measure gold in euros (see chart below), the yellow metal has broken out to all-time highs and now costs more than €800 an ounce.


I am forever saying that gold should be viewed not as a commodity but as another currency. Given the stress in the eurozone, is it any wonder that gold has been rising against the euro? I am also forever saying we are too obsessed with the price of gold in US dollars, when it is the price of gold in our own currencies that is important. Gold is your hedge against the fiscal irresponsibility of your own government.

The Swiss 20 Franc gold coin- Vreneli or Helvetia

Wednesday, February 17th, 2010

There are two different types of Swiss 20 franc coins. The first type with a laureate head of Liberty, wearing a coronet bearing the word “LIBERTAS”, with the inscription “CONFEDERATIO HELVETICA”. The reverse shows a 5 pointed star above the red cross of Switzerland on a simple shield within a wreath. The inscription at either side of the shield 20 FR, with the date below. The letter B, the mintmark for Bern, appears below the wreath. This type was issued form 1886 to 1896 inclusive.
swiss 20 frankThe second type known as Vreneli or sometimes Helvetia and commonly known as Swiss 20 Francs is undoubtedly one of the world’s most dignified and classically designed Swiss gold coins. The obverse of the Swiss Helvetia depicts “Vreneli,” the charming “Swiss Miss” of folk lore, wearing flowers and facing left, framed against the majestic Alps. The reverse has an image of the traditional Swiss arms, featuring the famous Swiss cross over oak leaves tied with ribbons and shows the face value of 20 FR and the date

The name “Helvetia” dates back to Roman times when it was the term for the original inhabitants of what is now Switzerland. In fact, the country for a time was named the Helvetian Republic during Napoleon’s rule over the region. Switzerland’s central location, privacy laws, and political stability have helped make it one of the world’s most important financial centers. Swiss currency has never been devalued. Swiss gold coins, like these Helvetias, are cherished worldwide for their fine gold content and excellent minting.

Because of their wide and constant availability, Helvetias trade remarkably close to their intrinsic gold value. You should never pay a high premium (price over gold value) for Helvetias in today’s market.

Swiss 20 fr spec

Maurice Hall

The Austrian or Vienna Philharmonic

Wednesday, February 17th, 2010
Austrian_Vienna_Philharmon rev

Instruments of the Viennese Philharmonic

The Austrian Mint first began producing the Vienna Philharmonic in 1989 and it quickly became very popular. The Vienna Philharmonic coin is struck in the finest and purest gold, 999.9 fine (24 carats)  in a painstaking minting process.. It is issued every year, in four different face values, sizes and weights. It is used as an investment product (bullion coin), although it inevitably ends up in private collections. According to the World Gold Council, it was the best-selling gold coin worldwide in 1992, 1995 and 1996.

A design of musical instruments a cello, four violins, a Vienna horn, bassoon, and harp representing the Vienna Philharmonic Orchestra, as well as the text WIENER PHILHARMONIKER (“Vienna Philharmonic”), can be seen on the reverse of the coin.

Austria Philharmonic_obv

The Musikverein

The subject of the obverse is the great organ in the Golden Hall in Vienna’s Musikverein, the concert hall of the Vienna Philharmonic Orchestra. The face value in Euros, the weight, alloy purity and year of issue are also inscribed on this side of the coin. At top sits the official name of the country, ‘REPUBLIK ‘STERREICH’.

Minted in 1/10, 1/4, 1/2 and 1 oz sizes, all Vienna Philharmonics are made from 99.99% pure gold. No alloyed metals are added. All coins are minted at the Austrian Mint AG, now a subsidiary of the Austrian National Bank which guarantees the weight and purity. The Mint was established in 1194. About 800 years ago, the Austrian Duke, Leopold V, took King Richard the Lionhearted of England prisoner after an argument in the Holy Land. When the King’s ransom was paid, a part of the silver was used to found the Vienna Mint and has remained in its current building since 1837.

Austrian P spec

Maurice Hall

The Maple Leaf – The Canadian pure gold coin

Tuesday, February 16th, 2010

$50 Gold Maple Leaf Obverse and Reverse

The Canadian Gold Maple Leaf is the official bullion gold coin of Canada,  was designed by Walter Ott and is produced by the Royal Canadian Mint. It is one of the purest gold coins of regular issue in the world, with a gold content of .9999  fineness  with some special issues .99999 fine. That is, it contains virtually no base metals at all, only gold exclusively from gold mines in Canada.

The coin was first introduced in 1979 and has been in continuous production longer than any other pure gold bullion coin. At that time, the only available bullion coin was the Krugerrand, which was not widely available because of an economic boycott of South Africa due to apartheid. Coins minted between 1979 and 1981 have gold content of .999.

Each gold Maple Leaf coin features the image of Great Britain’s Queen Elizabeth the second, along with the denomination and date of issue, on the obverse side…and an image of Canada’s national symbol, the maple leaf (from which the coin derives its name), on the reverse side, along with the name of the country and the level of purity of the gold, listed in both English and French.

The coin is offered in 5 different sizes from 1/20oz to 1oz denominations and is guaranteed to contain the stated amount in troy ounces of .9999 fine gold (24 carat). The coins have legal tender status in Canada, but as is often the case with bullion coins, the face values of these coins (C$1, C$5, C$10, C$20 and C$50) are purely symbolic and are much lower than their market value.

Production details:


The coins are all identical in design except for the markings on the obverse and reverse sides indicate the weight and face value of the coin. In 1994, 1/15 oz  ( $2 face value) gold and platinum coins were issued, possibly for jewellery. They were not very successful and so 1994 remains the only year that 1/15 oz coins were produced

In 1997, the Royal Canadian Mint also began producing new “five-nines” one ounce Gold Maple Leaf with a face value of $200 Canadian, the highest face value of any one ounce legal tender bullion coin.

Gold maples were never designed to be handled, the softness of 24 carat combined with the milled edge and clear field around the Queen and the tube storage supplied means the coins easily show handling marks.  This is a standard problem with pure gold and the bullion was never intended to be handled but rather kept in vaults as an investment

The classically beautiful Gold Canadian Maple Leaf coins are internationally recognized and the government of Canada guarantees the unsurpassed purity, weight and legal tender value of every gold Maple Leaf. They  provide investors and collectors with coins that can be both a secure and internationally-recognized addition to a well diversified investment portfolio.

The Maple Leaf is 1 oz  coin is a winner, especially when  compared to American Eagle because the Royal Canadian Mint readjusts prices to market changes more readily than U.S. Mint. These coins are usually  traded with premium of 4 to 5% dependant  on the quantity and , with up to 10% with coins sold separately or in small batches. Obviously, the smaller denomination coins have a higher premium so they do not always have the same success with investors.



The largest bullion coin in the world

On May 3, 2007, the Royal Canadian Mint unveiled a Gold Maple Leaf coin with a face value of One Million Dollars though the gold content was worth over $2 million at the time. It measures 50 cm in diameter by 3 cm thick and weighs 100 kilograms, with a purity of 99.999%. The 100-kilogram coin was conceived as a one-off showpiece to promote the mint’s new line of 99.999 per cent pure one ounce Gold Maple Leaf bullion coins but after several interested buyers came forward the mint announced it would manufacture them as ordered and sell them for between $2.5 million and $3 million.

Maurice Hall

Krugerrand – The original Bullion Coin

Monday, February 15th, 2010
Krug obverse

Krugerrand- the first bullion coin obverse

The South African Chamber of Mines had an inspired idea to help market South African gold. It was to issue a one ounce bullion coin, to be sold at a very low premium over the intrinsic gold value. The Krugerrand was introduced in 1967, as a vehicle for private ownership of gold. It was actually intended to circulate as currency. Therefore it was minted in a more durable gold alloy ( the same as the British Sovereign), unlike most other bullion coins and contained 2.826gms of copper  to resist scratching and gives the coin its golden hue. The Krugerrand was the only accessible gold investment opportunity for the everyday buyer, it was the first coin to contain exactly one troy ounce of gold, and was intended from its inception to provide a way for the private investor to purchase gold.

Despite the coin’s legal tender status, economic sanctions against South Africa for its policy of apartheid made the Krugerrand an illegal import in many Western countries during the 1970s and 1980s. These sanctions ended when South Africa abandoned apartheid in 1994, the krugerrand once again regained it status as one of the worlds leading bullion coins

Originally only one size was issued, which contained one full troy ounce (31.1035 grams) of fine gold. This was originally known as a Krugerrand, or Kruger, for short. From 1980, three other sizes were introduced, namely a half, quarter, and tenth ounce size. The Krugerrand derives its name from combining the names of Paul Kruger, a well-known Boer leader and local hero who went on to become the last president of the Republic of South Africa, and the “rand” – the monetary unit of South Africa. The obverse side of the coin is detailed with a profiled bust of President Paul Kruger and features the name of the country, “South Africa,” in the country’s two native languages, English and Afrikaans. The reverse side of the coin features the image of a springbok antelope, one of the national symbols of South Africa.

By 1980 the Krugerrand accounted for 90% of the gold coin market. Although not a beautiful coin, many millions have been sold since its introduction as the 1 oz coin can be purchased at very little premium over gold bars. The success of the Krugerrand led to many other gold-producing nations minting their own bullion coins, such as the Canadian Gold Maple Leaf in 1979, the Australian Nugget in 1981, the British Britannia coin in 1987 and the American Gold Eagle in 1986.

Krug spec

The South African Mint Company produces limited edition proof Krugerrands intended as collector’s items. These coins are priced above bullion value, although non-proof Krugerrands also have a premium above gold bullion value. They can be distinguished from the bullion Krugerrands by the number of serrations on the edge of the coin. Proof coins have 220 while bullion coins have 180.

Maurice Hall

50 Pesos Centenario: la crème de la crème of Mexican gold coins

Monday, February 15th, 2010
50 peso obverse

Reverse of the Mexican 50 Pesos featuring winged victory

The Mexican 50 Pesos gold coin is not very well known in the UK, but its many qualities are more than enough reasons to make it an excellent investment if you are looking to invest in gold coins for the long term. This coin has great aesthetic value, large mintage (now ended), strong historical value and a very low or non existent premium.

Let’s begin with its characteristics.  The beauty of the coin is initially striking.  It is 20% bigger than a one ounce Eagle, its American sister making it a large “bullion” coin.  It is 22 carat  with 10% copper to ensure that the coin is hard wearing and has an attractive colour.

50 peso spec

The image of Winged Victory makes the 50 Pesos Centenario one of the most beautiful coins in the world

A small history lesson is required to explain the image – in 1910, Mexico celebrated the 100th anniversary of the beginning of the war of independence with Spain. To commemorate the centennial, a huge victory column was erected in the centre of Mexico city, crowning the column is a 6.7 metre sculpture in bronze covered in 24 carat gold  and representing winged victory is   “ El Angel de la Independancia”, the Angel of Independence.  The angel represents Athéna Niké (Athéna brings victory), the famous Greek winged Goddess.

Located on the reverse of the coin, she holds a laurel crown in her right hand to symbolise victory and holds a broken chain in her left hand, to symbolise  liberty.  Two famous Mexican Volcanoes, Popocatépetl and Ixtaccihuatl, are situated in the background.  The date located in the bottom right is the year the coin was struck whilst 1821 is the year of independence.

50 peso reverse

Mexican 50 Pesos obverse with the national emblem

The obverse features an image of the national emblem – an eagle perched on a cactus eating a snake.

The edge of the coin reads « INDEPENDENCIA Y LIBERTAD »

Engraved by the artist Emilio del Moral, it was first minted in 1921 by la Casa de Moneda de Mexico to mark the 100th anniversary of independence (hence the name “Centenario” for the 50 Pesos coin).  The 50 Pesos coin therefore pays homage to the independence of Mexico.

More than 12 million coins were minted between 1921 and 1972.  The majority are dated 1947, but this is mainly due to 3 975 654 coins being re-struck between 1949 and 1972.  Only 309 000 coins were actually minted in 1947.  Re-struck  coins and coins dated 1947 are always of a very high quality however coins from earlier years are often rarer and therefore more expensive.

The 1943 dated coin of which 89 000 examples were  minted has a bigger diameter of 39mm but the same weight.  Very rare!

Today, the coin is a great success in the Hispanic world, mainly in Spain and Latin America.  The increase in popularity of the Kruggerand in recent years has however somewhat overshadowed the attractiveness of the 50 pesos coin for other investors.

50 peso mintage

A long term investment choice

Even if the differential premium for this coin is very low, it is a wise choice for investors looking to invest in gold coins for the long term.  It is in fact one of the lowest premium coins and as such can be purchased for practically the same price as gold.  It is obvious that in the case of a crisis, even the premium of this coin will rise, in particular in Hispanic countries.  In contrast to the Krugerrand, production of the 50 Pesos has finished and therefore the coin will one day become rare.  Avoid buying this coin directly from individuals as it has been widely copied and there are a large number of often crude fakes in circulation.

Buying 50 Pesos today to resell them when the premium has risen could prove to be a very wise choice.  You just need to be very patient and must not buy from just anyone.

Diversify when buying gold coins and consider  the 50 Pesos Centenario as  it has everything you need.

Did you know?

When Americans regained the right to own gold on the 31st December 1974, the Mexican 50 Pesos coin rapidly became one of the flag bearers for the physical gold industry.  The Krugerrand was not well known enough at the time.

Many transactions between Mexico and the USA were carried out using gold coins.  These gold transactions no longer occur today, but who knows, perhaps bank notes will become unfashionable some day and then…



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"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."