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In 1975, as Saigon was falling, South
Vietnamese refugees were air-evacuated into Guam and the U.S. The company Deak-Perera was hired by the State Department to serve as
the official “money changer” for the refugee camps, and it
quickly became apparent to the employees that even the most prominent of
Vietnamese citizens arrived with nothing but the clothes on their backs and
whatever belongings they could carry. It was a somber scene.
The problem facing the refugees was that the banks in their home country had
been nationalized (along with most everything else in the economy), meaning
they couldn't write a check that was cashable. This presented obvious
financial roadblocks for many of them, who were already dejected about their
circumstances and insecure about the future.
Perhaps the most dramatic example was a successful Vietnamese businessman and
his family who had been uprooted by the war. Though his suit was haggard, it
was readily apparent the man had been wealthy back in his home country. He
approached the exchange desk with two large suitcases full of piasters, the paper money issued by the Republic of
Vietnam. The Deak-Perera worker, Michael Checkan, gulped and, with as much empathy as
he could muster, explained to the refugee that piasters
no longer existed. They were worthless, and the employee could not give him
any money.
The reality of the situation visibly struck the man, and his face suddenly
looked like he'd been told he had 30 days to live. He protested, but there
was nothing the company or Michael could do. The currency simply wasn't worth
anything. The man was broke, in spite of suitcases full of his country's
money. As he trembled, his wife began crying and the children became
frightened. They shuffled away,
hopeless.
Later that day, Michael had another well-dressed refugee approach the
exchange table with his family. He carried a ragged satchel, and explained
that he had been a banker in Vietnam. As the man began pouring the contents
of the bag onto the table, Michael braced himself, knowing he would have to
explain that piasters could not be exchanged for
anything of value.
His mouth dropped open, however, when he looked down and saw, gleaming in the
sunlight, stacks of 24-karat gold TAELs, a form of gold bullion indigenous to
South East Asia. They looked like wafers, thin sheets of gold delicately
wrapped in paper. Each TAEL was .9999 pure gold and
weighed 1.2 ounces. The man had dozens and dozens of them.
Michael peered back up at the man; he was brimming with hope. The employee
calculated the bullion's value and moments later bought the gold TAELs,
issuing the refugee a traveler's check for a large amount. The family hugged
as they walked away.
As an American, you may not have to flee your country due to a military
conflict. But there is something far more likely; you may have to flee your currency.
There are many threats to your hard-earned wealth, and the most insidious is
a weakening of the U.S. dollar.
For the United States, the invoices are piling up. Out-of-control government
spending, rising healthcare costs, increasing entitlement programs,
burgeoning military expenditures, etc., all add up to a number well in excess
of revenue. The only politically acceptable solution is to print more money
and devalue the dollar. The money you use for everyday life will buy less and
less over this decade. Remember, as gold rises, it essentially means the
dollar is losing value, eroding the purchasing power of every greenback in
your wallet.
If you own any form of gold, you are already well aware of those facts. But
have you considered the implications of traveling with that gold? Sure,
coming from Vietnam in 1975, you probably got barely a sideways glance for carrying
gold TAELs, or even a suitcase full of cash. But today, in the age of TSA
“love tap” pat-downs and full-body x-ray scanners, and when you
must declare any amount of cash over $10,000 on your way in or out of
America, leaving the country with a stack of gold bullion is probably going
to raise a few eyebrows – if not land you in a TSA backroom
somewhere.
That’s why it is important not just to own gold, but to consider owning
it in various forms that give you both discretion and portability. There is
no substitute for gold bullion, but there are far more portable
alternatives, and which are far less likely to raise eyebrows (sure,
numismatics are collectibles, but good luck explaining to customs the
difference between a Gold Eagle and a Saint Gaudens).
Take 24-karat gold jewelry, for instance. To the casual observer, or the TSA
agent, it’s not unlike any other necklace or bracelet. To you, it is a
portable store of wealth. A "money belt" customs will ignore. And a
great insurance policy should you find yourself in need of money on the road.
Not only does 24K gold jewelry make moving with your money simpler, it also
makes giving wealth to heirs or as a gift simpler. In fact, there are a
number of advantages that are frequently overlooked: it's significantly
cheaper than most numismatics and carries far lower premiums than traditional
gold jewelry; it's subject to less of the complexities of taxes; it's more
accessible than gold stored in a vault or certificates that take time to
redeem; and as jewelry, it would avoid confiscation if that ever came to pass
again.
Unfortunately, you are not likely to find real 24K gold jewelry of any
significance in your local mall’s jewelry store. Instead, they are
probably selling 14K gold, and at premiums of 100% or more to the value of
the precious metal. It’s simply not practical to use designer jewelry
as a store of wealth – you won't find a numismatic-like resale market
for that Tiffany necklace.
Instead, you need to find a dealer that can provide
you with pure, certified 24K gold jewelry that was designed specifically for
use in passing down or traveling with your wealth, and at a reasonable
markup. It helps if the jewelry uses a common unit of measure as well –
each piece being an ounce or in some way easily divisible. That way you can
quickly account for how much you have, and if the time ever came where you
needed to sell it for emergency cash like our Vietnamese friend above, you
could easily do so.
At Casey Research, we’ve found just such a partner with First
Collector’s Guild, which specializes in 24K gold jewelry.
If you own bullion or any other form of gold, consider how portable it really
is. A little forethought and you may just realize it’s not all
available the moment you need it. If that’s the case, a little bit of
portable wealth protection might be in order. 24K jewelry is not an
investment, but in the right circumstances it can be a great form of
insurance.
But don't mistake it for just bullion; this is beautiful jewelry:
These pieces are very elegant and sophisticated. It's something you can enjoy
for many years and generations to come. And they're perfect for gifts.
If you want attractive, wearable bullion that allows you to store value
safely, then 24K jewelry is it. And it might be just the right way to sneak
some gold into a loved one’s stocking this year.
[But hurry – since every one of the beautiful
necklaces and bracelets is custom-made, you have to order by December 10 for
delivery by December 25. To see all the different choices you have and learn
more about Heirloom jewelry, click here.]
Jeff Clark
Editor, Casey’s Gold & Resource
Report
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