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The communist
Khmer Rouge's four-year folly in Cambodia is one of mankind's less glorious
moments. Led by the brutal Pol Pot, the human cost of this stupid revolution
was horrific. According to conservative estimates, over one million people,
or one in seven of the country's population, died from starvation,
malnutrition, torture, execution or physical abuse.
By 1979 every
trace and resemblance of civilized life had vanished and the economy had
completely collapsed. Towns and villages were abandoned, dead bodies littered
the countryside, the formerly productive fields no longer tilled, and all
forms of money had vanished. That same year, the Vietnamese invaded their
neighbour and slowly began to weaken the Khmer Rouge's
stranglehold on the country. Like the swing of a pendulum, free market money
(the money that the free market freely chose to accept) quickly flowed back
into the region aiding the reemergence of an economy.
Someth May
survived a Khmer Rouge labour camp and recorded this economic reemergence;
"Apart from foraging for rice there were three ways of making your
living. Those who didn't want to leave the village for fear of meeting Khmer
Rouge, worked in the market or made palm sugar or toddy. There were the
fishermen, who went in groups for safety. And then there were the
'gold-diggers', who wandered round the outskirts of the villages searching
for corpses and graves. Most Cambodians had gold-capped teeth, so these men
became known as millionaires. With astonishing speed - this all happened in a
matter of weeks - the gold diggers had motorbikes, brand new Hondas, which
they bought along the border. They had amazing watches, gold chains around
their necks, shirts open to the waist, Thai cigarettes.
Gold was
currency. It came in sheets. If you wanted to pay for something small you
snipped a bit off with scissors. People didn't yet have scales. The city of
Sisophon was the center of the gold economy, and everyone knew what he was
doing. The tradesmen had balances in glass cases. The smugglers had their own
balances. Even the Vietnamese had balances, so that they could settle any
arguments which broke out. The tradesmen held the gold in gas jets, heating
it till it was red hot, then letting it cool. If it discoloured as it cooled
it wasn't pure. All gold had to be cut before it was accepted, to make sure
there was no core of base metal. The most elaborate of bracelets were being
chopped up in this way. There were little children who waited for the traders
to go, then searched where they had been cutting the gold for the tiniest
specks.
As well, there
was an old kind of coinage which was called trough money, dating from
pre-colonial days, when sawn in half, the silver was absolutely white and
pure. Traders were hammering them into different shapes, testing their
malleability. (1)"
Cambodia in the
late 1970's is not the first time that the teeth and jewelry of the dead have
monetised the reemergence of an economy. Someth May's account is a
provocative, recent example of the age-old story. Cambodia in 1979
experienced first hand and very quickly, stage seven in the Life Cycle of
Money; 'Reemergence of Gold and Silver. Man had ceased working and producing,
the economy had collapsed, and money had failed. But the day balances of
power
turned, the economy sprung immediately back to life. Men picked up their
tools and went back to work. Money instantly appeared, the only money that
man has always returned to in times of change and social and economic
upheaval, gold and silver 'Free Market Money'.
In yesterday's
Daily Dig we quoted Millennium Money's closing words; "from the ashes
and ruins emerges a new age ruled by those who were prepared, a golden era, a
new millennium." In Cambodia's new economy, the richest men were those
who controlled and held the gold.
Philip Judge
Anglo
Far-East Company
Also
by Philip Judge
Philip Judge is the 3rd generation of a family that has had
substantial involvement in the Precious Metals markets. He has researched,
written and spoken on the gold, silver and commodities markets for over a
decade. Philip works in the marketing and operations department of The
Anglo Far-East Bullion Company, an internationally based Bullion Banking,
Investment Management and Financial Services Company
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