Saturday, 6th June 2020

This Month's Magazine
Pure Gold!

Pure Gold!

What is left to protect your savings and future security?

by Edwin L. F. Gladstone

When you cannot trust banks with your money, when investing in the stock market is perilous and when property investments demonstrate, for the second time since the early 90’s, that they can rapidly lose more than 50% of value, what is left to protect your savings and future security?

Yes, you can put your money under the mattress or bury it, but that’s not safeguarding it against inflation and currency valuations, so perhaps you should convert your money value capital (or part of it) into solid gold.

Gold has been treasured since time immemorial. Maybe because of its yellow colour, or the ease with which it can be converted into jewellery, it has always been given value by man; from as far back as the ancient Eegyptians, the Rromans and even before them, coins were made of gold to distinguish them from the lesser valued silver or copper coins.

In Britain, prior to 15 28 , the “pound” referred to the Tower Pound (equal to 5 ,4 00 grains and worth about £78 .75 at the current market value of silver). In 15 28 , the standard was changed to the Troy Pound, which is a little heavier and valued in today’s market at around £84 . Since then, promissory bank notes could be presented to any bank which, by law, was obliged to pay the bearer the banknote’s value in sterling silver, equivalent to the weight of 240 silver pennies.
In 1663 , a new gold coinage was introduced based on the 22 carat fine guinea. Fixed in weight at 44 ½ to the troy pound but from 1670, this coin’s value varied considerably until 1717 , when it was fixed at 21 shillings.

What followed is that British merchants sent silver abroad in payments whilst goods for export were paid for with gold. As a consequence, silver flowed out of the country and gold flowed in, leading to a situation where Great Britain was effectively on a gold standard.

The Bank of England was formed in 1694 , followed by the Bank of Scotland a year later. Both began to issue paper money and while “Britannia Ruled the waves” and banks could honestly promise “…to pay the bearer on demand the sum of… pounds” as printed on every pound note, everything was fine. Bank of England notes became legal tender and their value floated relative to gold.


During the late 19th and early 20th centuries, many more other countries adopted the gold standard and conversion rates between different currencies could be determined simply from the respective gold standards.

Then, to cut it short, two subsequent world wars took their toll resulting in a huge debt mainly to the USA with crippling interest repayments that eventually resulted in Sterling devaluations and “bearers” of notes could no longer be paid their pound value in gold. That is how currencies can be devalued while gold itself is GOLD.

The most recent serious gaffe (yet another) was committed by our dearest Gordon Brown in May 1999 , when, against all advice given, in his own wisdom, he sold more than 50% of the country’s centuries-old gold reserves. Gold has trebled in value since, costing the taxpayers some £3.3 billion.
All of this may now explain the appearance of various adverts offering to buy your unwanted gold!

If you are in need to raise cash because of the financial crisis, do remember that the value of gold today is $1007 per Troy Ounce (1 troy ounce = 1.1034768 grams). I found a useful site on the internet for advice and help to value your gold before selling it. Do remember that anything in 24 carat (999 millesimal finess) is pure gold, lesser carats means that other metals are present.

Gold, bullion, gold bars, gold coins, seem to be the order of the day; and there are loads of interesting and helpful websites on the net that should be useful to gold buyers as well as sellers, however do remember that it is the long term investment value that counts. Gold is not meant as a get rich quick investment unless you buy it for peanuts and resell at market value.

You should consider the ability of gold to preserve its value against inflation, which it seems to do very well, but bear in mind that there are times when even the value of gold can do down, for instance, when you get a Gordon selling off 400 tons of bullion in one day.

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