How to Legally Smuggle Gold
By Dr. Steve Sjuggerud
Wednesday, September 23, 2009
Did you know the President confiscated all the gold of American citizens in 1933?
It's true... all in one quick swoop of the pen:
UNDER THE EXECUTIVE ORDER OF THE PRESIDENT
Issued April 5, 1933
All persons are required to deliver
ON OR BEFORE MAY 1, 1933
all GOLD COIN, GOLD BULLION, AND GOLD CERTIFICATES now owned by them to a Federal Reserve Bank, branch, or agency, or to any member
bank of the Federal Reserve System.
It was the height of the Great Depression. And the U.S. government desperately needed to shore up its financial position. So in a dramatic move, it took everyone's gold.
Could it happen again? Well, put it this way: Who could have imagined it would happen the first time around?
Every day on the radio, I hear ads about buying gold as a store of wealth. But folks who held gold as a store of wealth in the Great Depression had that "wealth" confiscated by the government.
I had lunch with my longtime friend Michael Checkan on Saturday. Michael's business is called Asset Strategies International. He finds legal ways to protect and diversify your wealth. Michael told me about a neat little idea he came up with. I thought the idea was worth sharing with you...
"When the U.S. government confiscated gold back in 1933," Michael told me, "you were allowed to keep your gold jewelry. The President didn't ask for Grandma's wedding ring."
So Michael started a gold jewelry company, called First Collector's Guild. This company is different from other jewelry companies. It thinks about the gold first...
For example, each piece of First Collector's jewelry measures exactly one ounce or five ounces of gold. Most gold jewelry is 14-karats (which is only 58% pure) or 18-karats (which is 72% pure). But each First Collector's piece is 24-karat gold – which is 99.99% pure.
These pieces are, of course, jewelry... not currency.
For example, if you wanted to, you could carry 100 First Collector's necklaces out of the country, and you wouldn't run afoul of the currency laws. And then you could convert them to money at most gold dealers in the world. It's like legal gold smuggling.
Now, I don't recommend doing this on any scale. First off, you'd look like Mr. T. going through customs. And secondly, it's just not cost effective.... First Collector's jewelry is handmade and costs a premium over the price of gold. But a gold dealer will only pay you a discount to the gold price. Finally, I'm not a lawyer, but I'm sure that if you tried to bring a load of First Collector's jewelry across the border, someone would decide you're somehow breaking a law.
However, for a small portion of your gold, First Collector's jewelry is an interesting idea...
My DailyWealth colleague Tom Dyson was also at the lunch, and he was considering buying some for his wife. "My wife would like some jewelry, but I don't like getting ripped off through jewelry-store markups. If I bought this, my wife would get something she wants to wear... and I'll be confident that it's not worthless. It has real gold value."
If you feel the way Tom does, you might consider Michael's necklaces or bracelets... You specify the length, gold weight, and style you want. It takes four to six weeks to arrive at your doorstep.
With this idea, you can keep your significant other happy while you're confident you own something with real value. And in the extreme case, if we see another 1933 again, your gold should be safe.
It's an interesting idea. For a small portion of your gold holdings, jewelry from First Collector's is worth considering...
Good investing,
Steve
P.S. If you're curious, we don't receive any compensation from Michael. He's an old friend, and we liked this idea. |
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ANOTHER PICTURE OF THE "SPENDING" RALLY
Another picture of the amazing rally in "spending stocks"... This time it's department store chain Dillard's.
To recap, analysts have predicted the death of the American consumer for years. In 2008, those bearish analysts were right. Consumer spending plunged... and it took restaurant and retail stocks down with it.
But an amazing thing happened on the way to the morgue. As we've seen by the soaring shares of Starbucks, consumers are back to boosting share prices in America's restaurants and retailers. For proof, we point to the huge rally in Dillard's, a shopping mall linchpin. The stock just reached a new 52-week high.
Dillard's is no outlier, either. The charts of Macy's, Sears, and JCPenny look the same.
Granted, many consumers face huge problems like unemployment and falling home values. But the government just gave the economy an enormous, never-seen-before "goosing." Whether or not it's rooted in reality, we have to mind this uptrend. And we can only say it will end when it ends.
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One exception to [the global ignorance of gold as money] may well be China. This nation is mounting campaigns to educate their citizens about the value of buying gold and silver.
In fact, if you want to know where things stand with China, the following fact pretty much tells you all you need to know:
China is the world's biggest producer of steel. It is also the world's biggest producer of gold. The steel, it mostly exports. All the gold, it keeps.
Pretty much all the good thinking about gold as money being done today is taking place in Europe, in Asia, and in the Middle East. In America, sound thinking about money is still regarded as an activity engaged in by fringe groups.
– Chris Weber,
Weber Global Opportunities Report
...regarding China and commodities, we note that China is and has been a fervent and aggressive buyer of "stuff" around the world.
To that end, we note that China's sovereign wealth fund, China Investment Corp, bought 14.5% of the shares of Noble Group... a long standing client of [The Gartman Letter] and one of the savviest commodity trading firms we've come to know over the years.
For CIC, this is a wonderful decision for they've gained years of expertise in the markets that they would have taken decades to accumulate otherwise.
Further, this serves only to show how serious is China's intention of securing what it needs in the way of global commodities... "stuff"... to assure its long term economic growth. This is a win-win decision if we've ever seen one.
– Dennis Gartman,
The Gartman Letter
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