Toby Baxendale is an entrepreneur and investor, economist, former magistrate, ironman triathlete, philanthropist and family man. He set up the Hayek Visiting Fellowship at the London School of Economics. To promote Manchester Liberalism and provide a home for Austrian School Economics in the UK, Toby co-founded The Cobden Centre.
“For the most of my life, I have had zero interest in gold. My wedding ring was probably the only item of gold I owned – and that is obviously precious for reasons other than its being made of gold.
When I studied at the London School of Economics, I was aware of the historic role of gold in our monetary system. But it was only in the run-up to the financial crisis of 2008 that I really started focusing on our monetary system.
I then realised that the only stable system I could ever conceive of was one based around the gold standard. Having no counter-party risk when you own gold is unique for a monetary asset. In uncertain times, the focus on this has, for me, become more paramount. I certainly think everyone should have an element of gold in their savings. And I hope to live to see the day where gold as money is the default standard once more. The ‘barbarous relic’, as John Maynard Keynes called the gold standard in 1924, is actually one of the most democratic and fair parts of a money system.
Governments around the world now are ‘creating money out of nowhere’ to try to reach escape velocity out of this COVID-19 crisis. Asset classes that are desirable are once again inflating, and that will be a wealth transfer from those poorest in society to the richest.
This realisation leads me to conclude that gold is more desirable than ever right now”.
“I founded DiamondWare, a software company which I sold to Nortel Networks on August 19, 2008. It was the last acquisition Nortel ever did.
All my wealth was in cash. And suddenly, the world was collapsing into a global financial crisis. As Lehman fell, and Countrywide was not allowed to fail, I first moved my accounts to some too-big-to-fail banks. As events unfolded, I thought about how I could better protect myself.
I looked at real estate, including in remote and isolated places like New Zealand’s south island. Real estate can’t go to zero. But it can crash, especially if buyers can’t get credit. I also thought about stocks, but then (as now) many formerly-successful business models were wiped out when the world changed.
Real estate is not a financial asset. It is illiquid in the best of times, and is impossible to sell when credit is contracting. Bonds are financial assets, but corporate bonds dropped. Although government bonds went up, spending was spiralling out of control (although nothing compared to 2020). I did not want to be a creditor to the government. Stocks are also financial assets, but companies like Nortel can declare bankruptcy which it did, a few months after they bought my company).
Tangible assets are illiquid. Financial assets are liquid, but they incur counterparty risk. It seemed a dilemma with no way out. Then it hit me.
Gold is the way out. It’s the financial asset which is no one else’s liability. In 2008, the price of gold dropped the least of all assets. And in 2009, it was first to make new highs. Stocks did not recover their prices until years later, and real estate (in America) never did.
I founded Monetary Metals with a simple idea. Everyone should be able to earn interest on their gold, in gold.”
Keith Weiner is the CEO of Monetary Metals
Bill Murphy, Chairman of the Gold Anti-Trust Action Committee (GATA), has an extensive commodities and futures background with some of the world’s most well-known Wall Street firms. GATA has compiled a vast body of evidence implicating some of them in what he says is a scheme to manipulate the price of gold and silver. Bill is a graduate of the School of Hotel Administration at Cornell University and was a starting wide receiver for the Boston Patriots in 1968…
“I have been involved in the futures’ markets for nearly 50 years and at one point was a trader in copper. The fellow who guided me into becoming a large trader was a highly-regarded economic consultant named Frank Veneroso. In 1987, Frank realized the world underestimated the worldwide demand of copper due to enormous consumption in Asia. The copper price soared through the end of that year.
In 1997/98, I went to work for Frank in Portsmouth, New Hampshire to sell his gold service.
At the time the internet was just beginning to catch on fire and I was on it all the time. It then occurred to me to start my own subscription service on the internet.
That is what I did in September 1998. Soon after, the well-known hedge fund Long Term Capital Management blew up and it had to get out of all of its positions. One of these was a massive gold short position that Frank identified. Suddenly all these bullion banks showed up to prevent the gold price from going through $300. It was clear these banks were collectively suppressing the gold price.
This was after they had a meeting with the US Federal Reserve, the Fed.
So, my ‘gold moment’ was realising that the Fed was interfering with the price of gold and that this simply wasn’t fair. Chris Powell, a new subscriber of mine, got tired of me complaining about the rigging and suggested we try and do something about it. So we formed the Gold Anti-Trust Action Committee in January 1999. We have been exposing the suppression of the gold/silver markets ever since.”
Mario began his career in private banking in Geneva, Switzerland and then worked in the City of London for twenty years. For the last five years he has been informing and educating a worldwide audience on YouTube and other platforms about our monetary system, the financial markets and precious metals. His YouTube channel, maneco64, is the “home of alternative economics and contrarian views”.
“My first purchase of gold was prompted by a conversation with my wife. We were discussing how our private pensions’ values had dropped quite precipitously as a result of the stock market crash following the dotcom bubble. Our pensions were supposedly invested in a “safe” and diversified fashion.
We came up with the idea of buying some Krugerrand gold coins as an alternative to stocks. Back then I did not know much about gold, so I did not think about gold sovereigns. I paid £225.45 per coin (one troy ounce of pure gold) almost exactly 18 years ago.
At the time I still worked in the City of London and I remember going out during my lunch break and taking a short walk to John Haynes, a jeweler in St Michael’s Alley. Besides being a jeweler, Mr Haynes also dealt in gold bullion coins. The surprising thing about handling my first Krugerrand was its weight and the feeling that I was holding something of value. Unless you hold a Krugerrand or any other gold coin it is difficult to describe the emotion. When I took the coins back to the office my colleagues were amazed at how heavy they were. It was a very special feeling, owning my first gold.
Prior to buying my first gold coins I had started looking at the Austrian School of Economics and the concept of laissez faire economics. Being now invested in gold, the money of the free market, led me to immerse myself in the study of gold, sound money and the history of our monetary system. So not only has gold safeguarded the value of my savings but it has also pushed me to learn more about our fragile monetary system”.
It came in the late afternoon of 28 September 1999. I was standing on the doorstep of the Sheraton Park Hotel in Washington D.C. The IMF (International Monetary Fund) annual general meeting was in full swing inside the hotel.
Suddenly people around me, a large crowd, started shouting; some were looking for colleagues, others were asking what’s happening? I too asked a familiar face nearby; I was told that the managing director of the IMF, Wim Duisenberg, had just made an announcement about central bank gold sales.
I rushed inside to find out more. The essence of the announcement was that 16 European central banks, with endorsement from the US Federal Reserve, the Bank of Japan, and the IMF, had agreed to limit their gold sales from their reserves to 400 tonnes collectively per annum, and that the agreement was to last for five years.
The then deputy governor of the Bank of England walked past me. He looked at me and grinned. He said to me: “I think they thought you would get angry again if they didn’t do something…”. That was a reference to the hard-fought campaign the World Gold Council, of which I was at the time the CEO, had mounted in the previous five months against the central banks’ sale of gold reserves.
Only a few weeks into my being appointed CEO the British government announced that it would sell half of its gold reserves. The IMF, too, was publicly debating the merits of selling a part of its gold holding. We at the WGC mounted a two-pronged protest: a very public press campaign and a serious negotiation behind the scenes with the British Treasury and the IMF as well as with other European central banks.
In the press campaign we ran a series of petitions in national newspapers and a call centre campaign against the planned gold sale. On day one the call centre, which had 20 agents answering calls, crashed in the first 20 minutes, such was the volume of calls, and the call centre had to be expanded. Well over 20,000 people signed a petition against the gold sale, in just three days. We sailed a launch up the Thames and parked it outside the House of Commons Terrace. It had a banner on it saying ‘Gordon Brown & Co: Scrap Metal Merchant’ with pots and pans painted in gold colour; that was on the front page of the leading national newspapers the next morning, giving a little merriment.
But more serious discussions were taking place with officials by the WGC team. Serious research work was being presented during these discussions behind closed doors. Both Duisenberg and the IMF (which announced the following day that it would abandon its planned gold sales) acknowledged in their statements that they had been influenced in their decisions by the work of the World Gold Council.
The Washington Agreement on Gold of 1999, as the agreement was named, put a floor under the gold price. The five-year agreement was renewed four times and it lasted until last year. Ever since that agreement, central banks of the world have been net buyers of gold to hold in their foreign exchange reserves.
Haruko Fukuda OBE
Former CEO and Board Director of the World Gold Council and investment banker with James Capel, Nikko, and Lazard. Haruko has served on the boards of a number of major international companies, including AB Volvo, and is a Non-Executive Director of several public companies.
This week’s guest is Charlie Morris, the Chairman and Founder of ByteTree.com; an analysis site for bitcoins.
“In 1999 – seems like an age ago – I attended a presentation on gold by John Hathaway from Tocqueville Asset Management. Back then gold was trading under $300; a price not seen for two decades.
John put up several charts that put gold into its historical context. From these I could see that gold has always kept its long-term value and was a safe haven during tough times. In the heady days of the dotcom boom people began to worry it would all end in tears. It did, and gold started a bull run.
In those days it was difficult to invest in gold. Exchange traded funds for gold didn’t start appearing until 2003. Without those there was no way for a professional investor to invest in gold, other than futures and gold mining shares.
Then I met Graham Birch, who managed the Merrill Lynch Gold and General Fund (now part of Blackrock). He made a series of compelling arguments including that central banks would stop selling their gold reserves (they have); predicting lower interest rates (which has happened); and a recovery of sentiment in the sector (that has also happened). Gold mining shares were undervalued, he said, and would rise – and even more so when the gold price took off.
When the dotcom crash happened there was a scramble to sell these formerly highly-rated companies. Anything tangible, such as gold, proved its worth. Since then gold has become the cornerstone of my investment philosophy.”
This week, we ask our Founder and CEO Jason Cozens about what made him first think about gold as an alternative to paper money? What was the moment that everything changed for him?
I’ll never forget Friday 14 September 2007. I couldn’t believe what I was seeing, as the news broke that there was a run on Northern Rock, a high street bank based in Newcastle upon Tyne, near to where I was born. Huge crowds of the bank’s clients had descended on branches of the bank, as the BBC announced it had just received emergency funding from the Bank of England following problems in the credit markets in the unfolding global financial crisis.
It was the first time I realised a bank account is not the safe deposit of money that I once thought. Instead it is lent out, intentionally put at risk, normally in return for an interest rate; but not so much of that these days.
I then concluded that today’s government-issued currency is inherently unfair since it doesn’t maintain its purchasing power, due to central bank policies. The establishment call it ‘quantitative easing’ but to many like me it is simply means ‘money printing’ and is the reason why inflation exists and why the UK Pound and US dollar have both lost 80% of their purchasing power in my lifetime .
When your money can’t buy you what it used to and when banks go bust, it makes you think twice about what you use as money and where your money is stored. I wanted something incorruptible and reliable. Don’t we all?
I learnt that gold holds its purchasing power over time and – if it’s kept in an independent vault – it’s free from the contagion of a financial crisis.
The problem with gold is that you can’t use it to buy anything in today’s electronic payments’ world. At the time I was an architect of new solutions based on the emerging digital ecosystem and, with more than my fair share of self-belief, decided that I could fix the problem. I set out to find out how to reintroduce gold as money, to build a gold-based alternative to banking, payments and money itself. That’s how Glint came about.
To help protect your savings and be able to buy, sell, save and spend real gold, click here to download our app and receive the Glint prepaid debit Mastercard for free.