Last Saturday saw the Summer Solstice in the Northern Hemisphere. The time when the sun reaches its highest position in the sky and offers the world its longest single period of light in the year. Traditionally, druids visit ancient sites and my friends in Sweden eat too much herring and drink rather a lot of vodka in celebration of midsummer!
In which-ever way we recognise this time of year, most of us welcome the warmth and the golden light of the sun, even in lock-down we can open our windows or sit in our gardens or on our balconies and enjoy the warmth.
The feeling I get when I think of what we’re doing here at Glint is like this, it’s a warm feeling, a feeling that deep down I know that we’re helping hard working, everyday people to protect their savings by making it so easy for them to save in gold. Right now, in today’s society and with financial markets behaving so erratically, what we see happening around us can be stressful, but if we can feel assured that our savings are safe and our wealth is protected for future generations, then perhaps we can take five, relax a little and welcome the warmth that this time of year brings to those of us in the north.
I’m looking forward to being able to share some exciting news in the coming weeks, news that will enable all of our registered Glint clients to share your gold with each other. More later, but soon you will not only be able to buy, save and spend in real gold, but you will be able to instantly send and receive it as well.
So, when things get a bit stressful, take time to feel the warmth of the sun on your face, safe in the knowledge that here at Glint, we’re working hard to provide you with the very best service and to help your money provide for a golden future.
See you all next week
When I had the idea for Glint during the global financial crisis of 2008, it seemed obvious to me that the world deserved a reliable form of money. We all needed a form of money that insulated you from the destructive effects of inflation and from potential breakdowns in the highly leveraged financial system. To me, then and now, the answer was – incorruptible gold.
The everyday man and woman on the street easily understood the idea. My mother would often say: “Son, money doesn’t buy you what it used to.” London cabbies would tell me that “gold, always holds its value”. Experienced high net worth individuals, those who had worked hard through cycles of booms and busts over the last 50 years, they also got it.
But many of the younger analysts and fund managers, those who control the wallets of the big venture capital companies, didn’t get it. They had never experienced double-digit interest rates or difficult recessions.
The 2008 crisis was not allowed to play out. Instead of toppling over the economy was propped up by huge amounts of central bank stimulus. That led to the biggest period of growth seen in over 100 years. No bad thing one might think. Except, what was that growth built on, apart from illusions and credit?
The existing monetary system benefitted some people hugely, even during that 2008 crisis. Easy for them to get a multi-million mortgage; money poured into the funds they managed, fat bonuses returned.
I remember saying to one investment committee that just because house prices were going up in London, it didn’t mean that they always would, and explaining that a house in Japan worth 16 million in 1990 was now, twenty years later, worth 5.5m. The head of the committee looked alarmed and said: “Don’t say that, I’ve just bought a house”. It was probably a very nice and expensive house that was paid for with money lent at very low interest, nearly free, of course only available to those who has a big enough deposit. They were clearly quite short sighted… they didn’t invest in Glint.
Glint continued to find funding from contrarian investors, including many individuals who have worked hard all their lives to build up their wealth. People who have experienced the cycles of boom and bust and who worry about where the global economy and central bank policy is heading.
Covid-19 slammed us into this economic crisis, one that many had expected, but which has turned out to be far worse than anyone imagined. Most people in the investment community that I speak to are now extremely worried about the economy and global debasement of foreign currencies, thanks to the vast government borrowings that have been built up in the space of a few weeks. Suddenly it seems, I am not the daft contrarian, but we at Glint may argue, the visionary.
As a young man I didn’t think about death. Like so many young people I thought I was invincible. Even when I became a young father in my 20’s I never thought about what would happen after I passed away. It wasn’t just because I had no time to think of such things among the nappies, the bottles and running my eCommerce agency. Mortality was for others. Or so I thought.
And then I found
From its birth in the heart of a supernova, I learnt that Gold’s nature is constant, never changing. It’s one of the reasons we use it as money, as an incorruptible and honest ledger of what we owe to each other, always retaining that value.
But it was gold’s ability to defy time, age and life…for it to be witness to macro-economic cycles, black swan events and span generations. All those supra-human things about gold made me think about the bigger picture. It very sharply brought home to me the meaning of legacy.
The only thing we can be certain of in the long term is the breakdown of order. Entropy is forever. As if to test us, the good times will never last: a personal or public crisis is always just around the corner. But just far enough out of reach to lull a new generation into a false sense of security and foster unsustainable excess.
So, I look into the eyes of my sons and wonder – what can I do to help them through the inevitable challenges they will face after I am gone? Any ‘words of wisdom’ I may have to offer might sink in, something about how I conduct myself might have a long lasting positive and useful influence on them; but money always helps.
If I manage to save some by the time I die then I won’t put it at risk through an investment in some flaky get-rich-quick scheme but in the only tangible constant they can rely on: gold, money that stands the test of time.
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.”
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