Krugerrands Run Out
By Patrick A. Heller
time, I have been warning that apparently
plentiful supplies of gold and silver
bullion-priced coins and ingots could quickly
evaporate. Last Thursday we saw the first signs
of a looming shortage of physical metals when
just about all U.S. bullion wholesalers were
unable to accept orders for the South Africa
Krugerrand. One primary distributor said they
expected coins in a few weeks, which I think
means that they are waiting for a shipment of
freshly minted coins from the South Africa Mint.
My own company had to discontinue accepting new
orders until we could lock in a supply.
Tens of millions of Krugerrands have been struck
since they were introduced in 1967. They are not
rare. If demand for physical gold is so strong
(and the World Gold Council last week reported
that global third quarter demand was 15 percent
higher than the second quarter) that they are no
longer available, we could quickly see a domino
effect where other gold and silver
bullion-priced products also become sold out.
We may see some temporary price dips this week
as the gold and silver options expire. However,
I fear that there is little time to lock in
physical precious metals at reasonable premiums
for quick delivery.
But this is short-term news. There is also a
longer term view to consider.
Periodically, I have discussed reasons for
owning gold that have nothing to do with direct
consideration of whether prices are likely to
rise in the future.
This week at Thanksgiving I will include owning
gold and silver as one of my blessings. After I
bought both metals in the 1970s, it then enabled
me to purchase a home in 1980 for a much lower
cost than if I had not owned them.
In more recent years, owning precious metals has
helped me survive some of the ravages of the
falling values of paper assets like stocks and
bonds and the U.S. dollar.
As I reflected on the blessing of owning gold
and silver, it occurred to me that it has also
better enabled me to protect and care for my
Twelve years ago, the financial calamities in
the Far East were so devastating in Indonesia
that those who did not own gold were wiped out
financially. Those who owned gold saw little
impact on their standard of living.
There are hundreds of thousands of Southeast
Asian refugees in the United States today who
survived because they owned gold to get them
away from the governments that killed so many of
their compatriots. Owning gold definitely helped
them provide a better life for their children.
After all the economic trials and tribulations
of the past 30 months, it is not too difficult
to imagine a world where U.S. dollars finally
fall to the intrinsic value of the paper and ink
used to produce them. In such a circumstance,
all the dollars in your wallet, your bank
accounts, your credit and debit card limits, and
the like could become useless in providing for
There are a large number of potential gold
buyers who have not yet felt the urgency to make
their first purchase. Maybe it just doesnít seem
that important to you. If it isnít, then think
about any children or grandchildren you may
have. Would you buy gold if it had the potential
to someday improve your ability to care for
their health and welfare?
If you donít yet own gold (or silver), then do
it now. If not for you, then do it for the