Signature Coins & Bullion

To quote Ludwig Von Mises;
“…all problems are linked to one another. In dealing with any part of the body of knowledge one deals with the whole.”

It didn’t take long for the politicians of Ireland to sell their citizens into ECB servitude. The scale of the debts each and every Irish resident carries is most probably insurmountable, beyond default.
 
German chancellor, Angela Merkel, appears to be the only person that understands this, and until she convinces the other Euro members that default is better than inflation many more millions of European citizens will awake to find cowardly politicians bowing down to the economic hit men.

The really sad part is that much of the Irish contribution to the package comes from the National Pension Reserve Fund, which should have provided pre-funding public sector pensions from 2025 onwards.

This money is topping up sixty seven thousand million of EU funds, and is in addition to the one hundred and ten thousand million Euros already provided through the ECB liquidity mechanism. By any standard these amounts add up to a significant chunk of change for a relatively insignificant portion of the whole.

Interest payable on the loans is going to cost Irish taxpayers around E10,000 million per year.

The cost of the bailout will be nearly €60,000 per household, but on top of this, each household will have to pay an extra €2,000 in tax to pay for the interest alone – every year. The huge interest rate repayments will cripple the country. Inflation, or default, if not both appear to be the only saviour.

Regardless of the pity we have for those that use the Euro the currency is not going away. The implications of a Eurozone break up are far too great for even the most anarchistic of politicians to seriously contemplate.

There is a chance that a member may decide, enough is enough and make a break for the exit.  Realistically the only real way forward is complete fiscal and political union.

The fact that the German constitutional court has already ruled this out will not stop them. Eventually most of Europe will come under the direct control of the ECB without any democratic recourse.

1848 The Latin Currency Union:
"Before long, all Europe, save England, will have one money".

That was written by Walter Bagehot, the Editor of The Economist magazine, 130 years ago. At that time Britain, and the USA, were having a heated debate on whether to adopt the then single European Currency concept.

To be clear, currency union itself is neither “new” nor “evil”. After all, it was a currency union of sorts that lead ancient civilisations to produce coinage of standard weights and purity, if not portraits or design. The problem is few currency unions have worked without political and fiscal union.

In 1848 Latin monetary union was attempted in Europe. Lead by France, alongside Belgium and Switzerland, a bimetallic standard (silver and gold) was initially based upon a promise not to print more than six Francs of paper for every citizen and a fixed rate of silver to gold of 15 ounces of silver to one ounce of gold.  
Aside from this basic structure there were few rules on money supply, this was left to the market. If money were needed a merchant would simply turn up at the mint and have his coins struck. Further, when the price of the metal rose, it was often exported (smuggled) to more efficient areas of use.

Soon Greece, Bulgaria, Italy and even Venezuela joined. Driven by French geopolitics and their need to have a currency to match that of Britain. The Union officially lasted as late as 1926, but in reality it had ceased to function before World War One.

The International Monetary Conference in 1867 debated the introduction of a common currency across twenty nations using this model but little came of this.

Scandinavian Union
Shortly thereafter a Scandinavian union was attempted between Sweden, Denmark and Norway. The standard worked well, but when Norway became independent Sweden dismantled the union.

German Customs Union
Possibly a catalyst for World War Two, German monetary union, the Zollverein or German Customs Union, was a major irritant to France after the treaty of Versailles. Before the downward spiral of Weimar hyperinflation there was a chance to help Germany, not least of all by lowering restitution, but also by advancing loans. France who demanded an end to the Customs Union vetoed these loans, along with any debate on lowering restitution.

It is also interesting to note that quite often France is held up as being the root cause of World War Two. The argument goes that French demands for vengeance were so great they would not consider allowing a single Gold Mark go unpaid. As Sir Eric Geddes said of the French, “they were determined to squeeze the Germans until the pips squeaked”.
While this is indeed true, and again a “part of the body of knowledge”, it was American refusal to lower British debt repayments to them, that in turn, stopped us lowering that of the French, and thus the Italians’ and on down the line to Germanys restitution.

For a perspective, German restitution for WW1 was set at around $12 Billion 1920 dollars. A similar debt today is $2.4 Trillion. Compare that to the estimated cost of ALL wars from 2001 to 2010 of “only” $1.1 Trillion.

The German customs union is probably the only monetary union ever to work without a political and fiscal union. Could this be a lesson to France and the other Euro members today?

They say politics is a tough game, but clearly the central banks are the most ruthless of all.

An American & European
currency union.
The United States congress debated currency union with Europe, going as far as designing and minting patterns, or test strikes, of two designs. Both Charles barber and George Morgan, eminent engravers, designed coins. Although the reverse remained the same, a five pointed star, thus the name Stella. The obverse, or heads side differed and are known as the Flowing Hair and Coiled Hair type.

In the first year of issue, 1879, the coins were presented to Congressmen and Senators for approval. As four dollars was the going rate back then it is widely believed that many of these examples were spent into circulation by government officials using prostitutes.

In 1880 mint officers secretly struck another one hundred or so coins for sale to collectors. The 1879 flowing hair is the highest grading coin in MS67, and only 27 coins grade MS66.

Fetching over half a million before the crisis the Stella is seldom seen at auction with sales occurring privately between dealers and their best clients.

According to the Red Book 425+ coins were struck over two years. The PCGS and NGC population and census reports have 354 and 254 respectively, giving a population of 608 coins. This disparity mainly occurs through dealers resubmitting the same coins over and over in the hope of a higher grade, known as “cracking out”.