Price: Story of a Gold Coin

As I was shuffling papers in some old files, I came across a slip of paper on which I had written down the price I had paid for a Mexican $50 gold peso coin: $717 Mexican pesos.

Judging from the price, I figure that the purchase was made sometime in 1972, when the price of a Troy ounce of gold was $46 dollars. The Mexican $50 gold peso coin contains 37.5 grams of pure gold, and 37.5/31.1 grams per Troy ounce, is 1.206: so there is 1.206 times more gold in a Mexican $50 gold peso piece, that in a Troy ounce of gold.

Thus, $46 dollars per ounce x 1.206 = $55.48 dollars as the value of the gold in the $50 gold peso coin, in 1972.

The rate of exchange Dollar/Peso in 1972 was $12.50 Mexican pesos per dollar, so $55.48 US x $12.50 = $693.50 pesos. I paid $717 pesos, because gold coins are always sold for a small percentage more than the price of bullion gold; in this case, the surcharge was for 3.4%.

Hugo Salinas Price

The international price of an ounce of gold, as of November 30, closed at $1,222.10 dollars. The rate of exchange was at $20.40 Mexican pesos per dollar. So today’s price of the Mexican $50 gold peso coin should be close to $1,222.10 x $20.40 x 1.206 = $30,067 pesos. The quote this morning is: $30,890 pesos.

So my investment of $717 pesos, made 46 years ago, has turned into an investment worth $30,890 pesos today. Looks like a good investment.

But there’s a lot more! Because back in 1993, our President Salinas de Gortari chopped three zeroes off the rate of exchange. So actually, the $717 pesos I invested turned into – $30,890,000 of the old pesos!

Mexico has a brand-new President. Nobody has any idea what the peso/dollar rate of exchange will be, when his term is over in 2024. I really don’t care, for I don’t expect to live another six years. But for the time being, I am not selling my $50 gold peso coin.

I have been long gold since I was 10 yrs old. And I still am, long gold. Amply rewarded, at the present price. However, I may live to see much higher prices.

I believe much higher prices are coming, sooner, rather than later, as confidence in the Fed and central banks in general dives.

Written by Hugo Salinas Price and published by Plata ~ December 3, 2018.

Protecting YOUR Wealth is heard at 3:00 p.m. (Eastern Time), each Tuesday and Thursday on Republic Broadcasting Network. Jeffrey Bennett, host of the program will be sharing over 60 years of his personal experience in the precious metals markets, in addition to educational commentary regarding YOUR financial health and welfare.

Call Us Today…

Kettle Moraine, Ltd.
P.O. Box 579
Litchfield Park, AZ 85340
1-623-327-1778
Email:
gold@kettlemorainepreciousmetals.com

This entry was posted in Let's Get Physical. Bookmark the permalink.