9. Five People in the World Understand Gold and They Have Six Different Opinions

FIVE PEOPLEIN THE WORLD
UNDERSTAND GOLDAND THEY
HAVE SIX DIFFERENT OPINIONS

MAINTAINING YOUR SANITY WHEN GOLD DROPS $45

During an earlier lifetime I spent several years as assistant to Morris Colliers, an elegant Southern gentleman who kept an inventory of charming aphorisms and proverbs that he smoothly produced in a blink.

“If you hang by the neck long enough, you’ll get used to it,” was one of the old gent’s favorites and it got stuck in my consciousness as well,

My wife says that watching the gold market during the month of April was like, “hanging by the neck” and, she claims, “That’s what reminded you guys of the proverb.”

There’s much wisdom in the “hanging by the neck,” maxim, but there are some serious exceptions.

For instance, you’re in a commercial airliner and it hits an air pocket. It falls 3,000 feet before the pilot regains control. He announces that the plane is encountering “heavy turbulence.” To me, that translates, “This plane is about to crash.”

You can fly hundred times a year for fifty years and never get accustomed to one of those moments of shear terror in the sky.

It may not quite match the drama of nose-diving in a Boeing 767, but the gold buyer, too, never “gets accustomed” to as sharp a break in the gold price as we experienced in April.

It’s a different kind of scary, but it’s scary nevertheless.

While it’s still fresh in our minds let’s take a look what happened to gold in April, 2004.

The month started out with the price of gold at about $430. On the last day of April, gold was approximately $385.

A drop of $45 per ounce, 10.37 percent! That’s a significant hit, and the volume of phone calls at Camino Coin increased as prices went lower. The first wave of questions were reasonable.

“Doesn’t gold usually shoot straight up when there are wars and strife?”

“How come the price of oil is at highs, but not gold?”

Some callers seemed angry. It was as if gold had betrayed them. Others, suggested that their original decision to buy gold might have been ill advised.

In every instance, to a man, they wanted to talk. It was not long before their fears and panic became evident.

“How much lower do you think the gold can drop?”

(I never answer that one.)

“What about selling now and buying back at the bottom?”

(I had never even heard that one before last Friday.)

“Maybe I should have bought Krugerrands instead of St. Gaudens?” or

“Maybe I should have bought St. Gaudens instead of Krugerrands?”

Where I had the time I went back to basics:

•Why they should own gold?

•Who are the enemies of gold and why?

•Which gold items are the best to hold?

•When do you sell gold?

“Blumert, you sound like you’re at the pulpit giving a sermon.” observed George Resch, my long time associate at Camino Coin.

I started thinking. (Very dangerous) What’s wrong with a sermon directed to the disappointed gold buyer? Show them the brighter side. Reveal the history. Explain that fiat money is immoral.

George Resch was right. I was sermonizing and, most of the callers admitted that they felt better after our visit. I felt better too. Returning to “basics” does it every time.

If you have read this far, you have been “sermonized” as well. But, any sermon to be judged as valuable, must close with “hell and brimstone.”

1.If you are a novice playing with Precious Metals in the Futures Market, you shouldn’t be there, GET OUT NOW.! See “The Risks You Run When You Own Gold, and the Danger You Face If You Don’t.”

2. Some newcomers succumb to the trap of “getting even.” As gold goes lower, they get belligerent. “They’re not going to shake me out of the market! Buy me two hundred ounces. If it goes lower, I’ll buy more.” See “The ‘Hardly Noticed’ Rally in the Gold Market.”

3.A long term commitment to any market requires mental gymnastics. “Yes, the gold is down 10 percent, but look at the losses in other markets,” See “Why in Heaven’s Name Isn’t Gold Moving Higher?”

Even though you never get used to a market breaking down like it did in April, living through it does help build scar tissue which makes it easier to handle next time.

I was discussing this complicated dilemma with long-time customer, Prospector Mike, who, when faced with a dismal precious metals market, closes the door of his den, goes to the calculator, adds up his total ounces of gold, silver, and platinum and then basks in the fact that, “it’s all paid for.”

Needless to say, old Prospector Mike could be a Poster Boy for the Sound Mental Health Society.

May 7, 2004

THE POWER OF AN EIGHT DOLLAR RISE IN THE PRICE OF GOLD

(I write this article defying Blumert’s 7th Law, which warns that the moment that you report a favorable move in a market, it will be violently reversed, often with 24 hours.)

God is good; truth and justice prevail; the bad guys are in disarray; and the pollen count is at summer’s low.

Everything is falling into place.

Oh yes, did I mention that the price of gold was up $8 today?

I was two weeks late submitting copy for “Burt’s Gold Page.” When pressured by Editor Rockwell, I explained that I couldn’t find my pen. His withering glance was the one he reserves for neocons.

I just found my pen—Gold is up $8.

Those of us who comment about the gold market suffer “writer’s block” just like other writers. I suspect that this $8 rally will dissolve all blockages and articles telling us WHY it all happened will inundate us.

I enjoy fiction, and look forward to the varied opinions.

What I cannot countenance are those who actually CLAIM responsibility for the rally. These bozos believe what they tell you, but should be kept under house arrest.

They seem oblivious to just how tiny is the pro-gold constituency. They should know that everybody else is against.

This rally is “catch-up.” The weakness of the US dollar against other currencies and the disastrous results of insane economic and political policies can no longer be suppressed.

The level of fear may increase, but it is at the expense of US prestige. Mandating prestige may work for a while, but eventually, market forces prevail and that’s why gold was up $8 today.

The world is witness to ruthless empire building reminiscent of Britain in the nineteenth century. With one major difference; the Brits did it with style.

Picture David Niven, in starched uniform and pith helmet, oblivious to the 130 degree temperature, calmly doing-in the Fuzzy Wuzzies.

There are some great movies depicting English presence in Africa, India, and North America. Gunga Din, Four Feathers, and in recent days, The Patriot. I think I’ll do an article about this genre of film.

One prediction I feel safe in making—there will be no future movie classics dealing with the war on Iraq.

December 16, 2006

LOUISE ALLOWED ME TO MAKE MY LETTER TO HER PUBLIC

I thought you might like to see my response to a lady with limited assets who was considering buying gold for the first time.

Hello again Louise.

If you want a dismal view of the world, talk to a gold dealer. The sad truth is that he is usually right, although his timing on when events unfurl may be a bit off.

These are difficult times and we are all getting poorer. And things are not going to improve any time soon.

Aren’t you delighted to hear this good news?

In the old days, if you inherited $10,000 but didn’t feel comfortable with stocks, bonds, real estate, etc., you kept the money in a savings account and although there wasn’t much return, you were neutral.

When you needed your $10,000 it was there, buying power pretty much in tact.

Today, if you hold dollars in a money market, or savings account, there’s no neutrality! The risk in holding dollars is insidious. The fact that the account book continues to show $10,000, gives false security.

As to buying gold, it never fails that after you place your first order, the price will drop the very next day. (If it doesn’t happen on the first order, don’t get smug, it will happen soon enough.)

So, pick your poison. Lose the value of your money without fanfare by holding dollars, or buy some gold and learn to live with the ups and downs.

The inexorable flow of history contains the answer; at some point in the future, the dollar will be dust and gold will glisten.

Here’s another way to view it; Gold is often thought of as “insurance.” If you insure your car, your violin, or your life, you don’t want to collect on that policy.

You pay the premiums, but when it’s done, all you have is a vague recollection of something called “peace of mind.”

Not so with gold! Gold is the ONLY insurance where YOU hold the premium.

If you view it this way, holding gold is a “no lose” situation.

OK, these time-tested rationalizations should help you survive, without pain, every time the price of gold gyrates.

There will always be ugly days in the gold market, when the market seems to be saying, “gold is garbage.”

If one of those days puts you in a panic, call me and I promise to hold your hand.

If I’m more worried than you, then you’ll hold my hand.

Burt

March 20, 2003

I LISTENED TO WHAT I WAS SAYING AND GOT SCARED

Generally speaking, nobody pays any attention to me. My wife never listens, and my employees have learned to nod and smile at appropriate times—but they don’t listen either.

When I talk to some customers, their eyes glaze over after 90 seconds, and often, one will doze off.

None of this deters me, however, as I no longer gauge success by the level of impact on the listener. I grade myself after each customer encounter.

(“I was pretty good even if he didn’t react to anything,” I said. “How could I know the fellow spoke no English? I guess I’ll have to brush up on my Cantonese,” I muttered to myself.)

That was the start of a difficult day and the following actually happened. A new customer called with a challenge. He never really gave me a chance to present my views (another non-listener). I hope he reads what follows:

New Customer: “What would Camino Coin’s price be for 20 ounces each American Eagles, Canadian Maples, and Krugerrands? I want the order prepaid and insured. Please fax me the net price and if you are low dealer, you’ve got the order.”

Burt: “Sir, how many dealers will I be competing against?”

New Customer: “Let’s see, you’re the 6th or 7th and I’m calling one more.”

I worked up some competitive prices and sent him a fax. A 60-ounce gold order is nothing to sneeze at.

I haven’t heard from him yet, so I presume somebody beat my numbers. Being competitive is one thing, but if a dealer is always the cheapest, he could be courting disaster.

I agree with the New Customer that price is very important, but there are other things the buyer might want to consider:

(1) Who is he dealing with on the phone? Is it a commission salesman? Whom does he talk with if there’s a problem? Most dealers don’t want to rip anybody off. It’s when a problem comes up that you find out what kind of folks you’re dealing with.

(2) How does the company handle a lost shipment? Yes, all parcels are insured, but this is still a toughie. There’s no standard industry policy I know of, but the customer can judge the dealership by their demeanor when it becomes clear the coins are lost.

(3) What is company policy regarding payment? Do they require “good-funds?” If a personal check is OK, how long before merchandise is shipped?

(4) Does the company maintain an inventory, or are all shipments coming from a 3rd party? (There is nothing necessarily wrong with 3rd party fulfillment, but the buyer should know it.)

(5) What is the company’s buy-back policy?

(6) Is the company concerned with “Privacy Issues”? (This is a tough one to deal with by phone, but while chatting, you can get some feeling for the dealership’s sensitivity to your privacy.)

(7) Are they on your “wave-length”? Have they heard of Ron Paul or Harry Browne? The salesman doesn’t need to be a supporter of the Mises Institute—it wouldn’t hurt—but he should have some comprehension of “sound-money.”

(8) Are these fellows selling me bullion coins today at competitive prices only to get me in their file to pressure me over rare coins next time? Also, are they trading or selling my name to someone else?

Is this asking too many questions? Hell, no.

Let’s see, 60 ounces of gold, that’s about $22,000. You used to be able to buy a house for that. To the smaller buyer, one ounce of gold is a big deal.

Don’t ask these questions after the fact.

Now that I’m on a roll, and you may still be listening, here are some other pearls. Actually, they are more like “No-No’s.”

When buying bullion gold, do not buy medallions (privately minted). Only a government can issue coins (money). I am not being a statist here. All I’m concerned with is liquidity for the customer. Coins have it, medallions don’t.

Avoid any new government issues, even bullion coins. For example, the US Mint was considering a pure gold American coin to replace the 22-carat Eagle. If they do and it’s as nice as it sounds, let the new item establish itself in the marketplace before you buy one. Liquidity again.

Avoid any proof or mints sets produced by any mint, especially the US Mint. These items are over-priced and can usually be bought a year or so later in the “after-market” for less than the original issue price.

Don’t get suckered by special series of coins or medallions. I have a pal who loves antique automobiles and purchased a series of 100 medallions honoring these junkers. With what they cost him, he might have bought a real Mercedes.

When selecting a coin dealer, his reputation should always be top priority. But be sure you have the right dealer for the right occasion. You may have a terrific coin shop in your neighborhood, but he may not be the right fellow to sell you 10 Krugerrands. Division of labor.

Finally, never do any business by phone—unless you initiate the call.

Wait a sec: I think I already told you that last week. My apologies. Now I know why people stop listening.

February 21, 2003

NEW GOLD BUYERS BETTER READ THIS!

After a glittering rally, the gold market sputtered this week and took an ugly turn.

“The minute I buy something, the price always goes down,” a new gold buyer complained.

In less than 24 months the price of an ounce of gold went from $253 to $380, an amazing increase of about 50 percent. In the last few trading days, the price fell sharply to $353—a drop of 8 percent.

Some of the yellow metal’s new fans and some old ones as well were stunned. Everything pointed to “onward and upward” for the gold price. The increases were so plausible: the weakness of the US Dollar, the collapsing equity markets all over the world and the sickening plunge to war.

How could the price of gold come down so sharply, so quickly?

Gary North tried to explain people’s reaction to market disappointments with what he called “The Confirmation Blues.” It goes something like this:

In order to purchase their first ounce of gold, the new customer has to overcome a lifetime of convention. This requires a fresh view of history; adopting new gurus, a revamping of their family’s attitude toward savings. And, the recognition that failed government policy is usually the root of many of the problems.

When the new customer purchases that ounce of gold he is voting, “No.” No, to stocks and bonds. No, to paper money, No, to just about everything.

There’s an element of courage here and the new buyer NEEDS the market to confirm that he made the right decision. If the market goes up, all doubts disappear. The sharper the increase, the greater the confirmation.

Sadly, it doesn’t always work out that way. Instead of going up and confirming, the price drops, leading to “The Confirmation Blues.” It’s not just losing dollars, it’s an attack on self-worth.

One could suffer the Confirmation Blues in any investment area, but because gold is so counter cultural, so “out of the main stream,” suffering the Gold Confirmation Blues is the most virulent form of the virus.

There is no easy antidote to the Blues. If the market is slow to recover, eventually the pain dulls. “If you hang by the neck long enough you get used to it,” to quote Southern wisdom. Better yet, when the price goes up about 5 percent over cost, immunity builds. Bouts with the Blues became less frequent and painful.

In the meanwhile, I respectfully offer some band-aids to help you deal with the Blues. (I generally charge $4 an hour for this counseling, but, I waive the hourly fee for LRC readers.)

As an aside, a customer I had known for years asked if I would appraise a box of foreign coins and at what cost. My response was the little joke about $4 an hour. To which he responded, “It won’t take an hour.” I told him not to worry, that I would pro-rate.

I guess he was telling me the value of my time.

1.Don’t watch the price every minute.

2.Keep in mind that the King doesn’t like gold, never has, never will. Remember that the King is a powerful enemy to the gold market and lower gold prices can often be placed at his door. (See my article “The King Doesn’t Like Gold.”)

3. In the US gold is traded at the Comex, a futures market. This means that all trades are heavily leveraged. It doesn’t matter what the commodity, technical factors like “open interest” and “short squeezes” become key elements in price changes. When trading is leveraged, the buyer of 100 ounces of gold, for example, puts up a fraction of the total value. This leads to speculation and exaggerated price moves both up and down.

4.Don’t panic. Well, panic if you must, but don’t sell anything while you’re panicked.

5.Keep in mind that you have bought “insurance” with your gold. In a way, if gold is a fever thermometer telling us how sick we are, we don’t need $1,000 an ounce gold. This kind of thinking leads to sound mental health.

If all of the above fails and the gold price really worries you, call me and I will hold your hand. Unless I’m more worried than you. Then you can hold my hand.

March 7, 2001

HOW MANY DRACHMA DO I GET FOR A REAGAN?

Please don’t tell me this government doesn’t know how to bury a President.

There are critics who contend that Reagan’s eight-day, bicoastal journey to the next world never came close to the medieval pageantry practiced by our British brethren when they crown a King, for example.

For all their pomp, though, the Brits know it’s pure “show biz.” Simply Shakespearean theatre. Nobody’s sacrificing their life for the new king, nor are they promoting a Crusade to smash the infidel. (Such assignments are reserved for George W’s partner-in-crime, Tony Blair.)

The Reagan Event was more than a Hollywood epic: it was pure nationalism, elevating a B-grade movie actor into a mythological being, noble, kind, humorous, tough, principled and God-fearing, a giant worthy of supreme power. He could fight you “tooth and nail,” but he was never mean-spirited.

He was—a god and everyman at the same time.

Hundreds of political hacks, all wearing $3,000 suits, trudged from one TV camera to another giving testament to the great man and telling their favorite “Dutch” anecdote.

I was getting groggy, but I think I heard the following. If so, it deserves the “Windbag Prize”:

“Ron and myself were sitting alone talking about matters of state when Gorby entered the room and his fly was unzipped. We were on the brink of WWIII, but Ron said something so funny that Gorby nearly fell to the floor laughing, and the crisis passed.”

The days droned on, and the incessant stream of testimonials never seemed to end. All the while, the main theme was jack-hammered home: Great men of power are ecumenical. They cut across party lines: Reagan. FDR. Lincoln.

Even die-hard California Democrats who still gag when they see Bonzo the chimp in late night movies, bought the package and now, like sleepwalkers, have come to terms with Reagan’s surpassing greatness. Or at least they did for the eight days.

Things have quieted down. It’s Sunday and the clean-up crews are sweeping up the confetti. My regular soap, preempted the entire week, returns on Monday. Thank the Lord.

It’s as if we’ve been on holiday, and now we’re back to life’s banalities.

Back to those two bloody wars.

Back to watching Americans stumble through minefields, blindly following George W’s leadership.

Back to politics as usual and the tedious presidential campaign.

Come to think of it, it wasn’t really a holiday for the rest of us. This epic Reagan event was contrived to allow the state’s present administration, its camp followers and the media (if there’s a difference) to sort out the lies and deceit.

Ronald Reagan suffered two deaths, the first with the coming of his dementia. The second gave “Them” the opportunity to place him in the pantheon of state religion, and—

It provided the much-needed “breathing space” as indicated above.

But wait . . . while we were all teary-eyed and ecumenical, a seething power struggle was being fought out of camera range. The Reagan Loyalists, not satisfied with a federal airport carrying the great man’s name, now required his imprint on the money.

The “Ronald Reagan Legacy Project” (there really is such a group) began its efforts years ago. In addition to a government Reagan memorial in every county in the United States, they favor a Reagan $10 bill, replacing Alexander Hamilton, who was not even a president, they argue.

Others, proud to compare Ronnie with FDR, feel he should supplant that great welfare-warfare president whose face has dominated the dime for almost six decades. Rumor has it that Nancy, outraged at the thought of “Ronnie’s” likeness on small change, torpedoed the plan.

Mitch McConnell (R-KY), number two man in the federal senate, is pushing for the Reagan $10. Not to be outdone, “former libertarian,” Dana Rohrabacher (R-CA) is doubling the ante by proposing a Reagan $20 bill.

Congressman Jeff Miller (R-FL) is the Reagan 50-cent piece “point man.” He wants to eliminate JFK’s countenance from the half dollar and substitute Reagan’s image

(There are still customers at my coin company, who, when buying US silver half dollars, insist that 1964 Kennedy halves be EXCLUDED from their order.)

I suspect that the $10 Reagan may prevail, with one of those prettified (or is that deified) portraits that now adorn the fiat dollar in the various denominations.

All of this reminds me of my father Max’s strong views about retaining the “dollar” as the name of our currency. He felt it was a mistake.

For those who have not suffered amnesia of the monetary past, the US dollar once had terrific buying power, thanks to gold and silver and carried a worldwide prestige unlike the current buck.

Retaining the name of something that no longer exists leads to confusion. Other countries think nothing of knocking off zeros and renaming their currency.

“Let’s call it a ‘Schmollar’,” Max used to say.

Well, here’s my plan: Let’s eliminate the word, “dollar,” no longer defined as a weight of precious metal and, in its place, substitute “Reagan.” This will silence the combatants vying for their favorite place for Reagan’s face.

Ronnie will be on every denomination of coin and currency.

It won’t take us long to get accustomed to hearing the following while people exchange currency or make change:

“How many drachma to the Reagan?”

“Can you give me two Reagan tens for a twenty?”

“I need three 25-cent Reagans for the meter. Can you break a Reagan buck?”

“I’ll bet you a 5 Reagan that George W wins the election.”

Who knows, the “Reagan” might circulate for eternity.

Fortunately, to quote a former, prescient French finance minister, “eternity in monetary affairs is of short duration.”

June 14, 2004

THE ONLY TIME THE US MINT GET’S IT RIGHT IS WHEN THEY DO IT WRONG

Speaking of stupidity, I’ve been there and the US Congress wins awards for theirs.

I never thought I’d be drawing a line in the sand at Radio Shack.

“Why must I fill out anything? I’m buying the digital telephone with cash,” I said through clenched teeth. “It shouldn’t matter that I’m prepaying for phone time.”

“I don’t care how you pay. If you don’t fill out the form I can’t sell you the phone. It’s a rule,” Assitant Manager Ned responded, not realizing we were hurtling toward a Constitutional confrontation.

“OK, I’ll give my name and address but I refuse to fill in ‘Occupation’ on Line 2.”

“No ‘Occupation,’ no phone,” said Ned.

Ned was one of these “virtual” young people I seem to encounter all over these days and I trust he will worry a bit when he reads how I answered, ‘Occupation’ on Line 2: ‘Luddite Assassin, Specializing in Low-end, High-techers’.”

All of which started me thinking about “Occupations.” I formerly held the belief that what one did for a living told everything about him like the old quiz show, “What’s My Line?” Once the guest’s occupation was finally revealed, there was little else we needed to know.

I’m not so sure about that now. After all, one’s occupation is not ordained, but includes luck (good or bad), ambition (often misguided), compromise (selling-out?) and, most significantly, decisions made by others.

To demonstrate how unpredictable the career path can be, I submit this brief biographical note. In 1951, I was a twenty-two-year-old determined to avoid the draft and the certain death that followed in Korea. There was nothing ideological about it. It was fear and cowardice, pure and simple.

Draft day closed in and it was like awaiting the executioner’s call. Finally, fate intervened. The Air Force, suffering a severe shortage of pilots, cut their enlistment term from four to two years to attract aspiring aviation cadets who were reluctant to enlist for four years, fearing they might wash out of flight training. The two year deal was terrific and I was first in line the next morning at the Air Force Recruiting Office.

I breezed through the rigid Flight Training medical exams (it was amazing how much my general state of health had improved since the Draft Board physical exam I took weeks earlier) and I began to think career.

Fantasizing:

The gorgeous blonde asks, “What business are you in?”

“I’m an Air Force jet pilot,” I modestly admit.

Years later, now grey at the temples:

The gorgeous blond asks, “What business are you in?”

“I’m a commercial airline captain,” I modestly admit.

Not bad as “occupations” go, especially to a twenty-two-year-old.

Unfortunately, the Air Force decided that my flight training would be as a navigator/bombardier. That didn’t offer much promise for the future, as one could hardly go through life listing “bombardier” as an “occupation.” Although Ned at Radio Shack might have been impressed.

Pay no attention to “occupations.” If you want to know the “real person,” check out what he or she does at leisure. A friend, Doc Arnold, makes his living as a gynecologist and his waiting room is always filled to capacity. A few years ago his wife, concerned that he was becoming too involved with his work, pressured him to take up some hobby. She had no idea what her advice would lead to.

It may be hard to believe, but friend Arnold actually reads insurance policies for recreation and exchanges Christmas cards with the US Bureau of Weights and Measures. It goes without saying that he is the dullest fellow in the county, unless you need help deciphering the clouded language of your Blue Cross Health Plan.

I must confess that I, too, have a hidden interest, which approaches addiction. And causes great concern to family members. They bring my meals on trays as I sit glued to the TV watching tapes of Congressional hearings on C-SPAN. Don’t mock. Once you get to know the actors and capture the rhythm of the dialogue you realize you’re witnessing high drama.

It hardly matters the topic: the pollution of streams in New Mexico, or the funding of the FBI, the panels are always the same; boring testimony, prepared by boring lawyers, read by boring people. Fortunately, most of the transcripts and prepared testimony never again see the light of day. Only Congressional staff members are forced to take the material seriously.

I’ll admit that getting anything out of watching these bozos is like learning to enjoy caviar. It’s sort of an acquired taste. But, should you ever forget how pompous, arrogant, and dangerous government could be, tune in to some Congressional hearings and “watch them make sausage.”

Which brings us to that exciting time of the year when the “Making Sausage Congressional Awards” are about due. 2002 has produced some memorable events and here is a peek at some of the award highlights:

BEST VOTING RECORD FOR AN INDICTED CONGRESSMAN
—Rep. James Traficant, D-OH

WORST VOTING RECORD FOR A NON-INDICTED SENATOR—
Sen. Robert Torricelli, D-NJ

LIFETIME ACHIEVEMENT AWARD
—Sen. Strom Thurmond, R-SC

Sen. Thurman nicely symbolizes the disintegration of the Republic over the past four decades.

The Democrat and Republican Congressional Leadership announced the striking of a gold medal honoring Rep. Ron Paul, R-TX. The medallion is inscribed as follows:

“We Deeply Respect You, But Hope You Soon Return to the Practice of Medicine.”

And, finally, the “Making Sausage Award For the Best Congressional Hearing of 2002.”

This award goes to the Congressional proceeding which best portrays the waste, arrogance, and ineptitude of a government program.

The winner is—the US Senate Appropriation Committee’s Treasury Subcommittee Hearing on the Sacagawea Dollar.

LRC and Mises.org readers know a great deal about the “disastrous Golden Dollar.”

The Subcommittee hearing took place on Friday, May 17, 2002. The critical matter at hand was the Sacagawea Dollar. Why was it not circulating? What could be done to increase demand, and the BIG question: Should the program be continued with additional funding?

There was no debate, little disagreement, and few accusations with just a wee bit of blame placed on the Fed. The room reeked of bipartisan embarrassment.

Here are some highlights from the hearings:

Senator Byron Dorgan (D-ND), Chairman, very much in favor of the Sacagawea because the Shoshone Indian was from his home state, made some telling observations:

“I never received a Sacagawea coin in change.”

“My contention is the program is a failure.”

“We must determine what must be done to turn the situation around.”

“The banks haven’t seen much demand for them,” one expert said. “Retailers and businesses say there hasn’t been much demand for them.”

Prime witness, Mint Director Henrietta Holsman Fore, is a charming lady, clearly someone the senators were not about to attack.

With pride she reminded the Senators that under a recent deal ten million Sacagaweas would be distributed at NASCAR racetracks this year. (At the end of fiscal 2001 over three-hundred-twenty million coins were in storage.) She implored these important men to support any program to get the federal government to use the coins more.

It’s Fore’s opinion that the Susan B. Anthony Dollar is part of the problem. On occasions when Sacagaweas are ordered from the Fed, they come mixed with the despised Susan B. Anthony. To solve this problem, Fore advised that the Mint is considering removing the Susan B. from circulation.

A highlight of the hearings was the appearance of Amy Mossett, wearing traditional Indian garb. She testified that on the cab trip to the hearing she tipped the driver a Sacagawea. Dismayed, she reported that he didn’t know what it was.

There is a tag line to this Sacagawea story.

Earlier this month it was reported that two US Mint employees were charged with stealing and selling five $1 Sacagawea coins that eventually resold for $138,000. That’s an average of about $28,000 each. What’s that? A coin that they can’t give away fetches five figures?

The five coins were mint errors. In this instance the Sacagawea planchet (coin blank) was struck by a faulty die. The front (obverse) of this die contained a Washington quarter. The underside (reverse) of the die held the Sacagawea. The result was a “mule,” an error of such consequence that many coin dealers would sell their children into slavery just to obtain one.

There’s an irony here. Since they ceased producing silver coinage the only way the US mint can make their products desirable is to screw them up.

July 8, 2002