Hugo Salinas-Price, a hard currency advocate, and the founder of Mexico’s Elektra retail chain explains in the following guest post how he became a gold bug.
How I Became a Gold-Bug by Hugo Salinas Price
My father was Hugo Salinas Rocha -“Salinas” was his father’s surname, and “Rocha” was his mother’s surname; the custom of using both parents’ surnames is universal in Latin America. Father was a successful merchant in Mexico City, and in the 1930’s he ran a store in downtown Mexico City. The store belonged to a company founded by his father, Benjamin Salinas Westrup and to the partner he took into the business, his brother-in-law, Joel Rocha Barocio; the company name used their initials: “SyR” (the “y” means “and” in Spanish).
I was born in 1932. As a little boy, I loved to play in my father’s store after school hours, and one afternoon when I was perhaps eight years’ old, one of the salesmen took two gold coins out of his vest pockets (men wore vests in those days). They were the large, 1.2 ounce gold “Centenarios” that had been minted to celebrate the 100th Anniversary of Mexican Independence from Spain in 1810. The salesman balanced the two coins on his forefingers, and placing them near my ear, he gently touched one against the other. The sound was the delightfully pure ringing of gold!
A couple of years later, when my father was driving home after the store closed, he pulled out a lottery ticket from his coat and said: “This lottery ticket did not win a prize, but it did win a refund of $100 pesos. I’ll give you the refund. What would you like to buy with the refund?” I unhesitatingly replied: “Buy me some gold coins!” So the next day, a salesman from my father’s store took me on a short walk downtown, from the store to a side-street. Three or four men in suits and wearing hats – men wore hats in public, in the 1940’s – were posted along the sidewalk, and were clicking gold coins in their hands. They were gold-traders, and clicking gold coins was their way of attracting the attention of customers.
At that time, the silver pesos we used as money could be exchanged for gold pesos at a rate of five silver pesos for one gold peso. The smallest gold coin was the $2 peso coin, with 1.5 grams of pure gold content, so each one cost ten silver pesos. Thus, on a sidewalk in downtown Mexico City, my gift of $100 silver pesos was exchanged for ten $2 gold peso coins.
I went home with my gold coins, and promptly put them in my father’s safe, to which he gave me the combination. They were really the only thing of value in the safe, and from time to time, I used to open the safe to examine the beautiful gold coins. So that’s how I became a gold-bug at age 10.
When I was 14, in 1946, I was taken to school to my mother’s home-town in the US. The only person I knew there, was my maternal grandmother, but everyone knew who I was – the son of Norah, the Price girl who married a Mexican in 1931 and went off to Mexico to live. I was at school for three years of high school, and very much enjoyed my time there.
During my years at school it never crossed my mind to think that of all the people in that small town, I was very probably the only person – and only a youngster, at that – who had ever seen a gold coin, let alone owned one. Americans are still generally unaware of gold money, since they were deprived of it in 1933 by FDR, and only allowed to own gold again in 1971, thanks to the efforts of the great American Jim Blanchard.
What happened to my little stash of ten $2 peso gold coins? I still have them, after all these long years – I am now 84. Slowly but surely, they are growing in value, and they are still obtainable today, in exchange for $1,523 pesos each as of this date. These are really $1,523,000 pesos if we take away the artificial revaluation of our Mexican money in 1993, when every $1000 pesos was converted into $1 “new” peso. So my gold coins went from $10 silver pesos in 1942, to $1,523,000 paper pesos in the course of about 74 years.
The original post is at Hugo’s Plata website, How I Became a Gold-Bug.
I am pleased to have Hugo as a personal friend. His knowledge of history is nothing short of amazing.
Hugo is a tireless promoter of sound currencies, and President of the Mexican Civic Association Pro Silver, A.C. He is on a mission to get Mexico to adopt a silver coin as legal currency.
We wish him success.
Mike “Mish” Shedlock
Awesome.
Goldbugs are funny. Always have been, always will be.
Becoming a gold bug at ten makes some sense. Waiting until your sixties…maybe not so much. The problem with being financially conservative is that you always tend to buy at the top…after you are sure….after everyone else has already bought in. Conservatives do not make good gamblers.
Great story!
March 4, 1933 :
Franklin Delano Roosevelt is inaugurated as president of the United States. In his inaugural address, with unemployment at 25% he famously tells Americans they “have nothing to fear except fear itself!”
April 5, 1933 :
Barely in office for a month, FDR signs Executive Order 6102 banning the private ownership of gold. Everybody has to surrender their gold because somebody issued a decree that says they must do so. America hasn’t been the same since.
December 5, 1933 :
Ratification of the 21st Amendment, ending the Prohibition Era. Everybody could legally go get drunk. Why, because an Executive Order said so? No, because they MANAGED TO AMEND THE U.S. CONSTITUTION, that’s why.
Confiscating your family’s lifetime of savings was easy. It’s allowing you to drink while you pondered the future that was the hard part.
Democrats to this day regard this FDR fellow as a great president.
“In his inaugural address, with unemployment at 25% he famously tells Americans they “have nothing to fear except fear itself!”
“Barely in office for a month, FDR signs Executive Order 6102 banning the private ownership of gold. Everybody has to surrender their gold because somebody issued a decree that says they must do so. America hasn’t been the same since.”
We’ve never had 25% unemployment since!
We haven’t calculated UE the same way since. If I work three hours a week I’m considered employed. Underemployment is an even bigger scam.
Similarly, a person with an expired passport or some other irregularity that prevents their passage through a US Port of Entry is considered “deported” by the Obama administration. Then they go out and proclaim an absurd number of “deportations” they have effected when they have actually done no such thing.
President Dimwit becomes the “Deporter-In-Chief” as the hapless mainstream media goes right along with the wordplay around “deporting” someone, so that he is credited with being enforcement minded about US immigration laws. Nothing could be further from the truth, but the ruse works and bogus data gets set out for consumption by the low information types who vote for people like Hillary.
When FDR was governor of New York he said “Hoover would make a great president”.
When Hoover was president the democrat congress blocked most of his efforts to turn around the Depression. When FDR took over those same programs were adopted but FDR got the credit. All clever politicians take credit for everything they can including things they didn’t do and things that would have happened anyway. FDR thought Stalin was a great leader.
And if the political hacks keep refusing to count unemployed people when calculating unemployment we will will eventually get a rate of 0%. It still amuses to watch people take as gospel the economic data oozing out of DC.
Well, that’s entirely possible as they only count people who are looking for a job, and they are fewer by the day….they have alternatives now, being entitled and all. The best part will be when we are down to only two having viable jobs and suddenly a third is hired. Suddenly a 50% increase in employment! Boom times!!
The ral employment rate is about that right now, and most new jobs are lousy ones.
” He is on a mission to get Mexico to adopt a silver coin as legal currency.
We wish him success.”
uh-oh. Let’s hope he doesn’t suddenly become “suicidal”, when it looks like he might have succeed.
I hope Mexico sets the example for the rest of the world with a silver coin. I hope the rest of the world follows their good example.
Through history.
Tyrants hate guns and arms in the possession of the people.
Tyrants hate gold in the possession of the people.
Tyrants hate those who speak out.
Tyrants hate those who cherish their privacy.
Tyrants hate those who expect them to live under the same laws they want for everyone else.
And why do obama and Hillary have do much in common with tyrants?
You are confused. Tyrants only punish us for our own good! Eat your peas! Hillary “loves” us.
You spelled Obama with a lower case o. Do you want to go to prison?
_aleph_
Gold and silver may truly become money again only after WW3.
https://techcrunch.com/2016/10/25/ubers-otto-self-driving-truck-delivers-its-first-payload-50k-beers/
Automation in action …
If Mexico, or any other country, does not first fix the fraud and corruption, then anything can be devalued. The first fix for corruption is to eliminate the career politician. Trump is the only one calling for term-limits.
The Dilbert Dude did an about face.
Endorsing Trump
http://blog.dilbert.com/post/152293480726/the-bully-party
Another excellent blog by Adams. It is not really an “about face”, but more of an “in your face”.
“The salesman balanced the two coins on his forefingers, and placing them near my ear, he gently touched one against the other. The sound was the delightfully pure ringing of gold!”
…
That’s Gold Jerry, Gold!
That’s nice, buit it’s an emotional tale about something we should be totally unemotional about. Yes, PMs have very real value and should be part of what we own, but most of the time we’re stuck with whatever monetary systençm there is.
So the 100 “old” pesos from the lottery turned into 10 coins each with 1.5 grams of gold, each now worth 1583000 “old” pesos, a compound rate of inflation of 13% over 74 years for the mexican peso.
In 1942 the dollar was still theoretically at $35 per ounce or 31.1 grams, that is the 10 coins of 1.5 grams of gold each were worth at the time around US$17.
Currently 1583 “new” pesos can be exchanged for around US$85, so the total for 10 coins is around $850, giving a compound rate of inflation of 5.4% over 74 years for the US$.