One of the best arguments for investing in gold coins that I have ever heard came from Dwight D. Eisenhower:

October 07, 2011 – One of the best arguments for investing in gold coins that I have ever heard came from Dwight D. Eisenhower: “Neither a wise man nor a brave man lies down on the tracks of history to wait for the train of the future to run over him.” And one of the best illustrations of that I know is the story of the Mexican Peso.

The tale begins with the Bretton Woods Conference in the waning days of WWII. The world was facing unimaginable reconstruction and the need for unprecedented global cooperation to establish a new global monetary order was clear. It took 14 years to get it done, but the agreement was reached to unseat the pound sterling in favor the much stronger US dollar as the new global reserve.

It seemed like a good idea at the time to tie all currency to the greenback, which after all was unrivaled for strength and was convertible to gold. Besides, the Bretton Woods summary of agreements clearly stipulated that “they should outlaw practices which are agreed to be harmful to world prosperity.” What could possibly go wrong?

Only 13 years later the US woke up to find itself in a state of insolvency. Fearing a run on US gold reserves our government unilaterally terminated the Bretton Woods accord by summarily ending the convertibility of our dollars and debt to gold. Overnight, the ‘Nixon Shock’ instituted the fiat dollar as reserve and gave America the unique power to print it.

That rightfully caused grave concern among those who adhered to the Austrian school of economics. They needed a means to protect their wealth against the major economic catastrophe they knew was inevitable. But private ownership of gold was still illegal.

Fortunately Mexico was quick to recognize a golden opportunity. Possession of numismatic gold coins, which at the time were defined as those dated 1947 and before, was still legal. So the Mexican mint dug out the dies for the 1947 “Centenario” and commenced a massive restrike. Americans eagerly consumed vast quantities of the beautiful 1.2-ounce coins, which could be bought at near bullion prices.

Today, with that train of the future bearing down on us, we should heed the lesson. The wise and brave investors aren’t waiting for it to run over them, they are getting up off the tracks and buying gold coins.

Kevin Johnson

Senior Staff Writer – GoldCoin.net