In May of 1975, I sold the Grand Imperial Hotel in tiny Silverton Colorado for six times what I had in it, and took a 30 year note back, which meant that I didn’t have to work any more. I was 41, and that didn’t work. I had sort of ‘retired’ in Scottsdale Arizona. I was driving around in downtown Phoenix and saw an old Victorian house at 362 N. 2nd Ave. It had a sign out front calling it a hotel. It was a red brick dump. I knocked on the door and an 80 year old lady answered. To make a long story short, I bought it for $50,000 and began working on it. It eventually became, a few months later, America’s first non-smoking restaurant. Also probably, one of America’s first restaurants with no menu. One item per night, take it or leave it. It worked well.
While I was working on the building, a man named Sherman Unkefer came by and asked, “You’re from Silverton Colorado, aren’t you?” I answered in the affirmative. “Then you know about gold, don’t you?” I said I guessed so. “Well, when you finish this, I have started a gold and silver brokerage down in the First National Bank building. Come on down and broker some gold and silver. It’s called North American Coin and Currency.” Sounded interesting, so I did.
That was November, 1977. I went in, and it was a small office with a couple of desks. I was told to make calls and sell some stuff. Not my idea, because if you call someone, it means you want to sell them something they hadn’t thought of buying, and you are trying to create a desire. I buy things I want, not stuff someone is trying to sell me on the phone. I wouldn’t do it, but somehow I got started without making any calls, and I still don’t and told my kids not to also. If people want gold and silver, let them call us, because they want gold and silver, and we will never attempt to sell, only answer questions if they call us, and take an order if they feel safe with us and want what we have. I also figured that a really good word of mouth reputation would take the place of expensive advertising, which would obviously have to be paid for with higher prices to the buyers. So, in 40 years, we have never called anyone nor advertised, and we have had an A + rating with the Better Business Bureau ever since.
Back then, there wasn’t much of anything to sell, other than Krugerrands, and ‘bags’ of pre-1964 US silver coins, which weighed close to sixty pounds. So Krugerrands it was. The Canadian Maple Leaf didn’t come on till 1980, and the U.S. Gold and Silver Eagles not till 1986. Here’s a few facts about the “K-rand” as we call it.
In the 1960’s, people began to get a bit worried about inflation and the US dollar. The U.S. law against citizens owning gold was abolished, and people wanted something compact to secure themselves against inflation. South Africa still had apartheid (pronounced apart-hate), which wasn’t abandoned until 1991. This discouraged many nations from importing anything from South Africa, but the U.S. had no such rule. Thus began the production of the gold Krugerrand, and I have sold many tens of thousands or more of them.
Production began in 1967 with 40,000 coins, and this number continued till 1970, when production jumped to 200,000, and in 1974 over a million. In 1978, six million were minted, and who knows how many since. The K-rand is not too popular now, because the Gold Eagle and Gold Maple Leaf have taken the luster off of them, but it is still has a rather interesting set of things, which are unique, and even funny.
The K-rand, like the American Gold Eagle, has .09 ounce of copper alloy in it to make it not easily scratched, making both weigh 1.09 ounces, but both have one ounce of pure gold in them. The name “Kruger” is the name of a former president of South Africa, Paul Kruger. The “rand” is a South African currency, so “Krugerrand” in America, might be sort of, “George Washington dollar.” Paul Kruger died believing the earth was flat. No kidding! The K-rand has a bearded engraved picture of old ‘Earth is Flat Kruger’ on the obverse and a Springbok Antelope on the reverse, and they are dated. They speak a Dutch derived language in South Africa, so the coin is from “Suid Afrika.” There are now tenth, quarter, and half ounce K-rands, like those sizes in Gold Eagles and Maple Leafs.
The Canadian Maple Leaf has no alloy in it, is .9999 pure gold, and so pure that it is easily scratched, so leave them in the tube of ten, because people don’t want a scratched or dented gold coin, even though it doesn’t subtract from its content. The k-rand is still the least expensive 1 oz gold coin, other than the Australian Kangaroo, which is simply not a popular, well known coin. The cheapest one ounce gold is the one ounce bar which is pure and wrapped in plastic to keep it from being scratched.
The silver-gold ratio, as I write this, is 80 to 1, meaning that silver is a better buy. It was 16 to 1 in 1980, when Bunker Hunt was attempting to corner the world’s silver supply. I met him, and he was a big, fat, sloppy guy, who eventually lost everything, when he was ruined by the futures market. He kept buying futures contracts, which drove the price of silver up, and when he tried to sell, they refused to allow him to sell, thus driving price down. He was ruined. Times have changed, and if you want to know how much, think that I sold thousands of K-rands at under $300.
Oh I forgot. North American Coin and Currency got me started, and I learn fast. After three years, I was the top producer, and noticed that my customers were taking longer and longer to get their gold and silver. Other things also worried me about the place, so I quit. I was making big bucks, and North American had grown appreciably. Everyone thought I was nuts, but I wasn’t. North American went bust and took millions of dollars from customers who had ‘stored their gold’ with them. They had used the storage it to try to become solvent, and it didn’t work. The owners went to jail, and the ‘stored gold and silver’ was never returned to those who falsely trusted. When I left, I told my people to NEVER allow anyone to store their gold and silver, and I was correct then, and still have the same opinion. My people never lost anything. I was so honest, that I distributed my customer names to the other people in the office, and started over again. We ‘squeak.’
Don Stott 1-888-786-8822