Sjuggerud: “The Secret Currency”

By Travis Johnson, Stock Gumshoe, March 11, 2008

I’ve had dozens of readers send this one along, most with a long line of question marks. The teaser has been around for a while (a couple years, as far as I can tell), but it continues to spark interest — especially with the dollar at ridiculous lows, inflation fears bubbling, and gold near $1,000 an ounce (yeeks!)

The teaser has a few clues for us about what this “secret currency” is, but mostly the story is built on the aspiration to true robber-baron wealth that the gummint can’t get their mitts on — we hear the story of the Rothschilds, whose vast riches were built on Mayer Rothschild’s expertise with this “secret currency,” and we hear about a few other famously wealthy families, mostly around the turn of the last century, who built or protected their wealth using this “secret currency.”

So what the heck is it?

It’s related to gold, but “It has nothing to do with mining stocks, mutual funds, options, futures, or bullion.”

Man, that cuts the options down significantly.

One of the owners of the Boston Red Sox used it “to amass a fortune worth more than $15 million.”

It was banned on March 9th, 1933 by Roosevelt, a ban that held up for 41 years.

And there are several knockout examples provided of the returns possible through this investment … here are a couple:

  • “From 1972 to 1974, this investment rose 348%, according to an index that keeps track of its market as a whole. At the same time, stocks dropped 34% according to the S&P 500 Stock market index.
  • From 1976 to 1980, while the stock market plummeted 35% according to the S&P 500 Index, the investment I want to tell you about realized 1,195% profits.”

Sounds pretty good, eh? What do you want to bet that the current market malaise, and “so thick you could cut it with a knife” nervous tension of the investing public were the inspiration for the quick return of this teaser ad?

It is also noted in the ad that …

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“In fact, the last time the Salomon Brothers brokerage firm included this vehicle in its annual investment survey … THE SECRET CURRENCY RANKED #1 OVER THE PRIOR 20 YEAR-SPAN with an annual return of 17.3%. In other words, it was the single most profitable thing you could do with your money.”

So … this secret is apparently revealed, hopefully with much fanfare, in the special report they’d like to send you, entitled “The Secret Currency — How the World’s Wealthiest Families Make Money Even When Stocks, Bonds and Real Estate Lose Value.”

It’ll cost you $49. That’s the current sale price for the True Wealth newsletter, which I guess is normally $99. And I’m sure they’ll throw in a passel of special reports for you too.

The Gumshoe, however, is somewhat short of fanfare … and I left my pomp and circumstance in my other pants. So I’ll just have to come right out and tell you that this investment is …

Gold coins.

Yep … that’s right, no ticker symbol or anything, you can’t get these through Scottrade. Actual collectible gold coins.

When Sjuggerud talks about gold coins outperforming other indexes in that Salomon Brothers survery, that refers to surveys that they stopped doing a while ago because they weren’t accurately tracking the wide array of gold coins available for collectors and investors. More recent performance figures cited use the more modern index, referred to either as the CU 3000 or the PGCS 3000 index, and the performance numbers they cite certainly seem to be legit from my glance at those charts. More info about that is available from PGCS (the Professional Coin Grading Service … which is, coincidentally, owned by a public company, Collectors Universe).

There are at least dozens of fairly high profile shops and advisers online who would like to advise you about buying gold coins and even buy them and store them for you (though that gets rid of some of the fun of holding them in your greasy little paws and cackling with Scrooge McDuck glee), and there are plenty of actual marketplaces as well. Or you can do what plenty of people do and go to an actual coin store, where they still exist. You can even buy new ones directly from the US Government, if you’re leery of all the different varieties and the reputation of the shops and advisers (I certainly don’t know which ones are any good).

There are all kinds of gold coins — most people have heard of the US gold coins, which were still being minted as legal tender (the American Eagle coins). There are also at least a half dozen other countries that have recently minted gold coins, including South African Krugerrands, Canadian Maple Leafs, UK Sovereigns, etc. The benefit of the contemporary gold coins is that there are a lot of them, there is a standard market, and they all have a set gold content that is guaranteed by their government.

In recent memory, modern gold coins have generally traded at a small premium to the price of gold — so you can buy uncirculated gold coins from the US Mint directly, for example, for about $1050 for a one ounce coin, which is probably something less than a 10% premium to gold bullion, depending on the purity of the coin and the actual market price of gold (I didn’t look it up today). I expect the secondary market prices aren’t that much different.

So, should you? It really depends on you. It’s your money. I don’t own any gold coins, but I know a number of people who do, and they’re not all conspiracy theorists who are preparing for the apocalypse. I know Sjuggerud has recommended a variety of collectibles in his various newsletters, and he often mentions collecting things like classic guitars and other antiques, but for me that kind of investing takes far too much personal expertise … and besides, my closets are pretty small. That doesn’t mean that collecting unique items of any kind can’t be a good investing idea, as long as you’re not relying just on that for your retirement … and as long as you’re not talking about Beanie Babies.

It’s possible, maybe even likely, that Sjuggerud is talking about focusing on genuinely rare gold coins, which are priced dramatically higher (while modern gold coins trade at 5% or so above the price of the gold they contain, genuinely rare or ancient coins obviously trade much higher, even as they may still fluctuate with the price of gold to some degree). The really rare stuff would scare me because of my very limited knowledge of numismatics and the collecting marketplace, but the modern gold coins, which have pretty accessible markets and can even be bought directly from the government, make a certain degree of sense to me. Especially if you do happen to have a small part of your soul that believes “they” are going to come for you one day, and you’ll need a few gold coins in your pocket to make a run for it.

So I certainly can see the logic of putting a portion of your portfolio into gold, and it’s true that gold coins had some remarkable returns over the years for a variety of reasons, but I can’t tell you whether it makes more sense to buy gold coins (remember, you’ll have to store them somewhere — and probably not in the change jar on your dresser) or to buy shares of the Gold exchange traded fund, or a bar of bullion, or shares of a mining company or any of the other variety of investments that trade in a circle around the price of the yellow stuff.

Is anyone out there in Gumshoe Land a coin collector or gold enthusiast? I’m sure you can find the mistakes I’ve made above, and I hope you can share some wisdom with us.

And I’ll keep looking out for collectible oil — anyone wanna keep a few barrels of West Texas Crude in their basement?

Happy investing, all.


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Dean
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Dean
January 11, 2011 11:24 pm

what is this 18 digit computer code which allows you access to transfer money into your brokerage account from the Stansberry people, DAVID EIFRIG who claims to be a wall street hacker and will share these hacking codes with you for a substantial subscription price… any one know any details,,,,,,,has to do with some type of option purchase……thanks for your help………DEAN

Olden Atwoody
Guest
Olden Atwoody
May 4, 2011 2:40 pm

ONLY buy “PCGS-certified” coins, and study the trade papers for pricing. Visit a coin shop and ask to see the “Grey Sheet”, it’s a dealer pricing newpaper, published weekly.

You can do better in CASH at coin shows, but KNOW the VALUE.

PCGS. PCGS. PCGS. Nothing else unless you want a huge hassle to resell. http://www.pcgs.com/

PCGS does NOT sell coins – they are the premier and most trusted grader of coins. ONLY buy PCGS certified, and ONLY buy US gold coins, perferably $20 coins. The market for foreign gold, certified or not, is thin.

Hear me now, thank me later.

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Dennis
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Dennis
June 8, 2013 9:26 pm

Gumshoe,
Received an email regarding “Currency-X” from a source that will remain nameless. So vague, convoluted, full of dire consequences, secret conspiracies, and promises of riches easily gained that my BS antennae almost detached from my head. No explanation at all of what Currency-X really is. But because I’m so special they want to let me in on this secret underground economy bonanza for a mere $79.00! Wow, what a deal, Huh?
Anyway, I did what I always do and did a little research, was eventually led to your website, and found there the most clear, upfront, honest, and direct to the point explanation that can be found on the web. No BS, no smoke, no mirrors. Thank you for restoring my faith in mankind. ;>) Now, I’m going to sign up for your website. I like working with and learning from honest people. Best Regards

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2ndmouse
Member
2ndmouse
November 23, 2013 3:14 pm

This tease is back again, this time touted by Mike Palmer. November 2013

silverbull999
Guest
January 13, 2014 6:53 am

SELL YOUR GOLD AND BUY SILVER!! IT IS MORE VALUABLE AND RARE!!!

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David Conklin
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David Conklin
April 28, 2016 3:06 pm
Reply to  silverbull999

I don’t know the guy poersonally, but for someone who has a Phd in internationaly currency, he didn’t know the exchange rate of a VEZ bolivar vs US dollar–off by 100%.

David Conklin
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David Conklin
April 28, 2016 3:07 pm
Reply to  silverbull999

Actually there’s a lot more silver than there is gold. That’s why buying Chinese silver Panda’s is such a lousy deal.

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Robert W.
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Robert W.
January 30, 2014 4:12 pm

A general question… If anyone really did figure out a way to get much better than average returns at any investment, wouldn’t they make more money by borrowing and compound investing than trying to sell the “secret” to others? I could be wrong, but it appears that selling books is the way to get rich.

DrMar
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DrMar
August 17, 2020 8:35 pm
Reply to  Robert W.

I agree, anytime there is a cure, a secret, conspiracy, or a book for sale creates more caution. Greed is writing the words, thus not their hard earned monies to lose on darts thrown at the dart board. This theory applies to all the important areas of life. The quacks are burning the late night oils. 2020/2021

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larryg
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larryg
February 11, 2014 8:49 am

any body remember bullion reserve of north america?

Paul Romano
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Paul Romano
May 17, 2016 11:28 pm

How do you access your currency x account?Another news letter writer wanted $77.00 for this information with a satisfaction guarantee.scam. ty you for trying. Paul Romano