They Bought Their Freedom with Gold

Maybe there is something to the idea of a national memory, the experiences of a people or a country that affect its outlook for a generation or more. Certainly, the Great Depression had a lasting impact on its own generation, and perhaps own their offspring who heard about the travails of those years so many times.

The memory of the brutally ruinous monetary inflation of Weimar Republic Germany a century ago, the calamity that paved the way for Naziism and Hitler, seems to persist in German’s nation memory.  Many have commented at the aversion policymakers in Germany have to monetary destruction.  And in the current environment even Germany has repatriated gold it had stored in London and New York, even as it has added gold to its central bank reserves.  Just last year Germans stood in line outside gold dealers to buy physical gold before the imposition of new bureaucratic regulations on gold buyers.

Here is another example.  After the communist takeover in Vietnam in 1975, a humanitarian refugee crisis developed that lasted more than a decade.  It is best remembered in the plight of “the boat people,” a mass exodus of perhaps 800,000 people on ships, boats, junks, and rafts, all fleeing the slaughter, torture, and “re-education camps” of the victors.  Altogether, twice that number of Vietnamese, 1.6 million eventually resettled outside the country.

Most just escaped by any means they could.  

Those that had gold were among the fortunate.  The new government sold exit permits to some, bribes that often had to be paid in gold.  

Hundreds of thousands of boat people died at sea.  Those that survived the rough open seas faced robbery, rape, and death at the hands of pirates.  The United States took in more than 400,000 of the boat people.

  While coinage in the form of round disc shapes is the “coin of the realm” for gold in the West, gold in other minted forms has been popular in Asia.

In the second half of the 1970s, after the exodus of the boat people and other Vietnamese refugees, many American gold dealers began to encounter Vietnamese “taels”.  These were slim wafers of pure gold that had served as a currency in Vietnam.  Generally wrapped in rice paper, one tael consisted of 37.8 grams of gold. 

Gold taels bought freedom for many Vietnamese.  Others were able to use taels to reestablish their households and livelihoods in their new homelands. 

The importance of gold in a crisis is remembered to this day in Vietnam.  Just this week, the World Gold Council reported that a new survey has found that 72 percent of investors in Vietnam own gold.  A full 81 percent of Vietnamese surveyed believe gold is an important safeguard and source of security in times of political and economic uncertainty.  

It’s a part of their national memory.