SOME MUSINGS ON THE CURRENT CRISIS

The news is full of doom and gloom – with banks having to be rescued and shares plunging. However this week I’ve attended two interesting auctions and the results from these do show that some people certainly have money to invest. On Tuesday in Colchester four hand written letters from the late Diana, Princess of Wales, to her childhood nanny sold for nearly £25,000 and a three page letter written in 1937 by the Duchess of Windsor sold for over £13,000.

On Wednesday I went to the Spink auction in central London where a banknote sold for over £78,000. In a hushed room the bidding increased firstly in one thousand pound increments then in two thousand pound increments. The only other existing similar note had sold years ago for £8,000. Some other banknotes in the auction went for nearly £45,000, for £35,000 and £27,000 to mention just three more examples (all these prices include buyer’s premium and VAT). Several expensive ones sold to a gentleman sitting directly behind me which was a little disconcerting as the auctioneer appeared to be looking directly at me as he took the bids. So I was sitting there wondering whether I had blinked or rubbed my nose!

Of equal interest (well to me at least, as Mrs Troy yawns) was the price realised on Tuesday in Colchester for some run-of-the-mill gold Sovereigns. These had been estimated at £92 - £115 (including buyer’s premium). As you probably know (?) each sovereign contains 0.2354 troy ounces of gold – so their intrinsic value at that date was about £115. They sold for an average of £156 with the cheapest at £138! Dealers this week were offering £110 to buy sovereigns so several bidders were happy to pay well over the odds for gold. (If you do want to buy gold for a sensible price and which is safely kept in a secure vault I recommend the BullionVault.com website).

Finally, I read today that 100oz pure silver (99.9%) bars are selling on eBay (US) for in excess of $1,500 whilst the “market” price for silver is under $12 an ounce. More than a 25% premium is being paid for just a lump of the metal (no craftwork or aesthetic content).

So people in these times of crisis are putting their wealth into alternative investments and real money (gold and silver – not government issued promises) whilst others struggle to pay their utility bills or to stave off repossession of their homes – it’s a strange old world! What do you think?