Had some gold coins and bars sitting around for awhile, and figured it was time to convert it back into “currency.” But instead of into US Dollars and then into Thai Baht, I decided to skip a step and go straight into Thai Baht. Gold is after all, an international currency, and I wanted to put that concept to the test.
So I headed down to the biggest gold shop in Bangkok’s Chinatown. The place was a madhouse, with customers lined up three-deep across the wide counter. In much of Asia, gold shops are like banks. Paper money issued by governments is not to be trusted. Subject as it is to corrupt politicians, greedy banks, and irresponsible money printers. Paper money is like toilet paper, highly useful when you need it, but ultimately of little value.
Waited my turn for a buyer, but the guy looked at my Kruggerands and Swiss gold bars like they were dog turd. It turns out that Thailand has its own gold system, traded in baht not ounces, and 23 karat not 24. Since there are roughly 100 Thai customers doing things the Thai way, the big shops have no incentive to deal with my oddball metal.
I go to a few more bustling gold shops and get the same reaction. I give up. But further down the street I see a gold shop with no customers, so decide to give it a try. Flash a Kruggerand and they’re interested.
They ask me what percentage gold the coin is. Umm, that’s the wrong question. The right question is “how much” gold is in the coin. The answer is 1 ounce pure gold. But because of arcane U.S. laws in the 1970’s, South Africa alloyed some copper in the coin. Any gold dealer ought to know this. But my Thai language skills aren’t good enough to explain it, so I type 99.99 on the lady’s calculator.
She says she will give me 41500 baht per coin and I Immediately agree, as that is above current spot price. I don’t see how she can profit at that price, but that is her concern, not mine.
She asks me to sit and walks off with my coins. I don’t like that. She returns and one of the coins is now blackened – from some sort of test – and she proclaims that it is not pure gold. Yeah, I already knew that. I wonder if she is just using this “discovery” as a bargaining ploy. She now offers me 29000 per coin. Ha. No way.
But okay lady, you want pure gold, I’ll give you pure gold. I pull out a Swiss mint bar with 99.99% stamped right on it. What do you say about that?
She says she’ll give me 38000. Umm, what happened to the 41500 she was going to pay for the coin? Well the coin does weigh a bit more due to the extra copper, so if it were pure gold it would be worth more. But 38000 is still too low. The spot price today is more like 40100. I don’t expect to get that much, as the dealer needs to make a profit too, so I counter with 39500, about $1234 US at today’s exchange rate, and about what I’d expect to get at a US coin shop. It’s fair.
She goes off to check with the big boss, taking my bars with her. While she’s away, an old man comes to chat about my Krugerands. He points and asks, “Where from?”
I say, “South Africa.”
He points to the blackened one. I ask if he can wash it. He says he can and walks off with it. He returns shortly, puts the unwashed coin on the back counter and asks if I’d like to sit. Yeah, I’ll sit, but don’t even dream that I’ve forgotten about my coin old man.
I think I’m beginning to figure out why there are no customers in this shop.
The woman returns with my bars and news from the big boss. She says they are not 99.99% but only 99.9% and offers me a new price of 36000 per oz. I laugh and say, “no way.” Not only is the price stupid, but she is wrong. I turn over the bar, and point at the 99.99% stamp. I trust the Swiss Mint a helluva lot more than I trust you lady.
She stands firm as the boss looks on. I say I’m not selling at that price and pick the bars up in preparation to leave. All of a sudden, they like 39500 a whole lot more, in fact they like it so much, that they now offer to buy the third bar I have with me.
And fuck me too. Because if they want the third bar at 39.5 then chances are good I could have gotten a bit more. But 39.5 is the price I’ve set and agreed to, and as a man of my word, I’ll sell what I’ve said I would. Two ounces.
The old man is now fiddling with my Kruggerands and bars on the front counter with the cadence of a shell game. While he is handling the still clean coins, he asks if I want him to wash the blackened one. I say “yes” and point to where he left it on the back counter. He feigns surprise like he forgot that he put it there.
Yeah right. You little fucker.
The big boss, who is a kid in his twenties, goes off to get my cash, while the old man cleans my coin. For two ounces I got 79000 baht ($2468), makes for a wad about two inches thick. The paper money may actually weigh more than the gold, which is pretty ironic since paper money was initially adopted because gold was too heavy to carry around.
The old man puts my now clean Kruggerand on the counter, and I’m ready to leave. But before I do, the woman adds, “We buy coin too, same price.”
Well, well, well. She knew it all along. The coin has the same gold content as the bar. I’m not surprised that she knew, I’m not even surprised at her feigning ignorance before, but I am surprised at how readily she will admit her deceptiveness by making this new offer.
I pocket the coin and say, “Have a nice day.”