Gold coins in everyday life, on August 1, 20XX - a short narrative
Your travel companion
Hi, my name is Vreneli. I am pleased to show you how the Gold coin currency affect Mr. and Mrs Swiss, in everyday life. Today is August 1, 20XX, two years after the adoption of the popular initiative.
Name of the new currency
One thing in advance: The Gold coin currency has of course a name, which was chosen by the Swiss Parliament and included in the Constitutional text. I am not allowed to tell you, but you may guess: Is he the re-introduction of an old name like Vreneli, ducats, florins, Batzen, or an entirely new name? I shall call them simply "gold coin".
"And as always, at the end of the news, today’s exchange rates: one dollar costs such and such, one gold coin such and such" is what I hear from the radio during breakfast. My son has learned in school how the Gold coin exchange rate is determined. Gold coins are a bit more expensive per pound than gold bullion, on the one hand because more work goes into gold coins than in gold bullion and gold coins on the other hand are more practical in everyday life, which increases the demand for gold in the form of gold coins.
Goldcoins in daily transactions
I give my son money to buy fireworks, and that's still only paper francs. Also on the kitchen table are only francs and no gold coins. The gold coins in our budget are all in the piggy banks of our two children. For children saving plans the rule of thumb is 20% in gold coins and the rest in the bank. If it were up to the kids, the ratio would be the opposite. They prefer to save gold in the piggy bank to saving in anonymous bank accounts.
Gold coins are almost never held in your wallet, unless you go to a business or an occasion when one knows that they accept gold coins. But this is quite rare and special. I've read that in some countries this is sometimes quite different. Especially in areas of conflict Swiss gold coins are used in exchange, they are more fake proof than paper money.
The counterfeiting issue keeps popping up. To be able to tell you something about this issue I have to inform myself first. So let us go to my neighbor Hans, because Hans is a banker and not working on August 1.
"I am glad, Anna, that the topic interests you," says Hans. "Come in. Will you take a cup of coffee?"
"Yes, please, but I will not stay very long."
"Too bad, because on gold coins, I can talk for hours," Hans continues, in a passionate tone. "About forgery: The banks and other sellers of the coins naturally have the greatest interest in anti-counterfeit coins, because we have to declare our names on the coins and the reputation of the coins falls back on us. To date, counterfeiting in Switzerland is hardly an issue. Todays coins are carefully produced and still relatively new and therefore simply too complex to copy. But when in the future the coins get worn through intensive use, it will be different. We work closely with the coin producers to improvine security against forgery, so that we are prepared when the problem arises. The hologram technology is at the forefront, but also electronic components are being examined. The result is a complete new hi-tech industry in Switzerland, an exciting development! So far, however, the competition took place mainly among manufacturers in the design of the coins, because everyone wants to shape the most beautiful coins."
"That even I have noticed," I say. "To me it's a pleasure to study the new coins. When we're on the subject: how does this work with the Gold coin institute that supervises the gold coins?"
Supervising the gold coins
Right. The Gold coin institute is an association which has the federal mandate to supervise the design and the production of the gold coins. It is financed by the coin producers and sellers."
"Are there no conflicts?" "The institution has a monopoly, but it works very well so far, because it is still new and the members have the same interests. They want the coins to circulate as widely and as much as possible, that they are easily recognizable and convenient to use and of high quality. If there is in the future too much conflict, the federal government could create more institutions. The mere possibility of this competition, disciplines the Institute very well. A question for you as a consumer, Anna, what do you think about our new coin collection?"
"Do you have the collection here?"
"Yes, here is the complete collection. Our bank issues a new set every half year. Here the smallest coin with 0.1 grams of gold in the middle, the so-called "core gold coins". Have you noticed that this coin is the same size as the Fünfräppler? "
"No! Is that a coincidence?"
"Hardly, but I do not know the reason. Here are the other core gold coins with 0.2, 0.5, 1.0 and 2.0 grams of gold and here the smallest pure gold coin, 5 grams. "
"Wow, you even have the largest coin of 50 grams in your collection. May I touch it?"
"Sure, after all it is a coin for use, even if it is not as widespread. You see, here, the anti-counterfeiting is already made quite costly. "
The gold price
"What do you think, where is the gold price heading" I ask. The price of gold is an ongoing issue nowadays, because every time people save, the question arises, what part to put in gold coins, and which part should be saved in Swiss francs.
"Dear Anna, nobody knows. It comes down to supply and demand. Do you really want details? "
"Sure, if I already have an expert at hand!"
"The amount of gold in existence in the world is relatively stable, increasing by 1.5% a year. To double this percentage would take many years, if that is ever possible. On the demand side, if the demand for gold coins rises, so does the gold price, and this happens when people worry about the future of paper money. When the regain confidence, on the other hand, the price of gold can go down as well. But we may assume that gold will remain an important part of long-term saving, and this more and more all over the world. This will stabilize the price of gold and give it a tendency to rise. "
"Except if paper money will regain the stability it had before the financial crisis."
"Yes and no. The most striking development of recent years is not the increase of the goldprice itself, but the fact that the price fluctuations are becoming less and less. Experts attribute this to the larger volume that the gold market has gained through the Swiss gold coin. The lower the volatility, the more uses for gold arise - for example, for large international contracts - and that in turn stabilizes the price, etc "
"Well now, I should go do my shopping, will I see you at the fireworks tonight?"
"Quite possible, thanks for the visit!"
Gold and retirement savings
I stroll to the village shop, past the regional bank.
"Tax-privileged retirement savings 3c with gold coins - Get advise today", I read in the window, with large photos of gold coins and even larger golden plastic coins. The slogan before - "for a golden future" - I found a bit clumsy and not tangible. But retirement saving in gold coins, which I can deduct from the tax bill, I want to use now.
In fact, gold coins as a part of retirement planning is perhaps its greatest practical impact on everyday life. The law allows you to convert up to 15% of the pension fund annuities into gold coins. My father has done just that - "just because, and for safety and fun" - if not quite 15%. The conversion of a pension into gold coins is easy and can be done with any insurance. It is a simple annuity policy with a single payment and without interest. My father is happy every time he gets physical coins, or when they are credited to his Gold coin account. So far, he has also done very well through the increasing price of gold.
When I noticed my friends reflection in the bank’s window, I already heard her voice, "Anna, since when are you interested in banks?" "Oh, just like that. I'm on my way to shopping for tonight, we go to the neighbors barbecue," I reply and continue: "Did you by chance have any idea what should I bring him? Besides wine, that I have already thought of. "
Goldcoins in ATM's
"Let's try the ATM. I have read that it gives out gold coins now. You can bring him some coins and I have something to talk about at home. "
Said and done. The ATM now offers three choices: Swiss francs, Euros and gold coins, kinda cool! And how the coins sound when they are issued also. However, the coins of the regional bank are somewhat unimaginative in comparison with other designs.
The most beautiful Coins
Two Indian tourists have probably seen our lack of enthusiasm and ask in English: "Madam, where can we find beautiful gold coins of the Rhine Falls, Matterhorn and such?" "Not here, unfortunately," said I. "Either at the Rhine Falls or maybe in the jewelery store."
The most beautiful designs actually come from the tourist areas and are often exclusively sold there, at vending machines, so-called "Goldomaten". The coins depict mountains, landscapes, animals, hotels, castles, art, a diversity almost like a stamp collection.
At first the design rules were strict, today the rules are simple. One side of the coin is standardized, with a Swiss cross, the amount of gold in grams and the manufacturers name. The flip side is available to the issuer. The inspection board of the Gold coin institute is obviously efficient and approves countless designs.
Coin producers wildly try to outdo each other with ever new ideas of subjects for events, sponsorships etc. etc. Some critical voices are being heard, but so far the vast majority of the customers like the diversity of the designs.
Now it’s your turn
Dear readers, I hope you have gotten some ideas for dreams and visions. One thing is certain: The reality will be even more exciting than we can ever imagine today with our limited knowledge.
Thanks for your interest and help us turn this vision into reality!