Tampa Gold Pt. 03

The final day to Perth was another eight-hour haul, but more bearable as the terrain changed. Flat roads with low shrubbery gave way to trees and bends as the gradient of the land became steeper the further you drove west. Pockets of civilization also appeared with increased regularity. When I finally arrived at my destination, my car and I had had enough of each other. It was sick of being ridden hard and put to bed wet, and I was just tired of looking at it. But we still had one job to do before we could part ways, so after finding accommodation and sleeping like the dead, I drove it the next morning to my appointment with destiny at the Perth Mint.

Chapter 5

Perth - 17 August 2001

It might seem like a bad idea to drive across an entire continent to go shopping, but 2001 was a different time to now. The internet was looking promising, but online shopping was still very much in its infancy. If a shop even had an online presence, slow speeds and low bandwidth led to frequent drop outs in service at the very worst time. I can remember as late as 2009 that I would frequently lose signal in my apartment on a windy day; go figure.

So if you wanted to buy a specialty product, you either had to have a local broker and pay their additional fees; if they had any stock. Or you had to be located close to the source. For example, in 2001, Canberra was the porn and fireworks hub of Australia. Many a visitor would take a trip to one of the seedy light industrial districts of the nation's capital to stock up on VHS tapes and explosives for when the mood took them.

But my needs that year were very different. Cashed up after my tour of Timor over a year earlier and almost two years of living at the curtesy of a grateful government, I wanted to invest my ill-gotten gains somewhere profitable.

And while I like to spend as much as the next man, I have found that once I have a saved a little, a kind of mania overcame me. I remember saving for my first bike 15 years earlier. They paid me a pittance as a milk-runner (delivery boy)-$5 to 7 a night-but I used to horde my two and five-dollar notes in a drawer in my bedroom as if I was Smaug himself. It took a year, but I hit the magic $430 one day and marched into the shop and paid with cash. The bike was later stolen, but it didn't diminish the joy I felt as I watched the cash pile up on the way to my goal.

The problem now was what to do with my treasure. By the time of my drive to Perth, I had $65000 in the bank. It was enough to place a large deposit on a house, but not enough to buy one outright; my favourite type of deal. Even in Canberra's lowly 2001 housing market, 65k wasn't enough. If only I could have foreseen what was to come in that sector. But my answer came via my economics degree and everyone's favourite evil cartoon politician; Richard Nixon.

It may come as a shock to some reading this, but only recently has money been synonymous with phones, cards and even bits of rectangular coloured paper. For almost all of human history, little bits of shiny yellow metal were money. As banker J.P. Morgan once said, money is gold.

I will spare you the economics lecture and only say that by 1971 the entire world ran on the US Dollar, itself backed by the gold, not in Fort Knox, but mostly in the vaults of the US Federal Reserve in New York. That gold underpinned the entire world economy and, even though it never left those vaults, its presence was felt everywhere as little bits of green paper.

The problem was that while the world needed money to work, each of those bits of paper was not money. Gold was money. Each of those dollar bills was a promise. A promise to pay the bearer $1 of gold from the US reserves. Ironically, an ounce of gold from that pile would cost you $42 US Dollars. The gold price was set in 1934 and has changed little since.

America's power was at its height in the 1960s, which led to the unravelling of the international financial system established in 1944. With power comes influence and with influence comes affluence and Americans spent so very much. So much so that the rest of the world also got rich selling to the US, and they wanted to get paid. Paid in gold.

So, with the US spending and the world collecting in gold, the US horde shrank. And shrink at such an alarming rate that in 1971 Nixon did the unthinkable. He "temporally" suspended the dollar's convertibility into gold. From that point on, when the world got paid in Dollars it had to spend them elsewhere or lose them. Gold was no longer an option. Economists held their breath as they expected the system to collapse and... nothing. The world moved on from gold as a limit on money. And when nothing happened, the world got greedy and greed has no limits.

No longer was the amount of money in the world bound to the amount of gold that once backed it. Politicians were now free to spend as much money as they could imagine and I have never met one who wanted to spend less. And so the amount of dollars grew and grew and the gold price stayed the same. Some thought that the party couldn't last forever, and I was one of them.

However, the rest of the world didn't stand idly by, even though the US gold was securely stored and still valued at $42 an ounce. By 2001, you could buy gold at $350 an ounce from any bullion dealer you could find. $350 is almost ten times what the US Fed valued it, but that was a lowest point in some time. It had spiked as high as $800 in 1980. And while I would have loved to get into the market when it was $100 in 1977, I had been five then and didn't get any pocket money. So when I saw that the price was the lowest it had been in years, my back account full and my time in Canberra up, I saddled up my car and drove to Perth with one thought in mind. Buy a fortune in gold. And in 2001, there was only one place you could buy gold I could trust; the Perth Mint.

In 1896, they laid the foundation stone of Perth Mint, and it was officially opened on 20 June 1899. The population of Western Australia (WA) also boomed because of the discovery of rich gold deposits.

The Mint initially served two purposes. First, it minted coins for general circulation. Second, the Mint bought the vast majority of gold mined in WA and gave the miners a reward for their work. "Diggers", small-scale, independent miners, who had migrated to WA in thousands from other parts of Australia and overseas, did a large proportion of mining. Mining businesses could sell their raw gold directly to the Mint, where it was made into gold coins and bullion.

By the year 2000, the Perth Mint's refined gold output totalling 4.5 thousand tonnes, representing 3.25% of the total weight of gold ever produced by man. The same as the current holdings of gold bullion at Fort Knox.

When I arrived in 2001, the Mint was still housed in its original building of light brown stone and red-tiled roof. Slap bang in the middle of the modern metropolis of Perth, the Mint was easy enough to find with its distinct colonial architecture and well-manicured gardens. Passing through the gatehouse, I rounded a bronze statue of a couple of diggers in the forecourt, walked up the stairs and inside.

There were a few ways you could buy bullion: physical, allocated and unallocated.

Physical speaks for itself. You can hold it in your hand and it's your problem to transport and protect. Allocated means that the dealer holds it in their vault. It has your name on it and you pay the dealer to store and protect it. You can claim it any time you want and it then becomes your problem. The last way, unallocated bullion, is more like buying a time share. There is bullion in a vault somewhere, but it doesn't have anyone's name on it. You can't see it or touch it, but you can sell it back to the mint anytime you want. You still paid for storage, but unallocated was the cheapest of the three options.

A Mint employee explained this to me when I ducked into the bullion room to the left of the atrium. Suddenly, the reality of what I had done dawned on me. I had driven for five days straight, to the other side of my country, planning to take physical possession of $65000 of bullion. I had nowhere to store it and no way to protect it. $65k in 2001 would buy you about 3kg of gold or a quarter of one of those gold bars you see in the movies. That may not seem much, but that was my realisation. I could easily hold $65k worth of metal in one hand and just as easily lose it!

Further, concentrating all my wealth in a single object seemed like a bad idea. If it went up in value, as I expected, I would eventually want to sell a portion of my gold. If it was all in one piece, then I would have to cut it up. I did not know if or how I could do that. Could I even sell it if I cut it up with a hacksaw in my garage? As was so often the case, my plan now seemed poorly thought through. But I was still determined not to go home empty-handed. I needed to think, so I asked a mint employee where the best place in Perth was to buy a beer. Without hesitating he said, "The Cottesloe Beach Hotel."

It was probably the worst time of year to visit that pub. By anyone's standards, a Perth winter is not exactly cold. But you try telling that to people who live in a place with cloudless, blue skies all year round. I was told that the "Cott" was the place to be in the hot months. Situated almost directly on the beach, hot young things would exit the surf and directly enter the pub with more or less nothing on. While they wore clothes, a few patches of cloth wouldn't hide a thing. No one seemed to care, and the girls didn't mind if you looked at them either. It was all part of the show. Besides, they couldn't carry any cash of their own, so buying them a beer was the understood price of admission.

But summer was months away, and I didn't want to spend a minute longer in Perth than necessary. There was nothing wrong with it, I suppose, and even though the culture and the language were my own, it looked wrong to my eastern eyes. Too sunny, dry and flat. It was like someone had built a city in a desert in the middle of nowhere and then plonked the whole thing next to an undrinkable ocean to rub it in.

And it was that Indian Ocean I now looked out on as I sat in that pub watching the sun go down with a beer in hand and not a girl in sight trying to decide what to do. I resolved to go home with some precious metal, no matter what, as a stake in a future I knew had to happen. The gold price was too low, and the upside was too good. But what to buy and how to get it home safely?

I eventually split my fortune in half and spent 50% of my money on unallocated gold. It could stay in vault in Perth and I could sell it for a profit one day with a phone call. The rest I split again into gold and silver-$7 per ounce- in small bars. Coins looked better, but you paid an extra premium for that beauty. That the metal in each coin was only worth the same as an equivalently weighted bar finalized my decision.

But splitting my physical bullion into silver created another problem. In 2001, silver was 70 times cheaper than gold and so weighed 70 times more for the same price. 30kg of silver wasn't practical for storage or transport unless I wanted to drive all the way back home and couldn't bring myself to do that. I recalculated my proportions and settled on 25kg of total metal to take back to Canberra.

25kg was still too heavy to transport easily. I could slip it in a bag and fly home, but that meant losing sight of it for hours and the bag being x-rayed. I am sure some baggage handlers are decent people but...

That last problem, how to get it all home, seemed insurmountable. Unable to focus on a solution, I walked across the road to the beach, hoping a walk by the sea might clear my head. As luck would have it, I didn't need long. As I headed south along the water's edge toward the port of Fremantle, an answer to all my problems presented itself and it was then that my next adventure truly began.

Chapter 6

Perth - 19 August 2001

Upon taking their first overseas trip, many Australians quickly come to realise they live at the end of the Earth. It simply takes forever to get anywhere. As far away on the planet as we could be from the nation that spawned our culture-Britain-and cut off by the world's largest ocean from the nation that we increasingly identified with-USA-Australians are used to long trips to get anywhere.

A flight to the UK will take the better part of 24 hours, not including the trip to the airport and all that involves. Los Angeles is better, at under 14 hours, but that is non-stop. The saving grace of a trip to London is that it is so far that the plane has to land halfway and refuel to get to its destination. Foolishly, most passengers don't take this opportunity to have a rest in their port of call. They wonder about the airport in a daze for as long as they must, then climb back on board the same plane for another 12 hours of discomfort.

And I say overseas deliberately. Many other peoples may refer to foreign travel as "international", "the continent", or even "across the border" but Australians always say "overseas."

"I'm going overseas," they say. And with good reason. Because everywhere else in the world from Australia is literally on the other side of an ocean or a sea.

There are only two ways to travel over a sea in my experience; aeroplane or ship. I didn't need to go overseas to get home. I was still in Australia. But I had already ruled out driving and train. The train would have been easier, but it would take just as long. The car was out because I was never getting back behind the wheel of anything and driving that far again if I could help it.

I ruled out flying for one reason. The contents of my checked luggage would be worth more than a year's salary for any airport worker. At some point, I would be out of sight of my luggage for hours and my paranoia that I would lose it all gave me apoplexy.

That left one option, ship. And it was only when I was walking along Cottesloe Beach toward Fremantle and saw the freighters waiting off the port that the thought of taking a ship to get anywhere even occurred to me. I don't think that I would be alone either in that regard. As I pointed out earlier, Australia is a long way from anywhere Australians like to visit. And a ship wouldn't get you there fast enough, so why bother?

Ironically, people had been deliberately coming to Australia by ship since 1788. There were a few earlier missed steps and accidents which some have argued would have had us speaking Dutch or French, but Britain was ever the only real chance of settling Australia when it did. It began in 1788 in Sydney Cove with a bunch of convicts on the First Fleet. Convict transportation ended in 1868 from where I would depart 24 hours later; Fremantle.

In June 1829, Fremantle, originally known as "The Swan River Colony," was founded and established as a "free settlement" with the arrival of approximately four hundred civilian and military settlers on the HMS Sulphur and Parmelia.

People who migrated by choice originally populated Fremantle, which made its beginning different from other penal colonies established in New South Wales.

It was a military and civilian settlement, not a settlement for convicts; at least not yet. The settlers had a challenging time entering Cockburn Sound, both ships sustaining damage from rocks, and Parmelia was run aground, but did arrive safely. Cockburn is pronounced Co-burn by West Australians but anyone not from Perth still laughs when they visit.

During those first 20-30 years, life was very hard for those new settlers. The issue was one of fertility. The Swan River simply winds through a sandy flat. Not only was the vegetation hard to clear, but once it was cleared, it wasn't "good earth", just lots of sand.

The reports received back in England were not good. So, of course, people migrated elsewhere, which caused even more problems. The colony needed manpower to build the vital communications, transport, and administrative framework for the colony to succeed.

There was a depression in 1843 which almost ended the colony forever, however at the suggestion of the York Agricultural Society in 1847, "That it is the opinion of this meeting that, because the present land regulations have entirely destroyed our labour fund, we conceive that the Home Government are bound in justice to supply us with some kind of labour, and after mature deliberations we have come to the determination of petitioning the Secretary of State for the Colonies for a gang of forty convicts to be only employed in public work."

The settlers were not happy about the proposition of turning the colony into a penal colony. Regardless of the public opinion or previous promises, the decision was made, and in November 1849 they officially announced that The Swan River Colony had been 'constituted a penal settlement' to speed up the economic growth. As the colony grew, so did the mining and agriculture that it allowed, and ultimately, so did Western Australia.

Anyone visiting Fremantle today would be impressed with its well-preserved colonial architecture and its nightlife while simultaneously sniggering at its famously useless football team the Dockers. I believe that someone should give the men who decided that their uniform should be green and purple a knighthood for providing the rest of the nation with so much good material for a laugh. And 2001 was a particularly bad year for the Dockers. When I visited they had lost 17 games in a row and would end up dead last by season's end.

But none of that mattered to me in August 2001. I needed to find a ship that would take me home, and Fremantle was my point of departure. I spent much of the next day walking from travel agent to travel agent, only to be disappointed. None of them had any ships in their books that were travelling from Fremantle to Sydney, the closest port to Canberra. Or Fremantle to anywhere east. I was told that cruises simply didn't go across to the east coast. They went north to places like Broome and Darwin. And if you ever want a cure for happiness, visit Darwin!

It didn't help that it also wasn't the season for cruises. Winters in Australia are mild compared to most places in the world, but everything is relative. Just ask any English tourist who have lain on Bondi Beach without sunscreen for an hour.

So it was with a resigned acceptance that I would have to drive five days home again when I entered that last travel agent I could find. Why I went in there when I knew there were no cruise liners leaving Perth until March? I don't know. Pig headedness I guess. And I suppose I was only half listening as the agent again told me there was no hope. If only I would consider the other option she said. What was that I asked, expecting to be told about trains, planes and cars for the millionth time that day?

"Cargo ship cruises!"

"Cargo ship what?" I replied, not understanding.

"Cargo ship cruises. You get on a cargo ship and you go where it is going!"

"You mean I have to work on a cargo ship?" I asked. The idea of learning how to tie knots and scrub decks while paying for the privilege seemed ludicrous.

"No. You get a room and just sleep, I suppose. Or read a book. Oh, you can work. You don't get paid, but some people enjoy learning new skills and pretending that they are part of the crew. All part of the fun, I suppose."

"And how often do these ships depart?" I asked, suddenly getting interested.

"Oh, just about every second day. You should pop down to Freo and see how many ships there are coming and going."

"Any heading to Sydney? Or Melbourne?" Even Hobart seemed reasonable at that point, and it was on an island just north of Antarctica!

"No, not there. Most ships continue on to Asia. Singapore or Hong Kong. Or you could take a bulk goods ship. They go everywhere carrying grain and ore. But not to the east coast. They have their own resources."