# Story of a Gold Coin

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by Hugo Salinas Price, Plata:

As I was shuffling papers in some old files, I came across a slip of paper on which I had written down the price I had paid for a Mexican \$50 gold peso coin: \$717 Mexican pesos.

Judging from the price, I figure that the purchase was made sometime in 1972, when the price of a Troy ounce of gold was \$46 dollars. The Mexican \$50 gold peso coin contains 37.5 grams of pure gold, and 37.5/31.1 grams per Troy ounce, is 1.206: so there is 1.206 times more gold in a Mexican \$50 gold peso piece, that in a Troy ounce of gold.

Thus, \$46 dollars per ounce x 1.206 = \$55.48 dollars as the value of the gold in the \$50 gold peso coin, in 1972.

The rate of exchange Dollar/Peso in 1972 was \$12.50 Mexican pesos per dollar, so \$55.48 US x \$12.50 = \$693.50 pesos. I paid \$717 pesos, because gold coins are always sold for a small percentage more than the price of bullion gold; in this case, the surcharge was for 3.4%.

The international price of an ounce of gold, as of last Friday, November 30, closed at \$1,222.10 dollars. The rate of exchange was at \$20.40 Mexican pesos per dollar. So today’s price of the Mexican \$50 gold peso coin should  be close to \$1,222.10 x \$20.40 x 1.206 = \$30,067 pesos. The quote this morning is: \$30,890 pesos.

So my investment of \$717 pesos, made 46 years ago, has turned into an investment worth \$30,890 pesos today. Looks like a good investment.

But there’s a lot more! Because back in 1993, our President Salinas de Gortari chopped three zeroes off the rate of exchange. So actually, the \$717 pesos I invested turned into – \$30,890,000 of the old pesos!