The other day, I asked Sanjay Siroya, a prominent gold and diamond powerhouse here in Dubai, how much gold he thought was in private hands in Pakistan. His reply stunned me
Now we all know that the halcyon days of mucho denairo or, as the Brits are prone to say, ‘loadsofmoney’ are over. Things are bad. Just how bad, the US Treasury Secretary won’t tell you, nor will the ‘Advisor to the Prime Minister’ on such matters. But a man named Hal Turner will.Here are some excerpts from his ‘first information report’. Hal Turner is an unplugged radio show host who says he was taken off the air because he was about to blow the cover off one of the biggest financial conspiracies in modern history. He doesn’t say who took him off but I guess these things happen even in countries where they have never heard of things like the PEMRA Ordinance.
Denied access to his radio broadcast, Turner resorted to YouTube to present his ‘irrefutable proof’ in the form of a pretty sorry looking copper coin that bears a relief of the United States on its face and according to him was “minted at The Denver Mint in Colorado”.
“This is the ‘Amero’”, he says, holding up a copper coin, “the new currency that is going to replace the US Dollar, the Canadian Dollar and the Mexican Peso.” These three countries are going to “demonetise” their currencies. He also alleges that “800 billion Ameros were recently shipped to China to pay off America’s debt and to offset its two and a half trillion dollar trade imbalance.”
I know that America is short of money nowadays but if one was to believe Turner’s apocalyptic warnings, America seems to be running out of interesting ideas as well. Turner himself doesn’t seem short on them because he sure seems to have caught a lot of gullible people’s attention with his ‘idea’ to gain currency (for currency, read fame). Turner stoutly maintains that the “dollar is exhausted as a currency and in a few months will cease to be legal tender”, and that “…all this is an elaborate scheme to repudiate America’s debt.”
I don’t know about the veracity of what Turner is saying but they could have come with a slightly better looking ‘Amero’ to replace the familiar greenback. Imagine passing a coin that looks like that to a street beggar in Karachi. He is most likely to stare at it, give you a doleful look and return it to you with a shiny old-fashioned coin that still passes off as real money, even if it is only a keepsake. Beggars can be somewhat selective in the currency they deal in these times of pecuniary paucity.
The other day, I asked Sanjay Siroya, a prominent gold and diamond powerhouse here in Dubai who happens to be friend of mine (I still have a few left), how much gold he thought was in private hands in Pakistan.
His reply stunned me. He stated that even if you were to take only 60 percent of Pakistan’s total population of say 160 million — about a hundred million — and given its people’s insatiable appetite for gold ornaments, an average family of four owns about 3 tolas. He did some quick arithmetic and came up with some astonishing numbers. These financial wizard types always work on something they call assumptions. Here is his:
Assume that a hundred million families in Pakistan own a minimum of 3 tolas of gold each. The actual number could be much higher but for this exercise, this will do. Based on today’s price of gold — about Rs 11,000 for every 10 grams — the collective value of this untapped hoard in dollar terms at today’s exchange rate comes to an astronomical 48 billion dollars! I think you might have guessed by now where I’m going with this.
The trick would be to convince these hundred million people to contribute a minuscule portion of their bullion holdings (about 17 measly grams) — for a price, of course — to the cause of saving their country from ruination and humiliation. That figure equates to a staggering 24 billion dollars — more money than Pakistan has ever had in its foreign reserve coffers in its history. This could be done by simply appealing to their sense of national pride and in the ‘sovereign’ interest of their country.
In return, the government could issue a 10-year ‘Resurgent Pakistan Bond’, similar in spirit if not in essence to the Resurgent India Bond issued by the State Bank of India in 1998. It would differ from its Indian cousin in so far as the Indian Bond was aimed at non-resident Indians (NRIs); in Pakistan’s case it would be the reverse. The Bond would target its own burgeoning domestic population.
This Resurgent Pakistan Bond would not only guarantee the return to the donor/ investor of the principal collateral (gold), but would offer a 100 percent return on their investment in Pakistan’s present and future as well, backed by what would for all intents and purposes be a Sovereign Guarantee. No capital gains tax, no income tax, no gift tax, no tax at all.
Not bad for parting with a couple of useless ornamental trinkets. Those that feel somewhat diffident about going the Resurgence Bond route can always opt for the more Sharia-compliant ‘Sukuk al Murabaha’ or something similar.
Here are some of the immediate positive results that would impact the country’s economy if its people ever voluntarily undertook such a superlative gesture:
Pakistan’s reserves would soar to an unprecedented 25 billion dollars within 30 days.
Pakistan’s currency would be backed by gold.
It would immediately lead to Pakistan being upgraded by agencies like Moody’s and Standard & Poor’s.
Financial institutions like the IMF, the World Bank, the Asian Development Bank et al would be far more receptive to lend on less onerous terms then they normally do.
Pakistan’s infrastructure projects would almost instantly be put on the fast track.
The Pakistani Rupee would regain its strength and the stock exchange index will register unparalleled bullish activity with resurging stocks in a reinvigorated economy.
Pakistan could turn around and say to friends and allies: “ No worries, we will manage, but thanks for being there.” Imagine what that would do to Pakistan’s self esteem. Now what is so wrong with that?
As in all such plans, the devil will be in the detail!
Mr Shaukat Tareen and his financial experts can do some number crunching, put a plan together that will pass muster and present it to the people’s representatives in parliament for approval. They can then call in some of the best advertising whiz kids and other hidden persuaders to create and orchestrate a media blitz. This window of opportunity should not be left open for more than 30 days. It could be a win-win situation for everybody!
And you know what, the world will stand up and applaud the people of Pakistan who for once in their benighted lives will be borrowing nothing but a now familiar catch phrase: “Yes, we can!”
What are those two magic words that are at the very heart of such a plan?
If you haven’t guessed it by now, here is a reminder: self reliance.
This, in the interest of giving you some quantum of solace, in today’s ‘shaken and stirred’ world!
Mahmud Sipra is a best selling author and an independent columnist. He can be reached at
Reproduced by permission of the Author and The Daily Times