          
          
          
          
               GOLD -- AND THE SWISS METHOD OF ACQUIRING IT
          
               Gold is a traditional means of inflation
          protection.  Some investors have been disappointed with
          the performance of gold in the past decade, but they
          are forgetting the primary purpose of gold as an
          inflation hedge.  There has been very little inflation
          in the American economy in the past decade -- so there
          has been nothing to be protected from.  This does not
          mean that gold has been a bad investment.  The proper
          comparison is not to other investment performance, but
          to buying life insurance and not dying.  The gold did
          exactly what it was supposed to do in the investor's
          portfolio -- provided a store of value with inflation
          protection.
               An investor who is paying attention to the current
          price of gold is completely missing the point.
               Gold is the most effective protection of
          purchasing power.  This is illustrated by comparing its
          value today with its value in Biblical times.  From the
          Old Testament we learn that during the reign of King
          Nebuchadnezzar, an ounce of gold bought 350 loaves of
          bread.  An ounce of gold today will still buy about 350
          loaves of bread.
               Speculators have often lost badly with gold, but
          that is true of any speculation, and is not because of
          some inherent characteristic of gold.  This speculation
          is very different from the proper use of gold in an
          investment portfolio, as a way of achieving balance,
          diversification, and inflation insurance.
               To put an entire savings program into diversified
          paper investments, without a gold diversification, is
          not a truly balanced plan.  The security of the Swiss
          franc is one step in that diversification, because of
          its strong gold backing, and its traditional strength
          as a currency.  But only a step.  The next step is to
          also diversify some of the portfolio into a pure gold
          investment.
               Every paper currency buys less than it did at the
          turn of the century, but gold buys almost two times
          more.  That is true inflation insurance, and has
          nothing to do with overnight speculations on a belief
          in short term price trends.  There is nothing wrong
          with speculation, but it should not be confused with
          balancing the portfolio.  In fact, a small percentage
          of any diversified portfolio is devoted to speculation.
               As we have seen in the history of money section,
          paper money inevitably declines in value and purchasing
          power.  In an era when most governments have legally
          freed themselves from any requirement to act
          responsibly or tie their paper to real assets,  This
          makes it particularly important for the investor to
          create his own "reserve fund" since the government's
          paper money no longer is required to have one.  
               For thousands of years, gold has been man's
          premier store of value, more trusted worldwide by
          individuals than any paper investment or paper
          currency.  Gold cannot be inflated by printing more of
          it. It cannot be devalued by government decree.  And,
          unlike paper currency or many other kinds of
          investments (such as stocks and bonds), gold is an
          asset which does not depend upon anybody's promise to
          repay.
               Although gold has been mined for more than 6,000
          years, only about 110,000 metric tons have ever been
          produced.  If you could bring it all together, that is
          just enough to make a cube measuring only 18 meters
          (approximately 55 feet) along each side.  Gold is one
          of the scarcest, and so most sought-after, metals on
          earth.
               Gold cannot be fabricated by man.  Nature limits
          its supply.  The amount of new gold mined each year
          totals less than 2,000 metric tones -- an amount that
          could be fitted comfortably into the living room of a
          small modern house.
               Throughout recorded history, gold has held its
          value against inflation.  Experts say, for example,
          that the same quantity of gold is needed to buy a loaf
          of bread today as in sixteenth century England.  This
          is why so many investors world-wide see it as the
          "ultimate asset" -- an important and secure part of
          their investment portfolios.
               Gold has an international value that tends to
          respond to the changes in value of national currencies. 
          Time and again, gold has proved a successful hedge
          against the devaluation of an investor's national
          currency.
               Gold is one of the few investments that has
          survived -- and even thrived -- during times of
          economic uncertainty.  Gold is man's classic hedge
          against almost any monetary crisis, moving
          independently of paper investments.
               For example, in the slump following the "Wall
          Street Crash", from September 1929 to April 1932, the
          Dow Jones Industrial Index slid from 382 to 56 -- a
          drop in value of 85% -- and some 4,000 U.S. banks
          closed their doors. Meanwhile, the price of gold
          actually went up.
               Gold also increased in value during the events
          following "Black Monday", October 19, 1987, when the
          Morgan Stanley index of world shares fell 19% over 10
          days.  And during the mini-crashes which have afflicted
          the stock markets since then, gold has held its value
          and ignored the travails of share investment.
          
          Investing in Gold Bullion Coins
          
               Although many numismatic gold coins have been
          purchased by investors, most investors think of gold
          bullion coins when they think of investing in "gold
          coins".  And bullion coins are favored by many
          investors who want physical possession of their gold.
               The popularity of these coins and privately minted
          coin-like medallions can be attributed to their small
          size, convenient weights, and easiness to store.
               The "typical" gold bullion coin is legal tender of
          a nation and its gold content is guaranteed by the
          issuing nation.  It bears a face value that is largely
          symbolic because its market value depends totally on
          its gold content.
               If you invest in gold bullion coins, or in
          privately issued coin-like gold medallions, pieces, or
          "rounds", it will be easy for you to keep track of the
          daily value of your holdings because many of the most
          popular gold bullion coins and medallions contain one
          troy ounce of pure gold.  And the price of one ounce of
          gold is reported daily in most newspapers.
               Other bullion coins have been minted in easy
          fractional weights such as 1/2-ounce, 1/4-ounce, and
          1/10-ounce.  Among the countries issuing bullion coins
          are South Africa, Canada, Mexico, China, Great Britain,
          and the United States.
               Bullion coins normally sell for a 3 to 15% premium
          over the bullion value of gold, but a large part of
          this premium may be recovered at resale.  The premium
          of gold coins is justified by their ready divisibility,
          convenience, portability and marketability.
               While many gold investors would prefer to keep all
          of their gold coins at home or nearby, other
          strategists keep only sufficient coins for immediate
          needs after a political or civil disaster, and the cost
          of tickets for the entire family to get to Switzerland,
          and keep the rest of their coins in a safe keeping
          arrangement with a Swiss bank.  (The Swiss banking
          services chapter discusses this in more detail.)  
          
          
          Gold Accumulation Plans -- Economical Way of Enjoying
          Ownership
          
               Gold accumulation programs allow the investor to
          enjoy all the benefits of investing in gold without the
          responsibilities and costs of handling and storage.
               An accumulation plan is an organized method of
          buying gold purely for the investment and inflation
          insurance aspects of gold, and does not involve
          gambling on coin collecting values, or other gimmicks. 
          It is designed to be more efficient and more economical
          than buying gold coins for their bullion value.
               A monthly accumulation plan is based on cost-
          averaging, rather than trying to outguess the market. 
          It is designed for simple and systematic savings -- for
          example, an investor might decide to put $250 per month
          into gold.  That $250 is going into gold every month,
          regardless of what the market does.  In the long run
          the gold cost will be less than the average market
          price in the same period.  This is called cost-
          averaging.  It requires no market expertise from the
          investor -- just the dedication to make the same fixed
          investment each month regardless of the market.  (In
          fact, some investors make a point of not looking at the
          market price.)
               A similar technique is used by stock market
          investors -- the cost-averaging principle is the same
          regardless of what is being bought.  A fixed dollar
          amount is being invested every month, rather than
          buying a fixed unit such as one share or one ounce.
               Buying gold through accumulation programs can
          provide you with a number of advantages.  You can make
          purchases at any time.  Your order will be combined
          with other orders received that same day, and will be
          executed the next business day.  Since your brokerage
          house or bank buys and sells in the wholesale bullion
          dealer market, you are assured of competitive prices.  
               Because you are investing by the dollar amount and
          not by the ounce, your purchases are made in whole or
          partial ounces.  And you pay discounted commission
          rates that are up to 40% less than a regular broker
          charges on transactions.
               Your gold is stored in major depositories and is
          fully insured.  Your record keeping is done for you,
          and you will receive a confirmation of each transaction
          and a periodic summary statement.  While you leave your
          gold in an accumulation program, you do not have to pay
          state or local taxes.
               You can liquidate your accumulation plan holdings
          at any time.  And when you do decide to sell, you will
          avoid paying costly assaying fees for weight and purity
          testing.
          
          
          GoldPlan -- The Swiss Gold Accumulation Method
          
               GoldPlan is an investment account created by
          UberseeBank, a medium sized Swiss bank which
          specializes in investment management.  The bank does
          not engage in general commercial banking or in lending
          to corporations or foreign governments, so it is not
          exposed to such risks, nor does it have any conflicts
          of interest with managing the investor's money for best
          results.
               Founded in 1965, the bank now serves over 12,000
          clients, managing funds of almost US $3 billion.  It is
          a wholly-owned subsidiary of American International
          Group Inc., one of the largest insurance holding
          companies.  AIG has assets exceeding US $45 billion and
          capital of US $8.3 billion.  It employees 33,000 people
          in over 130 countries.
               Uberseebank handles the GoldPlan accounts, sending
          detailed statements on each purchase of gold made for
          the investor.  By purchasing in this manner, the
          investors benefit from the bank being able to buy at
          wholesale prices normally available only to large
          purchasers.  In turn the investor pays no extra fee on
          small unit amounts nor the regular spread charged when
          buying and selling gold.  These savings can be as much
          as 3% because of the wholesale price, and another 8% by
          not having to pay small order surcharges.  When added
          to the 20% savings that is often typical with cost-
          averaging, the investor is able to build the gold
          portion of his portfolio in the most economical way.
               Naturally, such accounts are treated with the same
          secrecy as any other Swiss bank account.  Each
          investor's gold is held separately by the bank, in a
          fiduciary (trustee) relationship.  This is important,
          because it means that the gold is always the investor's
          property, and not merely a gold denominated obligation
          of the bank.  Thus solvency or credit standing of the
          bank can not affect the investor's holdings, although a
          bank failure in Switzerland is almost unimaginable even
          with a commercial bank -- and UberseeBank does not even
          assume commercial risks.  Of course the gold is insured
          as well as guarded, and the investor has a choice of
          having it stored in Switzerland, the United States, or
          Canada.  
               GoldPlan accounts can be tailored to the
          investor's needs.  One may want to invest more money to
          achieve the diversification goal more quickly than
          originally intended.  Flexibility is the keyword in the
          operation of these accounts.  The investor can suspend
          monthly purchases at any time without penalty.  
               Account possibilities range from monthly purchases
          to large lump sum purchases, depending upon the
          individual investor's needs.
               In deciding how much of a portfolio should go to
          each type of investment, it is best to ignore the
          existence of the personal residence or a personally
          owned business.  These are not really investment
          assets, and serve a different purpose.  They do not
          provide ready access to capital for either growth or
          emergency funds.  To achieve a properly balanced
          portfolio, it is better to diversify based on only the
          liquid investments.  Otherwise one can find that the
          picture has become unbalanced, by including a very
          large part of the wealth in a non-liquid position, and
          counting that as part of the diversification.
               For more information on GoldPlan, write to:
                    JML Swiss Investment Counsellors A.G. 
                    Germaniastrasse 55,  Dept. 212
                    8033 Zurich
                    Switzerland
                         telephone (41-1) 363-2510 
                         fax: (41-1) 361-4074, attn: Dept. 212.
          
          
          
          
