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RISadler

Legal tender question ...

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RISadler

This auction refers: Gold Natura Series - VERY SCARCE 1999 KOEDOE PRESTIGE NATURA SET - NOT EVEN ONE COIN ON BOB AVAILABLE for sale in Pretoria / Tshwane (ID:102583998)

 

On the description insert regarding the coins, it states "... this legal tender proof coin set ..."

 

Now, since these coins are legal tender, it means I can use them as payment when buying something at any shop. So what are their designated fixed "value" in Rands?

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Cold Sea

Here you go:

 

Legal tender refers to banknotes or coin that may be legally offered in payment of an obligation and that a creditor is obliged to accept.

 

Any amount in banknotes may be offered for payment. In the case of coin, the acceptable amount per individual transactions, is equal to the total amount, not exceeding the following:

 

  • fifty rand, where coin of the denomination of one rand or higher are so tendered;
  • five rand, where coin of denominations of ten cents up to and including fifty cents are so tendered;
  • fifty cents, where coin of the denomination of five cents or less are so tendered; and
  • the value of each coin so tendered shall be equal to the amount specified on that coin.

 

and then:

 

In the case of gold coin, the Bank will purchase such coin at the value of that which the South African Reserve Bank is willing to pay for gold coin on the day of such tender.

Edited by Cold Sea

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PBGold

As of 2013, Natura:

 

1 Oz - R 100

1/2 Oz - R 50

1/4 Oz - R 20

1/10 Oz - R 10

 

Protea:

 

1 Oz - R 25

1/10 Oz - R 5

 

Gold R1 and R2

 

R1 (1/10 Oz) - R 1

R2 (1/4 Oz) - R 2

 

Of course, if someone uses gold coins to buy stuff at those face values, they may need some 'help'.

 

To me the face values are cosmetic and need to be there as the coins are gazetted as Legal Tender.

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RISadler

OK, so that "Kudu Natura" set, in terms of the dreaded fiat monetary system, has a transactional tender value of R180 only.

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PBGold
OK, so that "Kudu Natura" set, in terms of the dreaded fiat monetary system, has a transactional tender value of R180 only.

 

In theory yes, but it really isin't the way one should be looking at it.

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RISadler

Why not? I mean, that is the base value of the coins. As in, suppose someone discovers how to transform lead into gold and the value of gold subsequently drops to five Rand per kilogram, then those coins will still have a value of R180.

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RISadler
Edited by RISadler

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RISadler

With regards to that particular set on auction, please help me out ...

 

There are 1.85 ounces of gold in the coins and at $1240 per ounce that makes it worth - in gold - about $2300. With the current exchange rate of R10 to the USD, that makes those coins worth R23000. Correct? And some "investor" is willing to pay R27000 for the set.

 

OK so far, but what happens when the Rand strengthens to R6/$, because now the gold in the coins (at the same value of gold) is only worth R13800? Given what others are saying on this forum regarding "bad economic times" and "precious metals are the only hedge," I simply cannot reconcile that with the above scenario where the investor just lost 50% of his/her investment due to the exchange rate improving.

 

What it seems to me, is that all these investors in coins are dependent on (and thus actually hoping for) our economy going down the dunny just so they can make money! Or am I missing something, as usual?

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RISadler

Well, seeing as nobody is disputing my statement above, guess I'm right ... :amuse:

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