Some New Thoughts on Old Money

I think most of you would agree that the foundation for America’s best possible future can only be found in the bedrock of an enduring political system based on the rule of law, economic and civil liberties, a strong work ethic, and a superb educational system.  Although these principles are embedded in our nation’s DNA, many people believe that they are all in some danger of being lost.  They fear for the future of our children and grandchildren.  But, aside from political activism – an avocation most of us have neither the time nor temperament to attempt—what are any of us going to do about it?

The 2014 Edition U.S. Trust Insights on Wealth and Worth Report (TIWW) says that sixty percent of wealthy Americans believe it’s important to leave a financial legacy for the next generation.  For the very reasons suggested directly above, I believe that leaving a financial legacy has become increasingly important for virtually all Americans, not just the valde pecuniosus.  However, leaving such a legacy entails the further responsibility of providing an appropriate legal and philosophical framework to guide the future beneficiaries of our life’s work.

In the first place, I don’t want my heirs, nor do you want yours, squandering their inheritances, or otherwise doing themselves more harm than good with money they’re not prepared to manage wisely.

Secondly, I want our heirs to be prepared for any future contingency with a solid education, strong moral values, and the financial wherewithal to make the most of both their genetic endowments and their own productive interests.

Thirdly, you and I are “off-balance-sheet” liabilities of the federal government. ( Collectively—Social Security, Medicare, etc. to the tune of nearly $100 trillion.) Forgive me if I seem self-righteous, but that’s a moral issue, and our generation is on the wrong side of it. The least we can do, I say, is leave to future generations assets at least equivalent to that $10o trillion debt that we’ve created for them. Our generation—the wealthiest in human history—ought to be able to leave behind something other than a “train wreck”. We can, and should, bequeath our wealth wisely—preserving capital for investment by future generations—in the same way, and for the same reasons, that many farm families improve and bequeath their land (and values) to their offspring.

I’ll have much more to say about this in my forthcoming book, Old Money for the Middle Class Family, but for now, food for thought:

What is Equal in the Context of Family Inheritance?

One of the most challenging aspects of planning an inheritance is that families and family life are increasingly complex.  American families come in many forms, shapes, and sizes, but they mostly tend to fall into just a few broad categories. According to the Key Findings Report in the 2014 TIWW, those categories are:

Single person: About one-fifth of wealthy participants in a recent survey had never married or had not remarried after being divorced, separated, or widowed. A small percentage of those are cohabitating.

Traditional marriage: About three-fourths of affluent Americans are in their first marriage and two-thirds of those couples have children.

Blended marriage: The Silent Generation (twenty-four percent) and Baby Boomers (seventeen percent) are more likely than younger generations to have blended families, meaning they have remarried after being widowed or divorced, and they may have step-children.

Multi-generational household: Generation X (eleven percent) and Millennials (thirty-two percent) are more likely to live in multi-generational households, meaning they either live with siblings, parents, or grandparents; or they have adult children, parents, or grandparents living with them.

So, in the context of modern family legacy planning, what seems like the simplest choice – dividing assets equally among all of the children – can be problematic.  There are often personal histories and circumstances that cloud the definition of equality.  And, when you combine subjective judgments about fairness with the complexities of modern American family structure, legacy issues can become emotional dynamite.

Minimizing Inheritance Disputes

Determining an equitable division of assets is rarely easy, not even for single parents or couples in traditional families. One child may suffer a disability, have an addiction problem, or manage the family business.  Another may be less successful than his siblings, or have made lifestyle choices that the parents are uncomfortable supporting. If your family circumstances necessitate an uneven distribution of assets, there are many techniques you might use to minimize conflicts that may erupt among the children or other heirs. These could include:

Acting discretely. If you’ve decided an unequal division of assets is necessary, and know that one or more children will not be happy with your decision, consider establishing a discreet trust for each child. The advantages of discreet trusts are that they can be funded unequally and each one can have completely different distribution triggers and other conditions or terms of control. In addition, each child will be apprised only of the provisions of her own trust.  Be sure that the assets that will fund each trust are appropriately titled.

Establishing a shared trust. If you distribute the majority, but not all, of your estate equally among heirs, the remainder (perhaps one-fifth or one-quarter of the assets) can fund a shared trust to be used when an heir has an emergency need. The trust should have an objective third-party trustee who will be responsible for distributing funds fairly and according to the terms of the trust.  We have seen family members acting as trustees abuse their powers in this type of trust.

Choosing your executor carefully. Some say it’s best to follow family hierarchy and make your oldest child your executor or trustee. Others say it’s best to choose a family member who is organized, hardworking, honest, and a good communicator. Still others will suggest you appoint a committee of executors, because of the checks and balances a group provides.  I think that this decision is unique to each family, but in my own case, one of our children is our trustee and executrix, but we have named each of the others (in birth order) as her successors, if she is unable or unwilling to serve.  All of our children seem to be comfortable with our decision; so far, anyway.  No matter what you decide, my advice is to let all of your children know what your decision is while you’re still living and able to explain it.  That may save a lot of grief for your trustee or executor when you’re no longer on the scene.

Explaining your thinking. The difference between family harmony and an on-going feud may ultimately be determined by how clearly you communicate with your family. The Wall Street Journal suggests, “Whenever possible, try to be open about your inheritance plan while you are still alive, so that every family member understands it, minimizing the chances for suspicions to arise later. If you don’t want to have this difficult conversation while you are alive, you can write a letter or make a video elaborating the reasons and thought process behind your plan, making it clear that these decisions are yours alone.”  I think that’s good advice, but that doesn’t mean that you need to disclose to your heirs how much you have today.  In fact, I would not and have not.

Also, Linda and I tried to personalize our trust documents, telling our children that we truly love them, one and all, and detailing our purposes and intentions using our own words.  Your legacy documents do not have to be legal boilerplate (Legalzoom is not a friend who knows and understands you), and I think your documents should reflect your values and your personality, not just your wealth.  Your kids love you, too, you know; and it won’t hurt them at all to be reminded of you through the stories you choose to share within your trust documents.

It’s often said that there are no right or wrong answers when it comes to inheritance.  That idea just makes me crazy!  Of course there are right or wrong answers! The issue is:  Are they answers that are right or wrong for you and your family.  You should make your decisions based on your first-hand knowledge of your family’s internal dynamics and on the individual needs and values of your heirs. Indeed, The American Association of Individual Investors Journal (AAII Journal) suggests taking “a multi-faceted approach that combines psychology, good lawyering, a lot of self-awareness, and a good dose of common sense.”

If you haven’t done so recently, I invite you to visit with us about your legacy plans, before you embark on a rewriting of your will, trusts, and other estate planning documents.  With twenty-three years of professional experience, having advised hundreds of families on these issues, and more importantly, perhaps – I sincerely believe that I can help you frame your questions concisely and effectively, so that you and your attorney can create documents that really work for what you want.  To be perfectly clear, though, I am not an attorney nor a CPA, so I am not offering legal or tax advice; I am offering the wisdom and compassion that can only come from a love of the game, and a sincere desire to help your family prosper for many generations to come.  mh

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This information is not intended to be a substitute for specific individualized legal or tax advice.   We strongly suggest that before you make any final decisions regarding your estate plan, that you discuss your specific situation with qualified legal and tax advisors.

Source:  Much of this essay was prepared from material provided by, and with permission from, Peak Advisor Alliance, Omaha, Nebraska.

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A Noteable September Birthday

Samuel Adams was born on September 27, 1722 in Boston, Massachusetts. He graduated from Harvard College in 1740.

A strong opponent of British taxation, Sam Adams, as he is affectionately known by most Americans today, helped organize resistance to the Stamp Act (1765), and he played a vital role in organizing the Boston Tea Party. Sam was a cousin to John Adams, America’s second President, with whom he urged a final break from Britain. Both signed the U.S. Declaration of Independence in 1776.

An iconic American hero, Samuel Adams is, nevertheless, a controversial figure in American history. Disagreement about his significance and reputation began before his death and continues into our time. His contemporaries, both friends and foes, regarded him as one of the foremost leaders of the American Revolution. Thomas Jefferson, for example, characterized Adams as “truly the man of the revolution.” Leaders in other colonies were often compared to him: Cornelius Harnett was called the “Samuel Adams of North Carolina”, Charles Thomson the “Samuel Adams of Philadelphia”, and Christopher Gadsden the “Sam Adams of the South”. When John Adams traveled to France during the American Revolution, he had to explain that he was not Samuel, “the famous Adams”.

Although supporters of the Revolution praised Adams, Loyalists viewed him as a sinister figure. Peter Oliver, the exiled chief justice of Massachusetts, characterized Adams as a devious Machiavellian with a “cloven foot”. Thomas Hutchinson denounced Adams as a dishonest character assassin, emphasizing Adams’s failures as a businessman and tax collector, in his History of Massachusetts Bay.

Whig historians challenged the negative Loyalist versions of Sam Adams. William Gordon and Mercy Otis Warren, two historians who knew Adams, wrote of him as a man selflessly dedicated to the American Revolution. George Bancroft portrayed Adams favorably in his monumental History of the United States from the Discovery of the American Continent (1852). The first complete biography of Samuel Adams appeared in 1865, and was a three-volume set written by William Wells, Adams’ great-grandson. The Wells biography is still valuable today for its vast wealth of information.

I say, let the historians have their battles, if it makes them feel better. The truth is that the American Revolution might not have happened without Samuel Adams, though it required wiser men than he to make it successful; most particularly the aforementioned Jefferson, Sam’s cousin John, and America’s indispensable man, George Washington.

Samuel Adams served as governor of Massachusetts from 1794 to 1797, his term overlapping the Presidential terms of George Washington and John Adams. He died on October 2, 1803, during Thomas Jefferson’s first term as President.

Samuel Adams’ simple and un-pretentious cenotaph may still be viewed from the sidewalk that runs past the Granary Burying Ground in downtown Boston. If you’re ever in Boston, I urge you to visit that site, and take the free, short, and fascinating guided tour. mh

A Revolution Within a Revolution

Elsewhere in this newsletter I’ve half-argued the case that we’re headed, not for a repeat of the inflation of the 1970’s, but for inflation on steroids. Here is my perspective on all the issues we face, including that one:
The Global Capitalist Revolution. We underestimate its power, perhaps because its force is generated by two relatively small minorities. They are the savers and the entrepreneurs, especially the entrepreneurs – the business people who know no limits to their own creative energy. This revolution has been growing for nearly three hundred years, its spreading across the globe, and its transformative capacity is boundless. It is not going to be stopped by the megalomaniacal ambitions of a KGB thug. Ditto, the divisive rhetoric emanating from the political posers in Washington, D.C., and the Fed’s Keynesian thimblerig. In fact, I think all these things are but the death rattle of arrogant and repressive political philosophies, inconsistent with human nature.
The Global Capitalist Revolution, which arose in mid-eighteenth century Great Britain, had by about 1980, enabled almost two billion people worldwide to attain a lifestyle that had become known as “middle class”. Since the fall of The Berlin Wall in November of 1989, another three billion people have emerged from the darkness, half a billion of whom could now be considered well-off. World-wide, nearly one hundred and fifty million people are ascending out of poverty each year; and there will soon be a five billion person middle class inhabiting the Earth. In a few short years, the value of their output will very likely dwarf the production of the past three centuries. Production is the one thing that can both fight inflation and pay down government debt.
From the beginning of the Global Capitalist Revolution, Great Britain needed one hundred and fifty years to double its per capita income. From its Civil War, America achieved that standard in thirty years. China and India have pulled off a similar feat on a much larger scale, albeit from a lower base.
Africa now has six of the ten fastest-growing economies in the world since 2010, and it’s projected to claim seven of the top ten spots by 2015. The financial services sector in Africa is expected to grow by forty percent annually to 2020. Apple is expanding its African stores, intending to sell more than a billion iPhones in the next five years. Maybe these are the reasons why rock star and social activist Paul David Hewson (stage name, Bono) says that capitalism is what Africa needs more of, not foreign aid. It was “a humbling thing” he says, “to learn the role of commerce.”
In Mongolia’s southern Gobi desert, British and Canadian firms are partnering to develop one of the world’s richest copper mines, with gold and coal mines already in production. There’s a sixty-mile highway and a modern railway running from Oyu Tolgoi into China, and a mile-long air strip that can accommodate 737 and C-130 aircraft. New schools are being built. Imagine!

Yes, we have our scars, physical and financial; and we have unhealed wounds, too. But, the vast preponderance of the historical evidence makes me a firm believer in the economics of freedom, and in the ultimate triumph of truth. So, the idea I most want you to engrave on your brain today is that human beings flourish when information flows freely. All top-down political solutions—including Keynesian top-down banking and such sacred cows as Social Security, Medicare, Medicaid, and Obamacare—depend upon the public discounting of truth. (The truth is that all of these programs discourage personal responsibility in varying degrees; and more to the point, they will—if not reformed—eventually bankrupt the nation.) But, history teaches us that human problems arise and are then solved. The flow of information can be slowed, but not halted. Even now, the flow of information is accelerating. My bet is that in the great sweep of The Global Capitalist Revolution, today’s problems, by which I mean all of them, will be whisked away by the exponentially expanding bandwidth of human knowledge. The Global Capitalist Revolution—really a special case of the Information Revolution, which began with the invention of the printing press—has only just begun to transform the world. mh

U.S. Tax Court Changes IRA Rollover Rules

Flourishing Tax Principle #1:  It doesn’t pay to be too clever in your dealings with the Internal Revenue Service.

Just ask Alvan and Elisa Bobrow.  Despite Alvan’s being a tax lawyer by profession, the U.S. Tax Court ruled that Alvan and Elisa violated the spirit of the 60-day rollover rules outlined in IRS Publication 590—Individual Retirement Arrangements.  That publication says that if you take money from your IRA, you have sixty days to put it back, without incurring either a tax or a penalty.  Further, Publication 590 says that you can do that once per year (365 day period) per IRA account.  That idea was backed up by two Private Letter Rulings (PLRs) from the IRS—one in 1987, and another in 1996.  

So, Alvan thought it would be okay to take $65,064 from one of his IRA accounts, as long as he replaced it within sixty days.  Before his sixty period expired, Alvan withdrew $65,064 from another IRA and deposited it into his personal checking account, and then wrote a check for the same amount for deposit into his first IRA.  Elisa then withdrew $65,064 from her IRA and deposited the money into their joint checking account.  Then Alvin wrote a check on that account for $65,064 and deposited it into his second IRA, again within the sixty rollover window.  This all seems a little silly to me, but it seems to comply with the IRS’ previous guidance, as provided in Publication 590 and the two PLRs mentioned above.

Nevertheless, Alvan and Elisa received a letter from the IRS, disallowing Alvan’s second sixty–day rollover.  Along with the letter was a bill for unpaid taxes of$51,298.  They were also penalized $10,260 for inaccurate reporting.  Alvan and Elisa disagreed and took the IRS into Tax Court.

According to IRA guru Ed Slott, Alvan bungled his own argument in court, failing to cite Publication 590 and the PLRs.  Whether that was the reason for the court’s decision may never be known, but the court ruled against the Bobrows.  It also rewrote the sixty-day rollover rule to allow only one sixty-day rollover per taxpayer in any 365 day period, regardless of the number of IRA accounts the taxpayer has.  To reiterate:  Publication 590 currently limits sixty-day rollovers to one per 365 day period per IRA account.  Big difference.  The new rule takes effect on January 1, 2015.

The bottom line is:  It’s generally not a good idea to withdraw money from your IRA, intending to do a sixty-day rollover.   If you have any other choice in the matter, consider that first.  When transferring money from one IRA account to another, always do it as a trustee-to-trustee transfer, and never take possession of the money yourself.  Like everything else I’ve ever seen from the IRS, this new rule comes with exceptions, lots of them.  But, don’t try to be your own tax advisor, looking for loopholes the way that Alvan did.  Always seek advice from a qualified tax professional before—not after—you withdraw money from your IRA or other qualified retirement plan.  After is almost always too late.  mh

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Source: Ed Slott, Financial Planning Magazine Online, IRS Issues IRA Rollover Warning, April 11, 2014.

A Notable May Birthday

Friedrich August von Hayek was born in Austria on May 8, 1899.  After World War I, he earned doctorates in Law and Science at the University of Vienna.  Upon receiving his degrees he joined a private seminar led by the greatest of the Austrian economists, Ludwig von Mises.

The free market, Hayek said, was not designed by anyone, but evolved through the spontaneous ordering of self-interested human actions.  He showed, as have others, that so-called market failures are actually the failures of government central planners.  For example when the central bank holds interest rates at artificially low levels, people are led into mal-investment and reduced savings.  (A certain housing crash comes to mind, and before that a tech bubble.)

The reason socialist economists thought central planning could work, argued Hayek, was that they thought planners could take the given economic data and allocate resources accordingly. They’re smarter than their fellow citizens, after all.  But Hayek pointed out that the data are not “given.” The data do not exist, and cannot exist, in any one mind or small number of minds. Rather, each of the individuals who make up a market—millions of people, actually—has knowledge about particular resources, and opportunities for using these resources, that a central planner can never have. The virtue of the market is that it gives those individuals the freedom to use and share their own unique sets of information.  Without markets, information can’t flow.

In 1944, Hayek published The Road to Serfdom1 to warn the British people of Socialism as a growing political force within their country.  The warning was ignored, and it was finally left to the “Iron Lady” Margaret Thatcher to undo the damage thirty-five years later. 

In 1974, Hayek shared the Nobel Prize in economics with the Swedish economist Gunnar Myrdal (1899 – 1987) for their pioneering work in the theory of money and economic fluctuations and for their penetrating analysis of the interdependence of economic, social, and institutional phenomena. 

Hayek was still publishing at age eighty-nine. In his final book The Fatal Conceit2, he offered some profound insights explaining the intellectuals’ attraction to socialism, and he masterfully refuted the basis for their beliefs.  Of all Hayek’s work, the two named here are the required reading. 

Friedrich August von Hayek died in Freiburg, Germany on March 23, 1992.

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1   The Road to Serfdom, University of Chicago Press, 1944.

2   The Fatal Conceit, University of Chicago Press, 1988.

From the Dark Side

Over the past few months, I’ve forced myself to read from among the plague of doom and gloom books that have been published since the Great Recession of 2008-2009.  Think of it as a vaccination to strengthen my psychological immune system.  (That’s why I’m passing my thoughts on to you, dear reader.)

The quality of the analyses I’ve read has varied, from rambling to erudite.  There are some very smart people in the black sunrise industry, and there are a few people who are just a wee bit the other side of misguided.  The author who impressed me most is James Rickards.  His latest book, The Death of Money1 is a sequel to his first, Currency Wars2.  Each book can stand alone, but they’re better read back to back.  In this essay, I’ll focus on the overall message of both books, without trying to negotiate either the overlap or the differences.

The Death of Money could be to our time what Harry Browne’s, How to Profit From the Coming Devaluation3 was to the 1970’s; except that, unlike Browne, Rickards doesn’t tell his readers how to invest.  Harry Browne’s book was published in 1970, just before President Nixon removed the last formal link between the U.S. dollar and gold in 1971.  In the days immediately after Nixon’s de facto credit default, the dollar was devalued by more than 20%.  In the decade that followed, the greenback lost well over half of its 1971 purchasing power.  Unfortunately, in many ways, we seem to be repeating the worst economic policy mistakes of the Nixon/Carter era. 

From the late 1960’s through the late 1970’s, every sentient being on earth knew that our main economic challenge was inflation.  But the Federal Reserve (the Fed) and most academic economists had insisted that top-down banking could manage the economy more efficiently than a free market.  They generally blamed exogenous events like the war in Vietnam and Arab oil embargoes for the escalating rate of inflation.  Those things certainly didn’t help, but Harry Browne showed that it was the Fed’s monetization of federal budget deficits (money printing) that ultimately led to dollar devaluation and hyperinflation. 

Now as then, the vast majority of academic economists and the Fed share a shaman’s idea of how the world works.  James Rickards calls it “Keynesianism and the arrogance of the PhD.”  He’s being generous.  As I’ve watched the Fed’s operations over the past four decades, it’s become clear to me—as Rickards explains in considerable detail—that they don’t really know what they’re doing.  But to be fair, they’ve also been given a virtually impossible task.

James Rickards asks a lot from his readers with the depth of his analysis, but he’s not overly prone to jargon. He is an attorney, a portfolio manager, an investment banker, and he consults with the Pentagon and major corporations. He was the chief negotiator of the Fed’s settlement with Long Term Capital Management, when that firm’s leveraged bond market bets threatened to bring down the world financial system back in 1998.  In other words, his résumé reads like a who’s who of international finance.  One wonders if he ever sleeps. 

It’s Rickard’s contention that the Fed and other central banks are trying to solve deflationary problems, which in the present situation are structural—including, but not limited to cronyism, regulatory overreach, aging populations, out-of-control entitlement spending, and government debts and deficits—with a cyclical solution; e.g. money printing.  The Fed is actually doing its best to create inflation, with a target of 2% or more.  Therefore, he says they’re quite willing to err on the side of too much money printing, as opposed to too little.  He says that the Fed’s econometricians think they’re dialing up a household thermostat, but in reality, they’re tinkering with the control panel on a nuclear reactor.  The danger of overheating is much greater than the Fed thinks.  Once inflation reaches critical mass (above 2.5%), they won’t be able to dial it down; crowd psychology will take over, and inflation will spiral out of control.  That’s a familiar argument, one that both former Fed chairman Alan Greenspan and Harry Browne often made.  And, it’s a real possibility.    

Rickards’ more frightening complaint is that the world’s too-big-to-fail institutions are now exposed to more than $650 trillion in derivative securities risk; nine times world GDP.  Rickards says that Wall Street, the Fed, and the International Monetary Fund (IMF), are using the wrong risk models.  Their models assume that the derivatives mostly cancel each other out, thereby reducing overall risk to the financial system.  But, as we should have learned from AIG and others in 2008, he says, they should be using risk models based on the relatively new science of “complexity”, which, I confess, I found fascinating.  But, Rickards says, despite complexity theory, and the compounding nature of the risks it explains, the solution to the derivatives hazard is simple and straightforward:  Break up the too-big-to-fail banks and ban most derivative products.  I won’t hold my breath waiting for either of those things to happen.  My guess is that if Rickards’ analysis of derivatives risk is correct, nuclear may again be the appropriate metaphor, but in the sense of a meltdown, not an explosion.  The other aspect of the “too-big-to-fail” problem may not be size at all, but regulatory favoritism.

You may have noticed the chart on the back of this newsletter.  My sweetie says it’s monetarily obscene, but it reflects the aforementioned attempt by the Fed to offset the continuing deflationary effects of the housing finance bust of the late 2000’s.  Similar stories are playing out in Japan and in Europe, especially Japan.  That’s the main difference between the 1970’s and now:  For today’s central bankers and politicians, the threat of a 1930’s style deflationary collapse is more terrifying than the threat of a 1970s hyperinflation.  Inflation increases government tax receipts; deflation erodes them. 

The U.S. dollar has functioned as the world’s reserve currency since (and despite) the 1971 Nixon convertibility default.  It has served reasonably well, but according to Rickards, the Fed’s recent actions have threatened the dollar’s stability once again.  The saving grace, so far, is that no other currency is even in the same league with the dollar.  Still, as the chart shows, the Fed has printed more than $3 trillion since 2008, quadrupling the size of its balance sheet.  Rickards says that if the Fed were a regulated bank, and it was forced to disclose the true market value of its bond portfolio, it would be bankrupt.  So he asks, what will they do if there’s another crisis?  They can’t print another $3 trillion without destroying the dollar altogether; or can they?  Rickards says that the next global financial crisis will be bigger than the Fed, so it will be up to the IMF to bring order out of chaos.  I warned you that this was the scary part, didn’t I?

Yes, James Rickards draws a fairly bleak picture of the dollar’s future, but he assures us that we’ve been through this kind of thing before and survived.  He’s right about that, and if necessary, we’ll survive to thrive, yet again.  In the next issue of this newsletter, I’ll share a more positive analysis with you.  So please, don’t let this message from the dark side upset you; and especially, don’t jump out the window.  Indulge me just a bit longer, and go to page seven.  mh

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1 The Death of Money, James Rickards, Portfolio/Penguin, April 2014.

2 Currency Wars, James Rickards, Portfolio hardcover, November 2011.

3 How You Can Profit From the Coming Devaluation, Harry Browne, Arlington House, August 1970.

How to Win a War (Make it Personal)

With Commander N.D. Nguyen (USN Retired) aboard the U.S.S. Midway.
With Commander N.D. Nguyen (USN Retired) aboard the U.S.S. Midway.

The Battle of Điện Biên Phủ started on March 13, 1954.  Both sides in the fight wanted to emerge as the victor to establish a favorable position in the planned negotiations about “the Indochinese problem”.  After fighting for fifty-five days, the besieged French garrison in French Indochina (Vietnam) was overrun, and all French positions were captured by the communist Việt Minh.

Although the resulting negotiations technically set up national elections across all of Vietnam, the country was effectively divided into two separate states, a communist controlled North Vietnam, supported by China and the U.S.S.R.; and a democratic South Vietnam, supported by the United   States.  Seven-year-old Nguyen Dinh Nguyen fled from his home in Hanoi, along with his parents and siblings, to the relative freedom of Saigon.

A dozen years later, America became fully engaged in the War in Vietnam, and coincidentally, N. D. Nguyen joined the South Vietnamese military.  He was sent to the United States to be trained as a pilot.

How he did it, I can’t say, but in April of 1975, with a murderous band of communist soldiers from the north closing in—and with the last contingent of American Marines valiantly defending and evacuating the U.S. Embassy and other installations—N. D. Nguyen evacuated his parents and siblings from Saigon to Guam.

Upon arriving in Guam, Nguyen’s mother asked, “Son, we ran from Hanoi to Saigon; now we run from Saigon to Guam; Tell me, where do we run to next?

One can only imagine how she must have felt.  But, it’s worked out OK.  Nguyen’s parents are still alive—they are now ninety-four and eighty-nine years old—and they reside quite happily and peacefully in southern California.  N. D. Nguyen himself is a retired U.S. Navy Commander.  And, he recently retired a second time, ending a long career at Spawar Systems, Inc. in San Diego.  His business card reads,  “N.D. Nguyen,  Scientist”.

Commander Nguyen graciously told Linda and me his story while we were visiting the flight deck of the U.S.S. Midway, an aircraft carrier much like those that Commander Nguyen had flown from during his military career.  (My thanks to Derek Kenney and Columbia Management for inviting us aboard.)  mh