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16 - Modern Gold Bug How does the Modern Gold Bug compare to 30 years ago? Amber Ness takes us on a tour through time.
6 World News SPECIAL FEATURES
12 The Future of Bitcoin 16 The Modern Gold Bug 22 Making an American Eagle 28 Good Delivery, Good for You
22 - The American Eagle Has Landed
34 Closet Preppers 46 American Artisans
Jason Vaile reviews the historical value and production of this icon.
50 Mint Spotlight Numismatics
72 American Eagle First Strike HARD ASSETS
28 - Deliver the Goods The importance of good delivery is explored and shows why this could be good news for investors.
78 Top 10 Tips for Buying Metals LIFESTYLE AND LUXURY
40 We Love Our Cars 54 American Polo 57 Venom GT 58 American Watches 66 Space Visit
34 - Prepping on the DL
68 Captain America
When no one is looking, how do you prepare for “just in case”? Amber Ness shows us how.
Mining & Minerals
82 Mining News Reference
88 Preferred Dealers
78 - Tipping Point
94 Events
John Maben shows the first time buyer the Do’s and Don’t’s of metal investing.
96 Hindsight
www.ahametals.com American Hard Assets | 3
EDITOR’S NOTE
America the Beautiful
H
appy Fourth of July to all of our readers and hopefully you have experienced plenty of warm summer weather in whatever part of the country you picked up this copy of
AHA.
JUNE/JULY 2014
PRESENTED BY: AHA Metals, LLC
As we always do in this part of the publication, we ask you again to please visit our website at www.ahametals.com. We’re really proud of it and it’s there you will find the up-to-the-minute news and stories you’ve come to expect from AHA along with interesting stuff from our partners, real-time updates, exchange rates, metal prices, and more. We’ve introduced even more original content on the site in recent months from our great stable of industry writers and plan to feature even more in the coming year. This issue, as you can tell by the great-looking cover provided by our wonderful design folks, is all about America. The “American” in American Hard Assets is the focus here and we’re bringing you a boatload of content with a definite focus on American gold, American coins, refiners, wristwatches, and a whole host of other interesting stuff.
VP CONTENT: Brad Hastedt EDITORIAL SUPPORT: Kevin Thompson VP Sales & Marketing: Mike Obert SUBSCRIPTIONS: Leigh Chamberlain GRAPHIC DESIGN: J.K. Monte de Ramos, Noel ‘Kip’ M. Macasero (Open Look Creative Solutions)
FEATURE WRITERS: Ed Estlow, Gabriel Benson, Eavan Moore, Jason Vaile, Amber Ness, Susan Kime, Richard Alexander Rogers, Michael Haynes
CONTRIBUTORS: Christy Stewart, John W. Garibald, John Maben
DISCLAIMER: American Hard Assets is 100% American owned. All contents of American Hard Assets (AHA) are for information purposes only. AHA does not guarantee the accuracy, completeness or timeliness of the contents. None of the information contained herein constitutes a solicitation, offer, opinion, or reccomendation by AHA to buy or sell any security or commodity, nor legal, tax, accounting, or investment advice or
So, we’re all set to keep the summer going and to celebrate our great country and what it has to offer in the way of gold, silver, and other hard assets. We are excited to bring you this third issue of the year and, as always, don’t hesitate to give us feedback on the magazine or online to help us get better. We say it every time, but we are committed to bringing you the news and stories you want (and need) to see. Thank you for continuing your commitment to this publication and keep up with American Hard Assets for all your metals news in the future. Good Investing! American Hard Assets Editorial Staff
services regarding the profitability or suitability of any security, commodity or investment. All commentary and advice in this publication is of a general nature only, and doesn’t consider your individual circumstances or financial objectives. You should always consult a licensed financial advisor for your personal investment advice. Please do your own research.
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H A R D A S S E T S U P D A T E S | World News
World News Updates
Source: www.washingtonpost.com
The World’s Most Expensive Dog, A Tibetan Mastiff Sold for $2 Million A Tibetan Mastiff — an ancient breed of dog that looks more lion than canine — just fetched nearly $2 million at a Chinese “luxury pet fair” in the eastern province of Zhejiang, Agence France-Presse reports. More expensive than the 2011 sale of a red mastiff named Big Splash, which cost $1.6 million, Tuesday’s transaction might just make this dog the most expensive of all time, AFP says. The buyer, an unnamed 56-year-old property developer from Qingdao, dropped a whopping 12 million yuan ($2 million) on the dog on Tuesday, and the dog’s breeder was elated. For reporters on Tuesday, he laid it on thick. His dogs “have lion’s blood and are top-of-the-range mastiff studs. Pure Tibetan mastiffs are very rare, just like our nationally treasured pandas, so the prices are so expensive.” In 2010, the Associated Press called the breed the “dog of the
6 | American Hard Assets www.ahametals.com
moment.” Its ownership has come to symbolize status and wealth as much as a new car or an ostentatious mansion. “I used to invest in German shepherds, but Tibetan mastiffs are what’s hot right now,” business owner Sui Huizheng, who owns 20 of the dogs, told the AP. But in China, they are relatively common, and have a short life expectancy. “It’s quite puzzling why they are fetching such a high price in China,” says Martha Feltenstein, president of the American Tibetan Mastiff Association. This red-haired, two-million-dollar dog is a hulk of an animal, 31 inches tall and weighing nearly 200 pounds, AFP reports. The luxury dog trade has been a hot business in China lately. With more than 800,000 millionaires — the most in its history — that nascent class has helped make China one of the world’s largest luxury markets.
World News | H A R D A S S E T S U P D A T E S
World News Updates
SOURCE : www.cnbc.com
Most Expensive Markets for New York City has become an otherworldly market for real estate to most people. It’s the town where a skyrise condo just sold for more than $50 million—and it was only that cheap because it was raw space. But to the global rich, New York is a bargain. New York is half price compared to some other favorite cities of the rich, a new report shows that on a per-square-foot basis. The Knight Frank Wealth Report shows that the tiny, tony principality of Monaco remains the most expensive real estate market in the world. The report found that $1 million will only get you 15 square meters of space, or about 160 square feet. So you could buy a $1 million bedroom—and presumably share a bathroom and kitchen with other property-poor millionaires.
The darling of the rich: London is the favorite city of the rich. The study ranks cities by their attractiveness to the rich based on four criteria: economic activity, quality of life, knowledge/influence and political power. London ranks first in the world, followed by New York. The two cities always dominate the top of the list (they are like the Gates and Buffett of rich cities), and they are basically tied. But, as seen in the chart below, the study projects New York will eventually retake the lead.
2013
2014
2024
London
London
New York
New York
New York
London
Singapore
Singapore
Hong Kong
4
Hong Kong
Hong Kong
Singapore
5
Geneva
Geneva
Shanghai
6
Shanghai
Shanghai
Beijing
7
Dubai
Miami
Dubai
8
Miami
Dubai
Miami
Paris
Beijing
Geneva
Beijing
Paris
Mumbai
1 2 3
“New York is a definite bargain from the global marketplace perspective,” said Dolly Lenz, founder of Dolly Lenz Real Estate in New York. “It’s not a bargain from the perspective of New Yorkers who have seen the prices quadruple over the past 20 years. But the wealthy look more globally, and when they compare these cities, New York is great value.” But the report—done by Knight Frank, a London-based real-estate firm, along with research firm WealthInsight—had other interesting tidbits when it comes to the real estate and global wealth. These include:
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Biggest price gains: With prices up 38 percent for prime, luxury real estate, the city that had the biggest price increases for luxury real-estate was Jakarta, Indonesia. Auckland, New Zealand, ranked second, at 29 percent, while Bali, Indonesia, ranked third, with prices up 22 percent.
“History, location and their long established wealth mean that London’s and New York’s positions remain unassailable,” the report said, adding that New York will soon get an edge from political power and economic activity. www.ahametals.com American Hard Assets | 7
H A R D A S S E T S U P D A T E S | World News
World News Updates Worst Investment in the World This Year
SOURCE: qz.com
You’d have to hunt pretty hard to find a worse investment over the last three months than bitcoin. Bitcoin, the virtual, electronic currency tumbled at 38% against the US dollar since Dec. 31 last year, making it one of the worst assets to own. That’s right. We reckon bitcoin has dropped more than copper, the Russian stock market (Micex), and the Nikkei. It’s even declined worse than the official dip of the Argentine peso. Although unofficial black market declines in that currency are much worse. Of course, it’s expected that confidence in the crypto-currency has been falling apart. First of all, unless you were dodging taxes, laundering money or involved in selling illegal drugs, it never really made much sense to use bitcoin as a medium of exchange. It did momentarily make a lot of sense to own bitcoin for a few months. But only because it was going up. In other words, it made sense if you 8 | American Hard Assets www.ahametals.com
were confident you could flip it to another sucker at a tidy profit. But the Japanese bitcoin exchange Mt. Gox catastrophic collapse a month ago made it painfully clear that bitcoin is not a safe store of value either. (Some $450 million worth of bitcoins somehow disappeared during the implosion of the company.) In short, bitcoin is not a widely accepted medium of exchange. It’s not a reliable store of value. It doesn’t come anywhere near meeting the test of a currency. And, in March, the US Internal Revenue Service (IRS) dealt it a harsh blow by ruling that for tax purposes, bitcoin should be treated like a financial asset such as a share of stock, which will make it almost impossible to use as a currency. Of course, your ownership share of a share of stock represents a claim on the profits of an actual company. Your ownership of bitcoin, even before the IRS decision, represented, well, that you were a pretty cool, tech-savvy person. In other words, not much.
World News | H A R D A S S E T S U P D A T E S
World News Updates
The world’s richest billionaires are responsible for some of their nation’s most well-known products: The chairman of Samsung is South Korean Lee Kun-Hee, Amancio Ortega of clothing company Zara boasts a $64 billion fortune in Spain – the biggest in Europe. Heineken, Netherlands’ most famous beverage conglomerate, is responsible for the $10.4 billion fortune of heir Charlene de Carvalho-Heineken. And who could forget Microsoft’s Bill Gates, who is America’s wealthiest man as well as the worlds. As defined by Luisa Kroll and Kerry A. Dolan, those methodology rules rank individuals rather than large, multi-generational families who share fortunes. We don’t include members of the royal family or dictators who obtain their fortunes entirely as a result of their position or power, nor do we include royalty who, often with large families, control the riches in trust for their nation. Do you know who the richest person is in your country? View the full list below.
SOURCE: www.forbes.com
Algeria Richest: Issad Rebrab Net worth: $3.2 billion Source of wealth: Food
Belgium Richest: Albert Frere Net worth: $4.9 billion Source of wealth: Investments
Colombia Richest: Luis Carlos Sarmiento Net worth: $14.2 billion Source of wealth: Banking
Angola Richest: Isabel dos Santos Net worth: $3.7 billion Source of wealth: Investments
Brazil Richest: Jorge Paulo Lemann Net worth: $19.7 billion Source of wealth: Beer
Cyprus Richest: John Fredriksen Net worth: $13.6 billion Source of wealth: Shipping
Argentina Richest: Carlos and Alejandro Bulgheroni Net worth: $5.5 billion Source of wealth: Oil & gas
Canada Richest: David Thomson & family Net worth: $22.6 billion Source of wealth: Media
Czech Republic Richest: Petr Kellner Net worth: $11 billion Source of wealth: Banking, insurance
Australia Richest: Gina Rinehart Net worth: $17.7 billion Source of wealth: Mining
Chile Richest: Iris Fontbona & family Net worth: $15.5 billion Source of wealth: Mining
Denmark Richest: Kjeld Kirk Kristiansen Net worth: $10.2 billion Source of wealth: Lego
Austria Richest: Dietrich Mateschitz Net worth: $9.2 billion Source of wealth: Red Bull
China Richest: Wang Jianlin Net worth: $15.1 billion Source of wealth: Real estate
Egypt Richest: Nassef Sawiris Net worth: $6.7 billion Source of wealth: Construction
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H A R D A S S E T S U P D A T E S | World News
World News Updates
Finland Richest: Antti Herlin Net worth: $3.3 billion Source of wealth: Elevators, escalators
India Richest: Mukesh Ambani Net worth: $18.6 billion Source of wealth: Petrochemicals, oil, gas
France Richest: Liliane Bettencourt & family Net worth: $34.5 billion Source of wealth: L’OrÊal
Indonesia Richest: R. Budi Hartono Net worth: $7.6 billion Source of wealth: Banking, tobacco
Georgia Richest: Bidzina Ivanishvili Net worth: $5.2 billion Source of wealth: Investments
Ireland Richest: Pallonji Mistry Net worth: $12.8 billion Source of wealth: Construction
Germany Richest: Karl Albrecht Net worth: $25 billion Source of wealth: Retail
Israel Richest: Eyal Ofer Net worth: $7 billion Source of wealth: Real estate, shipping
Greece Richest: Spiro Latsis & family Net worth: $3.2 billion Source of wealth: Banking, shipping
Italy Richest: Michele Ferrero & family Net worth: $26.5 billion Source of wealth: Chocolates
Guernsey Richest: Stephen Lansdown Net worth: $2.4 billion Source of wealth: Financial services
Japan Richest: Masayoshi Son Net worth: $18.4 billion Source of wealth: Internet, telecom
Hong Kong Richest: Li Ka-shing Net worth: $31 billion Source of wealth: Diversified
Kazakhstan Richest: Bulat Utemuratov Net worth: $2.2 billion Source of wealth: Mining, banking, hotels
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Kuwait Richest: Fawzi Al-Kharafi, Jassim Al-Kharafi and Mohannad Al-Kharafi (tied) Net worth: $1.3 billion Source of wealth: Diversified Lebanon Richest: Najib Mikati and Taha Mikati (tied) Net worth: $3.1 billion Source of wealth: Telecom Lithuania Richest: Nerijus Numavicius Net worth: $1 billion Source of wealth: Retail, pharmacy Macau Richest: David Chow Net worth: $1.8 billion Source of wealth: Casinos Malaysia Richest: Robert Kuok Net worth: $11.5 billion Source of wealth: Diversified Mexico Richest: Carlos Slim Helu & Family Net worth: $72 billion Source of wealth: Telecom Monaco Richest: David Nahmad Net worth: $1.75 billion Source of wealth: Art
World News | H A R D A S S E T S U P D A T E S
World News Updates Morocco Richest: Othman Benjelloun Net worth: $2.8 billion Source of wealth: Banking, insurance
Romania Richest: Ioan Niculae Net worth: $1.2 billion Source of wealth: Agriculture
Taiwan Richest: Tsai Eng-Meng Net worth: $9.5 billion Source of wealth: Food, beverages
Nepal Richest: Binod Chaudhary & family Net worth: $1.1 billion Source of wealth: Diversified
Russia Richest: Alisher Usmanov Net worth: $18.6 billion Source of wealth: Steel, telecom, investments
Tanzania Richest: Rostam Azizi Net worth: $1 billion Source of wealth: Telecom, investments
Netherlands Richest: Charlene de Carvalho-Heineken Net worth: $10.4 billion Source of wealth: Heineken
Saudi Arabia Richest: Prince Alwaleed Bin Talal Alsaud Net worth: $20.4 billion Source of wealth: Investments
Thailand Richest: Dhanin Chearavanont Net worth: $11.4 billion Source of wealth: Food
New Zealand Richest: Graeme Hart Net worth: $7 billion Source of wealth: Investments
Singapore Richest: Robert & Philip Ng Net worth: $11 billion Source of wealth: Real estate
Turkey Richest: Murat Ulker Net worth: $3.7 billion Source of wealth: Food manufacturing
Nigeria Richest: Aliko Dangote Net worth: $25 billion Source of wealth: Cement, sugar, flour
South Africa Richest: Johann Rupert & family Net worth: $7.6 billion Source of wealth: Luxury goods
Uganda Richest: Sudhir Ruparelia Net worth: $1.1 billion Source of wealth: Real estate
Norway Richest: Stein Erik Hagen & family Net worth: $5 billion Source of wealth: Retail
South Korea Richest: Lee Kun-Hee Net worth: $11.1 billion Source of wealth: Samsung
Ukraine Richest: Rinat Akhmetov Net worth: $12.5 billion Source of wealth: Steel, coal
Oman Richest: Mohammed Al Barwani Net worth: $1.2 billion Source of wealth: Oil
Spain Richest: Amancio Ortega Net worth: $64 billion Source of wealth: Zara
United Arab Emirates Richest: Abdulla bin Ahmad Al Ghurair & family Net worth: $4.8 billion Source of wealth: Diversified
Peru Richest: Eduardo Belmont Anderson Net worth: $2.5 billion Source of wealth: Cosmetics
St. Kitts & Nevis Richest: Jacky Xu Net worth: $1.2 billion Source of wealth: Apparel
Philippines Richest: Henry Sy & family Net worth: $11.4 billion Source of wealth: Diversified
Swaziland Richest: Nathan Kirsh Net worth: $3.7 billion Source of wealth: Retail, real estate
Poland Richest: Jan Kulczyk Net worth: $3.6 billion Source of wealth: Telecom, oil, beer
Sweden Richest: Stefan Persson Net worth: $34.4 billion Source of wealth: H&M
Portugal Richest: Americo Amorim Net worth: $5.3 billion Source of wealth: Energy, investments
Switzerland Richest: Ernesto Bertarelli & family Net worth: $12 billion Source of wealth: Biotech, investments
United Kingdom Richest: Gerald Cavendish Grosvenor & family Net worth: $13 billion Source of wealth: Real estate United States Richest: Bill Gates Net worth: $76 billion Source of wealth: Microsoft Venezuela Richest: Gustavo Cisneros & family Net worth: $4 billion Source of wealth: Media Vietnam Richest: Pham Nhat Vuong Net worth: $1.6 billion Source of wealth: Real estate
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S p e c i a l F e a t u r e | Bitcoin Review
An Update on the Unsettling News for By Susan Kime Justluxe
B
ack in December, I discussed the pros and cons of Bitcoin, the new P2P (peer to peer) virtual currency at Justluxe.com. From the outset, this idea and its reality, its theory and its practice, has been replete with controversy. Paul Krugman, a 2008 Nobel Laureate in Economics, wrote in an Op-Ed piece in The New York Times called Bitcoin Is Evil. He said that “to be successful, money must be both a medium of exchange and a reasonably stable store of value. And it remains completely unclear why Bitcoin should be a stable store of value.” Krugman says this because of the fluctuations in value that Bitcoin has exhibited recently, as on December 6 and 7 of last year, the value of one Bitcoin fell from $1200 to $600 in the course of 48 hours. And, since computer programs can easily adjust the price
12 | American Hard Assets www.ahametals.com
of goods along with the value of Bitcoins, the currency doesn’t have to maintain a stable store of value. Yet there is another group of economists and business investors whose ideological passion lies in strengthening a system of exchange that is independent of any government or bank. As a spokesman for such views, I quoted Charles Eisenstein, author of Sacred Economics, in my previous article: “Today’s national and supranational currencies have become a blight…created through interest-bearing debt, controlled by financial elites, tracked by the surveillance state, and necessitating endless growth, money as we know it is a primary agent of inequality, injustice, and ecocide.” He believes in Bitcoin.
Bitcoin Review | S p e c i a l F e a t u r e
In both of these opposing ideologies, something may be missed: the basic newness of the idea, and how a new idea during its first years has a tendency to bump and grind along. The Bitcoin idea has had its share of dings, scrapes and bruises. The most recent one, occurring this week, could be considered a major fracture. Time will tell, but here is what happened. Even though the concept of Bitcoin rejects the control of banks and government, the flow and fiscal movement of Bitcoin had to be dealt with somehow, so digital currency exchanges evolved to allow trading Bitcoins for U.S dollars and several other currencies. There are many exchanges, but the largest and best-known Bitcoin exchange is Mt. Gox, which seems to have met its demise on February 24th after having lost, according to Bloomberg, hundreds of millions of dollars of its customer’s Bitcoins. The
New York Times reported that a document circulating widely in the Bitcoin world states that Mt. Gox had lost 744,000 Bitcoins in a theft that had gone unnoticed for years. That would be about six percent of the 12.4 million Bitcoins in circulation. To many, this was not a profound shock, as Mt. Gox had complications for some time - last year it had its accounts seized by government regulators and experienced increasing trouble allowing its customers to get at their money. In March, the company’s chief executive resigned from the board of the Bitcoin Foundation, the primary advocacy group for Bitcoin. Then they took down their website and their Twitter feed.
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S p e c i a l F e a t u r e | Bitcoin Review
There are many exchanges, but the largest and best-known Bitcoin exchange is Mt. Gox, which seems to have met its demise on Feb 24 after having lost, according to Bloomberg, hundreds of millions of dollars of its customer’s Bitcoins. What does all this mean in terms of Bitcoin’s viability? Again, there are two diverse sides. One believes that Mt. Gox was an accident waiting to happen, given what is seen now as lax security measures. Those who see it this way also see this as a Mt. Gox problem, and not a Bitcoin problem. Indeed, the other more secure trading Bitcoin exchanges — Coinbase, Kraken, Bitstamp, BTC China, Blockchain and Circle — have already released a statement, distancing themselves from Mt. Gox. Part of this statement reads, “This tragic violation of the trust of users of Mt. Gox was the result of one company’s actions and does not reflect the resilience or value of Bitcoin and the digital currency industry.”
14 | American Hard Assets www.ahametals.com
Ultimately, what this demise does is remind investors that Bitcoin is in its infancy, and seems still a capricious proposition. It also shows, right now, the darker side of unregulated currencies, and again defining the Wild West nature of anything unregulated by any governmental agency. So, what happens now? Will the general public view this experience to be just another reason to distrust Bitcoin? Will investors, who have become more skeptical and non-ideological as days pass, see the demise of Mt. Gox as a good thing, paving the way for greater security, transparency, and consumer protection in future transactions? Tune in tomorrow!
Alaskan Gold | S p e c i a l f e a t u r e
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S p e c i a l F e a t u r e | Modern Gold Bug
By Amber Ness
I
n his groundbreaking 1981 book titled Gold, Peace and Prosperity, former Texas Representative Ron Paul famously wrote: “The dollar died on August 15, 1971. After that date, it had no independent value for anyone. The new rules, with the dollar now simply a managed fiat currency, ushered in even greater inflation, economic turmoil, and set the stage for total loss of confidence in the dollar. This will happen eventually, and perhaps in the near future, though no one knows exactly when.”
Dr. Paul was of course referring to the day President Nixon put the proverbial nail in the gold standard’s coffin by announcing that the United States would no longer redeem currency for gold. In the decade that followed, geopolitical crises — including Russia’s invasion of Afghanistan at the tail end of 1979, and the shock of the 16 | American Hard Assets www.ahametals.com
Iran Hostage Crisis — combined with unorthodox monetary policies, led to the infamous gold spike of 1980. Though 1980’s Q1 $800 high was followed by a drop to the $300-400 mark (where it remained for a greater portion of the decade) it precipitated a renewed interest in owning the yellow metal. And it was spearheaded by what many Americans viewed as a fringe of right-wing nutcases. As the twentieth century drew to a close, the prevailing perception of the gold investor was the fanatical gold bug: guntoting, backwoods militiamen, fixated on anti-government conspiracy theories and apocalyptic doomsday prepping. Though some claim a stereotype is just a shortcut to the truth, like all stereotypes, the 1980’s image of the gold bug was based on an oversimplified caricature of forward-thinking Americans turning to the safe haven investment as a form of financial protection.
Modern Gold Bug | S p e c i a l F e a t u r e
As the twentieth century drew to a close, the prevailing perception of the gold investor was the fanatical gold bug: gun- toting, backwoods militiamen, fixated on anti-government conspiracy theories and apocalyptic doomsday prepping. But who was this new generation of investors? Though the tired old stereotype of the doomsday gold bug may continue to lurk in the shadows of the collective American consciousness, the people who really invest in gold may surprise you.
The Conservative Myth At the height of the Great Recession, as right-wing commentators like Glenn Beck — along with Tea Party leaders across the nation — began encouraging Americans to stockpile gold, the idea that gold investors leaned right-of-center continued to prevail. Yet according to Gallup polls taken over the last two years, there is little-to-no correlation between an investor’s political affiliation and his or her likelihood to invest in gold. While over the last decade Republicans and other conservatives reported more of a preference for gold than their left-leaning counterparts, in the last two years, the distinction has begun to dissipate as more Democrats join the ranks of precious metals investors.
A nod to Ron Paul, one of gold’s greatest champions: a copper round produced by the Provident Mint
The Great Recession: A New Investor is Born Fast forward twenty some odd years.
According to the same polls, men are consistently more likely to invest in gold than women, who tend to rely on savings accounts.
Propelled by the financial crisis of 2008, a United States budget deficit in the trillions, an unstable banking system, the constant threat of tax hikes, increased interest rates and insurmountable levels of debt — and BAM!
Middle income adults aged 50 and above are more likely to invest in gold than younger Americans, and those of upperincome levels prefer stocks and real estate to gold. Lower-income individuals tend to utilize savings accounts.
A new generation of sophisticated, dedicated gold investors was born. In an era of Facebook friend requests, reality TV stardom and a whirlwind of social progressivism, the first decade of the new millenium brought gold into the mainstream. Financial experts encouraged investors to hold anywhere from five to 20 percent of their assets in precious metals, and countless investors jumped on board. Doctors, teachers, lawyers, small business owners, plumbers — mainstream America began purchasing the metal as a safe haven investment in preparation for it to hit the fan. By 2012, gold began rating higher than other investment options like stocks, bonds, real estate and even savings accounts.
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S p e c i a l F e a t u r e | Modern Gold Bug
The Modern Investor: Why Gold? • A Hedge Against Inflation and the Weak U.S. Dollar Despite its ranking as one of the most influential currencies on earth, the United States dollar has declined — to a breathtaking degree. This is in thanks to an overly-large budget, massive trade deficits and overprinting of currency. When the value of the dollar deteriorates, investors turn to gold to safeguard their wealth, which raises the price of gold. Furthermore, gold is a real and tangible asset — not an IOU — which means it can serve as a hedge against other disasters, too.
• Geopolitical Crises Often touted as a “crisis commodity,” gold tends to retain its value, even as world headlines report grave geopolitical crises. As faith in the government wanes and global tensions rise, confidence in gold rises with it. When the world is in fear, gold generally outperforms alternative investments. In the aftermath of the 2008 financial crisis, gold prices skyrocketed. Subsequent circumstances — the eurozone debacle, angst surrounding Affordable Care Act and the Dodd-Frank Wall Street Reform Act among others — led to a rise in the price of gold, as safe haven investors braced for the worst. Between 2008 and 2011, gold prices doubled. Though prices have suffered in the years since, experts believe tensions over Crimea, along with concerns about the Chinese economy, will be key determinants in this year’s gold prices — which are expected to go up as the world grows uneasy.
• Supply and Demand For the last twenty years, gold has made its way onto market by way of the world’s central banks. As central banks slowed sales at the onset of the 2008 financial crisis, mining of gold had already been on the decline for nearly a decade. Though gold production has increased slightly in the last few years, the market continues to recover. Asian markets — namely China and India — have seen an increase in demand as their economies boom. India’s gold culture has created one of the world’s strongest appetites for the metal, especially during the high wedding season.
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Modern Gold Bug | S p e c i a l F e a t u r e
(Endless) Golden Opportunities There are countless forms of gold bullion to choose from, and the medium an investor turns to depends largely on his investment goals. For instance, some investors are also numismatic collectors, with an interest in the history, design, rarity or origins of a coin. Antique and rare coins tend to have value above and beyond their gold content. Investors who want to own quality bullion backed by a government tend to purchase gold coins like American Eagles, Canadian Maples, Austrian Philharmonics, South African Krugerrands, Gold Buffalo and Chinese Pandas. An added draw to owning these coins is in the event of financial collapse, is that government-issued coins would be most trusted for barter. Many of today’s investors prefer gold bullion bars, which are often produced by reputable private companies, like Provident Mint, Johnson Matthey, PAMP, Engelhard and others. Bars are convenient for ordering in bulk and they are also easy to store.
Wealthy Indian families spend thousands (sometimes hundreds of thousands) of dollars on gold for a family wedding, and the asset is generally saved as a family heirloom and hard asset. At the same time, mainstream America has grown to view gold as a viable means of diversification, further increasing demand for the yellow metal, including ETFs.
• Portfolio Diversification Today, one of the key reasons new investors turn to gold is to diversify their portfolios. With experts encouraging people to hold that five to 20 percent, the modern investor is adding precious metals alongside stocks and bonds as a means of reducing risk.
Exchange traded funds (ETFs) are also on the rise, especially for investors who prefer not to take delivery of their precious metals. ETFs allow investors to buy shares of gold without having to store it. Stocks and mutual funds in mining companies also serve this purpose — though critics claim storing your gold in a vault hundreds of miles away makes it virtually useless in an emergency.
The Mainstream American Gold Bug Robert A. Mundell (b. October 24, 1932), winner of the Nobel Memorial Prize in Economics eloquently framed the way the modern investor interprets the importance of gold: “When the international monetary system was linked to gold, the latter managed the interdependence of the currency system, established an anchor for fixed exchange rates and stabilized inflation.
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S p e c i a l F e a t u r e | Modern Gold Bug
In some senses, today’s gold investor holds on the ideas held dear by their gold bug predecessors — that owning a physical asset like gold is one of the only ways you can truly and completely protect your wealth in times of economic and geopolitical crises. Yet the modern gold investor is so much more. He is your neighbor. Your co-worker. Your pastor. She is your doctor, your lawyer, your best friend. The fact is, the modern gold bug is a member of mainstream America. One of millions who believe owning the precious metal is a way to protect their financial future — a legacy they can leave behind. As the future continues to grow uncertain, more and more Americans are finding space in their portfolios for one of the oldest, most trusted stores of value the world has ever known. Gold has been prized by mankind for thousands of years — long before recorded history. Prized for its beauty and malleability, gold was used in art, jewelry and other adornments, and as early as the bronze age, it was struck into coins used as currency. Today, gold has not lost its luster. Countless Americans — from both sides of the aisle, every walk of life and an pay scale — continue to look to gold in a world of increased uncertainty. Over the last 40 years, the world has continued to turn, and the gold bug has evolved along with it. Yet the hands of time have failed to change one thing for countless modern investors: what Ron Paul has been teaching rings true. Gold really is the ultimate money.
When the gold standard broke down, these valuable functions were no longer performed and the world moved into a regime of permanent inflation. What will be the character of the international monetary system in the next century and how will gold intersect with it? This subject may strike modern audiences as a strange topic, but back in the 1960s, when people were deliberating about the future of the international monetary system, gold figured importantly in the discussions. Even today, the importance of gold in the international monetary system is reflected in the fact that it is today the only commodity held as reserve by the monetary authorities, and it constitutes the largest component after dollars in the total reserves of the international monetary system.” ~Robert A. Mundell, Nobel Laureate for Economics, 1999 Over the past forty years, the term Gold Bug is one that comes with negative connotations: Bullish. Paranoid. Conspiracy theorists obsessed with the Gold Standard. Metal-pushers. 20 | American Hard Assets www.ahametals.com
Investing in Film | S p e c i a l F e a t u r e
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S p e c i a l F e a t u r e | The American Eagle
F
by Jason Walter Vaile
orged in fire, formed from the world’s most precious metals, sought after by millions... this is not a mythical ring to rule them all. It is the American Eagle Gold Bullion coin, one of the most popular mint produced coins of all time. The Mint has produced over 13 million of these coins since introducing them in 1986. Each year, the coin’s sales continue to exceed the previous year.
As successful as the American Eagle Bullion coin has been, coins have not always been the sought after collector’s items they are today. They began as simple currency -- a regulated item for trade. Though not as easy to carry or store as today’s paper currency, gold coins had REAL value because of the precious metals they contained.
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The American Eagle | S p e c i a l F e a t u r e
Coin History The Lydians, located in Asia Minor, were the first persons to use gold and silver coins. Around 550 BC, the Lydians began producing coins that were made from electrum, an alloy of gold and silver that occurred naturally in the area. They weighed from 17.2 grams to as little as .2 grams. They further enhanced these coins by stamping them with lion’s heads adorned with starbursts. This was the symbol of King Alyatts, who reigned from 610-550 BC. Coins continued to grow as the popular monetary trade with Greek colonization. They spread across Persia and then the rest of the world.
By the middle of the 6th Century BC, technology had advanced, and minting pure gold and silver coins became much easier. The Greeks were the first to create a “standard” so that coins could be widely circulated outside their geographical boundaries. The Aegina was a coin that was traded widely in the marketplace and has been found as far away as Egypt. Other cities began minting their coins to the Aegina weight standard (6.1 grams). Thus a universal coin was born.
American Coins The Constitution of the United States, Article 1, Section 8, claims that “The Congress shall have the power...to coin money.” When the framers of the United States Constitution created a new government for their United Republic, they quickly realized the critical need for a respected monetary system. Secretary of the Treasurer, Alexander Hamilton, personally prepared plans for the National Mint on April 2, 1792. Congress passed The Coinage Act, which created the Mint and authorized construction of a Mint building in the nation’s capital, Philadelphia. This was the first federal building erected under the Constitution.
Around the same time the Lydians developed their coins, China began producing utensil shaped trading pieces. Spade and knife shaped trinkets were created from bronze and traded for value. Around the 4th Century BC, the western state of Qin made a new type of coin, the “ban liang”. The bian liang coins are cast bronze, round coins with the familiar hole in the center.
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S p e c i a l F e a t u r e | The American Eagle economic growth, and made the Depression worse. People were threatened with $10,000 fine and up to ten years in prison. Executive Order 6102 required “all persons to deliver on or before May 1, 1933, all but a small amount of gold coins, gold bullion and gold certificates owned by them to the Federal Reserve.” In exchange, they would receive $20.67 (about $3 per troy ounce). The Treasury then raised the price of gold to $35 an ounce. This resulted in a large profit for the government which funded the Exchange Stabilization Act.
President George Washington appointed Philadelphian, David Rittenhouse, a leading American scientist, as director of the mint. Under Rittenhouse, the mint produced its first circulatory coins --11,178 copper cents, which were delivered in March 1793. Soon after, the Mint began issuing gold and silver coins as well. President Washington donated some of his own personal silver for the minting.
The price remained in effect until August 15, 1971, when President Richard Nixon announced that the United States would no longer convert dollars to gold at a fixed value. This abandoned the gold standard for foreign exchange. In 1981, Ron Paul presented an idea to Ronald Reagan’s Gold Commission. The South African gold Krugerrand was gaining popularity and provided a great source of income for their government. Ron Paul suggested America do the same. The stipulation was included that only American mined gold could be used in the manufacturing of the gold bullion coins. In 1986, the first American Gold Eagle coins were rolled out. Over a million coins were sold in the first month alone. What made it such a huge success? Obviously, the demand had built up over the years for gold coins since the market had been suppressed. Additionally, these were beautiful and desirable collector pieces.
THE DESIGN Mint officials approved the design of the American Eagle gold bullion coin that featured the striking Lady Liberty inspired by the design of Augustus Saint-Gauden. His early relief portraits decorated the Double Eagle coins he designed for the US Mint from 19051907. His original coin is still considered one of the most beautiful American coins ever issued. His ultra high relief $20 gold piece did not stack properly because of the detailing and was deemed unfit for commerce. Only 20 of them were produced in 1907 and are highly sought after collector’s items. One sold at auction in 2005 for the hefty price of $2,990,000.
About 140 years later, things drastically changed. President Franklin D. Roosevelt signed Executive Order 6102 on April 5, 1933. This order forbid “the hoarding of gold coins, gold bullion, and gold certificates within the continental United States.” It criminalized the possession of monetary gold by “any individual, partnership, association or corporation. “ The Great Depression caused people to fearfully store away their gold coins which stalled 24 | American Hard Assets www.ahametals.com
The American Eagle | S p e c i a l F e a t u r e
The American Eagle gold coin’s rendition of Lady Liberty features her hair flowing in the breeze, a torch in her right hand and an olive branch in her left. The Capitol Building is behind her in the distance. The reverse side is an eagle family designed and sculpted by Miley Tucker-Frost. The majestic father eagle is landing in his nest, carrying an olive branch back to a female eagle and her hatchling. This beautiful coin illustrates many of the most patriotic symbols of America.
The difference between a hub and a die is that the hub has a raised image and a die has an incuse image -- so one forms the other. The mint found that by using a lower amount of pressure in the hubbing process, they can prolong the life of the hub and die used.
Once the design was approved, the engraving began. An engraver fine tuned the brass model under a microscope where the date and lettering were added. Then another reduction process occurred which created a “matrix” negative. This matrix was the final size of the coin and made of high-grade steel. This is called the “punch” and is inserted into the coin press.
Production A plaster disc 10 1/2” diameter is sculpted by an artist from the design. This creates a “negative” design in the plaster disc. A “positive” is then created by making an impression of the cut out. An artist then hand details the positive mold. They add to the design and carve out areas that might not have been cast properly. A negative mold is cast again, which is turned into flexible rubber mold and cast a hard epoxy 10 1/2” diameter version of the coin. The hard epoxy allows for sharp design details to be transferred and won’t be damaged by the reduction process like the plaster model would be.
The epoxy model was placed on a pantograph, a reducing machine, that reproduced an exact copy, just 1 1/2” times smaller, called the master hub. This process takes about 36 hours. The master hub was then heat treated to make it harder. The master hub was used to make only a few master dies via hubbing. That involved pressing the master hub into a steel blank to impress the image on to the die. The master die was then used to form as many working hubs as needed through the same process. The working hubs were then put through the same process to form the working dies.
Several different versions were made and scrutinized before the final model was approved for production.
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S p e c i a l F e a t u r e | The American Eagle
Minting Many of the American Gold Eagle coins are minted at the West Point Mint in West Point, New York. They begin exclusively with gold mined in the United States. The coins are minted to an exact standard that has not been used since 1834. The American Gold Eagle has a gold fraction of .9167 for its 22kt gold rating. This English Standard is traditionally referred to as “Crown Gold.” The remaining alloys are 3% silver and 5.33% copper.
fact that, it could break when being struck. So the blanks are put into an annealing furnace. The annealing furnace is capable of heating the blanks to a specific temperature, known as the “re-crystallization temperature.” This produces changes in the atomic structure and allows the gold to soften. The typical temperature during this process is around 1,292◦ Fahrenheit. It is designed to give a uniform heating with a gradual cooling process to prevent oxidation. The heating chamber is air tight with a slightly positive pressure. Inside is typically a mixture of nitrogen and hydrogen.
The American mined gold and scraps from previous American Gold Eagle coins are put into a casting furnace at 2100◦ Fahrenheit. This melted gold is formed into a solid long bar that is 1 1/2” wide by 5 1/2” tall. The bar is then cut into segments that are 30” long so they are easier to handle. These bars are put into a roughing mill. Inside, two large rollers exert over nine tons of pressure to flatten the bars. After about a dozen passes through the roughing mill, the segments come out 1/2” thick. These are called fillets. Once the blanks are no longer brittle, they are moved to the coin press. The press contains a hub and a die, or stamps. One for each side of the coin. The two sides of the coin are pressed simultaneously. They are pressed twice to insure a high-quality, detailed coin results. Whether you are a coin collector, numismatic -- a studier of currency, or merely in it for the investment, the American Eagle Gold Bullion coin has a rich history in design, collectability and value.
The fillets are then sent to the finishing mill, which flattens the bars even more to the final thickness of the coin, which is 3/100” or 2/10”, depending on the denomination. The stamping machine then punches out the blank coins. The left-over webbing is then chopped and sent back to the casting furnace to be melted down and recycled into fresh bars again. The blank coins are moved to the rimming machine that applies a finish raised edge or “rim” to the coin. Next, the blanks go into a tub filled with water, a cleaning solution, and steel beads. When spun at a high rate of speed, the beads act as an abrasive, smoothing and polishing the blanks. After about twenty minutes, everything is poured into a sifter that separated the blanks and the beads. Each individual blank is then hand-dried to insure there will be no water stains on the final coin. As the gold is heated and reheated continuously during the coin-making process, the gold may become brittle. So brittle in
The Medusa Coin The snake coiled hair of Medusa was regarded as lucky in ancient Rome. It was intended to ward off evil, protect, and comfort friends. The mask or head of Medusa on coins was a common theme from 400-300 BCE. Medusa was one of three sister Gorgons, so these coins are often referred to as “gorgonian.”
Jason Walter Vaile wishes he had a large stack of American Eagle Gold Bullion coins in his collection. You can follow him as Mrpenhead on Instagram, Tumbler and Twitter.
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S p e c i a l F e a t u r e | Good Delivery
W
hen it comes to investing in physical material everybody wants to be certain that what they own, what they spend their finite capital on, is the real thing. Knowing that what you see is what you get is key to investing with confidence, whether your medium is Picasso and Pollock or baseball cards and comic books. Certainly, this same rule applies to investing in precious metal coins and bullion.
Good Delivery, Liquid Investing For verified investing in coins we have entities like the NGC that set an industry standard for verification and certification across the board. Coins issued by sovereign mints in the United States, Canada, and China (among several others) have a consistent precious metal content, and in a large majority of cases the veracity of these coins can be proven with a basic knowledge of their 28 | American Hard Assets www.ahametals.com
by Richard Alexander Rogers
appearance, physical weight, and markings. When it comes to bullion (bars, ingots, or rounds) minted by private refineries though, not all fine gold or fine silver bars are created equal, and only a particular category can be traded with the utmost liquidity at all times. This category, the most versatile bars to invest in within the industry, is known as “Good Delivery,” a status most importantly granted by one of two groups: the London Bullion Market Association (LBMA) or Comex, the commodities futures exchange run by The CME Group. So what does “Good Delivery” actually mean? The most common definition describes Good Delivery bars as “approved metals brands acceptable for delivery against metals commodities contracts.” It’s a vague, confusing definition for investors not concerned with trading in electronic commodities markets. To simplify: “Good Delivery” bars are created in adherence to a specific, strict set of requirements, and after minting are stored and transported through a traceable chain of possession.
Good Delivery | S p e c i a l F e a t u r e
The Global Standard LBMA and Comex issue their own lists of Good Delivery refiners, and as such they have their own exact standards for certification although the broad strokes-- the points that are relevant here-can be assumed to be closely similar. To simplify things further, at this point we are going to talk specifically about LBMA standards for Good Delivery. While Comex recognition denotes a very high standard of material production and management, the LBMA standard is even more demanding. Worldwide, LBMA good delivery is the top class for gold and silver production and is in high demand internationally, while Comex certification is not as recognized overseas as it is here in the United States.
LBMA good delivery is the top class for gold and silver production and is in high demand internationally.
So why is this important? It all connects to an important part of any investment’s value, mentioned earlier: liquidity. An asset’s liquidity is determined by two things: 1) how quickly it can be turned into cash; 2) your ability to convert the asset to cash without incurring large fees. Your stock of gold, silver, or other precious metals will always be more liquid as an asset than your mint copy of Action Comics #1 but as we have been hinting at, not all bars are created equal. Good Delivery bars, because they meet strict standards of production and storage, can be accepted on face-value within the investment and banking industry. No time needs to be spent assaying the bar for purity, which also means no assay/analysis fees to be charged. Let’s talk about the general requirements for a bullion bar to have Good Delivery status..
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S p e c i a l F e a t u r e | Good Delivery
Guaranteed Purity
Chain of Integrity
Good Delivery status guarantees that a gold bullion bar will absolutely be 99.5 percent pure or better (99.9 percent for silver; 99.95 percent for platinum) and more importantly guarantees that the purity marked on the bar is strictly accurate. LBMA’s certification officials confirm this by closely inspecting and testing not only a refineries minting facility and process to the most minute details, but also subjecting the refiner’s in-house laboratory to a stringent battery of tests. The former is done to ensure that the bars are created consistently every time, the latter to demonstrate that the refiner’s laboratory is able to accurately test purity to a fractional percentagepoint. There are also physical specifications for the bars produced:
The second important component to a bar holding Good Delivery status is a traceable, verifiable chain of integrity at all times. From the point the bars are produced and stamped, they must be stored in LBMA member vaults, and only transported by trusted and approved transport. Brinks and Via Mat are two examples of storage and transport companies that hold such status with LBMA. After being produced to the stringent standards of the LBMA, if a gold or silver bar is ever taken possession of outside this chain of integrity it is no longer considered acceptable as Good Delivery.
• gold bars must show a serial number, year of manufacturing, and the refiner’s assay mark • gold bars must have a fineness stamp to four decimal places; silver bars must be at least .999 fine • gold bars must be between 10.9 kilograms (350 troy oz) and 13.4 kg (430 t/oz) in weight • silver bars must be between 23kg (750 t/oz) and 34kg (1,100 t/oz) in weight.
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Good Delivery | S p e c i a l F e a t u r e
When it comes to bullion (bars, ingots, or rounds) minted by private refineries though, not all fine gold or fine silver bars are created equa. From the point the bars are produced and stamped, they must be stored in LBMA member vaults, and only transported by trusted and approved transport.
certain that all of that refiner’s gold products (and silver, if they are on the Good Delivery list of silver as well) will be produced to the same lofty standards. More importantly, the wider precious metals industry knows that it can expect the same. So while your local Chase branch might not accept your 10-ounce silver bar as a Good Delivery product, your preferred bullion dealer will recognize the quality and standard of production, allowing you to sell your physical material quickly and often at a premium to bullion from non-Good Delivery refiners. That means liquidity.
So What? At this point, since you probably aren’t an investment institution looking to purchase several kilograms of gold or silver at time, you would be right to wonder why any of this Good Delivery business matters to you as a smaller scale investor. For one, if a third party manages your investment in commodities (through a fund or otherwise) it can be useful to have this kind of information so that you can make an informed decision about whether you would prefer your fund to hold physical gold or “gold on paper.” But the larger point here is that for a refiner to be granted Good Delivery status by the LBMA (or indeed Comex) they must be operating at the very top of the game, producing some of the world’s best bullion on a large, consistent scale. Aside from the physical, purity, and transport specifications that we have discussed, to pass Good Delivery muster a refinery is also required to demonstrate the size, track record, and financial reliability of its business. And although it may only be a refiner’s 400-ounce gold bars locked safely in a Brinks vault that have official Good Delivery status, the individual investor can be quite
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S p e c i a l F e a t u r e | Good Delivery
Good Delivery status guarantees that a gold bullion bar will absolutely be 99.5 percent pure or better. Recognized Globally, Available Locally Ultimately this is all a collection of chemical specifications and technical discussion that amounts to one point: you should be making your physical bullion investments in material from refiners that hold Good Delivery status as granted by LBMA and/or Comex. It is worth recognizing the possibility that private bullion investment in the United States may one day resemble the market in continental Europe. There, investors, from the large firms all the way down to private individuals, for the most part prefer to only purchase and trade physical material in the form of LBMA approved product along with sovereign bullion from Europe, Asia, and North America. Good Delivery refiners can be found worldwide, and any reputable bullion dealer will have a variety of these refiners’ material on offer. • LBMA Good Delivery gold refiners based in North America include: Ohio Precious Metals, Johnson Matthey, Royal Canadian Mint, and Metalor USA among others. • LBMA Good Delivery Silver refiners based in North America include: Johnson Matthey, RCM, and Metalor USA among others • Prominent LBMA Good Delivery refiners in Europe: Heraeus Precious Metals, Allgemeine AG, SchoneEdelmetaal
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Private investors can often overlook the importance of having optimum liquidity in their portfolio, and this can be particularly neglected in the precious metals sector because metals provide an inherently more liquid position relative to other options. But if you can recognize the value of making your commodity investment in the top class of precious metal bullion, it becomes clear that material from Good Delivery refiners, as recognized by LBMA and Comex is the best, most versatile bet you can make.
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H A R D A S S E T S | Bail-ins and Deposit Confiscation
C l oset P re pp ers : by Amber Ness
I
f you’re like the rest of America, you’ve spent countless Tuesday evenings glued to your television screen, spellbound by the ingenuity and outright gumption of the colorful cast of Doomsday Preppers.
One of the highest rated shows ever aired on the National Geographic Channel, the reality hit follows diverse members of a small segment of the American population vigorously preparing for collapse. Stockpiling food, supplies and ammo, building covert shelters, charting emergency escape routes and preparing to live completely off the grid is second nature to these provident individuals — a lifestyle some viewers find unnerving and extreme. Yet as economic turmoil mounts, news of natural disasters surge, and crises in other parts of the world seem imminent, more and more Americans are jumping on board the prepper bandwagon. In fact, some estimate there are as many as three million all-out preppers making ready in this country — a number believed to be expanding. 34 | American Hard Assets www.ahametals.com
Rising with the tide is an ever-growing group of mainstream Americans who feel deep in their bones that trouble is on the horizon. Preparing their homes and families on a smaller scale, this legion of unassuming, forward-thinking citizens don’t reside far off in a desert bunker. They are your neighbors, friends, coworkers and family members. They are closet preppers. Often flying under the radar, this quiet bunch is taking small steps to safeguard their family in the event of an emergency — and their methods are so simple, it seems criminal not to follow suit. So how does the average closet-prepping-Joe arm himself against trouble ahead? We’ve compiled a basic list of some simple steps you can take to ready yourself for impending doom. Even if it’s just a power outage.
Closet Preppers | S p e c i a l F e a t u r e
Ready Cash One of the best ways to protect your family is to be prepared. Before you start stockpiling canned goods or digging that hole for a bunker, it’s imperative to have cash available at the onset of disaster. According to researchers from Princeton University and the University of Chicago Booth School of Business, 40 percent of the 25,000 Americans surveyed said they would unlikely be able to scrounge up $2000 in an emergency. Atif Mian and Amir Sufi, who conducted the research, also found that nearly 60 percent of U.S. citizens do not have a recommended three-month stash of emergency funds — which would be crucial in a crisis.
Coins for Barter Industry experts speculate that fewer than 10 percent of Americans own any gold or silver. To the hardcore prepper, that number is staggering. In the event of an economic collapse, coins like pre-1965 “junk silver” quarters and dimes, and trusted coins like American Eagles could be an easily divisible form of currency for barter. Gold and silver have been trusted modes of exchange for centuries, and gold has maintained its value across time, making it attractive to those who fear economic collapse. Today, financial experts encourage investors to hold anywhere from five to 20 percent of their assets in precious metals — as a hedge against inflation and a way to safeguard wealth.
Plan of Attack
“The survey responses are shocking, and should put fear into all of us about the financial vulnerability of U.S. households,” the researchers noted on their blog. So how can you prepare? According to financial guru Suze Orman, every household should have enough in savings to cover eight months’ worth of living expenses (and women should have three months’ worth of their own). And for the cataclysmic emergency? Experts recommend stashing at least 10 percent of your income in a safe place outside of a bank, where you could access it quickly. The cash could be used to purchase supplies like gas, food and water — at least in the short term.
According to the Adelphi Center for Health Innovation, 52 percent of Americans have not designated a family meeting place in case they are separated. So take an evening to sit down with your family and make a concrete plan in which responsibilities are clearly defined. It’s important to make sure your disaster plan is specific to your family’s daily needs. Consider the ages and skills of each person, along with any medical or dietary needs, so you can plan accordingly. FEMA recommends starting with a communication plan: a list of important contact information made easily accessible to each family member (and it notes that texting may be a more reliable source of communication than making actual calls). Next, choose two meeting places — one in your neighborhood and one outside — so everyone knows where to go if separated. It may be helpful to include a map pinpointing each rendezvous point in your plan.
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S p e c i a l F e a t u r e | Closet Preppers
q 20 pound bags of rice and dried beans q White sugar q Iodized salt q Cooking oil q Oats q Flour q Cornmeal q Dried fruit and nuts q 40 cans of fruits and veggies q 20 or more cans of meat (tuna, spam, stew) q Several large jars of peanut butter q Bottles of multivitamins q Powdered milk q Baby formula if needed q At least 20 gallons of clean drinking water
Once you have your food stored in a cool, dry place, remember to keep an eye on expiration dates and make sure your stash is replenished. Store dried goods in sealed plastic containers to keep the mice out. Place new items at the back of your supply and older items at the front. And don’t forget to keep quiet. When hunger strikes the broader community, you don’t want to come to people’s minds. Assemble an emergency pack (which we’ll delve into later) and ensure each person is able to carry their own. Practice evacuating your home at least twice a year. Lay out a clear plan for your pets, including a ready supply of food and a list of petfriendly hotels and motels in your area. (Do not leave your pets at home during a disaster. They are less likely to survive trapped inside.) You should also compile a list of all medications you are taking and copies of important identification and medical insurance documents.
Three-Day Food Kits According to the Adelphi survey, 53 percent of Americans do not have three-day’s worth of nonperishable food and water for an emergency. While most preppers recommend equipping your family with a year’s supply of food (at least), maintaining a three-day’s supply of food and water for each person is imperative. You can purchase ready-made, easy-to-carry kits, or you can assemble the kits yourself, including three gallons of water per person. Remember that you may not have access to electricity, and need to include foods that do not require cooking over heat.
Long-Term Food Storage Once your three-day kits are prepared, it’s time to consider the longterm. Amassing and maintaining a year’s supply of food and water may seem daunting, but it doesn’t have to be. There are several companies that offer bulk food storage kits and a variety of meal options with shelf lives of 25 years — so won’t have to think about it again. You can also assemble your own food storage supply. Make a trip to your local superstore and purchase some of the basics: 36 | American Hard Assets www.ahametals.com
Prepper Tip: For more on food storage and emergency preparedness, check out the books The Encyclopedia of Country Living by Carla Emery and Emergency Food Storage and Survival Handbook by Peggy Layton.
Gardening One of the best ways to maintain a steady flow of food for your family is to cultivate a garden. Harvesting your own crops is incredibly gratifying, and lessons learned from tilling the earth are ones your children carry forever. If you do not have a garden now, it’s important to purchase a supply of seeds for your food storage supply. If you are a gardening novice, no need to fear. Most seed packets come with simple directions for planting.
Closet Preppers | S p e c i a l F e a t u r e Choose crops based on the space at your disposal. Growing pumpkins or watermelons would not work in a small, urban space. Commonly grown vegetables include tomatoes, peppers, cucumbers, green beans, leafy greens, cabbage, corn and potatoes. It is important to consider how you’ll hydrate your plants if the water’s turned off. The average home is capable of collecting 50,000 gallons of rainwater annually, so put nature to good use. You can purchase rain barrels at your local hardware store, and place them underneath your downspouts. Hoses can be connected to each barrel, making it relatively simple to keep your precious crops hydrated. Prepper Tip: To learn how to become a harvesting master, check out The New Self-Sufficient Gardener by John Seymour.
The laws for acquiring a gun, along with concealed carry permits, vary from state to state, so make yourself familiar with your state’s laws before you gear up. If you’re serious about owning firearms, you’re clearly interested in protecting your family. That includes proper gun safety. It’s imperative to make sure your firearms are properly stored, while being accessible to you in the event of an emergency. This can be a fine line, but it is one every gun owner must balance. Keeping your weapons inside a concealed gun safe or lock box — and keeping it locked — is the best way to make sure it stays out of inexperienced hands. Use a trigger or cable lock and keep your guns unloaded, with the ammunition in a separate location. Hardcore preppers recommend owning (a minimum) of five staple weapons: a shotgun, an AR-15, a full-size semi-automatic pistol, a long-range rifle and a .22. It’s up to you to decide which bests suits your needs. So what about ammo? In the prepping world, the mantra seems to be you can never own too much. For most SHTF situations (Google it), it is recommended you maintain 500-1000 rounds of ammo per firearm. Ammunition could also prove a valuable bartering tool in an allout collapse. So it’s important to remember that guns and ammo could feed your family in more ways than one. Prepper Tip: for more information on all-things-gun, pick up Boston’s Gun Bible by Boston T. Party.
Tools and Supplies Guns and Ammo? Yes, Please.
An important part of any emergency stockpile is supplies. Yet it is estimated that 44 percent of Americans do not own a first-aid kit, and 48 percent have failed to collect emergency supplies.
There’s no doubt about it. You’re not a prepper if you don’t own a gun or two. Or 50. After all, a good rifle could be the ticket to your next meal — or life-saving protection from the outside world.
You can purchase ready-made emergency kits, or you can assemble your own. In an easy-to-carry, accessible container, store the following:
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S p e c i a l F e a t u r e | Closet Preppers
q A tent or bivy q Blankets q Waterproof matches q A fire starter q A portable propane heater q A hand-crank emergency radio q Hot packs q A flashlight with extra batteries q A whistle q Moist towelettes q A multi-tool q A can opener q A phone charger q Local maps q Copies of your emergency plan
You should also have a first-aid kit handy, including personal hygiene products like toothbrushes, toothpaste, soap, lotion, diapers and feminine hygiene products.
q Jumper cables q Flares q Flashlights q First-aid kit q Non-perishable food items like energy bars q A gallon of water per person for three days q A portable tool kit q A can opener q Pet supplies q A hand-crank radio q A shovel q An ice scraper q Extra clothes and shoes for warmth q Blankets q A cell phone charger
Regular tune-ups and oil changes ensure your vehicle is in good working order, and it is wise to keep your gas tank full. Prepper Tip: If you’re ready to get prepared, pick up the book Life After Doomsday by Bruce Clayton.
Feeling Overwhelmed? Don’t be. Though the most hardcore doomsday preppers spend years (and thousands of dollars) amassing a stockpile of goods and weapons, by checking off a few simple lists — and taking it one step at a time — you’ll be prepared to withstand even the most threatening herd of flesh-eating zombies.
It’s important to maintain a bevy of useful tools at your disposal, including: q A multi tool q Survival knives q A hatchet q An ax q A hunting knife q A folding shovel q Work gloves q A compass q Folding blades q Fixed blade knives q A machete
Another important piece of preparedness is having an emergency kit for your car. You can purchase a large bin and fill it with essential items that would be useful if you were stranded:
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H A R D A S S E T S | Gold in 2014
by Gabe Benson
T
here are two things that as Americans it is hard to argue. One, we love our cars. We love our big trucks, even if all we do is commute to work. We love our fast sports cars, even if the fastest we can ever drive is a little over the speed limit. We love our big touring sedans perfect for a long drive. We even love our minivans. Well, may not love them but we certainly appreciate the convenience. And the second thing that is hard to argue is that cars are a terrible investment. What is the saying? The minute you drive your new car off the lot it loses two thousand dollars in value. Sadly, it is true.
Mustang, complete with extra chrome and horsepower, will be limited to 1,964 cars. But if you were to buy this Mustang today, would it be worth anything in the future? Cars are not like many commodities, where you can just put them in the safe and hope they go up in value. Nor are they like art where you can put them safely on the wall and admire them, while “hopefully” they are rising in value. They are meant to be enjoyed. They are meant to be driven. And driven fast.
But it doesn’t matter. We love our cars. While there were many cars before it that are personal favorites, one of the cars that stands out as the car that started the craze was the Ford Mustang in April of 1964. The Mustang was a true sports car, and proved so popular that it changed the way that car companies made and marketed cars. This spring marks the fiftieth anniversary of the Mustang, and Ford is producing a limited edition Mustang. The production run on this 40 | American Hard Assets www.ahametals.com
And that of course means, maintenance, upkeep, storage, gas, repairs and a litany of other costs that either drive down your car’s value or at least increase your investment into the vehicle. But investing in cars is just like any other investment at some point. You want to either buy things you are passionate about, or something that is rare. One-of-a-kind preferably, but at least something with a short production run.
We Love Our Cars | L i f e s t y l e a n d l u x u r y
Cars are meant to be enjoyed. They are meant to be driven. And driven fast. The trick is to find a classic car. Not an OLD Car. And the line can be difficult to find sometimes. The Classic Car site www.f40.com specializes in Antique and Exotic cars. They have everything from 1951 Chevrolet 3100 Pick-up for $29,500, a 1957 Corvette for $125,000, a Ford Woody Wagon for $98,000. All in pristine condition and ready to drive. These cars can be found on eBay or even junkyards for a fraction of that price, but the restoration cost can be so high (and time consuming) that paying the higher price is sometimes the way to go. The trick is to temper your expectations on return on investment. To purchase the 1951 Chevy pick-up for $29,500 will certainly get you a cool looking truck, but the car is not expected to go up more than 10% over the next ten years. Meaning, there are certainly more efficient ways to grow your cash.
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L i f e s t y l e a n d l u x u r y | We Love Our Cars
The trick is to find a classic car. Not an OLD Car. And the line can be difficult to find sometimes. Often times, people make the connection between car flipping and house flipping. And there are certainly similarities, in that the money is made on getting a great initial price and then doing the renovations at the right cost. Additionally, Baby Boomers, which has driven the classic car market for years, have also lost some interest in collecting classics such as the Buick Skylark, 1957 Bel Air, and the 1955 Packard Caribbean. Hagerty, which keeps track of the average sale price of Classic American Cars, shows that prices have dropped since 2008, and show few signs of climbing again. The reason is that according to Sass in an article in Car & Driver stated that 58% of the collector cars sold in the US go to Baby Boomers, and that market is drying up. And for that reason, Wayne Carini, who hosts a show on Automobile Auctions on the Velocity Channel, says that the trick is to buy something you like.
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We Love Our Cars | L i f e s t y l e a n d l u x u r y So the question is, will Generation X, Y and whatever the next generation is called have the same interest in cars of the past 2030 years as the Baby Boomers did for the cars of their youth? Will there be a market for the Pontiac Fiero in the future? Or how about cars from the now defunct Mercury or Saturn? A quick search of eBay shows that the average Fiero is going for under $5,000. Based on purchase price, and maintenance since purchase the collectors market certainly hasn’t caught up to it yet.
The Future For The American Car Industry Did you know that there were 1800 car manufacturers started in the United States from 1896 to 1930? Market conditions, the Depression and later market consolidation meant that most of these companies have disappeared leaving us with pieces of the automobile history buried in the offering from what is left of the Big Three – Ford, Chrysler and General Motors. After what was arguably a downtime for the industry in the past two decades with decreased sales and increased competition, the great American spirit of innovation has actually seen a few new car companies emerge. Fisker and Tesla, are both looking to make a mark in the electronic car industry. Both make highly stylized great looking cars that are trying to take advantage of the compelling need for more energy efficient, yet functional, vehicles.
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L i f e s t y l e a n d l u x u r y | We Love Our Cars
Elon Musk, the founder of Tesla, has even jumped, as far ahead as stating that his new factory expected to open at the end of this decade will position the Model S to surpass the Ford F-150 as the most American Made car. The Tesla Model S is a four-door sedan, and the Model X a type of sports utility cross-over (with the backdoors that swing up open by going straight up), are proving very popular in certain segments despite the $80,000 plus price tag. The cost of ownership is surprisingly low, but the 250-mile range between charges seems likely to keep the Tesla and the similar product from Fisker from breaking wide. However, interest in Tesla (TSLA, Nasdaq) stock remains high (trading just under $200 as of this printing down from a peak of $268 in September 2013) as Tesla remains a vision of the future of the American car company. The hope stems from the rumored Model E, a lower level entry-level vehicle, can jumpstart the entire market. The bottom line is that Tesla seems to have positioned itself as the Apple of cars. Offering a slick futuristic product, and headed by a cantankerous and sometimes controversial leader. Will it lead to success in the long run? Too early to tell.
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S p e c i a l F e a t u r e | American Artisans
by Jason Walter Vaile
C
raftsmanship. A word rarely used these days. It stirs images of rugged men who have spent a lifetime mastering their work. Carving. Welding. Painting. Trades that have been honed over a hard lived lifetime. Artisans learn a craft, and through talent and years of experience, reach the expressive level of an artist. Even modern day trades like plumbers and electricians borrow common nomenclature from the medieval artisans. Those that owned their own business were called Masters. Those that worked under them were called Journeymen and Apprentices. Today, the quickest, easiest production method is usually the path chosen to save money. Ship it overseas to get it done faster, cheaper, but not necessarily better. A few men around the nation still do it the old fashioned way...by hand. Their unique methods and the resulting products make them true American Artisans.
Industry City Distillery Located in the heart of Brooklyn, Industry City Distillery has made an art of fermenting vodka. It began when five young men thought that they could 46 | American Hard Assets www.ahametals.com
improve vodka using art and science. Their goal was to create a vodka that someone would gladly drink straight. They opened the City Foundry, a small research and design group in an old warehouse space in Sunset Park, Brooklyn. The Industry City Distillery founders used their collective knowledge of biology, machining, physics, and chemistry to create a new, “outside the box� way of producing vodka. They had no previous background in alcohol distillery. The founders worked odd jobs until they united to form ICD. Peter Simon was a barista and yoga instructor. Rich Watts did graphic design. Zac Brunk ran a machine shop. Max Hands was a commercial fisherman, and David Kyrejko built aquatic ecosystems. The Distillery uses only American grown sugar beets and processes them into sugar. They ferment their yeast and sugar in sleek
American Artisans | S p e c i a l F e a t u r e
To honor the history of the materials they find, they try to retain some of the original character, (file marks, insignia, nicks and scratches) and then implement some of their own touches (antler, wood, grand dad’s jeans). Luke Snyder and David Van Wyk forge every blade by hand after carefully researching the steel they use. “Much emphasis is put on eating locally and sustainability, but the tools used to prepare these foods are largely made from unsustainable sources.” Luke has a Masters degree in Environmental Sciences. As a boy and young man, he always had access to a coal forge at a historical farm where his father worked. He began making swords and daggers in high school and eventually turned to hunting and camping knives for his personal use. David turned to his friend Luke to make his groomsman’s gifts for his wedding, and eventually talked Luke into teaching him the art of blacksmithing. All of their knives come with a lifetime guarantee (their lifetime) and if you deliver and pick up, they will sharpen your knives free of charge.
Jeff Traugott Guitars glass and stainless tubes called Bioreactors. They process much smaller batches that result in better fermenting control. Steam is used to separate the water from the alcohol to allow a more efficient and gentle distillation.
Jeff Traugott built his first dulcimer when he was a teenager from information he managed to cobble together from a book. After that he was hooked. He got a job with a guitar and violin builder in Santa Cruz, California. Under this artisan’s tutelage, he built his second instrument, an F-5 mandolin.
The art comes from the individual tasting of each cut. They rate the run by smell and taste to determine which ones to blend into a final batch. Their end goal is not just produce great tasting vodka, but be profitable enough to finance new ventures. I personally can’t wait to see what those turn out to be.
Blood Root Blades “We make things that cut.” A simple motto for a knife company, but a good place to start. Blood Root Blades uses only recycled and found steel to make their field and kitchen knives, tools, and razors...like their motto says, “things that cut.”
In 1991, he opened his current shop, which is located in an old industrial complex. Most of his first jobs were repairing old Martins and other high end acoustic guitars.
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S p e c i a l F e a t u r e | American Artisans
architecture. This became the foundation of his unique profession. Today, many architectural details are cast in plaster and resin, poured into a mold, and popped out when they harden. “You just don’t get the amount of detail in fabricated pieces. It loses something.” Paul uses only hand carving tools. He found even using mechanical tools to roughly outline his pieces, he spent more time cleaning those areas with his hand tools than what it was worth. As a self admitted “control freak”, he works alone in his small shop, covered in saw dust and curls of carved wood. “I feel kind of a karmic debt to eventually pass on my knowledge to an apprentice, but right now I’m content working alone. I see myself as a dinosaur of sorts. Doing things the slow old-fashioned way, by hand. Everybody’s in a hurry these days, time is a commodity that everyone is short on. Someone can turn around a cast piece of resin in twenty four hours. Luckily, some clientele still see the value of my work.” How could they not? Each curl of a pineapple leaf, each flower carved into a Spanish renaissance door, done by hand by a true wood-working Artisan.
Bruce Breslow
Eventually his own guitars and instruments gathered a following until it was all he had time to produce. He developed a line of guitars that have a clean, classic look, and simple elegance. “I really like to let the materials speak for themselves. Tone and playability are crucial and because each player has her or his own needs, I listen carefully and try to make each instrument one-of-a-kind.” Jeff custom blends hand-picked woods and then carves, sands and bends them into beautiful pieces of musical art. His models range from small guitars with huge sound to burled electric guitars that are stunning to see. A Brazilian rosewood or German spruce guitar and custom case will set you back $26,500.00.
Paul J. Labadie Paul J. Labadie studied the great artists in college: Michelangelo, DaVinci, Monet. It was in studying those masters that Paul came to love and respect beautiful artwork. That admiration is reflected in his traditional hand-carved woodwork. Early in his career, Paul worked odd construction jobs in Minnesota, California, and Texas. About thirty years ago, he discovered his passion for woodworking. He decided to combine his experience in finish carpentry and cabinet making with his life-long study of art and 48 | American Hard Assets www.ahametals.com
Bruce Breslow cooks at 2,150 degrees. He twirls a strip of glass through a blue flame until it takes the shape he wants and then places it into a graphite mold to form a perfect sphere. He adds in strips of mulit- colored glass to add dashes of color. He brandishes a welding torch and heats the sphere up again.
American Artisans | S p e c i a l F e a t u r e
“My canvas is complete!” Breslow exclaims and pops out another marble at Moon Marble Co. in Bonner Springs, Kansas. This is the only store in the nation where shoppers can buy mass-produced toy marbles and even watch them being made. Breslow opened the shop in 1984 as a woodworking business and began using scraps to craft old-fashioned toys. When one game required marbles, Breslow was not satisfied with the plain Jane marbles he could find. So he decided to learn how to make them himself. He poured over books, called other artisans, and traveled all over the nation to visit old-time craftsmen. By 1996, Breslow was spinning his own marbles, learning the process through trial and error. Breslow creates between 400 and 600 marbles annually using glass from around the world. They sell for between $20 and $300 each. His specialty marble are tie-dye versions; bright, beautiful marbles that are as unique as the man that crafts them.
Mejia uses hat making blocks, molds, and equipment to fashion hats from a variety of materials, including cashmere, fur and linen, for celebrities and other hat wearing aficionados. Today, Mejia created original hats for Johnny Depp in “Public Enemies;” Ryan Gosling’s fedora in “Gangster Squad;” and the majority of the cowboy hats for “The Lone Ranger.” Though production deadlines can be tight and stressful, Mejia prides himself on creating authentic and fashionable head ware for Hollywood’s leading men and ladies. “There’s nothing more important than a hat,” Mejia says.
Mark Mejia Mark Mejia has worn thousands of hats, hats that he has made during the last twenty years. From British bowlers to pretty pillboxes, he has made just about everything. The owner of Baron Hats in Burbank, California, Mejia is a bit of a perfectionist when it comes to creating custom head ware. Looking for his passion, he left his position as a science technician for the Los Angeles Unified School District. He bought Baron Hats, a small hat shop with hundreds of aluminum hat molds, in 1995. He studied under the master hat maker and founder, Eddie Baron, who started the company in 1970.
Seek out and find these men and others like them. Artisans that strive to make a product better or unique. Where time is not the meter it is judged upon, but purely on its quality. These are our modern day sculptors, artists and craftsmen that combine a blend of skill and art into everything they do. Artisans by the very definition. Jason Walter Vaile is a jack of many trades but an artisan of none. He types words onto a screen, Hemingway would be ashamed. You can follow him in Twitter, Instagram and Tumblr as mrpenhead.
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S p e c i a l F e a t u r e | Mint Spotlight: U.S. Mint
222 Year History of the
U.S. Mint
A
lexander Hamilton, first U.S. Secretary of the Treasury and George Washington, first president of the United States of America were instrumental in launching the United States Mint. However, prior to the Washington presidency Congress had been studying the use and manufacturing of coinage since the early 1780s.
Before The Mint Since the earliest establishment of the American colonies, a mix of various foreign and local monies had been used to conduct business. As the fledgling nation began to mature, it became necessary to bring order to this chaotic state of affairs. In 1787, Congress authorized the production of copper coinage after a few of the 13 states began to strike their own coins for circulation under the Articles of Confederation. The first coin authorized by the U.S. government was called a Fugio cent, also known as the Franklin cent. It was the first try at producing a U.S. authorized uniform
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By Douglas Kale
coin for all 13 states. A Connecticut entrepreneur named James Jarvis contracted with the United States to produce 300 tons of the new cents, roughly 26 million coins. Unfortunately, after failing to provide the contracted number of coins Jarvis fled the scene. The 400,000 or so coins that were produced were put into circulation about a year later, but were found to be underweight and therefore shunned by the people.
Mint Spotlight: U.S. Mint | S p e c i a l F e a t u r e
The Birth of the U.S. Mint On Jan. 21, 1791, Alexander Hamilton submitted a plan to Congress for another United States coinage that would include both gold and silver coins. As Congress mulled over Hamilton’s suggestions, they began to build upon Hamilton’s idea. On March 3, 1791, a resolution was passed and President Washington gave his approval for a Federal Mint building to be constructed in Philadelphia, Pennsylvania. In April 1792, Congress passed theCoinage Act, a law authorizing the production of coins in the following denominations: copper half cent, copper one cent, silver 10 cent coins (originally called disme), silver half disme, silver quarter dollar, silver half dollar, silver dollar, $2.50 gold quarter eagle, $5 gold half eagle and a $10 gold eagle.
The 1700s The original weight of the large one cent instituted by the Coinage Act of April 2, 1792, was 17.11 grams. However, copper prices were rising fast and in 1793 the weight was reduced to 13.48 grams. Copper prices continued to rise again and by 1795 the weight of the cent was lowered once more to 10.89 grams. To keep the Mint running smoothly, President Washington appointed David Rittenhouse as the Mint’s first director as of April 13, 1792. It’s estimated that from April to May 1792 the U.S. Mint had produced $50,000 worth of cents and half cents. A few years later they encountered major shortages of copper and the Mint adroitly obtained large amounts of scrap copper to produce the coins. Even though there were several types of coins minted from 1787 to 1792 by the United States government, the first official circulating coins (cents and half cents) struck by the United States Mint were the ones dated 1793. According to the U.S. laws, the Mint was required to produce half cents that were exactly half the weight of one large cent.
True or False? Members of the House of Representatives wanted the first United States coins to picture the head of their first US President, George Washington.
True! Unfortunately, George shot down the idea by expressing great disapproval. The House and the Senate later voted to feature Lady Liberty as the more appropriate choice. In January 1793, President Washington appointed designer Henry Voigt as the Chief Coiner of the U.S. Mint. By March 31, 1793, the Mint had struck, delivered and circulated 11,178 copper coins.
The 1800s As the population grew in North America and more states were added to the Union, the U.S. Mint adjusted to the changing times and began to increase their coinage production for all denominations. However, the Mint continued to be faced with challenges such as higher prices in copper and silver. By the mid1800s, the cost of copper and coin production had risen greatly. In order for the Mint to remain profitable they were forced to reduce the size of the large cent and do away with the half cent. With the a new coin Act of 1857 in place, the Mint began to produce a new copper and nickel small cent called the Flying Eagle. The coin ran a course of three years and was changed to the well-known Indian Cent which is actually Lady Liberty wearing an Indian headdress. In 1851, Congress authorized the mintage of a new coin denomination, the silver three cent piece which was called the trime by the Treasury Department. Although the coin was very small and light in weight it stayed in production for 22 years. As soon as silver prices rose in the 1860s, the public began hoarding the silver three cents; the Mint was forced to issue another three cent piece made from a nickel alloy. These coins lasted until 1889. Silver dollars were very popular in the 1800s because they carried a great amount of weight in silver and people preferred silver over copper if they could get it. In the 1800s, the Mint expanded beyond its Philadelphia location and opened up new branches in New Orleans (1835), Carson City (1866), San Francisco (1874), and
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S p e c i a l F e a t u r e | Mint Spotlight: U.S. Mint
Denver (1897). The one coin which was produced at many of these branch locations was the silver dollar. Many years saw tremendous production of the dollar coins while others saw record lows (i.e., 1893S) and thus are now hunted by collectors.
The 1900s The Mint upped their production once again as the US population grew further, and made several design changes to attract new public interest to the coins. By the early 1900s coin collectors began hoarding types of coins that were fazed out of production such as the large cents, two and three cent pieces, 20-cent pieces, gold coins and other design variations. At the end of the 1800s and into the 1900s, The Mint looked very closely at the business of creating and selling coins to collectors. As it turned out, this was a very smart move. By the 1920s, the Mint began issuing silver commemorative coins to satisfy some of the demands of the collectors. However, when the Great Depression of the 1930s hit and prices for silver and gold went through the roof, the Mint was forced to stop the production of its gold coins as well as its silver dollars. When the depression was finally over and the Unites States was rebounding, collectors began to up their coin collections again. The Mint once again followed the trends and started a new series of limited edition coin sets in 1936 called Proof Sets. The production started off slow, but by the end of the 1900s the Mint was producing millions of these sets for collectors throughout the US and worldwide. Proof and Mint sets were a hit. People enjoyed giving them as birthday and graduation gifts and continue to do so today.
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The 2000s As silver and gold eagle bullion coins become more popular for investment portfolios, the Mint is often faced with the challenge of changing the price of bullion coins to reflect the current market trends. Their website has become “the” go to place for anyone interested in purchasing today’s newest and hottest coin releases. The Mint has also become more visible in the public by setting up history displays of rare coins at large coin shows around the country. By offering collectors the chance to purchase newly released coins on the spot at these events, they’re giving thousands of collectors the thrill of a lifetime. With the introduction of the Internet, collectors from around the world can visit the U.S. Mint’s website at www.usmint.gov to purchase proof sets, rolls of coins, commemoratives, silver and gold bullion as well as other U.S. Mint collectibles. From the huge demand of the recent Major League Baseball commemorative coins to the latest Silver Proof Sets, the US Mint continues to be a major vehicle for entertainment and investments.
Story Name | S E C T I O N N A M E
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L i f e s t y l e & L u x u r y | American Polo
Changing the Face of American Polo:
Nic Roldan Discusses His Love of the Sport, Horses & What Really Matters in Life By Courtney Driver JustLuxe
N
ic Roldan has been called the face of American polo for more than one reason. Having a host of accolades and tournament wins under his belt, he was the youngest player in history to win the very prestigious US Open at the sprightly age of 15, a memory he told JustLuxe in a recent interview is one of his favorites. Besides being one of the top-ranked polo athletes in the United States, he is also a third-generation player, a brand ambassador for watchmaker Piaget, is currently contributing to the future of the sport (more on that later) and has a sweet, likeable personality to boot. It also doesn’t hurt that Vanity Fair listed Roldan among Polo’s 10 Hottest Horsemen; clearly the guy is easy on the eyes. That’s a pretty complete package. For anyone unfamiliar with the game, polo is an intense sport that doesn’t get quite enough time in the limelight. Frankly it’s a shame. In Nic’s own words, the game is “like ice-hockey on horses, land speed of thirty to forty-five miles an hour, chasing a white ball…trying to stay on the horse.” Make no mistake; polo is an intense sport that commands multiple talents of its players, only one of which is the
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ability to ride a horse well; an activity that is a sport in its own right. Roldan is no stranger to a range of athletics, having actively played soccer, ice hockey, golf and tennis. He is quick however to draw a firm distinction between more commonplace sports and polo. “It’s a much different experience, a lot more intense…you not only have to be a very good rider to play polo, you also have to have good hand-eye coordination, and you have to have great timing…of all the sports I’ve played it’s by far the most difficult.” Couple all of that with the agility, quick thinking and overall strength needed, and you have a game that has been over and over called the sport of kings. In fact, do a quick search online and you will find that the media has played the “sport of kings” card so much that the tagline has probably done more damage to the reputation of the sport than good, bringing with it the connotation that the sport is somehow exclusive to the uber wealthy.
American Polo | L i f e s t y l e & L u x u r y
different technology, and I think it’s the new technology for saddles; moving on into the future…we’re designing new polo equipment, new helmets, knee-guards…I’m actually quite involved. […] Fashion is something I’ve always loved as well…so we’re working on new lines with the company, and a lot of good things are happening there.” While the PoloGear Nic Roldan Free Shoulder Saddle™ is already on the market for anyone interested in purchasing one, the whole line is still in development and, according to Roldan, will hopefully become available in the next three to six months.
Granted, it takes what would appear to be a small army to support a single polo player, which certainly makes it a pricey sport to play. Nic has a team that he likens to a NASCAR crew, traveling around the world right alongside him. “I have four [people] that work with me all year round, two that are part time, you’ve got vets, you’ve got horseshoers…it’s a huge entourage, it’s a big expense, a lot of maintenance and work involved, a lot of people are a little bit misconceived at the sport and think of it more as a lifestyle, it’s actually an intense, very grueling [sport]; it’s a lot of hard work, focus…determination needed to compete at the top level.” On average, Nic travels with somewhere between 10 and 15 horses at any given time, even shipping his best overseas to the UK, where he has begun competing during the summer.
Also propelling the “sport of kings” into the future, Britain’s royal princes can and should be credited with drawing attention to polo in the more mainstream media over the past couple of years, especially in the US where the game does not enjoy even half the attention it commands in the UK and India. Perhaps fittingly, Nic had the privilege of being on the field with both gentlemen, at one point captaining Prince Harry’s team at the 2010 Veuve Clicquot Polo Classic on Governors Island. The media attention lavished upon the royals has certainly been a wonderful boost in exposure for polo, hopefully arresting and captivating a new audience in its wake. “It’s opened everyone’s eyes, it gives the sport a chance because nobody really knows about it or has been educated about it, but once people get the idea of the sport and how it works, and how much work and dedication is involved, and sort of see the speed and intensity, they fall in love with it.” Despite rubbing shoulders with royal blood (not to mention polo legends, celebrity names and the general upper echelon), Nic seems
With a very clear-cut passion for polo Roldan seems to be putting his all into being the best and bringing the sport he loves into the mainstream. “Any sort of good publicity and attention toward the sport is great,” according to the athlete, “one of my dreams is to try to win, or try to even compete in the Argentine Opener, the biggest tournament in the world, but it’s tough trying to have horses both here and in Europe and in Argentina, so I’m trying to focus more on just, you know, doing the best that I can in the United States. I’m going to be in England for the summer, competing there, which is something new for me, a second year, there’s two big competitions, the Queen’s Cup, which is hosted by the queen, and the Gold Cup.” Like any professional sport, polo is filled with sponsors and naturally keeping them happy ranks among Nic’s top career responsibilities, right alongside furthering awareness of polo as a spectator sport and contributing to the growth and development of the game. “Polo’s becoming more and more competitive every year, there’s more and more sponsors, more and more money, more and more competitions around the world. And we’ll be getting more attention now from the public eye, which is making the sport a lot more professional,” Roldan explained. So things appear to be heating up and Nic seems to be at the center of it all, not only on the field, but off of it as well. When the athlete isn’t swinging a mallet while riding a horse, he is thinking about how he can be more effective at it, a practice that led him to design his own saddle for PoloGear, a brand he will eventually be the face of. “We came up with the design of a concept for a saddle that’s very
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L i f e s t y l e & L u x u r y | American Polo the field with my father was an amazing experience. You know, he’s been my mentor throughout my career, and he’s really helped me a lot.” He goes on to say that he also loves children and looks forward to having his own one-day. “I have a huge passion for kids, I love ‘em…when the right time comes.” He is clearly devoted to his family and finishes by saying “we’re a very close family, we spend a lot of time together. I value my family immensely, without them I wouldn’t be where I’m at today.” So what about tomorrow? Like any sport, the expiration date on a career in polo is inevitable. When I pressed him on his modeling
like a pretty normal, humble guy. After chatting shortly about his fairly boring lunch of chicken with salad, I asked him why he really loved polo. He told me it was the horses. “First and foremost is the horses, I grew up on horses, I grew up on a farm...horses have always been a passion in the family, I just love being around them.” Any animal lover can probably relate and might even be a tad bit jealous of the polo star’s relationships with his animals. “And then the sport,” he continued, “pretty much all I’ve ever done with my life is play sports. I used to play a lot of ice hockey, golf, and tennis and a lot of soccer.” But his love for the intensity of polo trumps all of the others and the sport seems to be engrained in the man, who has been riding since he was five years old. Growing up as a third generation player, Nic strongly credits his upbringing for his success. “We had lots of horses, and you know, we played polo growing up, which really helped me get to where I’m at today…being able to be on
career thus far, Nic was super humble. “I think part of being an athlete is the endorsements, and the modeling…whatever else that brings to the table, it’s not like I was striving to do it. But it came with the position of being an athlete. I think it’s fun, I think it’s something different. Something enjoyable.” While Roldan is most certainly at the top of his game today, he is also level-headedly planning for the future, of which modeling does not seem to have a part. “Real estate is something I love, architecture, interior design, those are all, you know, passions of mine…I’m starting another company…called Bedford Park, it’s an advisory group, we’re a real estate investment group.” He also has a newfound passion for all kinds of art, which he has just recently started to collect. “Anything that catches my eye, I don’t have a specific preference, that’s sort of the way I approach life… when it comes to music there isn’t a favorite type of music, I love all music, I think all art is beautiful. There’s different ways to look at it… that’s sort of the way I approach life, just sort of move forward and enjoy whatever you have.” Nic’s sentiments leak into every aspect of the conversation. Pretty much a sweet guy who just so happens to also be very talented on the field, the man’s personality is likeable and his drive is undeniable. While polo does not get the attention that it perhaps rightly deserves, maybe Roldan is the person to change that. Either way, one thing is certain: I am planning on being at a polo match in the very near future.
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Hennessey Celebrates 270 MPH with Venom GT | L i f e s t y l e & L u x u r y
Hennessey Celebrates 270 MPH with Venom GT World’s Fastest Edition
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By Noah Joseph JustLuxe
here are all sorts of contests in the world, but few are as hotly contested as who makes the world’s fastest car. In the late 1980s and early 90s, it hovered around 200 miles per hour: the Porsche 959 was clocked in 1986 at 195 mph, the Ferrari F40 beat that the next year at 203 mph, followed by the Bugatti EB110 at 209 mph, the Jaguar XJ220 at 213, and finally the McLaren F1 at 240 in 1993. The record stood until Bugatti moved it up to 254 mph in 2005, which was broken by American startup Shelby SuperCars with the Ultimate Aero TT at 256 mph, before Bugatti took it back again at 268 mph with the Veyron Super Sport. Koenigsegg thinks it can break that speed with its new Agera One:1, but until that can be properly tested and verified, the new king of the hill is the Hennessey Venom GT.
Built by Texas-based tuner Hennessey Performance Engineering, the Venom GT is a highly modified Lotus Exige with a 7.0-liter twin-turbo V8 driving 1,244 horsepower to the rear wheels through a six-speed manual gearbox made by Ricardo — the same outfit that makes the transmissions for Bugatti and McLaren. The Hennessey Venom GT had previously set a top speed of over 265 mph on the runway of a US Navy air base in California, but recently eclipsed even that speed at the Kennedy Space Center in Florida, where it was clocked at 270 mph.
celebrate its unofficial record, Hennessey has released the “World’s Fastest Edition” you see here. “The Venom GT is America’s supercar and it broke 270 mph on the same runway where the Space Shuttle landed at the Kennedy Space Center,” says company founder John Hennessey. “We wanted to offer a special paint scheme that would incorporate the colors of the American flag — the same flag we flew on the Space Shuttle runway. Thus, our special livery package includes a body in white with red and blue stripes.” The commemorative edition Venom GT is distinguished mostly by its white paint job with red and blue stripes running up the nose, across the roof (including its protruding air scoop), down the tail and across the adaptive rear spoiler — giving it a rather patriotic appearance to represent America in the race for the world’s fastest car. The supercar remains mechanically unchanged from the others Hennessey has produced to date, but then with over 1,200 hp on tap, we’re not sure any modifications were called for. Of course the cost of owning the world’s fastest car is high: in this case, $1.25 million. That’s still a fair bit less than what Bugatti charges for a Veyron these days. But even if that sum sounds reasonable to you, you can’t get your hands on this special edition, because only three will be made, and they’ve all been spoken for. Contact Hennessey, though, and we’re sure they’d build you one with whatever colored stripes you want — for a price, of course.
Because it’s registered as a modified Lotus with only a handful made and not as a series production car, it’s not eligible for the Guinnesscertified world record. Nor did it make the requisite pass in the second direction, the average from which is calculated the official world record. The Venom GT is, however, certified by Guinness as the quickest car to reach 300 km/h or 186 mph, hitting the speed in 13.63 seconds. Technicalities aside, when push comes to shove, it’s still faster than anything Bugatti, SSC, McLaren, or anyone else has thrown out. So to
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L i f e s t y l e & L u x u r y | American Watches
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By Ed Estlow
few months ago we discussed the state of the American watch industry. The fact is, horology that’s uniquely American is making a comeback. There are dozens of young watch companies in America these days, from tiny one-man shops to brands that have been established for a couple of decades. Now, we need to state that most American watch companies are assembling parts imported from overseas, mostly Switzerland or China. It’s far and away the best business decision for a young startup. Large
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watch fairs on two continents – Switzerland’s Baselworld in the spring, and the Hong Kong Watch & Clock Fair in September – offer countless opportunities to meet with component designers and suppliers well versed in the fine art of making small parts for the watch industry. All it takes is a little imagination, some capital, and a place to work, and you too can have a watch brand with your name on it.
American Watches| | L i f e s t y l e & L u x u r y
Perhaps the company with the highest profile these days is the Shinola Watch Company. Shinola is making watches (and bicycles) in Detroit, once the iconic hotbed of American manufacturing.They’ve got a flagship store in New York City, and recently partnered with Filson, the iconic American outerwear and soft goods company. Although Shinola assembles their watches using imported parts, their watches have a uniquely American – some might even say biker – vibe. It only takes a glance to see the American design heritage in their work.
Towson Watch Company is run by two watchmakers, George Thomas and Hartwig Balke. Thomas and Balke started their own atelier in 2000 after full careers working for others.Their work typically involves tuning and coupling Swiss movements with dials and cases of their own design. They’ve got some significant notches on their belts, including Balke’s first chronograph, which was worn on NASA space shuttle mission STS-99, the first shuttle mission of the new millennium.
Kobold, whose watches are noted for being kit components of explorers and mountain climbers, is another company assembling great watches here in the US, near Pittsburgh to be exact. They do much of their assembly here in the US, often reworking and fine-tuning parts imported from Switzerland. Kobold has also just opened a manufacturing facility in Nepal, bringing a different kind of international flavor to their watchmaking.
Such companies as Shinola, Kobold, and Towson, along with many others, are American based brands, but to call their products wholly American is a stretch.
Are there companies that are duplicating here in America what exists en masse in Switzerland? That manufacture not only watches, but many of their constituent parts, here in the US? There are, but using that criteria reduces the number to just a small handful.
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L i f e s t y l e & L u x u r y | American Watches
Three come to mind: RGM in Mount Joy, Pennsylvania, Keaton Myrick in Sisters, Oregon, and Devon in Los Angeles, California.
Devon Never let it be said that Devon is not an edgy company. Consider the names of various versions of the Tread 2, their current model: Murder, Nightmare, Shining, Ghost. And watch the videos on their website. These guys have little use for classic watchmaking, sort of a “to heck with tradition, we’ll do it our way” trait that’s uniquely American. Devon is on the cutting edge of avant-garde design, both from an industrial standpoint and a horological engineering standpoint. Dedicated to bringing to life luxury products that exemplify the American spirit, the company is made up of expats from the aerospace and industrial design industries. Only now becoming known for their watches, they have also produced the Devon GTX, a swoopy, luxury super car which they used to set the one-lap record at Laguna Seca in 2009. These guys were car guys before they were watch guys.
else uniquely American: an in-your-face approach to telling time. The watches are a mix of digital and mechanical. In the Devon Treads, numbers are printed on Time Belts™ moving horizontally, vertically, or at an angle across the face of the watch. These belts are driven by miniature precision motors which are in turn controlled by a single chip, essentially a tiny computer.All this miniature machinery is powered by a rechargeable lithium battery. The limited edition Tread 1 was a big, blocky, some say noisy affair that was not the most wearable timepiece ever devised. It was however, unique. It’s been referred to as the timepiece which started a new category of timepieces.A new version of the Tread 1 – the Exoskeleton – was introduced at this year’s Baselworld watch fair in Basel, Switzerland.Devon watchmakersreplaced several metal pieces of the original design’s case and bracelet with translucent polycarbonate. This gives the observer an even better view of the groundbreaking movement. The Tread 2 takes up where the Tread 1 left off. It’s lighter, smaller, quieter, and much more wearable on the wrist by all reports. It foregoes a running seconds function, but with a press of a lever adjacent to the crown, the minutes track temporarily becomes running seconds. Scott Devon categorically states, it’s not just a watch, it’s kinetic art. He holds a global patent on the technology, and he isn’t slowing down with the design process. He’s on record – in a video on the Devon website actually – as saying, “We’re just starting … we’re really going to have fun playing with future versions of this watch.”
Keaton Myrick And now their Tread 1 and Tread 2 timepieces “bend reality” for what one expects a wristwatch to be – and to look like.And that’s about what one would expect to see from a group of designers who are not classically trained in watchmaking. Instead, these refugees from various branches of American high-tech industry have come up with something
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Keaton Myrick trained at the Rolex-sponsored Lititz Watch Technicum in Lititz, PA. Myrick chose the Lititz school primarily because of curriculum added to the standard WOSTEP (Watchmakers Of Switzerland Training and Education Program) syllabus by administrator Herman Mayer. That additional curriculum included a school watch project. The work Myrick did on that school watch still
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L i f e s t y l e & L u x u r y | American Watches
influences the watches he makes today. After graduating Myrick worked for a year at Rolex USA before heading home again to Oregon to practice on his own.His first watch was based loosely on an ETA 6497, but incorporated elements important to him.
Among those were a German style three-quarter bridge and Swiss Observatory style balance bridge. Design took six months and Myrick put in another two and a half years of prototyping and manufacturing. That prototype ultimately became the basis for his custom commercial watches. Of American watchmakers, Myrick perhaps comes closest to the late renowned George Daniels of Great Britain in that he makes about 75% of the parts himself. Main plate, bridges, screws, dial, and hands all come from his hand. So does the balance wheel, the beating heart of the
watch. In fact, Myrick’s creations probably reflect a broad European influence more than most American timepieces. He claims the countryside around his Sisters, Oregon home base is a lot like Switzerland, with its mountain vistas and the great outdoors in close proximity. With that sort of daily influence, and horological heroes like Philippe Dufour, it’s understandable why Myrick’s goal is to make relatively simple watches to the highest possible standards.
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American Watchess| L i f e s t y l e & L u x u r y
Many of their watches are assembled from imported Swiss parts which are tuned in-house before assembly. But they also claim three in-house movements: the Caliber 20, the Caliber 801, and the MM2, also known as the Pennsylvania Tourbillon. RGM’s first in-house movement, Caliber 801, was inspired by the old Howard Watch Company’s Edward Howard model. The focus was on making a very traditional, a very American movement. First high grade movement made in America in a series since the 1960s.
watchmaking, and we wanted to just make the best one we could possibly make – regardless of anything else. So the materials involved, the way that it’s built, the hand finishing, there is no sacrificing here, there’s no compromising. We did everything we could to make it the best it could possibly be.” – Roland Murphy, on the Pennsylvania Tourbillon. Roland Murphy’s RGM Watch Co. of Mount Joy, Pennsylvania is perhaps the 800 pound gorilla of American watchmaking. Mount Joy is just down the road from Lancaster, the historical epicenter of American watchmaking. Murphy and RGM are continuing that tradition, and improving on it as they go.
The MM2 is the first tourbillon ever serially produced on American shores. (For those who may not know, a tourbillon is an intricate mechanism designed to counteract the effects of gravity. It does so by continually rotating the moving parts prone to such effects.) The Pennsylvania Tourbillon watch is designed to give the wearer equal access to reading the time on the right, and to simply gazing at the hypnotic revolutions of the tourbillon cage on the left. Caliber 20, which honors RGM’s 20th anniversary, is tonneau shaped.Non-round shapes often take additional time – and skill – to make, a fitting tribute to Murphy’s 20 years in business.Part of the Caliber 20 is a high grade motor barrel, which contains the mainspring This barrel uses more parts than a typical barrel and has been designed to increase efficiency in energy transmission.
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L i f e s t y l e & L u x u r y | American Watches
The Challenge for American Watch Brands Part of the challenge of making watches in America is lack of a vertical industrial infrastructure – a support industry. There are no parts vendors to go to for the myriad small parts that go into a movement. RGM ended up going to companies serving the medical device, aerospace, and auto racing industries to find the expertise necessary. However, these suppliers understood precision small scale parts manufacture, but had no knowledge of watches. It was an education all the way around. And there are very few machines left that can do some of the specialized work. RGM owns five antique machines – three round machines which are called rose engines, and two straight line machines – that are capable of various types of the decorative engine turning found on high end watch dials. Murphy collected these rare machines over several years. And just in the development of caliber MM2 for their Pennsylvania Tourbillon, they needed to make over fifty tools – before they could start making movement parts.
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However, it’s obvious from watching Keaton Myrick, Scott Devon, and Roland Murphy, these watchmakers will persevere. It appears American watchmaking is here to stay – even if it doesn’t always look like Swiss watchmaking.
The Bitcoin Controversy | H A R D A S S E T S
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L i f e s t y l e & L u x u r y | Space Visit
CEO of World View Experience Discusses $75K Trip for Civilians to Visit Space in 2016 By Susan Kime JustLuxe
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eeing earth from space can expand and transform awareness and inspire awe, changing our perspective forever. In that moment, maybe it is possible that we finally see our personal interconnectedness with our living, ever-changing world. We perhaps see that we are one people; one environment where everything connects—we all live here and in space.
This type of change in both sense and sensibility is called the Overview Effect as suggested by Frank White, a noted space exploration and space development writer and author. The effect is the result of astronauts explaining what it feels like to see the earth from space. The above is an ideational compilation of what astronauts and others have explained, after voyaging to the edge of space. But in a few years, space will become accessible to many more. In 2016, World View Experience will be offering transformative space travel experiences that will allow six passengers and two crew members to float more than 100,000 feet above the atmosphere, ascending in a fully pressurized flight capsule, under a high-altitude Parafoil, and a high altitude balloon, then float to the edge of space. Large panoramic windows allow for 360-degree vistas, and thanks to in-flight Internet access, the voyagers may share their experiences and images with the world below in real time. After a gentle liftoff, the capsule ascends for about one-and-a-half to two hours, 20 miles above the earth, until it is above 99 percent of earth’s atmosphere. Then, the World View capsule will float down to earth. This is not a wild rocket ride, this is a peaceful ascend/descend, allowing the voyagers to see what only astronauts have seen before. Intro ticket pricing is $75,000 a person, and it is an all-day trip, beginning early in the morning. I recently interviewed the CEO of World View, Jane Poynter whose life experience has been in space exploration and sustainable technologies. She was one of eight Biosphere 2 crew members, who spent two years in that sealed enclosure. I asked her about her motivations, inspirations, goals, and objectives for World View. JustLuxe: What lessons did you learn while inside Biosphere that you have taken with you in the creation of World View? 66 | American Hard Assets www.ahametals.com
Jane Poynter: I learned quite a lot and there are a few direct lines of education I took from Biosphere into World View. But along the way, actually inside Biosphere 2, I founded Paragon Space Development, which developed technologies for extreme environments. I also, both philosophically and experientially, came to understand and actually see the interconnectedness of all plants and animals to us, how viscerally we are part of our environment, and how inter-reliant all plants and animals and humans are to each other and everything else. Biosphere really changed the way I saw the world, and I wanted to share it, which is one of the goals of our World View project. JL: Could you explain this further? JP: Well, it is the World View experience that allows you to really absorb seeing earth from space. It will be accessible, something that space really hasn’t seen before. There will be a time when, on this flight, you will hear the absolute silence of space. You will see the starscape without any light pollution, and you see the sun rise across the curve of earth. And you will see our earth in a cosmic perspective, as a planet. Seeing our home this way has ability to change ideas about everything. JL: I wrote my first article on Space Tourism about four years ago, and now Forbes believes space tourism will be an active trend in the
Real Estate with Joe Farrell | L u x u r y & L i f e s t y l e
near future. World View looks like a more practical development, and certainly a less expensive exploration experience than others who have offered this before. How long will the trip be, from take off to landing? JP: It will be a full day, from start to finish, beginning at early dawn. It will be dark outside when we get in the capsule. And for an hour and a half float up to the edge, over 99 percent of the world’s atmosphere. We get there pre-dawn, so we can see the full glory of space before the sun rises. Then, the sun rises over the earth, we’ll see light coming across the curvature. Then we will slowly come down. We’ll be in the capsule five or six hours. It will be a transforming life experience. JL: Explain some of the precautions you have made for the safety of those first passengers. JP: There will be much testing beforehand, we will look at potential problems from every point of view. One of the big things, the Parafoil will be open the entire time, they are unbelievably reliable. In opening them, they turn the capsule into a glider and the capsule can glide down to the ground from any altitude. We are also planning for multiple launch sites throughout the US, as we plan to launch from these sites all year. Right now we are looking in the Southwest, as at dawn the high desert air is clear and calm. JL: Explain your philosophical as well as practical interest in this project. What thrills you about this, and why at this particular time? JP: My practical interest is that I want to make space truly accessible to everyone. I also believe in the Overview Effect – that when you see earth from space, you will understand on a deeply visceral level, the true meaning of inter connectedness and sustainability. From a philosophical standpoint, I believe that rarely in anyone’s lifetime, can an opportunity occur that will change human perspective. I feel this is one of those experiences, and I am grateful to be part of creating a cosmic perspective, from being, even for a short time, in and of the cosmos.
Lavish New Book Celebrates Rockefeller Favorite Hinckley Yachts
By Jared Paul Stern JustLuxe
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illionaire banker, philanthropist, and former Chase Manhattan Bank CEO David Rockefeller could obviously own any boat in the world. However, when he heads out on the water in Southwest Harbor, Maine, his hand is on the tiller of a Hinckley — vessels which have been built by hand in Southwest Harbor since 1928. “As any sailor will tell you, most of the pleasure of sailing is in the quality of the boat,” Rockefeller writes in the introduction to Hinckley Yachts: An American Icon, a lavish new coffee table book celebrating the brand that’s been published by Rizzoli New York later this month. “My family and I have been extremely fortunate in that regard. For the past fifty years, the beautiful boats built by the Hinckley Company of Southwest Harbor have been a constant part of our lives.” The book, written by avid yachtsman Nick Voulgaris III, features behind-the-scenes images of Hinckley yachts and picnic boats under construction, archival images dating back to the 1920s, and photographs of the beautiful vessels on the water. It also includes an essay by Martha Stewart, who bought the Edsel Ford estate in Seal Harbor near Hinckley Headquarters in 1997, and soon after commissioned a yacht from Hinckley. “One trial boat ride was all it took to know that a classic Hinckley 36’, with its sleek and beautiful lines, its shallow draw, its fine craftsmanship, its jet drive (no propellers to catch lines and lobster pots), and its excellent nautical specifications and modern technology, was the right boat for me,” the home design guru writes. Stewart was so enamored of Hinckley’s work that she produced a segment called “The Making of a Hinckley Picnic Boat,” which first aired on the Martha Stewart Living Show in 1998 and has been broadcasted several times since. The book is available on April 29 for pre-order on Amazon. www.ahametals.com American Hard Assets | 67
L u x u r y & L i f e s t y l e | Art Market in 2014
Costume Designer Judianna Makovsky Takes Us Behind-the-Scenes With Captain America By Mila Pantovich JustLuxe
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hen I called Judianna Makovsky for a chat, Gary Ross happened to be on the other line — no big deal. Nominated for three Oscars, the costume designer has had a long run in the movie business without ever limiting herself to any one specific genre. Sure, she’s worked with Ross several times (from 1988’s Big to 2003’s Seabiscuit to their most recent Peter Pan project), but that’s because her decision to work on a film is hugely influenced by the people backing it. You may not know it, but you’ve been watching her costume work on the big screen for years now — A Little Princess, Lolita, Pleasantville, Harry Potter and the Sorcerer’s Stone, X-Men: The Last Stand, and of course, The Hunger Games. How did she get where she is today? Well, when Judianna was a kid she auditioned for the Metropolitan Opera Ballet and Children’s Chorus in New York and got in. Though she enjoyed performing for a crowd, what she really loved was everything that happened back stage. “I liked the sets, I liked the clothes; I was much more interested in all of that from the age five. My mother said I always wanted to do this; from the minute I was in that world, that’s what I wanted to do. So, I guess I was born with it,” she laughs. Though her start was with opera and ballet, her passion was
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always rooted in film. At a young age she was enthralled with Piero Tosi’s work on The Leopard and later discovered Milena Canonera’s work on Barry Lyndon. “I was just mesmerized and said, ‘That’s what I want to do. That’s the kind of design I want to do,’” she recalls. “I liked the little details on clothes and you can get that in close-ups in film, whereas on stage it’s more broad. I think getting into the movies was just luck.” Pure luck definitely plays a big role in breaking into the film industry, but so does talent, passion and calculated dedication. For her undergraduate studies Judianna went to the Art Institute of Chicago, which owned the Goodman Theater School of Drama at the time, meaning that she could do everything at one school. Afterwards, she went to the Yale School of Drama for her graduate work and was taught by famed costume designer Jane Greenwood — who is best known for her theater and ballet work. Once she finished her schooling, she went to work for Greenwood and eventually met Milena Canonero (A Clockwork Orange, The Shining, The Life Aquatic with Steve Zissou, The Grand Budapest Hotel, among many others). Through Canonero, Judianna snagged her very first big movie as an assistant costume designer, The Cotton
Captain America | L u x u r y & L i f e s t y l e
and period films. In the end though, regardless of genre, the movies that interest Judianna the most are those that are character-based and have a great crew backing them. “It’s mostly about the people. If I like the whole design team, the production designer, the director of photography, and the director, that’s really what makes the experience good.” Out of everything she’s done so far, she finds science fiction and comic book films to be the most difficult — though that certainly hasn’t stopped her. Not only that, but she’s pretty used to working on projects that have a massive fan following, including The Hunger Games, X-Men, Harry Potter, and Captain America. In these worlds, you have to really know your stuff if you don’t want to disappoint legions of fans. So where does one even start? Club in 1984. “I got lucky, let’s put it that way,” she laughed. “Met the right people in the right place at the right time. [I] was lucky enough to get that step. Otherwise, I’d still be doing opera.”
“You always start with the director; it’s the director’s vision that you’re trying to get across,” she says. “Sometimes I read the book and sometimes I don’t, it depends on what the director wants to do. Harry Potter was definitely based on the book. I was going to do what was in that book, there were too many fans and I didn’t want to ruin their experience, you know? I tried to read it the way a fan reads it.”
In the span of her exciting career, Judianna has worked with some of the greatest filmmakers, including one she would love to work with again, Alfonso Cuarón (Y Tu Mamá También, Children of Men, Gravity). Though incredibly well known now, back in 1995 Cuarón was making his very first American film, A Little Princess, and hired Judianna as the costume designer.
When the movie has such a big history already, like one based off a Marvel comic, the world you’re designing for is essentially already
“He wanted a specific look that was so different from most movies. When I interviewed for the job, he said, ‘Well, I want the whole movie to be all green.’ Apparently I was the only designer he interviewed who said, ‘Green? Wow, I love green. That could be really interesting.’ Everybody else said, ‘Oh green doesn’t look good on camera,’” she laughs. Not only did the project have a color restriction and a very small budget (which is incredibly difficult for costume designers, because more often than not, money isn’t thrown their direction), it also had to be rooted in reality. Despite the magical storytelling, Judianna wanted the clothing to provide a touchstone for the audience to relate to so they could identify with the young main character. “I think when things are too fantastical, you don’t have an emotional connection with them, it’s more just a visual thing,” she explains. “I think there’s a fine line between pulling it back from the fantasy and making it based in reality.” She never sticks to a certain genre, though a lot of designers do. Instead, Judianna prefers jumping around to all different types of films, seeking out something new and challenging with each one. Of course, everyone has their favorites and hers include fantasy
created. “It’s sort of interesting to go in where its already created and make it the new directors own world. It’s hard to do that because you want to stay with that world and the concept, but make it something new.” Not to mention the time and team it takes to even make something like the Captain America suit. “It takes 30 people who do different things to make these kind of clothes, the molding and sculpting, it’s really fascinating and then you have to have movement. I think they’re the hardest things to do,” explains Judianna. “I think people should really look at them. Like Batman suits, they’re so complicated and they’re works of art in their own respect.” Speaking of Captain America: The Winter Soldier, they came up with several different designs for the seemingly single suit you will see in the final film. They had around 16 different suits for each design, all of them catering to specific stunt needs — like movement and wirework.
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L u x u r y & L i f e s t y l e | Captain America into the final movie or are barely given screen time. “Every costume designer will tell you, ‘Oh my god, I did these beautiful things and you don’t even see them!’” Before our chat ended I just had to ask about the upcoming Peter Pan project she’s working on with Gary Ross and Disney. An origin story about how Pan became the poster boy for eternal youth that’s based on Peter and the Starcatchers by Dave Barry and Ridley Pearson, Judianna has been doing research and development on the film for the last three months with Ross. “We just don’t know where we’re shooting at the moment, so they’re working out the budget and all of that,” she says. “We did a big studio presentation with our ideas and some sketches. It will be a great project; Gary’s script is very good.”
“It looks like it’s all one fabric. If you really get in there and look at it, there’s really four or five different fabrics in there that are all dyed to look exactly alike, but all have different stretch or different movement in different areas. The people who actually make them are absolutely genius.” Though The Hunger Games was highly anticipated by fans of the book back when it was being filmed, they didn’t actually have that big of a budget or preparation time, which made Judianna’s job really tough — one usually needs a good three or four months of research alone. “I had to take what I could out of the book, and then also go with Gary’s vision and sort of pick and choose the moments I could afford to do, frankly,” she laughs. Luckily, she had worked with Gary before and was called into the fray early in production, which allowed her to get some looks prepared ahead of time. Of all of the costumes she’s designed and all of the people she’s worked with, one of her favorites to dress has been Sharon Stone for the western, The Quick and the Dead. Judianna loved making the semi-period clothes to create Stone’s character. “I did a lot of movies way back with Sharon and really liked working with her. She was very involved, and very collaborative and fun. It was always girls playing dress up,” she laughs. Typically, the clothes she’s really liked the most either never even make it 70 | American Hard Assets www.ahametals.com
No one will be surprised to know that this is just one of three upcoming Peter Pan projects in the works, because that’s how Hollywood operates — if something is popular, they’re going to inundate the media with several incarnations. One is being helmed by Joe Wright (Pride & Prejudice, Hanna), which he’s apparently doing instead of the darker The Little Mermaid he was signed up for previously, and the third one is being developed with Channing Tatum and Joe Roth producing. However, Judianna is hopeful that because they started first, they’ll be able to start production before the other two, which would be a huge benefit. No one wants to be last. For Judianna, being a great costume designer isn’t as much about the clothes as it is telling a story. Much like one approaches a puzzle, she has to interpret a script and build a character in real time. Most casual movie viewers won’t realize just how much of a character is created through the wardrobe, but that’s because Judianna knows exactly what she’s doing. Instead of allowing the costuming to take center stage, she manages to straddle that line which allows the character to be brought up without being swallowed. Her work has become the subtle stage from which some of our very favorite film characters have come to life and for that, you should be keeping track of Judianna’s every career move.
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N U M I S M A T I C S | American Eagle First Strike
American Eagle First Strike: Gold and Silver with Zing By Michael Haynes, Chief Executive Officer, APMEX, Inc.
W
hat if you could have all the benefits of physical Gold and Silver bullion coins, but also add some “Zing” to the demand for your coins when it was time to sell?
American Gold and Silver Eagles are some of the most popular bullion coins in the world, backed by the United States government for purity and content. The values of these Gold and Silver bullion coins move up and down almost identically to the respective movements in the current market prices for one ounce of Gold and one ounce of Silver. Movement with Gold and Silver is the fundamental reason for owning these bullion coins, but there is an opportunity to add to this fundamental value with “Zing” associated with the coins, an added dose of demand that can diversify the affirmative prospects for the investment.
How A New Year Creates Zing As shown in Table 1, in 2013, the United States Mint struck 42,675,000 Silver Eagle bullion coins and struck 743,500 Gold Eagle, one ounce bullion coins. The manufacturing or striking of a coin is violent process, requiring pressure from two dies banging together with a round blank or planchet between the dies, with pressure of up to 50 tons per square inch, or more, applied in less than a second. The pressure is so great that the metal in the round planchet “flows” into the grooves of the design in the
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dies so that the planchet exits the dies with the design of the dies permanently reflected in the round blank, now a coin. Table 1. Mintage of 2013 U.S. Mint American Eagle Coins
U.S. Mint Bullion Coin
Size
2013 Mintage
Silver American Eagle
1 oz
42,675,000
Gold American Eagle
1 oz
743,500
Gold American Eagle
1/2 oz
58,000
Gold American Eagle
1/4 oz
122,000
Gold American Eagle
1/10 oz
535,000
Although the minting process is only applied once to the planchet (or finished coin), the dies are used for many thousands of strikes on many thousands of planchets. With repeated use, the dies become worn and as a result, the detail reflected in the finished product, the coin, takes on the diminished detail of the dies and the images on the coin appear flat and without acceptable definition. The U.S. Mint does not publicize the number of dies used during a given year to strike the American Eagle Gold and Silver bullion coins, nor does the Mint publicize the dates on which the dies are changed so that the resulting quality of the coins is maintained
American Eagle First Strike | N U M I S M A T I C S
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N U M I S M A T I C S | American Eagle First Strike within acceptable standards.(Link to U.S. Mint brief: www.tinyurl.com/ firststrikecoin)
titled “First Strike” to dealers and collectors who submitted bullion coins for certification within the first thirty days of the new year. (Link to PCGS description: www.pcgs.com/firststrike) In addition to the designation of First Strike, the submission for certification also required a request for “grading,” the assignment of a state of preservation as measured on a scale of 1 to 70, with 70 representing the perfect state, without any blemish, just as the coin left the dies in mint state (or “MS”). The perfect coin with the designation would be sealed in a tamper evident, hard plastic case with a label stating that the encapsulated coin was a First Strike, MS 70. (Link to PCGS list of grades assigned in certification: www.pcgs.com/ grades.hml)
2014 PCGS First Strike MS 70 1 oz Gold American Eagle
Even though the U.S. Mint does not publicize dies changes, under U.S. law, the Mint must only strike coins in any year from dies that have the current year as a part of the design. Accordingly, as the calendar turns at the end of one year to the next, the U.S. Mint prepares new dies for America’s coinage so that the new dies carry the digits of the new year as a part of the new year design. For the American Eagle bullion coins, this means that each year, at the beginning of the year, the U.S. Mint must have new dies striking the bullion coins for the new year. New dies mean sharper strikes and more detail in those bullion coins struck early in the life of the new dies. Consequently, to the extent that these bullion coins struck early in the life of the dies and distributed at the beginning of the new year can be identified, there is a potential for higher quality and that creates “Zing.”
How to Know a Bullion Coin has Zing
2014 NGC Early Release MS 70 San Francisco 1 oz Silver American Eagle
PCGS was joined by privately held Numismatic Guaranty Corporation, or NGC, to provide this service and designation of bullion coins that were struck and distributed early in the new year. NGC titled their designation “Early Release.”
In 2005, the Professional Coin Grading Service, or PCGS, a unit of Collectors Universe, Inc. (NASDAQ: CLCT), began offering a designation
2014 NGC Early Release MS 70 1 oz Gold American Eagle 2014 PCGS First Strike MS 70 1 oz Silver American Eagle
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American Eagle First Strike | N U M I S M A T I C S
In subsequent years, the First Strike and Early Release designations have become increasingly popular with collectors and bullion coin buyers. Now the Zing associated with the better strikes could be identified and attested by these third party services (either as First Strike or Early Release) and in the same tamper evident capsule, a quality rating of as high as MS 70 could also be certified.
How to Value the Bullion Coin with Zing Each year since 2005, PCGS has received and certified MS 70 First Strike bullion Gold and Silver coins. Table 2 below sets forth the number of MS 70 First Strike bullion coins that have been certified by PCGS for each year from 2005 through 2013 (titled “MS 70 Population”) and the market value for such certified bullion coins as of April 10, 2014. As a reference for the 1 oz bullion coins certified in 2014 MS 70 First Strike, American Silver Eagle and American Gold Eagle, the current market price as of April 10, 2014 (including the current bullion price), is $50.02 and $1,473, respectively. All of the current market values in Table 2 reflect both the current bullion price for the coin (as of April 10, 2014) and the current premium the marketplace adds for the limited supply required to satisfy all of the market demand. Table 2. PCGS First Strike MS 70 Population and Market Value
Bullion Coin/Year
MS 70 Population
Market Value*
2005
447
$ 700
2006
557
$ 325
2007
213
$ 225
American Silver Eagle 1 oz
2008
10,756
$ 95
2009
19,515
$ 115
2010
25,806
$ 95
2011
38,405
$ 100
2012
8,859
$ 110
2013
28,130
$ 110
2005
178
$ 2,150
2006
1,022
$ 2,700
2007
115
$ 2,350
2008
191
$ 2,325
2009
225
$ 2,350
2010
742
$ 2,400
2011
1,588
$ 2,400
2012
723
$ 2,350
2013
1,801
$ 1,950
2014 PCGS First Strike MS 70 1/2 oz Gold American Eagle
the highest quality of MS 70. Even with the growing population of First Strike MS 70 Silver Eagles beginning in 2008, the aftermarket pricing seems to be supporting this growing supply, presumably with a growing number of buyers. First Strike MS 70 is also available in fractional American Eagle Gold bullion coins as reported in Table 3, for bullion coins with ½ oz, ¼ oz and 1/10 oz of Gold. As a reference for the bullion coins certified in 2014 MS 70 First Strike, American Gold Eagle, in the ½ oz, ¼ oz 1/10 oz, the current market price as of April 10, 2014 (including the current bullion price), is $761.40, $422.20, $200.88, respectively. All of the current market values in Table 3 reflect both the current bullion price for the coin (as of April 10, 2014) and the current premium the marketplace adds for the limited supply required to satisfy all of the market demand.
American Gold Eagle 1 oz
*Survey as of April 10, 2014; Source: www.PCGS.com While historical results are no guarantee of future performance, there seems to be a number of collectors and buyers who have an interest in owning the First Strike series of 1 oz bullion coins in Silver and Gold in
2014 PCGS First Strike MS 70 1/4 oz Gold American Eagle
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N U M I S M A T I C S | American Eagle First Strike Table 3. Gold American Eagles PCGS First Strike MS 70 in 1/2 oz, 1/4 oz and 1/10 oz 1/2 oz
1/4 oz
1/10 oz
Year
MS 70 Population
Market Value*
MS 70 Population
Market Value*
MS 70 Population
Market Value*
2005
567
n/a
264
n/a
432
n/a
2006
506
$ 1,095.0
641
$ 565
223
$ 320
2007
40
$ 1,245.0
41
$ 850
89
$ 285
2008
101
$ 1,135.0
358
$ 555
549
$ 320
2009
763
$ 1,130.0
1,186
$ 590
8,410
$ 375
2010
462
$ 1,230.0
484
$ 560
10,642
$ 275
2011
487
n/a
258
$ 510
7,526
$ 310
2012
229
$ 1,200.0
216
$ 625
552
$ 290
2013
982
$ 1,120.0
755
$ 550
2,334
$ 270
*Survey as of April 10, 2014; Source: www.PCGS.com; n/a; not available
Diversifying Gold and Silver with Zing As you consider your allocation of Gold and Silver in your portfolio and you choose to exercise that allocation with physical Gold and Silver bullion coins, perhaps you should also consider diversifying the Gold and Silver with MS 70 First Strike American Eagle Gold and Silver bullion coins and put the “Zing� to work as an extra benefit as a part of your investment. 2014 NGC Early Release MS 70 1/4 oz Gold American Eagle
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2014 NGC Early Release MS 70 1 oz Gold American Eagle
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H a r d A s s e t s | Top 10 Tips for Buying Metals
Top Ten Tips for Buying Precious Metals By John Maben
The purpose of these tips is to help educate potential buyers of Precious Metals and to demystify some common perceptions that are prevalent among newcomers. I’ve purposely kept this simple and it is not intended to be comprehensive. Further education is encouraged and there are many resources online from which to build your base of knowledge.
1 2
Are you ready to assume market risk?
Prices rise and fall continuously. If you are spending a considerable amount of money, you must be prepared to take a loss or to hold as long as necessary.
Buying Coins vs. Bars and Rounds
It boils down to personal choice. Commonly traded bullion coins such as Gold and Silver Eagles, Canadian Maple Leafs, and many others are excellent choices. When buying bars and rounds it’s important to know a little bit about the maker. Sunshine Minting, Credit Suisse, Johnson Matthey, and Perth are examples of well-known and reputable producers. There are other reputable manufacturers.
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Top 10 Tips for Buying Metals | H a r d A s s e t s
3 4
How do I determine a fair price?
The best way is to shop and compare. Perform numerous searches before pulling the trigger. Make sure you are comparing apples to apples because there are often subtle differences that can translate into a big difference in price. Be skeptical of any prices that are too good to be true! It is important to realize that there are costs involved in producing and distributing bullion. You can NOT buy name-brand products from reputable sellers at the “spot” price. Typically consumer prices range from 5% to 15% over the “melt” price of an item, but there are exceptions. Small purchases are generally more costly than buying in volume. Finally, always compare the “all-in” prices. Most charge for shipping, but some do not. “As low as” prices are generally not the price that most will pay.
What is the difference between “spot” and “melt”?
The “spot” price is the price at any given moment that precious metals are trading at on U.S. and world markets, quoted per troy ounce. The “melt” price of an item is the value of that item based on its metals content and spot. For example, if silver spot is $20, a ten ounce .999 silver bar would have a melt price of $200. A half ounce silver round would melt at $10. The “premium” is the amount being charged over melt for an item.
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H a r d A s s e t s | Top 10 Tips for Buying Metals
5 6 7
What is “fineness”?
Bullion is typically described in fineness, not karats. Fineness is the percentage of precious metal in an item. For example, sterling silver is 92.5% pure or .925. 14K gold is 58.3% fine or .583. Most but not all bullion products are either .999. .9999, or even .99999 fine. Once you get past 99.9% does it really matter? It does to some.
Troy Ounces vs. Grams
As stated in #4, the “troy ounce” is the standard unit of measurement for precious metals. However, “grams” are also often used and it’s as simple as knowing that 31.1 grams = 1 troy ounce.
What is “Transparent Pricing”?
The answer to this is vague at best. To demonstrate go to Wikipedia and read up. Ok, done? Confused? So was I. Sellers of precious metals typically update using “live feeds,” resulting in dynamic pricing. However, this is no more transparent than manual updating unless one were to know: a) the mathematical factors being used that work in conjunction with the feed prices to calculate prices that are always subject to change b) the exact quantities the seller has if prices change according to inventory levels c) the source of the feed d) complete disclosure of any hidden fees including but not limited to sales commissions. Because of this, my simple definition of transparent pricing is knowing what you will pay at any point in time based on a posted price, that short of some type of error, will be honored. Simple.
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Top 10 Tips for Buying Metals | H a r d A s s e t s
8
Is eBay a safe place to buy bullion?
9
How do I sell when the time is right?
10
The short answer is yes as the eBay platform provides some levels of protection not found elsewhere. This should NOT be interpreted as a green light to buy anything from any seller and feel warm and cozy. Do your research! Most important, anyone can create an appearance. Do not buy based on appearance and claims only, check credentials and verify.
In a word, shop, just as when you buy. Dealers will quote buy/sell prices on the products they stock and sometimes on products they do not stock. As an example, if spot gold is $1300 a dealer might quote a buy price of $1305 and a sell price of $1385 for a named brand one ounce gold bar. The difference between the buy and sell price, in this case $80, is known as the “spread”. If there isn’t much competition where you live, don’t be afraid to deal with an out of state business. Most precious metals transactions are done this way. Again, check credentials.
Who should I buy from?
Obviously this is a personal choice. However, most would consider it prudent to buy from an established seller with a strong and visible track record. A majority of online dealers have been in business less than 5 years, and many are relatively unknown in the business. Accessibility matters, but you may want to be wary of a company that immediately assigns you an account manager that calls you to make solicitations. Someone has to pay for that, and it could be you. Check the company’s rating with the Better Business Bureau (BBB), check their credentials, and if possible be aware of who actually owns the business and what level of expertise they possess.
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M I N I N G & M I N E R A L S | Mining News
Mining News By Eavan Moore
Transition Metals Finds Platinum in Ontario While labor unrest continues to roil the South African platinum industry, companies exploring in Canada made a discovery at Sunday Lake, Ontario. Canadian-based project generator Transition Metals Corp (TSX.V: XTM) and its Africa-focused partner Impala Platinum (Implats, JSE: IMP) reported “significant” platinum group metals mineralization from their fall 2013 drilling program at Sunday Lake, about 25 km west of the Thunder Bay North deposit owned by Panoramic Resources Ltd. A 20 m thick mineralized zone appears to contain more than 1 g/t PGMs, on average, over a strike length of 800 m. Four out of six diamond drilll holes contained significant platinum mineralization. One drill hole averaged 3.22 g/t PGMs over 20.2 m. The platinum to palladium ratio is high at 1:1 or more. Transition and Implats began a folllowup diamond drilling program in March in order to expand the mineralization zone. The companies
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formed a joint venture under which Implats will fund 100% of expenses on the project and Transition will hold a 25% free carried interest up to the competition of a Feasibility Study. Seef Vermaak, group executive – mineral resource management at Implats, said in a statement:”We are pleased to have achieved our goals under the [former strategic alliance] by making a new platinum discovery in an emerging PGM district. We look forward to a continued partnership with Transition Metals as we jointly seek to advance the Sunday Lake project.” Meanwhile, Transition also plans 4,000 m of drilling at its Aer-Kidd nickel/copper/PGM project near Sudbury, where highly conductive drill targets were identified last year. The company has about 25 gold, copper, nickel and platinum projects in Canada.
Mining News | M I N I N G & M I N E R A L S
Mining News
Canadian Minister of the Environment Leona Aglukkaq rejected the New Prosperity gold-copper mine proposed by Taseko Mining (TSX: TKO) in February. It was the second time the mine came before the Canadian Environmental Assessment Agency, after an initial 2010 rejection and a change in mine plan to work around a sacred lake. A review panel had already concluded the mine would have significant adverse effects on the lake’s water supply.
The Ministry of the Environment stated in a press release that the New Prosperity project was “likely to cause significant adverse environmental effects that cannot be mitigated. The Governor in Council has determined that those effects are not justified in the circumstances; therefore, the project may not proceed.� Aglukkaq invited Taseko to submit another proposal that addresses the stated concerns. Taseko has said it will reapply.
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M I N I N G & M I N E R A L S | Mining News
Mining News
Sandstorm Gold (TSX: SSL) had record revenue of $59.8 million in 2013 but reported a net loss of $74.6 million. It took a non-cash impairment charge of $52.2 million on the Serra Pelada gold/platinum/ palladium project under development by Colossus Minerals (TSX: CSI) in Brazil, which had suffered delays and a lack of sufficient capital. Sandstorm president and CEO Nolan Watson commented, “Amidst a challenging gold price environment in 2013, our streaming partners demonstrated the economic strength of their mining operations as the average all-in cost of the mines underlying our four key streams was close to $1,000 per ounce by the end of the year.”
Silver Wheaton (TSX: SLW) also had a record year. Production grew to 35.8 million silver equivalent oz and sales reached a high of 30 million oz. “Our production growth was primarily due to the acquisition of gold from the Salobo and Sudbury operations, along with the delivery of the first full year of silver and gold from the 777 mine,” said Randy Smallwood, president and CEO of Silver Wheaton. “We also achieved one of our best years of acquisition growth in 2013, as we gained exposure to world-class assets with the addition of the gold from Salobo and Sudbury, enhanced medium-term growth with the purchase of gold from Constancia, and, finally, added to our long-term growth profile with the Early Deposit Gold Stream Agreement on Toroparu.”
Sandstorm paid a deposit of $10 million to SilverCrest Mines (TSX: SVL) in March as part of an agreement to buy 20% of the gold produced from underground operations at the Santa Elena gold mine in Mexico. Sandstorm has already purchased 18,593 oz of gold from surface operations. It will continue to pay $350/oz until its total deliveries equal 50,000 oz, then pay $450/oz thereafter.
The newly formed private royalty company Mineral Streams made its first royalty investment, agreeing to receive a .25% net smelter return on the Williams mine and a 1.5% net smelter return on the David Bell mine at Barrick Gold’s (TSX: ABX) Hemlo complex in Ontario.
N. Eric Fier, president and COO of SilverCrest, commented, “The upfront deposit of $10 million will improve our cash balance and further enhance the Company’s financial position to achieve its 2014 goals for the mine expansion at Santa Elena.” The mine is ceasing surface operations this year and expanding to a 3,000 ton-per-day mill throughput. It expects to generate 3.3 to 3.6 million oz in 2014.
Will Ansley, COO of Mineral Streams, and prior co-founder of Gold Wheaton, said, “The Hemlo complex is located in a top tier geopolitical jurisdiction and has been in production for decades with recovered gold exceeding 25 million ounces. Over the past five years Hemlo has produced between 200,000 and 275,000 ounces of gold annually and based on existing reserves we anticipate the complex will continue to operate for at least another five years and, as demonstrated in the past, has the opportunity to be extended further.”
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M I N I N G & M I N E R A L S | Mining News
Mining News Centerra stays in Kyrgyzstan The Kyrgyz Republic struck a deal with Centerra Gold (TSX: CG) in February after years of wrangling with the Canadian miner over its Kumtor open-pit gold mine, which has great importance to the Kyrgyz economy. The deal creates a joint venture divided equally between the Kyrgyz Republic and Centerra. At times Kyrgyzstan had threatened to nationalize the project under pressure from citizens who felt that they were not benefiting adequately, but political leaders were reluctant to take that step and the associated risk. Kyrgyzstan currently owns of a third of Centerra Gold; under the deal, it will trade that equity interest for a 50% stake in a joint venture.
Rio Tinto Trims Down Rio Tinto plc (NYSE: RIO) increased its profit 10% in 2013 after initiating a stern cost-cutting program. In reducing its costs by $2.3 billion, the company exceeded its targeted $2 billion. “These strong results reflect the progress we are making to transform our business and demonstrate how we are fulfilling our commitment to improve performance, strengthen the balance sheet and deliver greater value for shareholders,” said CEO Sam Walsh. He said an unexpected 15% increase in Rio’s dividend “reflects our confidence in the business and its attractive prospects.” Rio ended the year with net debt of $18.1 billion. The cost cutting will continue with capital expenditures of under $11 billion in 2014, down from $12.9 billion in 2013. Capital projects still on the agenda include a mine extension at its Argyle diamond project and its ongoing investments in the Pilbara region. In 2013 Rio conluded its Pilbara Phase 1 infrastructure expansion and increased production volumes of iron ore, which contributed more than any other commodity to its bottom line. 86 | American Hard Assets www.ahametals.com
Mining News | M I N I N G & M I N E R A L S
Mining News
Sweden Top Jurisdiction for Mining Investment Sweden, Finland and the Canadian province of Alberta remain the most the attractive jurisdictions for mining investment worldwide, according to a global survey of 690 mining executives conducted by the Fraser Institute, a Canadian public policy think-tank. The Fraser Institute’s annual survey asks exploration and mining executives and consultants to rate jurisdictions in categories such as mineral potential, taxation, and uncertainty around regulation. Sweden, which ranked second last year, leapfrogged Finland, last year’s top ranked jurisdiction, to grab the top spot, while Alberta ranked third worldwide for the third consecutive year. “This is the fourth consecutive year that Finland and Sweden have ranked among the global top 10 for mining investment. The confidence miners show in Finland and Sweden proves it’s possible to enact sound environmental protections while maintaining a successful mining industry,” said Kenneth Green, Fraser Institute senior director of energy and natural resources. Wyoming was the top-ranked U.S. state, coming in fifth overall, a position it also held in 2012. Nevada was the second highest U.S. state in eighth spot. Nevada was among the top three in 2010-2011.
Among the written comments made by respondents, Colorado received praise for its mining-friendly policies. “Colorado declined to enact legislation allowing local governments to pre-emptively ban mining,” wrote an exploration company president. “Colorado also passed a regulation allowing for continued mineral development in Colorado’s ‘roadless’ areas. That has enabled mining of coal to continue.” Wyoming ranked high across all categories and won praise for its low-interest bonds for new mining construction. One exploration manager was less pleased with the state, writing, “Sage grouse rule the world. WHY??” Wyoming has pursued a strategy to protect sage grouse habitat, partly to avoid the tighter restrictions that would pertain if the birds made it onto the Endangered Species List. About half the sage grouse in the U.S. roam Wyoming. The 10 least attractive jurisdictions for investment worldwide (from the bottom) are Kyrgyzstan, Venezuela, Philippines, Argentina-La Rioja, Angola, Argentina-Mendoza, Zimbabwe, Ivory Coast, Indonesia and Madagascar.
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H a r d A s s e t s I n f o r m a t i o n | Preferred Dealers
Preferred Dealers Look for American Hard Assets at these locations! To become a Preferred Dealer, contact 1-877-695-1258
2801 John Hawkins Pkwy | Suite 117E Hoover, AL 35244 (205) 637-7033 4710 University Drive NW | Suite 17-A Huntsville, AL 35816 (256) 722-1550
Alabama Southern Bullion
6850 US Highway 90 | Suite 6 Daphne, AL 36526 (251) 625-1818 1605 Beltline Hwy (Highway 67) D-8 Decatur, AL 35601 (256) 686-2220 245 Cox Creek Parkway | Unit A Florence, AL 35630 (256) 349-2782
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3698 B Airport Blvd Mobile, AL 36608
(251) 287-6565
6371 Atlanta Hwy Montgomery, AL 36117
(334) 356-5116
1420 McFarland Ave | Suite 7 Northport, AL 35473 (205) 469-9079 3909 Pepperell Pkwy | Suite E Opelika, AL 36801 (334) 209-2170 100 Ali Way Oxford, AL 36203
(256) 241-0131
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H a r d A s s e t s I n f o r m a t i o n | Preferred Dealers 1963-B Cobbs Ford Road Prattville, AL 36006
(334) 356-0741
1423 Gadsden Hwy Suite 103 Birmingham, AL 35235 (205) 661-2621
California
4209 Cloud Springs Rd. Ringgold, GA 30736
(706) 891-2646
idaho
A Coin Exchange
Infinity Coins
18631 Ventura Blvd. Tarzana, CA 91356
545 Shoup Ave Suite 108-A Idaho Falls, ID 83402
Wild West Coin Company 6723 Winding Way Fair Oaks, CA 95628
100 W Walnut Ave | Suite 142 Dalton, GA 30720 (706) 278-6272
(916) 967-2646
(208) 201-5007
illinois Chicago Coin Co., Inc.
Colorado
6455 W. Archer Avenue Chicago, IL 60638
Chamberlain Coins & Collectibles LLC
Dallas Gold & Silver Exchange
385 Main St. Longmont, CO 80501
(303) 774-9661
1831 St Johns Ave Highland Park, IL 60035
(773) 586-7666
(847) 780-006
florida
missouri
Coin & Bullion Reserves
Crystal Coin & Jewelers
2621 East 15th St. Panama City, FL 32405
(850)785-9546
521 Bailey Rd. Crystal City, MO 63019
(636) 937-5017
north carolina Southern Bullion
1636 Hendersonville Rd | Suite 100 Asheville, NC 28803 (828) 575-2134
new hampshire Seacoast Coin & Jewelry 725 Lafayette Rd Ste 1 Hampton, NH 3842
David Reynolds Jewelry and Coin 4009 Central Avenue Saint Petersburg, FL 33713
(727) 327-2646
A Coin and Stamp Gallery Inc. 6217 St Augustine Rd Jacksonville, FL 32217
(904) 733-1302
Southern Bullion
16055 Emerald Coast Pkwy | Suite 105 Destin, FL 32541 (850) 424-7627 4771-6 Bayou Blvd Pensacola, FL 32503
(850) 912-6557
Georgia Southern Bullion
3145 Peachtree Road Atlanta, GA 30305
(404) 460-2783
4519 Woodruff Road | Unit 2 Columbus, GA 31904
(706) 221-4974
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(603) 926-7771
new york LI Coins and Jewelry 1846 Grand Ave North Baldwin, NY 11510
(516) 223-1212
Bullion Trading LLC 1156 6th Avenue 8th floor New York NY 10036
(212) 997-2520
Ohio HCC Rare Coins
7151 Spring Meadow Dr. West Holland, OH 43528 (419) 865-8461
Preferred Dealers | H a r d A s s e t s I n f o r m a t i o n
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H a r d A s s e t s I n f o r m a t i o n | Preferred Dealers
Toledo Coin Exchange 5590 Monroe St. Slyvania, OH 43560
(888) 795-6446
Halex International/Extraordinary Jewels 12900 Preston Rd. Suite 1112 Dallas, TX 75230 (469) 774-8951
DGSE
190 East Stacy Road The Village at Allen Allen, TX 75002 (972) 481-3870 13534 Preston Road Dallas, TX 75240
(972) 481-3850
6174 Sherry Lane Dalla s, TX 75225
(972) 481-3800
11311 Reeder Road Dallas, TX 75229
(972) 484-3662
200 N. Kimball Ave. #205 Southlake, TX 76092
(817) 722-0075
1201 Airport Freeway Euless, TX 76040
(817) 283-4469
1109 West I-20 Arlington, TX 76017
(817) 505-1005
6115 Camp Bowie Blvd. Fort Worth, TX 76116
(817) 840-1546
south carolina Southern Bullion
120 Commons Parkway Anderson, SC 29621
(864) 226-0010
1175 Woods Crossing Road | Suite 2A Greenville, SC 29607 (864) 288-6544
tennessee Nashville Coin & Currency 7003 Chadwick Drive. Brentwood Tn 37024
(615) 377-4949
7003 Chadwick Drive. Brentwood Tn 37024 (615) 377-4949
Southern Bullion
4521 Brainerd Rd. Chattanooga, TN 37411 843 Keith St. NW Cleveland, TN 37311
(423) 622-1298
(423) 479-2646
2244 North Roan Street | Suite 103 Johnson City, TN 37601 (423) 434-0400
texas C S B Williams Inc
711 W Bay Area Blvd #100 Webster, TX 77598
92 | American Hard Assets www.ahametals.com
west virginia Bronze Element
311 Mercer St. Princeton, WV 24740
(304) 920-2081
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H a r d A s s e t s I n f o r m a t i o n | Events
Events May 12-13, 2014 Metals & Minerals Conference New York, New York www.metalsandminerals.com/ny
September 14-17, 2014 Denver Gold Forum 2014 Denver, Colorado www.denvergold.org/gold-forums/
May 19-23, 2014 LPPM Platinum Week London, England
October 15-17, 2014 14th International Mineral Processing Symposium Kusadasi, Turkey http://www.imps2014.org/
May 23-30, 2015 ALTA 2015 Nickel-Cobalt-Copper, Uranium-REE and GoldPrecious Metals Conference & Expo Perth, Australia http://www.altamet.com.au/conferences/
October 20-23, 2014 LME Week London, England www.lme.com/lmeweek.asp
May 29-30, 2014 Precious Metals Summit Hong Kong www.precioussummit.com
November 3-5, 2014 2013 Precious Metals Summit Zurich Park Hyatt Zurich http://www.precioussummit.com/event/2013-summit-zurich/
June 1-2, 2014 World Resource Investment Conference Vancouver, BC, Canada
November 7-9, 2014 Expominer Barcelona, Spain
http://cambridgehouse.com/event/world-resource-investment-conference-2014
http://www.biztradeshows.com/trade-events/expominer.html
June 7-10, 2014 IPMI 38th Conference Orlando, Florida www.ipmi.org/seminars/conf_detail.cfm?id=35
November 11-14, 2014 Metal-Expo 2014 The All-Russia Exhibition Center, Moscow http://metal-expo.ru/en/programm
July 16-18, 2014 Life-of-Mine 2014 Brisbane, Australia http://www.lifeofmine2014.ausimm.com.au/
November 20-21, 2014 Minerals Engineering International - Precious Metals 2014 Vineyard Hotel, Cape Town, South Africa
August 11-14, 2014 XII International Platinum Symposium Yekaterinburg, Russia http://conf.uran.ru/default.aspx?cid=12ips##16
December 11-13, 2014 Jakarta International Expo (JIExpo) Jakarta,Indonesia
September 1-5, 2014 21st General Meeting of the International Mineralogical Association: IMA 2014 Sandton, South Africa http://www.ima2014.co.za/
January 26-29, 2015 Mineral Exploration Roundup 2015 Vancouver Convention Centre - East Facility http://www.amebc.ca/roundup/overview-2014.aspx
September 4-7, 2014 10th Minerals, Metals, Metallurgy & Materials International Exhibition and Conference New Delhi, India http://www.mmmm-expo.com/
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http://www.miningnews.net/eventdetail.asp?eventid=2970950
http://www.biztradeshows.com/trade-events/indo-metal-jakarta.html
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HINDSIGHT
The Impact of Geopolitical Events on Gold By John W. Garibald
W
ith headlines currently chalk full of Russian aggression, metals have caught a little bit of a safe haven bid. Many metals investors look to these sorts of events for an increase in the spot price and premiums on their physical. The reality is that very seldom do the temporary, headline-driven rallies last and that many of the producers will actually look to fade or sell into the rise.
sources of demand to affect the overall market. If Venezuela, with a $ 380 Billion GDP is running an inflation rate of 57% (which it is) and locals are buying with both hands, it still is not enough to move the needle. Sure, some local premiums for physical bars will pop higher and global shipping routes will adjust to meet demand, but it still cannot make a dent in the global price.
The question remains then, if gold is supposed to be the ultimate hedge, why are metals not higher when Vladimir Putin is threatening to re-unite the USSR one gas-rich strip of land at a time?
When financial players view the global landscape, there are much better methods for playing a local crisis than through the macro lens of gold. Fortunately for us both, this is a hard assets magazine, so we will leave the rates and currency discussions to another forum.
As with most things in financial markets, the answer is multi-faceted and nuanced but there are at least some primary contributors to study. First is that the global metals market is huge. That sounds a bit obvious, but the actual numbers are astounding. The London Bullion Market Association, long considered the hub of the world’s gold trade, estimates that the total transfers of gold between clearing accounts in 2013 were 570,000 tons. That is a US Dollar value of $26 Trillion. The GDP of the United States is $15.68 Trillion (Russia is at $2 Trillion if you are keeping score). These are big numbers folks. Admittedly, very little of that metal is delivered as physical and much of it is counted in duplicate (a mine selling to a bank selling to a mint would count the same ounce twice in a single session), but even the physical demand for last year was almost 5,000 tons. The events required to shift this market are not just small spikes but macro-level trend changes. Even when the Federal Reserve first enacted Quantitative Easing in late November 2008, the initial moves were small at first. The ‘barbarous relic,’ it often takes investors time to come around to the idea that a larger share of their portfolio may need to be attributed to metals for a coming storm. As new paradigms are formed and staid monetary policies wildly thrown into the breeze, the momentum grows and the financial players begin to pour money into hard assets and anything in particular with stability. Inevitably investors will refer to the inflation hedge component of gold demand. While that is certainly useful, the much larger long term contributor, statistically, is the direction and level of real rates. If interest rates are below the prevailing rates of inflation, we are in a negative real rate environment. These scenarios are usually very bullish for gold as the broad levels of consumer prices are rising faster than what you can generally get for treasury rates. This sends investors looking for easily held hard assets and metals top the list. The issue is that inflation can be very localized, especially at the extremes, and local phenomena are not usually large enough 96 | American Hard Assets www.ahametals.com
The summary here folks, is that trying to trade the headlines or data points in gold is akin to roulette: you may win, you may lose, but the house will take their spread and the odds work against you. Much better then to take a longer view of markets and average your costs, you will be much more financially secure for it.
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