Sunday, February 10, 2013

Review of American Hard Assets

The distributors of Barron's down here in my city are quite often asleep at the switch, and I sometimes go through the whole weekend without being able to get the issue...  Barron's!  You guys are going to have to tighten up that ship fellas...

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However, I was able to buy a brand new magazine yesterday (at Barnes & Noble, there were extra copies): American Hard Assets.  The magazine seems to have been originally out of Australia (2010), but they have a US partner, and if I got it at Barnes & Noble in a kind-of gold unfriendly environment like Miami, you should be able to find it too.  If I have this figured correctly, this is their US issue, and it's Cover Subtitle is "The Gold Issue".  It looked very promising, so I bought it and went to lunch to read it.  The magazine says it will come out every two months.

This magazine is aimed at the "high end readership", it is glossy, costs $7.00 and has articles on other things besides gold, silver and platinum (those "other things I will get to later below).  I was happy to note (and some you probably will too) that there are LOTS of high quality photographs of precious metals, dare I say "gold porn" (high quality photos of gold coins & bars)....  Yes!

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As soon as you open the magazine, there is a two page display ad from Valcambi, the Swiss precious metal refiner.  The picture is of their new "CombiBar", the 50 gram bar which is divided into 50 tiny bars of 1 gram each, that just "break-off" like you would pieces from a Hershey bar...  When I saw that ad, I knew I was hooked to this magazine...

Turning the page again, there is some "silver porn", both sides of a Silver Eagle, the facing page is the Table of Contents.  The magazine makes no pretension about trying to stay very current, how can they if it comes out every two months.  Their articles are fairly timely, but really aimed at getting the readers to think (and drool over the pretty pictures).

The ads are all pretty much high-end as well: safes, diamonds, expensive watches, auction houses, and of course numerous ads from suppliers of precious metals, some of them I had never heard of.

Many of the readers of my blog are like me: we follow PMs almost every day!  So some of their news items are not news at all to us, but those who do NOT follow PMs on the Internet every day will get the news (and some points of view you may not get from Zero Hedge or pmbug.com).  American Hard Assets ("AHA" for the rest of this article) starts with "World News Updates", the only one that struck me as "news" was their short piece on Turkey being a big new player in physical gold, a theme that Jim Willie CB discusses in his new piece (required reading this week, there will be a test):

http://www.24hgold.com/english/news-gold-silver-pitched-currency-war--usdollar-rejection.aspx?article=4229595454G10020&redirect=false&contributor=Jim+Willie+CB

The first real article is "What Gold is Not", and most of you already understand that gold is not the GLD ETF, nor the miners, nor jewelry, etc.  It IS the real physical stuff.  There is a nice picture of seven big gold bars stacked up...  This article, like some of the others, does not list a specific author, I will mention the author of each article where that information is included.

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The next article is "How to Buy Gold", by Janie Simpson (ABC Bullion, Sydney, Australia).  Most of us know most of this, but she does write that if you are buying bars that it is important to select a well known brand for resale (if necessary).  She also mentions that different gold products are suitable for different individuals, she mentions but does NOT caution about "unallocated" gold (like Kitco's Gold Pool, etc.), something that I would NOT choose, because if you don't HOLD it, you don't OWN it (het, but that's lil ol paranoid me).

After the Porsche ad, the next article is "London Gold" by Greg Canavan (a contributing writer).  Canavan goes through some of the fairly technical details (important reading if you follow gold very closely) there in London.  The LBMA trades some 5.6 billion ounces (paper gold) per year, almost as much gold as exists...  And he is a believer in holding the physical!  Canavan:

"If gold wasn't such a crucial part of global finance, it wouldn't be such a huge market.  Gold is crucial, regardless of what Warren Buffett or Ben Bernanke say.

The day when physical gold leaves the the banking system - for good - is the day when the paper dollar based system dies."

Good enough for you?  Canavan clearly is on "our side"!

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The next article is "A Barbarous Relic", author not mentioned.  But, the author takes a nice shot at both Charlie Munger (Buffett's sidekick and fellow gold-hater) and Berkshire-Hathaway itself, Berkshire has way underperformed the "Forever Unproductive Asset" (gold) over the last six years (graph of both).

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"The Gold Price for the Next 16 Years" is up next, again no author.  S/he writes that the debasement of our currency represents about one half of the higher price of gold to date, and goes into detail about printing money, etc.  There is a nice little table that predicts the price of gold in nominal dollars as well as current fixed dollars, all the way out to 2028 ($50,000 / oz nominal dollars then, $8400 in current late-2012 dollars).  Note that I have learned from N. N. Taleb (as well as two alternative investment (ie, bearish) books) that prediction is kind of a fool's game, nowadays I look at predictions only for ideas...

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Greg Canavan also writes "The World's Financial System: Heading for a Final Showdown", which again is a topic that many of us gold fans already have read about.  He mentions that producer nations (China) are only going to want physical gold (as opposed to Treasuries or paper gold).  And when all of those owners want "their" real gold but are holding only paper...?   Ruh-roh.

On the page where Canavan finishes his article ther eis an ad from OPM Metals (aka Ohio Precious Metals), a US refiner I had never heard of until a few months ago when I saw their gold offered for sale at Tulving (tulving.com).  I went to OPM's website (opmmetals.com) and looked around, one interesting thing is that they *may* be America's only COMEX "good delivery refiner".  OPM's website is worth a look.

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"Focusing in on Physical Bullion" (author Giorgia Xenakis?) mentions security features found on both OPM's 1 oz gold bars as well as Credit Suisse's gold bars.  In this era of threats of gold counterfeiting [a topic I will address in a future blog piece], these security features should make some customers of OPM and Credit Suisse feel more secure about their gold purchases.

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Contributing writer The Bullion Baron (www.bullionbaron.com, and he is launching www.bulliongallery.com which promises will be a site where investors and collectors can upload and share pictures of their coins & bars -- oh boy!  Yes!  A gold porn site!) writes a piece on various mints (Singapore, New Zealand, Canada and the Perth Mint) having produced commemorative gold and silver bullion coins (more gold porn!) on the Chinese Year of the Snake.  The Bullion Baron brings up the issue as to whether or not any of the "Bullion coins" may get an extra "numismatic" premium (for low mintages or very pretty pieces), a topic also worth following if you are a collector.

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On Page 50 there is perhaps the most interesting article ("Coins to Corner in 2013") in the AHA, yet it does not show who the author is...  Well, whoever it is wrote a NICE piece where s/he contacted various pros in the coin business for their views on which kinds to buy...  Each expert had their own view, but one of them, David Harper, Editor of Numismatic News, likes proof Platinum Eagles (of the US Mint).  I have a couple of those, and am (maybe) interested in more of them...

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Hector Cantu (editorial director of The intelligent Collector magazine) interviewed Jim O'Neal who retired from being CEO of Frito_lay International in 2000.  Mr. O'Neal is a serious, serial collector!  O'Neal is now chairman of the Pacesetter Capital Group, a Dallas-based venture capital team.  O'Neal has collected almost everything at one point or another in his life, he now has put all else aside to collect rare coins.  And yet, Mr. O'Neal still has a "wish list", some collectors never know when to quit!

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The balance of AHA has articles on other collectibles and things "for rich people".

Frank Martell writes an interesting article on new wines from The Ukraine.

Nicholas Forrest writes "Art Crime and the Art Market".  He quotes a British expert who says that "the black market" for stolen art is a fantasy, I of course would not know...  Bronze sculptures are now getting robbed and melted down for the copper value...

Alastair Bailey writes "Art: Worth the Risk?", in which he details that the art world is not transparent nor efficient.  If you are going to buy, you better like it!

A case is made for diamonds (especially "fancy colored" ones, worth much more) in the (unnamed author) article "A Diamond for Investment".  [Ed. Note: you'd better know what you're doing in diamonds, it is a very closed business, maybe the only way an outsider (who has DONE his homework) can succeed is by buying at auction...]

Mr. Darryl Middleton (Watch Trader of Melbourne, Australia) writes of the rare and expensive Rolex Double Red Sea-Dweller.  Some of these are worth $100,000 now.  I used to have a Rolex, but not like that!

Yet another author-less article is devoted to high-end real estate, namely quality ranches out west.  If you can prove agricultural status (running sheep or cattle counts), then your property taxes are lower...

Michael Moore (www.swissmetalassets.com) writes "Rare Earths: An Investor's Point of View".  He is very positive on rare earths, the problem is that rare earth miners AND the rare earth metals themselves have gone DOWN in value since late 2012.  Rare earth metals speculation is dangerous, the whole industry is very volatile and depends on more than the state of the economy and what China (producing some 95% of rare earth metals) is up to...

Near the end of AHA are two other items: an Event Calendar for the first half of 2013 and an ad from Roseco, selling instruments for jewelers (these three are a Legal Trade Scale that measures to 0.1 g ($299, but my El Cheapo from China does too and cost me just $20, LOL, hey it weighed the Osmium Pellet that I recently got, 31.1 grams...), a diamond tester and an electronic tester for gold and platinum (it does not say, but I will guess that is uses ultrasound, it costs $459 but looks like a better unit than I have seen at amazon.com for +/- $300).

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Visit their website at: americanhardassets.com!

About the only advice I would suggest to make the magazine better would be to include the names of all authors!  And their emails.

Subscriptions are $29.99 / year (six issues, I will send off my check tomorrow).  I have never seen a magazine like this before, and I hope that they have a lot of luck here in the USA market.  They are off to a great start by selling at Barnes & Noble.

2 comments:

  1. Nice find Robert. It sounds like an interesting read. BTW, I'm pretty sure that the Bullion Baron is a sponsor of and posts on the Australian PM forum Silver Stackers: http://forums.silverstackers.com/index.php

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  2. Small bits of content which are explained in details, helps me understand the topic, thank you!

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