Review Of American Hard Assets -- Issue No. 3

I was pleased to receive the third issue of American Hard Assets on Friday.  The issue is loaded up with the usual articles than many of us are interested in...  The Cover highlights the security theme: "Secure Your Assets", as there are six articles related to the whole theme of security.

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Before the Cover Story are there "World New Updates" columns.  Thieves stole $50,000,000 in diamonds from Brussells Airport, the diamonds were stolen right out of the cargo hold soon before take-off to Zurich.

Two metal detector enthusiasts on Jersey (UK) found a BIG HOARD of Iron Age coins.  These are thought to have been buried just before Roman General Julius Caesar showed up.  Estimated worth: perhaps $15 million!  Wow, guys, way to go!

In New York, two friends bought a Long Island home as an investment, they paid $2500 more to get the paintings of recently deceased Armenian-American painter Arthur Pinajian.  They got 3000 paintings!  Value could wind up being up to $30 million!  Another big score!

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The first major story is by our own Department of Homeland Security (DHS)!  "Trade-Based Money Laundering" is about how various bad guys (mostly drug-smugglers (aka Transnational Criminal Organizations, TCOs) and terrorists) are using gold to launder their ill-gotten gains.  Trade-based money laundering is a set of schemes that use the international trade system to disguise money flows.  A classic example is under-invoicing by importers, in which an importer asks the exporter the state that their import shipment is worth LESS money (for example) so that they pay less import duty, etc.  Depending on what the dirty international trader wants to accomplish, under-invoicing and over-invoicing (the opposite, if the importer wants to send money OUT of his country for example) have been used...

The authors (David M. Marwell and Hector X. Colon) are part of DHS's Homeland Security Investigations (HSI), a group I had never heard of.  HSI has over 7000 special agents, and is the second largest criminal investigative agency in the entire federal government.  How about that!

Marwell and Colon describe various schemes that the bad guys do, some history of and what HSI does and their work with precious metals dealers to combat trade-based money laundering.

One interesting scheme is that money-launderers have been melting down gold and painting it to look like hand tools.  There are MANY other schemes used by these guys.

Editor comment: It would be MUCH easier to be sympathetic to HSI (and the IRS, etc.) if our government were not showing such totalitarian tendencies...  While I hate terrorists and drug-smugglers as much as the next guy, the militarization of our law enforcement (especially DHS, the agency also responsible for the odious TSA) has made millions of us hostile to the whole growth of government's law enforcement...

Just above I mentioned the DHS, TCOs, HSI, TSA and IRS.  Do these government guys like their acronyms or not?

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Mark Brasfield (Nashville Safe House, a merchant of safes I imagine) writes "Ten Things to Know When Buying a Safe".

He discusses gun safes (typically large but not very strong), fire safes and burglar-resistant safes.

Also, if you buy a safe, get one a little bigger than you think you may need, think about the future!

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AHA Editor Ryan Kasmiersky interviews Trident Response Group (TRG) President Clint Bruce.  TRG offers many of the services that many companies in that space do: training, intelligence gathering and the occasional foreign rescue.

Bruce details what they do as well as what individuals and families can do to protect themselves in dangerous places.

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Wayne Simanovich (visit his website: www.simanovich.com) writes an article on guard dogs.  Guard dogs, of course, cover a part of home security beyond that of alarms and having a gun handy.

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"Company Spotlight" features The Armored Group (TAG -- acronym city today, folks), a manufacturer of armored vehicles.

They just received "blast certification" for their Toyota Land Cruiser and Toyota HiLux vehicles.

TAG's manufacturing facilities are ISO 9001 certified.  Their customers include the US Army, the US Air Force, other US agencies, the UN and other customers around the world.

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Fred Reed (who writes on numismatic matters, including for AHA) writes an interesting article on numismatic crime.  It turns out that theft of valuable coins is rather common.  So common, in fact, that a retired police chief and now coin show promoter Doug Davis has founded the Numismatic Crime Information Center (NCIC) to coordinate information flows regarding thefts of valuable collector coins.

Reed writes that he found over 21,000 Google hits on just the exact terms "coin theft".

Reed also goes on to describe a lot of such thefts, many are connected to TCOs...  There is occasional BIG MONEY, Reed describes a robbery of a coin worth $1,000,000.

Be careful, vendors, at coin shows!

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"Online Buying Guide" (c'mon, guys, all articles should mention who the author is...) outlines buying gold and coins via the Internet.  It is suggested that doing your due diligence is important.

Described and mentioned favorably (selection, shipping, prices, etc.) are:

APMEX (apmex.com)
Gainesville Coins (gainesvillecoins.com)
Provident Precious Metals (providentmetals.com)

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Doug Kale writes "Top 5 Free Gold Apps"!  I already use kitco's (kitco.com) for my iPhone.  Kitco's is mentioned and given five stars.  OPM Gold Alert and Merite Gold are also rated five stars, Gold Price Live abd US Gold Bureau are rated at four.  All of those are free.

Kale also rates Gold Tracker at five stars, but that app that costs $2.99.

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Ed Estlow (who wrote on diamonds last issue and is a jewelry designer: www.edestlow.com) writes an article on other gemstones (that is, other than diamonds).

He suggests that if anyone wants to get into other gemstones, that you ought to just go ahead and get certified as a gemologist or seek out the advice of trustworthy experts.

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Scott Wayne writes ("Let's Get Physical") that it is better to pay a little more and have your gold stored as "allocated" gold (the bar is actually yours, you get the bar info, etc.) rather than "unallocated" (pooled), where you would own a percentage of a gold pool...

Why not just find a place at home?  Corzine stole allocated gold.

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Here we go, Mark O'Byrne (of GoldCore fame, probably familiar to readers of Zero Hedge) writes on rhodium!  South Africa and Russia produce 96% of the world's rhodium.

Rhodium is a platinum group metal that is used as a catalyst as well as for plating silver jewelry.  Rhodium has also had a history of majestic rises and falls in price (it now runs some $1300 for a one oz bar from Kitco), it reached a peak of $10,000 just before the financial crash in 2008.

O'Byrne writes that rhodium is the rarest of the precious metals.  But, low investor (and general worldwide) demand keep the price reasonable.

(the RAREST non-radioactive metal is osmium, also in the platinum metals group, but osmium has very few applications)

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Nicholas Forrest writes about alternative ways to buy art.  The art market is opaque and really no very "investor-friendly".  Most art is illiquid, there is no standardization (part of the appeal of fine art, of course).  Still, there is investor interest, and where there are investors with money, a way will be found for them to invest.

And so this is happening in the art world.  There are many types of investment funds now set up to invest in art, Forrest writes.  The global art investment fund market increased an impressive 69% from 2011 to 2012 (with 2012 amount an impressive $1.62 billion).  There is even a fund dedicated to just violins: the Marquis Carbonelli Investment Company Limited!

The most well known is the Fine Art Fund out of London, they even have launched several other funds to seek out niches.

An industry association is there to provide information: artfundassociation.com.

Why the demand?  These funds hire experts, and investors can have relative safety in owning a piece of different artworks.  There are other variations too: the Liquid Rarity Exchange seeks to be able to securititze classes of artworks.  Hmm, uh, I dunno...  There are other efforts underway to have investors participate in renting out art to corporate accounts Art Equity of Australia buys paintings from $10,000 - $50,000 and rents them out (www.artequity.com.au).

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Numistatists would likely enjoy John Dale Beety's article "Odd Denominations".  He examines various US coins with unusual denominations (half-cent, two-cent, three-cent and 20-cent coins).  Nice pictures.

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Once again, collecting is profiled in an article in AHA.  To collect properly, it seems, you should:

-- have a long-term plan
-- learn about what you collect (yes, of course)
-- get information from experts and anywhere you can
-- have lots of money...

OK, I wrote that last one, but it's true.

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The most interesting advertisement of the issue is form Beretta!  They have a new "technopolymer" frame automatic pistol (similar I would think to the Glock) in 9 mm Parabellum, it is called the "Nano".  Very impressive looking and made in the USA.

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Matt Insley (dailyresourcehunter.com) wonders how much gold China really has.  China SAYS they have a (lowball for sure): 1054 metric tons ("tonnes"), according to him "we know" they have about 3900 tonnes, he goes on to calculate that they have 7000 + tonnes...  The USA has about 8100 tonnes if no one is lying.

And China buys more every month.  They are the world's largest producer (yes) yet export NONE of it.  They import a lot via Hong Kong, that is the source of a lot of people's guesswork in trying to figure how much gold really has.

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AHA's "Mining News" columns describe recent events El Dorado Gold's Greek gold mine (lots of protest against it there).

New executives promising (really, they really are promising, really!) to cut costs at BHP Billiton, Newmont and Anglo American.

Hecla Mining appears to be on track to restart its Lucky Friday silver mine in Idaho (training..., maybe they had an accident?) as well as agreeing to buy Aurizon Mines (of Canada).

Turquoise Hill Resources (on the NYSE: ticker TRQ, although they are majority owned by Rio Tinto) is operating a BIG copper and gold mine (Oyu Tolgoi) in Mongolia.  They have suffered from numerous delays, but they may be back on track.  This is truly a big mother mine, I have been reading about on occasion for years.

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"HindSight" is again written by John W. Garibald.  He discusses the case of Cyprus, and how that small country has affected so much.  This is turf that Zero Hedge has covered very well, so I will not repeat what is already well-known.  Garibald wonders about the future implications of Cyprus and the whole situation in Europe.

And well he should.

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Verdict: Yes, if you can find this magazine and have interest in the above topics, buy it!