Wednesday, July 31, 2013

Rare Tangible Assets: Consider Buying Some

Ordinary investors and the wealthy for about 300 years now have been able to invest or buy intangible assets (paper, in one form or another) as well as tangible assets.    Intangible asset examples would include stocks and bonds (popular since the Mississippi Bubble in the late 1600s / early 1700s), cash, trademarks and software.   Intangible assets have been popular because they are easy to buy and require little or no storage or other safekeeping.  Access to intangible assets have, without doubt, allowed great numbers of people to participate in the growth of the world’s various economies since those early days.

Tangible assets on the other hand are those that are real things, whether precious metals, farmland, guns & ammo or many other things that are desired.  In this article I will only discuss tangible assets that are worth at least some money even though there are many things that are rare and collectible but not valuable (e.g. butterflies).  I also exclude tangible assets that are worth money, but not of interest to most investors (capital goods like John Deere farm equipment).  Below is a table that classifies tangible assets, many of which, especially valuable ones, are discussed below:

Examples of Rare Tangible Assets
Not collectible, not valuable
Collectible, not valuable
Beanie Babies
Rare butterflies
Not collectible, but valuable
High quality family farms and "Bug-Out" farms
Collectible and valuable
Silver and platinum
Diamonds and other gems
Art and certain antiques
Coins and stamps
Rare watches and other high end collectibles
Collectible guns

Some general comments from the above table:

An example of a tangible good that is not collectible nor worth (much) is the metal osmium (Os, element number 76, see an interesting article here:  Osmium is the densest element and the rarest stable (non-radioactive) element.  Despite its unusual properties, osmium has very little use and is of very little interest to collectors (except for those collectors who collect all of the elements…).  Osmium and the like will not be examined further.

There are lots of collectible things that are of little or no monetary value.  A nearly perfect example would be butterflies, I know two people who have extensive butterfly collections, but they are worth little.  “Beanie Babies” are collectible doll-like toys that were a fad in the 1990s, these were for a brief time a collectible that people would pay for (at least for certain scarce ones).  I consider things like Beanie Babies to not be valuable because of that characteristic that they were only valuable for a short time.  Collectible items that have a history of being valuable are a better bet.

Also noted are whether or not each item above is “Useful”.  Useful means that there is a fairly high percentage that is used in industry or otherwise used in productive activity.  The reason for this distinction will become clearer below.


Certain pieces of real estate could be considered “rare” and of potentially great value to a certain class of investors.  Included would be small family farms of high quality (good soil, good water and right location); similarly a high-quality “Bug-Out” farm would have those same characteristics of good soil and good water.  A piece of rural property that can produce enough food to feed a family is of potentially great value when the chips are down…

These kinds of rural properties are rare as it turns out.  While there are a lot of properties available for sale at any given time, there are very few very high quality properties that make in onto the market.  Such small farms with good water and other desirable characteristics are often snapped-up by locals, and so never become available for sale to outsiders.

(Special thanks to “DCFusor” for insights into rural properties)

Excluded from this discussion are pieces of real estate like beachfront homes and luxury penthouses in popular cities (cities like London, New York and Miami).  While beachfront homes and luxury penthouses are desired by many wealthy people, they are not rare.


Our discussion now turns to collectible and valuable goods, which are defined as those rare tangible assets that people want (they may want them for various reasons) and that are worth something.  Most of these collectible assets have little use outside of people just wanting to collect them.  Two of the few exceptions to this are silver and platinum.

Silver and Platinum

Silver is used in more industrial processes and to make more products than anything else (other than crude oil).  Silver has unique properties that make it almost critical (nothing can substitute for silver) for a huge variety of products – a famous example is the 50 lbs. of silver that goes into every Tomahawk missile.  Much silver that is used by industry is used but once, not recycled.  Platinum is the other precious metal with extensive industrial use (catalysts).

Silver (and to a lesser degree platinum) has its fans.  Apparently there are no large above-ground stockpiles of silver anymore, and its industrial usage is running very close to the amount of silver coming into the markets now.  Fans of silver claim that supply disruptions and other events could cause the price of silver to go way up in the future due to these characteristics of tenuous supplies and extensive industrial demand.

To a similar degree platinum shares those characteristics of silver, especially the high use of platinum by industry.  Other physical materials that are rare and useful in the recent past have been considered for investment (owning and possessing the materials themselves) have been rare earth metals and ruthenium (ruthenium is a platinum-group metal that will be used in jet engine turbine blades).

The rest of the collectibles described below are not particularly “useful” to industry. 


Probably the most famous collectible tangible asset (“hard asset”), however, is gold.  About 10% of gold production is used by industry, but the other 90% is used in jewelry and in investment forms (coins and bullion).  Because gold has relatively little industrial use, it can be classified as being desirable just because people (and central banks, central banks hold only gold among the precious metals) want it.  Gold is a hard asset that humanity has valued for over 5000 years.  Most all of the gold ever mined is still with us (gold often is recycled, from old circuit-boards for example).

Gold is probably the best Store of Value throughout humanity’s history.  Much about gold is controversial, even among fans of physical ownership and/or Gold Bugs.  The price does indeed move up and down relative to the dollar.  Some consider gold to be money, some do not (“money” is a little bit of a tricky concept to define, many people think of “money” in different ways).

Gold has a number of properties that are desirable in making it desired as a store of value or as money:

n  It is inert, resistant to almost all chemical attacks
n  It is fungible and divisible, it can be re-melted and divided almost without limit
n  It is shiny, people just like it and it universally valued; it is liquid everywhere
n  It is rare, and its properties make it fairly hard to counterfeit
n  Gold is produced in a variety of countries, there is no monopoly on gold supply
n  Gold has a high “value density”, a little bit of gold is worth a lot

Gold has been getting more attention recent years as we have seen major problems in the world’s economies (excessive debt perhaps the greatest problem of them all).  The price has about tripled since 2000.  It has been as high as $1900 and was briefly traded below $1200 in the April – June 2013 price declines.

Gold is also bought and held by those who want “insurance” against government financial ineptitude or as a protection against financial catastrophe.  Few other investments have the characteristics of gold as a protection against almost all economic woes.

There are almost innumerable sources of information about gold, including many blogs that examine gold in as much detail as almost any investor could want.

(Special thanks to anonymous blogger “FOFOA” for making the gold discussion better, read his blog:

Diamonds and Other Gems

Somewhat related to gold are diamonds and other rare gems.  These have been valued throughout human history as well.  Beautiful diamonds and other gems (usually emeralds, rubies and sapphires) are often extremely valuable.

Diamonds and the other “precious gems” usually exceed gold in density value.  In other words a handful of high quality diamonds are worth a fortune…

There are a couple of issues re investing in diamonds and gems.  The first is that much time and study must be put into studying diamonds and the diamond markets.  Diamonds are not a game for amateurs, diamond grading greatly influences the valuable of diamonds, and such grading can really only be done by experts.  The second issue is liquidity, unless one is in the business, the price for selling a diamond (in your city’s “Diamond District”, for example, or even a jewelry store) is very low compared to the price you would have to pay for a similar diamond.  A high bid-ask spread.

Art and Certain Antiques

Art as well as certain antiques and historical relics have always had high value among many wealthy people.  These clearly have no industrial use, and very well illustrate the idea that certain collectibles are have inherent (but sometimes difficult to quantify) worth.

Art and antiques are examples of collectibles which are collected for their own sake, that is, the collectors enjoy possessing them in addition to hoping for financial gains…  The beauty of these kinds of collectibles gives their owners a satisfaction beyond their financial worth.

There are lots of different kinds of art competing for attention however.  Paintings are the most famous artworks out there.  High-end paintings have been a feature in the homes of the wealthy for centuries, and this kind of art has maintained its value very well through time.  Many paintings since Pablo Picasso have tended to be in the class of “Abstract Expressionism” which makes them dependent on opinion makers in the Art World to value…

Rare antiques and historical relics can be good items to invest in as well. 

As with diamonds and gems, a knowledge of the art in question is important in getting a good value (unless you are so rich that you do not care…).

Coins and Stamps

Coins and stamps are perhaps the two most famous types of “collectibles”.  Both have a long history of being collected, lots of experts and a fairly liquid marketplace.  There is a lot of information available on both, especially coin collecting.  Because of the long history of collecting coins and stamps, there is a reasonable expectation that collecting these will remain a worthwhile hobby that might generate a good financial return.

Once again, knowledge of the asset is useful if any financial gain is hope for (or even just to be a competent collector).  Not all coins, not all stamps are good candidates for collecting for value.  Historically, for example, “Morgan Dollars” and “Double Eagle” US coins in excellent condition have done well.

(Special thanks to “Rocky Racoon” and “Matt in NC” for insights into coin collecting)

Exotic Collectibles (Watches, Guns and other collectibles)

There are other less known collectible items that have an active collector marketplace (buyers and sellers).  These would include high-end watches (like Patek Philippe and Rolex brands) as well as collectible guns.  But, these more exotic assets are less liquid than the ones described above.  It would be even more important for prospective collectors to educate themselves in the field chosen.

Here is a final comment on collectibles.  The time frame may be important in deciding what is collectible (and for what price).  In good times and bad, it is typical for the “best of the best” of a collectible to do well.  In a bad economy / SHTF / TEOTWAWKI low-end Rolexes and somewhat high-end guns may do poorly if desperate consumers must dump them to get cash.  In these cases, other hard assets (TP, .22 LR and .45 ACP ammo, etc.) might do better, but these are not rare.  But, there will always be a market for the best of the best.

(Special thanks to “Polly Metallic” and “Matt in NC” for comments on hard assets in hard times)


Buying rare, and valuable, tangible assets has always been an option for the wealthy and even ordinary investors who have extra money to spend beyond the necessities.  There is a variety of assets available to cover almost any interest.

This article described some of these kinds of assets.  Prospective buyers and/or collectors have a lot of choice, and in many cases it is important that they educate themselves in the assets they consider buying. 

American Hard Assets is a new magazine that covers a large variety of rare and high-end hard assets.  Here is a link to their website:

Wednesday, July 24, 2013

And The Winner Is...

By chance I was at the Shell station buying provisions for my lunch, and I happened to glance down at our city's newspaper.  The Cover Story today was about how our city is the Number One importer of gold in the USA and the Number Three exporter.  And our city, the winner, is:

Miami!  Miami?  Yes...  Wow, whoda thunk it?

Reporter Maureen Whitefield (of the Miami Herald) writes in today's (July 24) edition about some of the major players here, the amounts coming in and out (and where from and where to) and some about the nature of the gold business as a whole.  She provides some data from 2012 (dollar import value of gold: $8.8 billion, dollar export value: $9.2 billion) and notes that 2013 is on track to surpass 2012.

Almost all of this gold comes in and leaves via MIA, our airport.  A fair amount of the gold comes from Peru (which as I have noted before has no gold refineries) as well as countries like Colombia, Bolivia and minor gold-hub Curacao.  Export destinations include Switzerland (hmm, just like in Italy: and the UAE, where Kaloti Metals is based and has a large gold refinery.

What was a real eye-opener for me was the number of major players here...  I will be calling on them in the not too distant future to provide me education and to provide education & fun reading for you all, dear readers.

The link below shows her whole story, including six pictures, she wrote me by email this afternoon that I was not allowed to publish her/their story here at my blog, but clicking the link is easy enough:


I need to look into more about the laws in certain Latin American countries re importing and exporting gold, in its various forms, especially how it is taxed and at what parts of the entire gold production process.

I believe that at Newmont's Yanacocha Gold Mine (in northern Peru, discussed to some degree here:, Ms. Whitefield, you might be interested in seeing how a Peruvian provincial newspaper works...), Newmont sends their "doré bars" (+/- 100 lb bars roughly 60% gold, 40% silver) produced at the mine, and the same for other gold mines, for export to foreign refineries (like here in Miami) because of Peru's silly ideology of not encouraging a gold refining business (with a gross dis-incentive, not allowing a gold refinery to be free of Peru's equivalent of a VAT (tax), a beefy 19%, many other countries do not tax gold sales, and so get the jobs...).


So, now I know that our city is a major player!  It looks like I will be able to find lots of interesting things to discuss about gold around here.

I already have four companies I want to talk to...  I will not forget pictures either!  Wheeee!

Sunday, July 21, 2013

Reality & Fakery In Peru And The USA!

Many of you know I am recently back from Peru, a short trip mostly on business.  Even though it was short, I found out that a lot is going on...

First, a couple of pictures of Peruvian women...  Below is our Administrative Director Lily with her two granddaughters, she has every right to be proud.  Left to right: Alondra, Lily, Camila

Below are (seated): Alondra (4 months) w/ her mom Isabel, Denise w/ her daughter Camila (1 year), standing are Grandma Lily and Great-grandmother Ana.  Someone was gracious in telling me that Ana looks like Queen Elizabeth!

Why is everybody all bundled up?  Because it is winter in Lima, and Lima is cold in July (say 55 degrees at night) and very few people have heat, it is "not needed" because it does not get "very cold".  Right.


I did not have a long time there, but Roberto and I were able to get out and visit a customer.  Here we are visiting our customer "Rodatin", in the back you can see "Iljin" Hub & Bearing Assemblies (blue boxes at top).  L-R: Our warehouseman Erick, Sales Director Roberto and Mr. Tineo Correa, the owner of Rodatin:

(I like Erick's shirt, take a careful look...!)

Another wall at Rodatin, with our promotional material on the wall for our four brands, KBC (Korea), Iljin (Korea), MBS (Japan) and Delfu (China):


The topic of counterfeit money came up while I was down there.  For years this has been a well-known problem in Peru.  They fake both US currency and Peruvian soles.

I was told NOT to bring US $100s to Peru whose serial number begins with "CB", as sometime ago somebody counterfeited a LOT of them using that prefix.  Those "CB" prefixes are from the Bush era, Paul O'Neill was TreasSec.  If you are going to Peru (or elsewhere in South America), don't bring $100s starting "CB".

The ones I had to bring back I took to my bank here.  I asked the branch manager to have them checked with whatever Top Secret way they have  to quickly check for fakes.  She said run them through the bill counter, I replied that I wanted some checked to see if they were counterfeit, not how many "CB"s I had.  She told me the machine checks automatically...  I did not know that!  How much are those machines anyway, I asked?  $425.  Hmm...

They do not just counterfeit US currency there, but Peruvian soles as well.  The counterfeiters do a pretty good job, all things considered.  People with a lot of experience with Peruvian money (like our Collections Director Raul) can tell right off, but if you collect 1000 soles from a customer in 20 bills of 50 soles each, you would spend a lot of time checking each one...  So, in some cases we just let the banks catch them for us.  Unlike in the USA (where the banks confiscate the counterfeit, they just give it back to you in Peru).  Since counterfeits are worth zero, I asked Cesar if he would let mew just have them...

Below are a fake 50 soles note (top) and a genuine one (bottom).  The picture is not good enough to allow you to see the differences.

Below is a similar picture for 20 soles, again, the bad one is at the top.  Here, however, you can see the fake bill has the "2" and the "0" too close together (large purple numbers left of center):

Peru has had the misfortune of getting bad gifts from Colombia, as the government of Colombia has been cracking down on counterfeiters there (they have been famous throughout Latin America as the best), so some of them have moved to Peru and set up shop there.

Also coming to Peru are the "sicarios", drugged-up & crazy assassins of the cocaine mafias from Colombia.  Peru now exports more cocaine (finished product) than even Colombia now...  Not good.


My last anecdote was my experience upon re-entry into the USA.  My wife asked me to buy some Peruvian food items for her, but I was only able to get just one thing (all the others came in glass containers, and I only had a carry-on bag).  All I could bring back was a 500-gram bag of "frijoles canarios" (yellow beans from Peru).  On the plane filling out my Customs Declaration, I chuckled to myself that Customs would give me some "extra attention" because of a $2.00 bag of beans was all I was bringing back...

Yes, the Customs Man told me to follow the "Yellow Dots" for secondary inspection..., LOL!

Wednesday, July 10, 2013

Ameru Update

My in-laws have been working hard to lead Ameru to a great year!  They have sold bearings to three other countries:

-- Costa Rica (twice)
-- Uruguay
-- Ecuador (indirectly, in 2012)

Our new customer in Uruguay needed a hard-to-find bearing for a Hyundai there.  He found Ameru on the Internet, contacted Lily, sent his money to us (he, of course, did not know us -- this is kind of rare in Latin America), received his piece, and then sent a nice email which we received just today:

Date: Tue, 9 Jul 2013 19:41:47 -0300

Estimada Lilia,
esta mañana llegó finalmente el ruleman.
No tengo palabras para agradecerte, el compromiso tuyo y de la empresa para la que trabajas, ya que sin duda me soluciona un problema que no podia arreglar ya que no conseguia ni similares chinos.
Evidentemente no es la venta de esta pieza lo que suma en el diario de todos los dia en Ameru, pero si lo es la gente que trabaja en ella y su preocupación por el cliente tenga una solución.
Especialmente a ti y a todos los que trabajan contigo, muchas gracias nuevamente, y que no le quepa la menor duda que esta experiencia mia será divulgada en este pequeño pais, por si acaso...
Un abrazo grande desde Uruguay
Dr. C. V.


We just sent our customer in Costa Rica (MIGSA) 200 kg (gross weight) of bearings, our first export shipment by ocean freight (the paperwork is considerably more complex than an airfreight shipment).  The below is a genuine Bill of Lading for those of you who have never seen one before (*click* on image for a better view):


Our sales in 2013 are not doing badly either (sales by month, amounts through June 30):


We are up some 9% above our record year 2012...

And, no, we are not in the 1%, nor a "TBTF" !!  Our success is almost completely due to the hard work of our people there in Peru.  And, of course, we are exposed to China, because Peru is a big-time exporter of natural resources (copper...), so if the economy of China goes bad, it would not be good for us.

Sunday, July 7, 2013

Review Of American Hard Assets -- Issue No. 4

The Cover Story of this issue is "The Actual Cost of Mining Gold", a topic I have seen addressed a couple of times or so recently.  Since the April and June price plunges in gold, many mines are struggling, although I do not have actual examples of any mines so far shut down to low prices.  Included with this article is a big graphic from Visual Capitalist on gold, where it is and how it is produced (I think I saw this at Zero Hedge not long ago).

This is an important subject.  If real numbers of mines shut down, what would that do to (paper) gold prices?  My initial thoughts are that gold would go up, in that there would be psychological pressure, the visibility of mines shutting down would draw in gold buyers.  I think!  I put this question to a well connected gold guy, and I hope to get some guidance on this point.

Author Eavan Moore discusses the subtleties of "cost of mining".  Here is his second paragraph in which he describes three ways of looking at the costs, they depend on what expenses you include:

"Most gold miners use standards establishes by the Gold Institute in 1996.  A "cash operating cost" covers the amount spent on operations, such as mining, processing and transportation, minus the revenue from selling byproducts.  A second category "total cash costs" adds in royalties and production taxes.  "Total production costs" include depreciation, depletion and amortization, reclamation and mine closure."

[Ed. Note: I have also seen that the more complete cost measurements would have to include other costs like exploration as well as office overhead, etc., he addresses these further below, keep reading...]

Just looking at the two cash cost measures above, Moore points out that there is a pretty wide spread among costs of mining for various gold miners, he finds a low cost producer (Monument Mining, TSX-V: MMY, with an open pit mine in Malaysia) with 2012 cash costs $306 per oz., while labor-intensive operations in South Africa came in at over $1000 per oz (the latter from John Tumazos Very Independent Research).  But Tumazos and Moore both note that total pretax costs are usually much higher, a general range would be $1250 - $1750 per oz.  (Clearly it would be expected that some mines would be much more costly than others.)  A general cost range that high would mean that many miners are operating at a loss (of some sort), that with costs well above current gold prices (around $1226 per oz as I write), the industry is in some some danger...

So, the pressure is on in the gold mining industry for better numbers re total costs to mine it.  Eavan Moore:

"Total costs matter, and there is no standard for reporting them."

South Africa based miner Gold Fields Ltd. (NYSE: GFI) in 2008 decided to calculate a more transparent  "notional cash expenditure" (NCE) that includes other costs as well.  Gold Fields in 2012 provided two numbers:

"average total cash cost": $894 per oz

NCE: $1376 per oz.

That's a pretty big difference.  Goldcorp (GG) has done something similar, their 2012 "cash costs" were some $300 per oz while their "all-in sustaining costs" (these would include general and administrative costs which are substantial) were $874 per oz.  Goldcorp is considered a "low-cost" producer.

Moore writes that there is considerable debate among mining companies about "what counts" and what does not.  They are under pressure to do a more accurate job (likely including more costs) by investors while the local host governments also need to know the actual costs of mining (and so the companies hope for more lenient tax treatment).

Why is this so inconsistent across the gold mining industry?  In a word: "accounting".  Moore notes that companies have discretion on 17 different elements (one of these as an example: costs (and sales figures) for byproducts like copper and silver) as to how they account for costs.

Barry Cooper (CIBC World Markets Report, May 2013) has many doubts that this whole issue of total costs will be made more clear...  Moore quotes VP of Investor Relations Brian Christie at Agnico-Eagle Mines Ltd. (AEM) that Christie forecasts average costs for 2013 to be $1690 per oz, ruh-roh.

The miners appear to have a high risk profile, I will stick with buying gold rather than investing in the miners.


American Hard Assets now has a website, they include daily market updates and other material:


In their "World News Updates" section is a piece on how Ghana has arrested 124 Chinese citizens for illegally mining gold.  What a surprise.  Also in the Updates is a note that the US Mint is now selling 1/10th oz gold Eagles again (I had missed that news) after having suspended their sales for a while, a piece on South Africa finding some of Gaddafi's gold & diamonds there (I saw at ZH that a fair number of other places have the Gaddafi family's gold and assets as well), the Austrian Mint expects good business for its Philharmonics and that Taurus (of Australia) is shutting down its version of the US ETF GLD.


Famed author Peter Schiff contributes "Gold Bull vs. Paper Tiger", an article whose title pretty much explains the article itself.  With all the financial problems out there and lack of trust among parties and conuterparties, stick to the physical...


Michael Haynes (CEO of APMEX, they a nice double-page ad) contributes "What the Rest of the World Knows About Gold That the United States May Not".  Haynes starts his article noting that world central banks became net heavy buyers of gold in 2011, after having been sellers for many years.  He surveys several important countries, from early antiquity (1700 BC for China, 1900 BC for Turkey) to the present.  Not surprisingly, he demonstrates that the USA, with a high GDP, is a low consumer of gold per trillion dollars of GDP compared to the countries he examined.  Here's a summary of a nice table he produced, the USA is based at "100" as compared to other countries in 2010 - 2012 purchases of gold per trillion dollars:


The higher the Index, the more gold a country buys per trillion of GDP, which roughly would measure how much gold is valued by citizens of each country.  India, for example, buys almost 31 times as much gold per trillion dollars of GDP than we do...


Michael Kosares (USAGold) writes "US Mint Sales" in which he notes that April 2013 sales of Gold Eagles (ounces) were the second highest ever: 209,500 oz.  He provides a graph of ounces sold by month from 2000 to present by ounces per month.  A quick examination of the graph shows that Gold Eagle sales have been much higher from late 2008 on (vs. before), but very spiky...  He also shows sales of Silver Eagles, which have been fairly similar, but with the interesting spikes in January of each of the past three years.


Tom Genot writes "Seven Errors Survival Preppers Make".  He leads off with a nice photo of a bunker...  But, instead of going into detail, I will just list the Seven Errors:

1)  Centering all resources and time in preparation for a single event
2)  Stocking too much in one place (he assumes "bugging-out" is a factor)
3)  Collecting anything & everything not knowing what is really important
4)  Blab, blab, blab
5)  Belief that "you already know everything...
6)  Too much dependence on supplies / no "Plan B"
7)  Forgetting to monitor your supplies (eg, expiration dates)

It's a good list, and it's a good article.


Rickard Warnelid (Director, Corality Finacial Group) writes about risks on iron ore projects, but this really, IMO, would extend to almost any mining projects as well.  These risks that need to be studied would include proper modeling of the project, government risks (taxation, rules), infrastructure (need a railroad for iron ore), funding risks, project management and working with investors or other financial backers.


Ed Estlow writes "16 Watches You Want on Your Wrist".  Please recall that this magazine is aimed at the "carriage trade", and the Editor himself has admitted that he likes high end watches.  So, I guess we should get used to seeing high-end watch articles.

I do admit that some of them are quite beautiful...


Gabriel Benson writes "Sunken Treasure" an overview of the two world leading companies in recovering sunken treasure!  The article goes into detail on Odyssey Marine Exploration's (ticker: OMEX) recent find: a haul of perhaps over $100,000,000 (depending on how much they ultimately find, so far at $41,000,000) of  silver from the SS Gairsoppa, a UK British cargo ship that sunk in 1941 off of Ireland.

Odyssey was the company that found silver from a sunken Spanish frigate (a warship) in 1804, Nuestra Senora de las Mercedes, details of this complex case here ($500,000,000 -- and IMHO the money should have gone to Peru, where it was all stolen by Spain!):

A private company, Sub Sea Research (Portland, Maine) is now searching fro some $3 million in Boston Harbor.


Tara Imperatore tells us in "Third Homes" why we should have one.  Um, um.

This is actually an article on a "kind-of" home rental member club:


Susan Kime ("How They Spend") writes about the Knight Frank Wealth Report 2013, which tells us how the REALLY RICH spend their dough.  Much of it is spent on luxury apartments in glamorous cities in the US and UK, where the rich perceive stability.

Also discussed are philanthropy and collecting...  Many of the super-rich collect not so much with an idea to profit, but just to enjoy their assets.


Fred Reed, an author who writes about rare coins, pens a piece titled "Dollars and Sense".  This article is Part One of two, and discusses gold coins (mostly bullion coins) up to and including the American Buffalo.


Other shorter articles in this issue include:

"Restorations and Builds" (about car restoration)
"A Guide to Art Market Indices" (there are a lot lot of 'em, almost like ETFs...)
"Paper Money Autographs" (where someone famous signed an FRN)
"Golden Time Capsule" (some treasure from the SS Central America has been sold)
"Coins of Peace" (the "Peace" silver dollars minted in the 1920s)
"Art Authentication" (more political & subjective than you might think...)


"Mining News" discusses some news on Glencore Xtrata as a new combined company, Rio Tinto's plans to expand the Argyle Diamond Mine ("fancy" (= expensive) pink diamonds from Australia), the government of Quebec's new proposal to raise taxes on miners (I presume that would include Osisko's Malartic mine that I visited), and a story on Anglo American Platinum's ideas of laying off platinum miners in South Africa.


Editor John Garibaldi ("HindSight") wonders which way the Fed is going to go re tapering, reducing or whatever their economic stimulus.  Garibaldi suggests that the below three are the most commonly discussed:

1)  reducing QE (ouch!)
2)  raising the Fed Funds Rate (ouch!)
3)  increasing the interest rates the banks must pay the Fed on excess reserves

He would choose option 3, making the banks pay a bit more for the Fed to hold their excess reserves there, he suggests that it would be the mildest of the three above.

He also suggests getting a bucket of popcorn ready...  I agree!


Bottom Line: If you are interested in gold or in how RICH people do their thing, buy this issue!

Tuesday, July 2, 2013

Learning More About Encryption

I would like to thank "Manipuflation" for kindly linking to my blog with his (check it out here:, and giving me some inspiration to do some more work into how to make communications more secure OR how to just spoof on-line spies...

Many of you readers know that I keep a sales database of our customers purchases of our bearings.  At rare times I want to publish a list of customers to show prospects there that we sell "real amounts" of bearings, but we do not want them to know who those customers are.  So, I wrote up some SQL to encrypt the customer identification number and the name.  Here is the SQL, but do note that I changed a couple of numbers buried deep in there...!

SELECT DISTINCTROW (((Right(([df_2].RUC),2) Mod 2) + 1) * 10)  & (Right(Left((([df_2].RUC) * 599),11),10)) AS Cust_ID, (Right(Left(([df_2].Cliente),4),1)) & (Left(Right(([df_2].Cliente),3),1)) & (Left(Right(([df_2].Cliente),2),1)) & (Right(Left(([df_2].Cliente),4),1)) AS Customer, Sum([df_2].Cant) AS Sum_of_Qty, Sum(CCur([Cant]*[VUnit]*((100-[Dscto])/100))) AS Expr9
FROM df_2
WHERE RIGHT(([df_2].Fecha),2) = "13"
GROUP BY [df_2].Cliente, [df_2].RUC;

There is a lot going on in the above SQL (multiplying by a prime number, selecting digits in derived numbers, and a modular function...) my table "df_2" is where I keep the raw sales numbers for each line item we sell.  "Expr9" is the sales amount for that line-item transaction (eg, 10 pcs of KBC's 6007-RS * price also taking into account any discounts the customer gets).

Here is some output, customers (in Peru) of ours who bought between $1725 and $3999 of bearings so far this year.  Cliente "DEMA S.A." doesn't care about this, I chose this customer kind-of at random.

Note a few things:

1)  Field "RUC" (4th column) is the Peruvian equivalent of our "Employer ID".  In Peru, companies have a RUC that begins with "20", individuals have one starting with "10".  The RUC in Peru is always a 11 digit number.  The more secure "Cust_ID" has 12 digits, note that they ALL start with a "10" or a "20", but they do not correlate with the actual RUCs (illustrated here in DEMA's case).

2)  Field "Customer" (2nd column) has letters from their company or individual names selected and manipulated.  Obviously this is not secure, as a determined opponent (does not even have to be highly skilled) could likely break this one.  But, this column does illustrate the power of SQL to do interesting things...

3)  Cust_ID "102244777431" (yellow background)  in reality has a different RUC than all of the others...  But, that's OK!

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DEMA S.A.                                        
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By only using columns 1 and 3 (and of course a bigger prime than 599 (in the SQL coding near the right side, highlighted in red), or multiplying two or more primes together), you can really make this a much tougher nut to crack.

Again, this is only an example!  It is "good enough" to shield this kind of information from almost anyone with out advanced decryption technology and good computers.