Tuesday, October 29, 2013

Review of "American Hard Assets: The Silver Issue"

It took a while for me to start to do this review of American Hard Assets ("The Silver Issue") because of my unusual recent schedule, but I now have the time, even while down here in Peru.  As most of you know, I like silver (not as much as gold though), and once again I put out the call for someone to write a Guest Post on silver!

Before I get to American Hard Assets (from here on now referred to as "AHA"), here are a pair of pictures from just 30 minutes or so ago on some Peruvian hard assets, 10 pallets of KBC bearings arrived a little while ago!  This first picture shows José and Nestor opening up the boxes (José is working the pallet-jack):

This next photo shows one pallet, there are 40 boxes of 6007-RS bearings (our top seller, for Daewoo Tico), there are 60 pcs per box, so 2400 bearings here.  These pieces will fly..., the closest thing we have to "instant money"!

Note how well the Koreans pack their boxes, there was a triple-wall paperboard top and walls covering each pallet, see packing of another pallet at the extreme right.


OK, now down to business.  Managing Editor Ryan Kasmiersky starts by describing why some of the writers believe that silver is now the way to go.  He also mentions that their website is now more useful, take a look:


I must mention again that AHA is written for a high-end readership.  Lots of the ads and articles are aimed at the wealthy, but are of interest to everyone who wants financial protection and/or alternative investment ideas.

The "World News Updates" section has six short articles, the first mentions that gold ranks highest as most smuggle item (by value) into India.  The second mentions that Silver Eagle sales continue to shatter records (recall that the magazine comes out every two months), the third writes that Mexico's silver production is down (and looks to be for the whole year 2013) down 10%, a lot!  Two other short articles on gold (for those who do not "watch the pot waiting for it to boil", lol...) and finally an article mentioning the Royal Canadian Mint is taking orders on its various special bullion coin pieces, the kingpin is a PROOF 1 kilo gold coin, only 18 pieces will be made...


Author Mark O'Byrne writes "Silver Likely to Surge to more than $100/oz. in the Coming Years".  Yow!  I'll take it!

He believes that silver is just in one of its typical hard bull-market drops (silver is the Queen of Volatility"), and that the silver bull will be on the march again as the public becomes more aware (and acutely feels) coming inflation.  He also points to declining silver production (see Mexican production mentioned earlier) even as industrial demand has risen and looks likely to continue to rise.  In particular he points to increasing medical use (silver kills germs) and hi-tech use,  He finishes by saying that physical silver will likely rise to an inflation-adjusted $130 in the coming years.  He is NOT a fan of paper silver...


Nicholas Forrest writes an article titled "The Art of Silver".  I see relatively little (compared to the past) gold jewelry and art objects, but silver still is still used in (expensive!) art.  He quotes British artist Damien Hirst:

"...  In ancient times artists drew with a stick of silver -- it has a slightly graphic feel.  Textures and edges feel crisper than bronze.  It's dreamy, other-worldly but also sensuous and sexy -- natural to make sculpture with.  I think I may have just begun to tap into its potential.  Silver seems to magically throw out more light than it absorbs."

FINALLY I have some writers saying some really nice things about silver!  Forrest then goes on to show and write about some of Hirst's silver sculptures, and then writes that Picasso and (American sculptor) Alexander Calder both loved working with silver.

So, there it is.  Many serious sculptors are into silver, not just us "stackers"!


Tate Williams writes an interesting article about how many are trying to recover precious metals from electronic scrap ("Urban Mining").  Apparently some $21 billion worth of PMs went into electronic items in 2012, but only about 7.7% of that gold was recovered (he did not mention how much silver, probably not very much).

Recycling PMs from electronics is a dirty business in the sense that there are many toxins used and left behind.  A big part of this business is that there are so many different kinds of electronic items that assembly-line style work cannot be done.

More regulation has recently been enacted with more to come, including bans on certain kinds of electronic waste exports (I have read about some really dirty work being done in China recycling raw materials from old electronics...).


Gabriel Benson writes an extremely interesting article on "The Commercialization of Space", which at first does not discuss precious metals at all.  But, there is real progress being made by private companies (like Boeing, Richard Branson's Virgin Galactic, Elon Musk's SpaceX, Deep Space Industries, Planetary Resources, Bigelow Aerospace and others).

Governments are cutting back (fair enough, but space spending programs were OK with me...), so private companies are moving in.  Recall that SpaceX sent is Dragon Spacecraft with 1000 lbs of supplies to the International Space Station in 2010.  SpaceX is hoping to launch its new "Falcon Heavy" craft in 2014, it will rival the Space Shuttle in cargo capacity.  SpaceX may IPO, but Musk is keeping very quiet...  But, good on ya, SpaceX!

These companies are working on a wide array of projects to do work in space, including mining precious metals and WATER on asteroids.  Benson's article alone is worth the price of the magazine alone (at Barnes & Noble)!


Collector cars are not my thing, but they ARE very popular among a segment of US buyers.  John Gilbert writes a rather complete guide for interested newbies to vintage car collecting, although I confess I did not read the whole article.  The article has two cool photos of film actors James Coburn and Steve McQueen in old sports cars...


Watch and jewelry expert Ed Estlow writes up a great piece on Rolex watches.  I used to own a Rolex a long time ago (when I worked in the oilfields from 1979 - 1981), I really loved my Explorer II...

The Rich, The Powerful wear Rolex!  They sure did when I was in the oilfields (most of the top honchos wore Rolex Presidents).  Rolex is fashionable without being trendy...  Here's a list of past and present Rolex watch owners:

James Cameron (film director)
Marlon Brando
Dwight Eisenhower
Ronald Reagan
Lyndon Johnson
Roger Federer (Tennis Champion)
Jack Nicklaus
Steve McQueen
Roger Waters (a founder of Pink Floyd)
Martin Luther King, Jr.
Pope John-Paul II
Muammar Gaddafi, Fidel Castro and "Che" Guevara
Hillary Clinton

and many more...


Amber Ness writes "Diamonds as Bullion" extolling the virtues of buying diamonds as an investment.  While I agree with her that diamonds might be a great long-term investment (and certainly are portable wealth!!), I would advise that only people who have done extensive homework or have a trusted expert invest in diamonds....


As you might expect, there is a market for almost anything of quality...  Noah Joseph writes about the Richard Paterson Collection of of vintage bottles of Dalmore Scotch, from 1926 to the 1990s.

Hey!  Many rich guys drink scotch!


Numistatist Fred Reed is back again this time with "Dollars & Sense", his Part Two of buying gold bullion coins.  The most common gold bullion coins (in 1 troy ounce size, 1 ounce of GOLD) are:

American Eagle (916 fine, so the coin weighs MORE than 1 troy ounce)
Krugerrand (same comment)
American Buffalo (9999 fine)
Canadian Maple Leaf (9999 fine)
Austrian Philharmonic (9999 fine)
Australian Kangaroo (9999 fine)
Chinese Panda (999 fine, NOT 9999 as in his table)

If you follow gold closely, you may already know most of what he writes, other than his important note about the Industry Council on Tangible Assets (ICTA) and their agreement with the IRS re reportable gold sales.  FOREIGN gold must be reported in 25 oz lots or larger, apparently American Eagles and Buffaloes are exempt from reporting...  My opinion, and this is NOT YET ESTABLISHED LAW!


Mark O'Byrne writes another article for AHA this issue: Protect Your Wealth With International Bullion Storage".

He starts out with a quotation from Cervantes about not having all your eggs in one basket, and so goes on to recommend (to rich people who have a LOT of gold I hope...) that gold be stored by the various independent storage companies.

While that might be OK with folks with a lot of gold to do, I am more militant, if you don't have it in your own personal possession, you don't own it!

However, Mr. O'Byrne is a pro, I am just a fringe blogger...


Michael Haynes returns to AHA's main subject: silver!  It's an excellent article on silver's price, demand and usage history from 2000 - 2012.  Bravo!

Despite silver's recent decline, silver has gone up 306% since 2000 (some 6% per year if I did the arithmetic right).


Exotic wine fans will like Frank Martell's article on wines from the Black Sea are of Russia.  Among the cognoscenti, there is rising interest in these wines (remember, if something is really good, there is money chasing it...).


In the "Mining News" section I note that junior miners are "just hanging on", Rio Tinto has decided to stay in the diamond mining business (including keeping the famous Argyle Mine in Australia that produces rare pink diamonds), Barrick as another Pascua Lama (Chile) gold mine delay [Ed. Note: as does Newmont & Buenaventura in Conga, Peru], and the likely-to-be-important World Gold Council's new standardized metrics for measuring "all-in" costs of mining gold (as there is a lot of gamesmanship in calculating miners' costs of gold...).


As always, the slick advertisements actually ADD VALUE to AHA...


Finally, Editor John W. Garibald writes his "HindSight" column to finish the magazine.  Here he examines the reasons why silver is a good buy despite the apparent manipulation.

I quote his last sentence:

"I am not leveraged long, but I will tell you one thing, friends, I am definitely not selling my physical."

[Ed. Note: I just put "not" in Mr. Garibald`s quotation, sorry for the error]

My thoughts exactly.


AHA looks like they are hanging in there, I believe this is their fifth issue (remember I am in Peru as I write this).  This is an interesting magazine for all people who want to look at other investments beyond the normal ones.

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