Thursday, October 31, 2013

More Peru Photos: Olloquito, Mountains, Vehicles, Bearings...

I close out our Peru visit with more photos.  I have noted in Google's blog statistics that when I write something (with pictures) about unusual vehicles, I get visitors to my blog from all kinds of interesting places (India, Pakistan, Africa, etc.).  Welcome!

But before I get down to business about vehicles & bearings, I lucked out again at lunch and had "olloquito" (made with Olluco, a potato-like tuber, but smaller, about the the size of a big man's thumb).  If you come to Peru, find someone who can prepare this well!  The little yellow pieces are the Olluco itself, it is laborious to prepare...  Also included are chunks of chicken all on top of rice, mmm...:


Here are a few more pictures of the northern Peruvian Andes, which in most part are not as cold, high, nor austere as the mountains in the center and south.  En route to Kuelap:

The Utcubamba River (at the bottom, of course, of most of the canyons there), the closest thing to a major river near Chachapoyas, it empties into the Marañon River, which IS big, further down where the Marañon and the Ucayali meet (just upstream of the lowland jungle city of Iquitos), the combined river becomes known as the Amazonas (Amazon).

Tour guide Ernesto explaining the horizontal diamond pieces found on only a few houses (Kuelap).  They "think" that these were houses of dignitaries of some sort:

Two llamas at Kuelap.  Peruvians often keep llamas at touristy places for, well, the tourists!  But, they are NOT friendly to strangers, do NOT try to pet them...

Near Chacha, note you can see tilted limestone formations (white):

A picture towards Huancas, the small town next to Sonche Canyon:

 Near Chacha, note that for thousands of years almost every piece of land they would put into food production, they did!  The area was heavily populated when the Spanish showed up...

Two pictures of colorful flowers on Cocachimba (elevation 1850 meters, more-or-less tropical), I have NO IDEA what these are.


I have mentioned that we have had great luck selling "bocamazas" (hub & bearing assemblies) for some new cars found in Peru.  These are NOT found (to my knowledge) in the USA.  In my March, 2013 article, I showed a photo of our big selling "E90A" piece for Nissan Tiida, well here is the car:

Toyota has a fairly new van out as well, the "new" Toyota Hi-Ace.  It took me a  while to find an example of the new Hi-Ace, Raul suggested that I change location and go to the Panamerican Highway, a little over a block away,  Here it is, kind of spacy-looking (esp. for Peru), this one from above:

And two more at the loud and kind of menacing bus stop along the Panamerican (ex-photo interpreters often like seeings of interest from different angles...):

The front wheel uses a "bocamaza" now, rather then a pair of fairly small tapered roller bearings.  Here is our Delfu 54KWH02 for the new Toyota Hi-Ace:

A common taxi is the Chevrolet Sail, made in China.  Yes sir, we have your wheel bearings (MBS's M309726BD and KBC's DT-255237)!

Chinese trucks are all over the place!  Many brands.  There WILL be blood...  JAC is below, but there are two other brands from China with similar names: JBC and JMC!  JAC, however, is by far the largest of those three.

A Yuejin truck (on the PanAm Highway):

A Yutong bus, Santa Catalina (an urban mass transit (bus) company) just bought 60 new ones of these.  Are you reading this Roberto S.?  We can make some money supplying wheel bearings for this both here in Peru and in Venezuela!

China has NOT taken over all of the market though.  Unicon, a BIG cement company located not far from Ameru has a huge fleet of cement-mixer trucks.  Most are VW and Mercedes (Brazil), but the first one in the photo below is a Mack (now owned by Renault of France), the second is a more typical VW Worker:

But, companies with big fleets of higher-quality brands do not buy Korean bearings (or even Japanese in many cases).  So, these guys are beyond our reach (as is the HUGE mining industry here in Peru).  ALl of them want SKF or Timken...

One of my favorite places to "hunt for vehicles" is right there along the Panamerican Highway.  Here is a general photo that will give you an idea...:

The second yellow vehicle is an armored car (from Prosegur, Peru's leading security company, they provide our alarm system, etc.).

Finally, I found out today that KBC has started shipping new laser-engraved bearings!  The high precision lasers they use cut right into the metal (non-stressed parts along the sides).  They do this to make it harder to counterfeit their bearings (a real problem in our business).  About half of what we received this time are laser-engraved, they now let us know which boxes having laser marked bearings (unfortunately my camera will not take close-ups well enough to show the laser markings on the bearings, but, hey, I tried...), look at the green circles:

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.

Sunday, October 27, 2013

The Wonders Of Amazonas, Peru

The three of us (my wife, her sister and I) are back in Lima from a most extraordinary trip up into a part of the northern Peruvian Andes ina and near the city of Chachapoyas (the capital of Amazonas Department (equal to a US state).  This is a corner of Peru that few tourists get to, yet it offers amazing and marvelous wonders.  This trip was possibly my most interesting excursion to the provinces of Peru (other than, of course, in 1981 when I met the Peruvian girl on the train who would later become my wife...).

We decided to go to Chachapoyas and some of the nearby area because their housekeeper (as well as Ameru's) came from the region and told us it was very pretty and full of interesting things to see.  Chachapoyas is the capital (and largest city, pop. 54,000 and is at about 2300 meters (roughly 7800 feet) of the department.  Chachapoyas is the red dot in the narrow province of Amazonas near Ecuador (my work on map from wikipedia):

We spent four solid days in and around Chachapoyas (the locals just call it "Chacha", so from here so will I).  This first photo will give you the idea of what the northern  Peruvian Andes look like in Amazonas:

This photo is from some 2800 meters up (call it 9000 feet), you can see a road winding its way in the mountains across the Utcubamba River Canyon between Chacha and the impressive pre-Inca (and later rebuilt Inca) ruins.  We arrived by bus from Chiclayo (northern coastal city, we got to Chiclayo by air), the bus trip was 10 hours at night (yes, Doctor, I took a Xanax to sleep through that...).  We arrived at our hotel at about 7:00 Am, ate breakfast, and then took our first excursion/tour to the ruins of Kuelap.

A little bit of history.  The Chachapoyas were conquered by the Incas about 1400, and many were dispersed (as was Inca custom with conquered peoples), some as far away as Bolivia.  But, some remained.  When the Spanish came by (they built a city near present-day Chacha even before they built Lima), they noted that the Chachas were tall and light-skinned, which has led to all sorts of theories that I am unable to comment upon.  One thing happened though, they no longer speak ANY of their original language nor do they speak Quechua (the language of the Incas).  Very little is known about the ancient Chachas or their language.  They DID share many customs with other nearby tribes though (eg. mummifying bodies of important persons).


Kuelap was first settled about in the Sixth Century AD (, that date is one of the relatively few things that are known about Kuelap.  The wiki article just cited is pretty good, and covers a lot of material our guides did not go into, but some of the wiki article conflicts with some of what are guide did tell us...  My best assessment is that they do not know too much about it (there is still a lot that is not understood about the more famous Machu Picchu in the southern Peruvian Andes).  The explanations about the fortress-like Kuelap that make the most sense to me are that the fortress was built to occasionally house the Chachapoyas Indians from hostile neighbors (centuries before the Incas even showed up).  This part of Peru is relatively fertile, and there was constant conflict between almost all neighboring Native American tribes, as well as trade (this should help put to rest all of that BS about how native peoples left in their natural states were peaceful and took such good care of the Earth...).  Below is a picture at the entrance to Kuelap's ruins of Lily (left) and my wife Carmen:

"Dos Hermanas"

The walk to the actual ruins is about 1 km from the entrance there.  The main fortress part of the ruins are about 600 meters (almost 2000 feet) by 110 meters.  This next picture is along the western wall (a "long" side), note the "neblina" (mountain fog) coming in, very common in the Andes:

Here are the two lovely ladies at the "South Tower" of Kuelap:

There are a lot (50?) houses all of a typical round shape, Only the stone ruins remain, but they had a conical roof made of dried straw.  The below picture shows a typical house, usually some 5 - 8 people (a family) lived in each one.  I took this photo partly because there is a nice red bromeliad growing on the rock...:

Note a few things here, first is the circular shape (I got about one half of it), then note a an arc of rock just left of center.  This arc was actually a cage or house for "cuys" (guinea pigs, a delicacy among Peruvians).  The round two foot circle covered by stone is a hole where they stored food (Kuelap is at 3000 meters, so fairly cold year round, especially in the ground).  Finally just below center and to the right is a rounded stone on top of a larger smooth one, these were used for grinding grain (corn and quinua).


The trip took all day.  We got back to our hotel and took a trip into town for dinner.  Our hotel was the "Villa de Paris" and was just fine!  We stayed in the room at the far right of the larger building (near center).

There is not a whole lot to do in Chacha itself.  Here is a picture of their main town square ("Plaza de Armas" -- the name for almost every town's main square in Peru) with a rainbow:

Note that it is almost always cold or raining in the Andes!  If you go, make sure to be prepared!  Another picture of the Plaza on a different day, the Plaza almost always has the main Church located there as well:

And just WHO are these two (also at the Plaza de Armas)?

Here is my "Humor Photo of the Day".  I took this at a pharmacy in Chacha, it is a decongestant, pain reliever and fever reducer.  But the name?  NastiMed Plus?  Plus what?


The next trip we went on was a short trip to the village of Huancas which has a nearby HUGE canyon (the Sonche Canyon).  It rivals both our Grand Canyon as well as southern Peru's Colca Canyon.  It is not all that deep, but it is HUGE!  When we arrived unfortunately there were clouds covering the entire view.  We decided to wait and see if we got lucky, and about 15 minutes later enough of the moisture had moved on and we could take some acceptable (but not great) pictures...  (Both pictures are taken through haze, and pictures really do not do justice to this extremely interesting place)  A view to the south along the Sonche Canyon to the south (upstream view of the Sonche River), you can see part of a panoramic walkway they built at this marvelous place:

In this next picture look for the three narrow spindly waterfalls, the easiest two to see are near the top-center and just left of center, with the smallest one about halfway between them:

A last photo that shows the depth and size of Sonche Canyon:

And yet hardly anyone outside of Peru has even heard of Sonche Canyon (most Peruvians have not either).


Hardly anybody outside of Peru (and few there as well!) has heard of the Gocta Cataract (waterfall), these are the third highest (vertical drop) waterfalls in the world.  They were publicized only recently by Dr. Stefan Ziemandorff in 2005 to the world, though of course the locals living there knew all about it...  (There were no real roads until Dr. Ziemandorff's expedition).  There is a new (but rough) road to the nearby village of Cocachimba, much of that work done under the supervision of then President Fujimori.  Once again we had real doubts that the weather would cooperate, so as soon as we got to Cocachimba I took the below photo "just in case".  The Gocta Cataract falls in two stages, below you can see the first 200 meters +, and a small part of the other 500 meters behind the top of the roof:

We hired a local guide to take us part way there, just far enough to get better pictures.  Our guide Martina also took us around to look at various plants of interest.  One of the first things we saw was a couple who were making sugar cane juice.  Their work is essentially a two-stage process, the first is crushing sugarcane with a press, usually this is done by animals (horses or oxen), but here I put Martina and Lily to work (will I get into trouble for this?):

Note the crushed sugarcane fibers coming out (of the near side, the juice exits at the bottom and goes down to the bottom of the house), this leftover material is called "bagasse", a HUGE amount of bagasse is generated worldwide and they are always looking for a good way to use this resource (having had the sugarcane juice squeezed out).  Here, they use it as fuel to boil the sugarcane juice into a smaller thicker liquid for sale.  The iron press was made in Chiclayo, Peru!

Martina then brought us to a better view of the falls, here you can see almost the entire 700 + meters in the two stages:

Gocta, by the way, is one of the relatively few words that still survive from the extinct Chachapoyan language.

Cocachimba sits in kind of a basin, half surrounded by other waterfalls, approximately 21 of them!  Here is one of the larger ones, this one falls in 7 - 9 stages, "depending on you count them":

Martina then took us to their "huerta" (orchard, but really a densely packed plot of land with many kinds of useful plants, they do this all over the world to help stop spread of plant diseases).  She told us there is just ONE orchid that is native to their immediate area, I did not ask her for the name of the yellowish orchid, but here it is in her huerta, it hangs upside-down:

We did not have enough time to go to a national park of some sort not very far from Chacha that has more orchids than any other place on Earth!


A few last commentss that will be of interest to some.

1)  After we finished with Martina in Cocachimba (Gocta), we spoke with a store owner who told me some interesting facts that I did not know about gold!  According to him, there appears to be a "gold belt" (I suppose similar to the Rand area of South Africa) that extends from near Cajamarca (see my article from March, 2013 with LOTS of comments about Cajamarca and Peru's gold:   But there is HUGE resistance among almost ALL locals everywhere in Peru where there is gold, for example, the proposed Conga mine (gigantic deposit of gold, much bigger than Yanacocha) has been suspended, at least in part due to local resistance.  Apparently even though Newmont and their Peruvian partner Buenaventura went to further lengths than before to protect the environment, they still have polluted the area severely.

It would appear to me that the miners will have to do two things to make big gold mines come online in Peru: pay much more to the locals than they have AND be fined, say $1,000,000 per day by the Peruvian government (with most going to the locals damaged) for any serious accidents or spills.  Gold miners still have a very bad reputation there.

Hey, I am just calling them as I see them...

2)  Peru is way under-explored.  We were told this by several knowledgeable locals.  There are still various wonders that they have NOT publicized because they do not yet have the resources to build roads and hire guards...  Northern Peru I knew very little about before going there.  Hardly anyone does!  Yet, there seem to be a LOT of good things coming on-stream in the years to come.

This will help Peru a lot.  Peru does not seem like the kind of place where Intel or KBC will set-up high-tech factories...  Peru's greatest asset is likely its incredible natural beauty found in so many parts of the country.  Good food too...

3)  While Peru is one of the very best countries worth exploring I have suggestions...  Whatever the tour agencies, travel agencies, etc. say, Peru is a hard country to explore.  It is not easy like France or Italy...  The roads are rough, the weather variable, hiking boots are pretty much necessary, Spanish is very helpful, etc.  I do not recommend Peru to anyone feeble or elderly (altitude and lack of medical facilities <--- although that is getting better), it truly is a Third World country where you just cannot get a meal anytime you want...  Stores may be closed, there may be little choice in what you can eat (at odd hours).  Many tours are arduous...

If any of you, dear readers, are thinking about heading to Peru, I invite you to email me your wishes and circumstances, and I will reply the best I can (which of course will partly depend on how many emails I get, hey why not just comment below instead?  Your questions may very well be similar to other people's questions...)

4)  Yes, I did do some "work" while in Chacha, Ameru has no customers there (yet).  I dropped off information on Ameru and our lines of bearings at three likely looking businesses.  There are real possibilities there, Hyundai is becoming more popular (smile).  We will see what happens in the coming weeks...

Sunday, October 20, 2013

Hunting The Elusive New $100 Bill

On October 8 the new US $100 bills (FRNs) were issued.  It took some time for me to find them!  They were supposed to be “ready” to be issued that day, but the two banks I went to that day had none.  The next day I was able to find another bank (“third one’s the charm”) that had two of them so I snapped them right up.  There already has been plenty written about the new C-Note (an old term for the $100 bill), so I will refer mostly to items NOT seen at the website that describes the new $100 is some detail:

As many of you know, I am now in Peru.  The whole issue of counterfeit money is a much bigger deal than in the USA.  All the banks that count bills, for example, not only count them but check each one to see if it is real or fake.  Those machines cost about $400 they told me…

Below is a photo of the front side of the new FRN.  One of the most visible changes is the vivid blue security strip that appears to “move when the bill is moved.  Also, the large colored “100” changes from green to gold color as the angle to light is changed.  Finally for me, what is especially useful is the “textured area” along Franklin’s right shoulder (left of his portrait, you can tell it is a bit rougher when you lightly rub your fingertip or mail across the lines.)

I would like to point out a couple of features that the new C-Note that they do and do not mention at the website.  They mention the microprinting on Franklin’s collar and at the border of the gold-colored quill along the white watermark area.  Indeed there is.  What they do NOT mention is that there is microprinting in many places all over the new C-Note.

This photo is the rear of the new C-Note:

It is quite different than the old one.  What you can see (with a 10 x loupe you can see it better) is the very small microprinting (letters not visible in the photo) along the narrow vertical edges on the left and the right as I point out above.  This feature is NOT mentioned at the website…, now you all know!


These security features, while new to us, are NOT new to currency printed in other countries.  The below is a photo of the new (2012, although, like in the USA, the currency is dated when there is a change of Treasurer, so it is like OUR “Series 2009” (even the new $100s), note similar looking blue security strip (that also “moves” in the Peruvian 100 soles note (front):

Also note that the vertically printed “100” is purple colored in this picture.  Like the US colored “100” it changes color too, but in Peru the two colors are purple and green, while in the USA the colors are green and gold.  The purple “100” also has the words “NUEVOS SOLES” printed vertically, these also have a texture.

The below is a picture of the reverse side of the Peruvian 100 soles note.  Note that there is a lot of microprinting there as well, particularly along the horizontal colored stripes near the top and near the bottom.

If you look carefully at the top-center you can see the word “CHRISTIANS” written obliquely in small letters.  Christians is the name of the Casa de Cambio where I change US$ into Peruvian soles when I come here.  They told me that they get Chinese Yuan on occasion as well.  I will drop by and see if I can get a Chinese 100 Yuan note in from China than pristine condition, as I do not know if you can get them in the USA very easily.

[Ed. Note:  China is now Peru’s Number One trading partner now, buying and selling more with China than the USA.  Ameru buys Chinese bearings but no US ones.]

Tuesday, October 8, 2013

Gold And Numbers

Two ideas about ownership of physical gold have been on my mind lately, and the time has come for me to address these.  They both fall into the general rubric of "how much gold should we own?", maybe I should start a separate blog for that...


It always amazes me when I think that only some 1% - 3% of Americans own any meaningful (ie, non-jewelry) amount of gold.  Most of the numbers I have seen actually lean more to just 1%.  Only ONE in 100 people own investment gold?

Yet we see that it is perfectly OK with many money managers to own up to 5% of your wealth in gold.  And this is a mainstream view.  Yet, if only 1% of people own gold, how few of Americans have 5% or more in gold?  I would have to guess perhaps 0.5% - 0.75% (say, half to 3/4ths of ONE PERCENT of Americans actually do)...  I do believe that those who do own gold are likely to own a reasonable amount, but I wonder how frequent gold owners actually have 5% in gold...


On the other hand, I know of two people who claim to be "All Inn", that is, most of their assets are in gold!  Even a Happy Follower of the Mighty FOFOA like myself want to share a huge gain if/when gold hits its "$55,000", has to wonder where to place his bets in a safer manner...

Being All Inn has its risks as well, unless you are so fabulously wealthy (with no debt or other liabilities) that it does not matter what happens...  All Inn implies not much else is held other than gold.

A Thought Experiment here:  "Let's say" a member (not fabulously wealthy) of the All Inn Club loses his job.  No income, or meaningful income.  What happens of that were today, with gold hanging in there at some $1320?  Having an income stream allows you to "Defend the Precious" (that is, get along OK without having to sell any of your gold that presumably would be worth a LOT MORE after reset).  Let's run through a couple of scenarios.  Please note that I am just "MSU" (as is typical of my "Thought Experiments"), but I am trying the best I can to model two American Middle-Class scenarios with what seem to be reasonable numbers.


Nico is a middle-aged guy who, until just now, had an decent job making $65,000 with a wife and young child.  Nico has been prudent in his affairs and is able to save (invest) $5000 per year, his family's living costs would then be some $60,000.  Let's also say that Nico has two children, and has, in toto, saved up some $40,000 for his retirement as well as $30,000 for his children's future college expenses.  He also is the owner of 10 oz of gold (worth some $13,200 today), and we will pick a number like $200,000 for Nico's total net worth (gold then would be some 6% of his net worth).  BUT, Nico has $40,000 + $20,000 + $13,000 for a total SAVINGS of $83,000 (I will refer back to this number).  Nico, as far as I can tell from my little scenario-painting here, is doing pretty well by American standards.

OK, his job is out-sourced to China, or he loses it to Obamacare, let's go with the latter.  Nico has no other job lined up, and now must start downsize.  He and his wife talk it over, and they find that they can reasonably easily forego $15,000 in non-essential spending, good, they are now down to $45,000 (mortgage, cars, food, etc.).  What if he is out of work for a year?  He loses some combination of his retirement savings, college-for-the-kids-fund and/or his gold.

Hmm.  Tough spot!  One way he could keep his family's lifestyle (reduced to $45,000 remember) is to cut his retirement in half (netting $20,000), cutting the college money for his kids in half ($15,000 more) and sell EIGHT of his twelve ounces of gold...  Ouch, because look at what Nico "will eventually" miss when a reset in gold happens:

Two ounces (left of gold) at $55,000 each:    $110,000 (nice!)
$-value of eight ounces lost due to job loss:    $440,000 (ouch!)

But, assuming his misfortune has ended after that bad year, he survives it all OK...  In fact, the value of his investments (as listed above) is worth more than before!  ($110,000 vs. $83,000)

Of course, Nico's timing could be off:

Two ounces of gold, no reset, or reset way into the future:  $2640.  Plus half of the college fund and retirement savings: $2600 + $20,000 + $15,000 = $37,600 left after his bad year (down from $83,000).


Fred ,observant guy that he is, trustful of no one, has a similar financial situation as Nico, but we will posit that he has a very understanding wife who allows him to save as he chooses.  Fred decided to save only in gold, with very little into other investments.  OK, so let's say his holdings are $0 (in cash) for retirement, $0 for college for the kids and $73,200 worth of shiny gold (55 ounces).  But, alas, Fred loses his job too, and they decide to forego various expenses, like Nico and his family.  So, Fred has no choice but to sell gold, at $1320 along the way:

$45,000 (spending) / $1320 = 34 ounces

Fred is left with 21 ounces:

21 ounces left:  $1,155,000   (with reset, very nice!!)
34 ounces sold:  $1,870,000  (well, ouch, but he still has his $1 million)

Unless no reset or reset far into the future:

21 ounces at $1320:  $27,700  (from $83,000).  And, with NO other savings, he has just $27,700 vs. Nico's $37,600 (no reset).  Fred has just $27,700 left after his bad year...

My point here is that Diversification (Nico: $37,600) wins over All Inn (Fred: $27,700) if the reset does not happen AND the chips are down.

All Inn wins by a lot if the reset DOES happen.


1)  Staying at the All Inn vs. a broad diversification has widely varying results for a middle class family with a tough year (loss of a job for a year).  Reset happens?  Gold wins big!  Reset does not happen (during that year anyway)?  All Inn not so good...

2)  And who can tell me when the gold price reset will happen?  Members of the All Inn Lodge better have a decent income or lots of other assets as well if they wish to reap the great fortune of a Gold Reset.


The above Thought Experiment was so much fun that I would like to explore another!  We can lump the below into "What happens to me if gold DOES go to $55,000?".  This one is more fun!  And we will NOT inflict that losing their job misfortunes upon them...


Alice has 5% of her wealth in physical gold (at $1320 today), let's call it 10 ounces saved up (so $13,200).  That works out to her having a Net Worth of $264,000.  What happens, assuming no misfortunes like the guys above had?

10 ounces at $55,000 @ = $550,000 (in gold) plus her OTHER wealth ($251,000), total:

Alice, post-reset: $801,000


Betty does not trust people, our government nor the financial system (single guys: get her number!).  By coincidence, Betty has the same $-value net worth, but she owns 50 ounces of gold ($66,000)!  So, Betty (while not completely All Inn) is a true believer.  Gold then resets:

50 ounces of gold at $55,000 each:

Betty, post reset: $2,940,000  !!  (($55,000 * 50) + $198,000 (non-gold savings))


Camille, is even harder than Betty!  Everything she has is in gold!  $264,000 (net worth / $1320) = 200 ounces of gold, I think you can see where this is going (smile):

Camille, post-reset: $11,000,000  !!!  (it is rare for me to issue three exclamation points)

The above three ladies all experienced the joy of a gold reset.

And if gold does NOT reset?  Assuming no misfortunes, they still have their initial stakes of $264,000.


Final Conclusions:

There are three big factors at work in the above Thought Experiments:

1)  How likely and how big a reset would be?

2)  Diversification vs. Concentration (All Inn)

3)  Probability of downside risks to income stream and/or losing other assets.

For me, if I fit into a middle-class scenario, even with the allure of a huge gold windfall, lil ol me would be prudent and very careful to maintain diversification!  I have mentioned before that I cannot predict the future (and have a long list of financial positions to back up my assertion), so for me, diversification is smart.

But, diversification includes gold ownership...

Thursday, October 3, 2013

Thought Experiment: Who Was At The Helm?

Most people I have seen and heard making comments about the current government shutdown have been saying words to the effect that the Republicans are the ones getting hurt, that they are getting the blame (true in the current polls anyway) and they will get the blame if the shutdown leads to a bad ending re the Debt Ceiling debate.  Especially if a .gov lockup leads to a markets crash or other really bad events...

But, a small number of comments I have seen made me do some thinking.  I do not wish to make a prediction, but instead provide some grist, some fuel for the fire of the debate.  What seems to be ignored, except by just a few I have seen, is that in time, and IF something really bad happens, is that the Democrat Party, and President Obama, will be seen as at the helm...

And that will hurt African-Americans.  "The Black Guy did it."  President Obama -D.  Irrespective of the quantity of blame that could/should be applied as to who was most at fault (as if you could quantify "who was at fault").

WHO was at the helm, and UNDER WHOM did the markets crash and the (new presumed, remember, this a thought experiment) recession unfold?.  WHO pushed onto the people an unconstitutional, yet, required (you live, therefore you must buy insurance, from a private company no less) travesty like Obamacare?  Congress and their staff are not covered by the Obamacare law.  How many of you, dear readers, have read even 20 pages of Obamacare...?

Obamacare...  Call 1 800 FUCK YO (insert second digit of "1", recall that 1 on the telephone dial does not have a letter...).  Poseurs, amateurs, lightweights and hypocrites!  Comparing their technology platform failures to Apple's...!  Ridiculous, Apple hardly ever has serious software failures, while over 2/3rds of people visiting the on-line "Exchanges" can't get signed up!  Obamacare may indeed be set up for failure, just to bring in Socialist single-payer.  And then we will likely find that most people will pay more!  And get less...

Do you expect me to really believe that it was the "Tea Partiers" that are causing Obamacare failures as well as the shutdown as well as the upcoming debt ceiling (possible) crisis?  Do you really expect me to buy that it is ONE FACTION of one party of one branch of government that is putting our system at risk?


Who caused the Great Depression?  Most who study the issue would say there were various actors (the Federal Reserve, President Hoover, President Coolidge's handling the "Roaring Twenties", etc.) who caused it.

But, who got shanty-towns named after him?  President Hoover, the smartest guy in the room (he apparently was smart).  Hoovervilles.  Fair or not, Herbert Hoover was president when we had our Great Depression.  Fair or not, FDR "saved" our economy (although many contend that FDR's programs actually hindered our recovery).

So, President Obama and the Democrat Party control the government.  They even control the Mainstream Media!  They are the ones at the helm.  Obamacare is theirs!  The Democrats (at the least the majority liberal wing) don't even (seriously) claim to want fiscal prudence.

The liberals now lead the country.  They are at the helm.  And it would be "The Black Guy" who was at the top when it all happened...  Then how long until the next African-American would be elected President?  Would that sour Americans on a woman as President?


Keep in mind that this is yet another "Thought Experiment" here at my blog.  Am I predicting something like this?  No, but is its plausible and possible.  And worth thinking about.