Review Of American Hard Assets -- June/July 2014 Edition

American Hard Assets ("AHA") is out with their June/July issue, they call this "The American Issue" in that they have several articles analyzing hard assets mostly pertaining to Americans.  Before I get to the magazine itself, I wanted to stroll around their website:

ahametals.com

as I have seen various Bitcoin ("BTC") articles linked by Justine Hermosa (a member of a Facebook Bitcoin Group).  Ms. Hermosa is closely following AHA's coverage of BTC and posting new articles from their website.  Why would AHA (purportedly following gold and hard assets...) be devoting part of their website (as well as two articles in this issue of their magazine)?  It looks like a combination of the below two concepts:

1)  AHA apparently feels that there is at least some merit in BTC

2)  AHA perhaps has gotten feedback from readers who want BTC articles...

At AHA's website, there are SIX current articles (3 days or less since published) on BTC.  I should ask them if they would take BTC for a subscription, smile,,,

Here is an interesting article that they post from the UK (in which they look at some fundamentals of 20  stockmarkets):

http://www.ahametals.com/20-top-contenders-world-cup-investing/

Nor has their website forgotten about gold:

http://www.ahametals.com/shanghai-start-international-gold-trading-4q/

There are six other gold-related articles linked at the above as well.

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In AHA's "World News Updates" section, I noted an interesting table originally from Knight Frank Wealth Report (of London).  The below shows their view of the preferences of the very rich on cities where they will choose to live:

Rank	2013	2014	2024
1	London	London	New York
2	New York	New York	London
3	Singapore	Singapore	Hong Kong
4	Hong Kong	Hong Kong	Singapore
5	Geneva	Geneva	Shanghai
6	Shanghai	Shanghai	Beijing
7	Dubai	Miami	Dubai
8	Miami	Dubai	Miami
9	Paris	Beijing	Geneva
10	Beijing	Paris	Mumbai

Note Beijing (in red) moving up, despite pollution, and their prediction that Mumbai (India) will move into position 10.

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Also in "World News Updates" is their short piece on BTC (as a bad investment this year, but recall that AHA's BTC info is always late), a nice article on the richest billionaire in each of some 49 countries (um, where are the Rothschilds?), as well as The New York Times own Paul Krugman calling Bitcoin "evil" (?, that's, "The Old Gray Lady" has jumped the shark...).  Granted, Krugman's article popped up just when BTC exchange Mt Gox crashed & burned...

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Author Amber Ness is a regular there at AHA.  She pens a piece "Birth of the Modern Gold Bug" in which she looks at modern history of physical gold buyers, notably gold purchases picking up since The Great Recession.  Also interesting is her observation that gold owners are NOT just TEA Party members, that even more Democrats are buying gold...

She goes on to cover familiar (to us!) ground: why investors should consider having 5% - 20% of their wealth in gold.

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Jason Walter Vaile writes a nice article outlining the history of the American Gold Eagle coin.  He starts with a quick overview of gold coins (Lydia was first, 550 BC), and then goes on to describe the design and production of the Gold Eagle.  The obverse ("heads") side is inspired by the design of Augustus Saint-Gaudens and the reverse side designed and sculpted by Miley-Tucker Frost.

Vaile has a handy chart (data from Zero Hedge!) showing sales of Gold Eagles since January 2009.

All gold in the Eagles is mined from the USA.

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Richard Alexander Rogers writes "Good Delivery: Good for You".  "Good Delivery" bars are required for many LARGE buyers of gold bullion, in the USA Comex has their standards, outside of the USA the standard is LBMA standards for gold delivery.

LBMA (London Bullion Market Association) standards include gold bars of at least .995 fine, bar weight between 350 and 430 oz (troy) with fineness and refiner's stampings.  Both Comex and LBMA insist on a "Chain of Integrity" (gold stored at recognized warehouses), else, the bars have to be assayed...

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Amber Ness writes "Closet Preppers: Quietly Arming for Doomsday"!  Apparently prepping is catching on all over the USA.

Her article is very good, quite comprehensive!  She covers most of the bases:

-- cash, both at a bank and/or at home (eight months worth)
-- gold & silver coins (including "junk silver" - pre-1965 US dimes & quarters)
-- a plan as to what family members are to do...
-- food (short-term and long), gardening
-- guns & ammo (yep, she says get them)
-- tools and similar supplies (a very long list)

But, she writes that doing SOME of the above is better than doing nothing!

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Gabe Benson wonders in his article whether we can make money in Classic Cars (not just old ones).

Ah, not for me...

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While we all read that manufacturing is nearly dead in the USA, Jason Walter Vaile advises in his article "American Artisans" that there are a wide variety of Americans producing high quality products (vodka, knives, guitars, woodworking, marbles and hats).

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"222 Year History of the U.S. Mint" (by Douglas Kale) is a nicely done history of our Mint, from before we even HAD one (Alexander Hamilton proposed it in 1791, official coin production started in 1793).

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AHA has recently featured pieces from authors from JustLuxe (justluxe.com, as website of luxury products and services for the wealthy, very weaalthy).  And this month, AHA features five articles from JustLuxe.

JustLuxe author Courtney Driver contributes a piece on polo, about an elitist sport as I can imagine.  She discusses the sport with Nic Roldan, an important American player.  Polo requires a variety of abilities, riding a horse in stressful conditions is but one...

JustLuxe author Noah Joseph writes a piece on the current fastest car, the Hennessey Venom GT (a highly modified Lotus Exige, this is now the world record-holder at 270 MPH...

Susan Kime (who has contributed to AHA before) writes a nice piece about World View Experiences, a company hoping to offer balloon & glider trips to take tourists to the edge of space (over 100,000 feet) by 2016...  At that height, you can experience the "Overview Effect" where you see the curvature of the Earth as well as the light coming up from the sun before sunrise there at the edge of space...  I hope they are able to make that happen!  Cost: $75,000 per trip.

Jared Paul Stern writes about a new lavish new "coffee table book" about American yacht maker Hinckley Yachts.  Billionaire David Rockefeller takes his Hinckley out for cruises from Southwest Harbor, Maine.  Martha Stewart owns one too!

Mila Pantovich (the fifth author featured in AHA's current issue) writes about costume design (movie costumes).  She focuses on costume designer Judianna Makovsky, who did much of the costume work for the new "Captain America" movie and has dome other work including for "The Hunger Games" and "Harry Potter".

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Watch expert Ed Estlow follows up on his earlier article with more information on the re-emerging American watch makers.  "American -- No Really -- American Watches" looks at Shinola Watch Company ("Built in Detroit") and goes on to look at other American watches (none look inexpensive nor traditional) such as Devon, Keaton Myrick and RGM (Roland Murphy).

OK, I am happy to see more "American Artisans" making quality products that appear to succeed in this highly competitive world we share, but NONE of these are "vertically intergrated" yet, they import at least some important parts (from Switzerland and perhaps other places).

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Michael Haynes (CEO of respected precious metals dealer APMEX) writes "American Eagle First Strike: Gold and Silver with Zing", about coins that are minted while the dies (that stamp the metal coin planchettes into their Eagle designs) are brand new, and (whose coins) are submitted by collectors and dealers to the grading companies PCGS or NGC.  These grading companies then "slab" the nicest pieces into the plastic, (hopefully) tamper-proof holders with a grade ("MS-70" is the highest possible grade: NO blemishes on the coin).

There DOES appear to be demand for these extremely high quality bullion pieces.  The MS-70 population of Eagles (silver and gold) commands prices well above "spot Eagle" prices (regular Gold Eagles typically already cost some 5% or more than spot price of gold).  In the case of the 2011 Gold Eagle, a "First Strike, MS-70" Eagle commanded a price of around $2400 (April, 2014) or around an $1100 / oz premium vs. gold spot price.

I did not know that these "numismatic quality" God and Silver Eagles went for so much more!

[Ed. Note: Beware of fakes!  China is making fake "slabbed" pieces...]

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John Maben writes "Top Ten Tips for Buying Precious Metals".

Many of you, dear readers, already KNOW how to buy silver and gold.  But, Maben's article is of value to any new people considering buying precious metals.

[Ed. Note: Maben is really writing: "Do your homework."]

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AHA publishes several shorter pieces each issue on developments in the mining industry.  This issue's "Mining News" has an article on Transition Metals finding a likely good discovery of platinum at SUnday Lake (Ontario).

Another item in "Mining News" finds that Taseko Mining got rejected (second time) by the Canadian Minister of the Environment for a new gold-copper mine (Taseko will change their mining plan and try a third time).

"Streaming companies" are those who buy-in (one way or another) into receiving a percentage of a mine's or a refiner's output.  "Streaming Companies Break Records in 2013" explores three players in this space, the most well-known being Silver Wheaton (ticker: SLW -- whose stock has zoomed about 25% in the last month, see: http://stockcharts.com/h-sc/ui?s=slw).  But, many miners, including streaming miners, are losing money...

Other "Mining News items include pieces on Rio Tinto (ticker: RIO) cutting costs as well as Centerra Gold maintaining its Kumtor gold mine (the second highest -- altitude -- gold mine in the world, after Peru's Yanacocha) in risky Kyrgystan.

Finally the last mining item this issue is a very interesting report (a survey of 690 mining executives) from the Fraser Institute on friendly mining jurisdictions worldwide.  Sweden comes in at Number One!  That would not have been my guess.  Other highly rated (mining friendly) jurisdictions include Finland, Alberta (Canada) and Wyoming (in at Number Five worldwide), also considering mining friendly wre US states Nevada and Colorado.  LEAST friendly jurisdictions include Kyrgyzstan (um, Centerra?), Venezuela (duh), Argentina (no surprise either), Philippines, Zimbabwe, Ivory Coast Indonesia and Madagascar.

[Ed. Comment:  Buy the metals, not the miners, but that's just me...]

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John W. Garibald writes the Editorial at the end of each AHA issue.  "The Impact of Geopolitical Events on Gold" is a fine piece explaining why sometimes not much seems to happen even when alarming news arrives (he looks at Russia and Ukraine here).

He asks why the prices of precious metals are not rising higher on what appear to me (and others) to be ever-more bad news in the world today.  Garibald writes this gem of a sentence which sums this conundrum up rather well:

"As with most things in the financial markets, the answer is multi-faceted and nuanced, but there are at least some primary contributors to study."

These contributors include size of the physical and "paper" PM markets, Federal Reserve QE policy, real interest rates and inflation in general (including in different places).  He suggests that you NOT play the headlines when buying (or selling PMs), but instead to average-in your costs through time and think long-term.

Bravo, Mr. Garibald!