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.

***

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.

***

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...

***

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.

***

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.

***

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...

***

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!

***

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

Ah, not for me...

***

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".

***

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).

***

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...]

***

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."]

***

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!

Review of American Hard Assets -- April/May 2014

The publishers of American Hard Assets (AHA) continue to keep cranking out magazine issues oriented toward high-end collectors/investors/consumers.  I am pleased with the progress of this magazine.  As a reminder, here is a link to their website:

http://www.ahametals.com/

At the bottom of their home page they state just who they are aiming at (emphasis mine):

For the high net-worth individual, no other information source in the country brings you the detail and in-depth value on the topics you’re interested in. From the future of gold and other precious metals to all of the different diversification avenues for the hard assets investor, American Hard Assets is the premier source for hot industry topics, as well as the latest in gold and silver news. - See more at: http://www.ahametals.com/#sthash.U53wTswM.dpuf

The website has more news than the magazine, they are trying to keep up with current gold & silver news (a crowded space now on the Internet), as well as news on art, collectibles, Bitcoin (yes, the rich are interested in Bitcoin), etc.

So when are they going to start writing about high-end firearms?  Smile,,,

***

The Cover Story is about precious metals and taxes.  Author Amber Ness starts her article with the rather famous case of Robert Kahre of Las Vegas (what is it about the Feds and Nevada???), where he paid his employees with American bullion coins at face value ($50 in the case of a 1 oz Gold Eagle) rather than the market value (around $1300 today).  In 2003 the Feds came in and busted him and various employees, put Kahre and nine employees on trial, looking at hard time in the pen...  There were a variety of tangled legal issues, and on September (2003) the jury was hung -- unable to come to a verdict.  In 2009 Kahre and three others were found guilty, he was sentenced to 15 years and restitution of $16,000,000.

Amber Ness goes on to describe the "more complicated than you would likely believe" (my terms) of precious metals and taxes.  The single most important (and unfair IMO) is that gains on the sale of any precious metals (that would include the GLD ETF as well) are taxed at a punitive 28% on capital gains.

She provides some examples of how to legally avoid certain tax events.  These would include buying American Gold Eagles, keeping purchases and sales below certain levels, and giving away (to your children say) an amount under $13,000 ($14,000 to minors) without tax liability.

These tax laws are very complicated.  Ness provides a commendable overview of this.

***

In "World News Updates" are short articles on:

-- China overtaking India as the world's largest gold consumer
-- A large diamond (128 carats) being sold by Sierra Leone
-- The one tonne (world's largest gold coin) Australian goes on display in Hong Kong
-- The interesting news that JP Morgan now holds the largest amount of physical silver in the world

***

AHA prints an article from Forbes.com about Bitcoin's legality around the world.  About 35 countries are listed with comments.  Note that laws about BTC are changing all the time.

Note also that AHA is following Bitcoin pretty closely.  Why?  Because the rich are too...

***

Judith Rosby writes a fun article on how 2013 was a record-breaker in various ways in the diamond business.  She writes up 12 cases where record amounts were paid for various classes of diamonds, most of them in this article were colored diamonds.  The highest price?  $83.187 million for a flawless pink diamond, 59.60 carats...  Almost all of these diamonds went to auction, so we know the prices.

[Ed. Note: IMO, unless you are both very rich and very knowledgeable (or have a pro on your side), diamonds are extremely tricky and risky...]

***

Gabe Benson writes "Winning and Breeding: Investing in Horses".  Horses is a hobby for the 1%...  Benson writes a good introduction to racehorses, especially the costs and major issues (pedigrees, buying & selling horses, racing, stud fees, etc.).  He covers the various costs and other issues that horse investors must cope with (a champion class racehorse costs over $60,000 for stables, vet bills, training, etc.).

I enlisted an insider ("Lady Who Knows Horses" from here "LWKH") I know.  She has owned (partly, with some others) horses, including racehorses as well as breeding horses.  She has been at this some 15 years and has loved horses most of her life.  I asked LWKH to put some color into this hobby of buying horses, as the article sketched the numbers fairly well, but provided little insight into the lifestyle...

LWKH told me that most horse owners lose money on the hobby, even if they are paying attention to horse pedigree...  They do because they love horses!  Relatively few make money.  For some, there is the social activity of being around other rich folks with similar interests (which explains many hobbies of the rich that are net financial losers).  The people who are investing in horses are those, who like hobbyists everywhere, do so because they are interested!

***

The next article (by Jeff Patton (pseudonym)) is completely different: "Drugs and Money: It's What Makes the World Go Round".  Patton points out the growing fascination among Americans on the drug trade, see the popularity of "Breaking Bad" ("Better call Saul!").  He passes along a UN estimate of illegal drug sales being some $321 billion (2003).

"Patton" (who has worked for a government agency dealing with illegal drugs), his article provides a nice overview of the illegal drug business for those unacquainted with it...  Methamphetamine has been growing (worldwide, but especially the USA).  Cocaine and terrorists are related (Colombia and Peru).

He spends some time discussing money laundering and the threat (very real) that drug smuggling techniques could be used by terrorists to bring in weapons of mass destruction into the USA...

***

Gabe Benson writes another interesting article in this edition of AHA: "A Different Kind of Search for Treasure Under the Sea".  He provides photos of nodules and equipment being used to examine them and bring them to the surface of the sea.

It appears that there are tremendous amounts of many metals down there in these nodules (a product of super-heated water and matter vented out from below the ocean floor.

There are numerous companies working on seeing if they can mine these treasures profitably.  But there are numerous problems (technological and political).  Benson believes that it will be years until there is any full scale production).

***

Jonathan Kosares (of USAGOLD) writes an article ("Black Swans, Yellow Gold") that looks at historical price changes of gold in periods of deflation and disinflation (low inflation).  Kosares mentions that NO ONE can predict the future, it is NOT a guarantee that we will have (hyper)inflation.

Gold performed very well in our Great Depression.  And gold has performed very well since 2001.  Not so well in the past year or two though!

Kosares recommends look at holding gold to ensure one's financial safety in other economic conditions that may be hard to foresee...

***
Watch expert Ed Estlow focuses on watches that pilots and astronauts wear in his latest: "Watches of the Skies".

Back in the past, when worldwide navigation devices were not available, airplane pilots often had to calculate themselves where they were...  Because of the limited amounts of space in an airplane cockpit, many pilots wore special watches  that allowed them to check time zones and even use some watches as engineers long ago used slide rules...

These watches have become popular now.  World leader Rolex makes number of these kinds of watches, but there is a lot of competition for these multi-purpose watches with large dials (they are easier to read).  Many of these are waterproof watches as well.  I saw these kinds of watches all the time when I worked in the oilfields decades ago.

It was Estlow's article that first alerted me to the new Rolex "Sky-Dweller" watch that I wrote about in my last article ("Peak Wealth?").

Nice article!

***

Jared Paul Stern writes a piece on a new gold (and a silver one as well) coin celebrating tthe National Baseball Hall of Fame.  These coins will be very unusual in that they are bowl-shaped (resembling a catcher's glove on the "heads" side).  Only 50,000 of the approx 1/4 oz gold piece will be made.

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Elena Mannes writes "Treasure Assets", an article mostly about art and the wealthy.  Art prices go up and down.  There are tax considerations.

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Jason Vaile writes a (mostly) tongue-in-cheek article "How to Break into Fort Knox", the repository where out national gold is stored.

Well, it seems there are four fences (at least one electrified), land mines, cameras (covering every square inch near the depository building), motion detectors as well as roaming and stationary (in towers) armed guards.  The U.S. Mint Police are armed with machine guns.  The whole facility is surrounded by a US Army base.  The building itself is built like a fortress, it is believed that it could withstand a direct hit by an atomic bomb...

Vaile writes the following: "More recently, in 2010, Ron Paul asked for an outside audit of the vaults' contents.  This request was promptly denied by the Treasury Department, saying it would be "too expensive.""  Mmm-k.  Too expensive.  Sure.

***

In "Mining News" there is a short article on Goldcorp trying to take over Osisko Mining (Osisko is the owner of the Malartic Gold Mine that I visited and wrote about in June 2013).  Osisko is still in play.

Also in Mining News are notes about platinum mine unrest in South Africa (also still going on at present) as well as notes on some small mining company results and an article on new mining laws passed in Quebec.

***

John Garibald ("Hindsight") writes that the Fed's QE program as well as uncertainties with the Taper are causing problems in emerging markets.

I read something similar lately about how the Fed machinations have been affecting Brazil, so it is likely true what Garibald writes: that the hard-to-predict flows of money to the emerging markets is now flowing out.  We are near an emerging markets currency crisis he writes.  Even with differing emerging countries' responses (he says that India is essentially ignoring Fed policy as Argentina fires up the printing presses...), few of them will escape.  He does not mention China here, but the news has been getting worse from there as well.

Review Of American Hard Assets: Jan/Feb 2014

The latest issue of American Hard Assets ("AHA")is out and focuses mostly on precious metals, offering up predictions from various serious players in that financial sector.  This issue kicks off its second year of publishing here in the USA.  Their focus remains the same: examining various kinds of "hard assets" mostly focuses on the core metals, and aiming particularly at a high-end readership.

The publisher noted that this issue is their best one yet.  I agree!

It is important to remember that AHA comes out every two months, the information is meant to be more reflective in nature...  Quicker information is better derived from a multitude of internet sources (which I follow nearly every day).

In their "World News Updates" section there are articles about a rare coin auction (netting $23 million).  Also there is an interesting article on Antwerp (Belgium) and how that city is the heart of the secretive world diamond trade (I have previously advised to take extreme care in playing in the diamond business).

For me the most interesting article was their piece "Is Russia (Finally) Running Out of Palladium", some experts are saying yes, the Russian government stockpiles are running out, on the other hand, that fact may not wind up influence palladium pricing this year.

Other "World News Updates" items include an article on Dubai hosting a $7 billion expo in 2020, an article on Bitcoin (getting much more attention..., later in the issue is another BTC article), and Elemetal's subsidiary Ohio Precious Metals being added to the LBMA's Good Delivery List (more comments on Elemetal below).

***

Eavan Moore writes up an article "Going for Gold in Alaska" on mining for gold in Alaska, perhaps capitalizing on the popularity of a couple of "reality shows" on cable TV about small miners giving that a go...  There are many small players (including individual miners, "panning for gold" (placer mining in streams) -- 450 of them are "permitted miners", as well as various other small players).

But he writes the small miners face high obstacles.  Alaska has a sort "mining season" for them, as the rivers freeze in October...

Regulatory compliance in the small sector space is light -- for now.

But, the larger quantities of gold come from real gold mines.  This is now getting harder to pull off even in fairly mining-friendly Alaska (where there is already considerable production).  The "Big Enchilada" of Alaskan gold would the the Pebble Mine, but due to environmental fears (the EPA looks to release a negative assessment of environmental impact of the mine) as well as local opposition, this world class gold mine is, at best, on hold -- Anglo-American walked away, even with a huge deposit, world scale...

***

Numerous times I have mentioned that this magazine is aimed at the wealthy.  "Investing in Film" (by Gabe Benson) would further evidence of my point.  Film (movies) is not really a "hard asset" but is definitely only for those who can place money at risk.  But, the rewards can be there: successful: films that had early investors include "My Big Fat Greek Wedding" (over $360 million in ticket sales) as well as "The Blair Witch Project" ($248 million), so it can be done.  As always with these kinds if investments:

"Have a professional you trust advise you, or you may lose it all."

***

Luis Golino writes an article aimed at buyers of gold and silver coins who want a pretty coin ("American Coin Designs").  It seems that the classic designs of the past have been much better accepted by collectors.  Yet, the US Mint knows that they must move forward with new designs that people like, most modern designs for special coins have not been, well, beautiful.

The resolution to this may depend on how much freedom the Mint gives their artists as well as careful judgement in choosing the designs for coins.

***

Both silver and gold are previewed for 2014.  Brad Yates writes "2014 Silver Preview".  Yates provides an overview of silver, interest rates and actions by the Federal Reserve in 2013.  He writes that the consensus is that the Fed will continue its "Taper" in a gradual way.

Yet he is somewhat cautious, perhaps bearish, on silver prices if the economy grows and the Fed does not mess anything up...  He explains that silver (and gold) are diversification.

***

The time has come for me to start looking and researching Elemetal, LLC.  Elemetal is a major advertiser in AHA and is the owner of a number of companies involved in segments of the precious metals sector.  A quick glance at http://elemetal.com/About.html shows the below companies they own and their participation in the precious metals industries:

-- OPM (Ohio Precious Metals), a refiner in Jackson, OH that specializes in refining recycled gold and silver.  They have just become LBMA-certified for gold (mentioned above).  They make a 1 kg gold bar that looks very attractive, and it is "green" -- recycled gold.

-- NTR Metals, which offers precious metals recycling and processing services in 12 countries, they have some 20,000 companies who are customers.

-- Provident Metals, a leading internet seller of precious metals, check out their OPM 1 kg gold bars apparently now in stock: http://www.providentmetals.com/ohio-precious-metals-opm-1-kilo-gold-bullion-bar-9999-fine.html.

-- Echo Environmental, a large-scale processor of hazardous and non-hazardous products containing precious metals.

-- Elemetal also has some kind of relationship with DGSE Companies, Inc. (ticker DGSE, so I imagine that Elemetals does not own all of DGSE).  DGSE owns some 30 brick & mortar stores that deal in precious metals, coins in general and high-end watches., most of their stores are in Texas, Georgia and a few more in other southern states and a store in Illinois.

Elemetal, even though they have advertised for sometime in AHA has been relatively opaque.  They appear to be privately owned.  About a year ago, I made an inquiry with them as to how to buy a 1 kg gold bar, I was not able to get a straight answer, but they appear NOT to have owned Provident at that time.  Provident WAS recommended to me after I made a number of calls to OPM and NTR.  It may be that Elemetal was working on consolidating their businesses, they look to being a major presence in their niches in the prcious metals world.

I hope to make better contact with Elemetal and write more about them in the near future (so be waiting for my calls guys...).

***

Mark O'Byrne founded GoldCore, a precious metals seller and provider of PM storage services.  Mr. O'Byrne is prominent among gold fans who read Zero Hedge (GoldCore is a "Contributor" to ZH almost every day) as well as 24hgold.com.  Here is GoldCore's website: http://www.goldcore.com/.

In this issue of AHA he writes at length on the dangers of bail-ins and other deposit confiscation ("Bail-Ins and Deposit Confiscation Makes International Gold Ownership Essential").  He goes into detail about what happened in Cyprus (bail-ins, oh, except for the very rich who got advance word) and the various proposals being floated in Europe and to a lesser degree in the USA.  His article is excellent, and goes into great detail, he has clearly done his homework.

Bail-ins are clearly a real risk today.  O'Byrne is a believer in diversification, a concept I have pounded the table about for a long time (forever?).

***

"At the Crossroads: Gold in 2014" (Mike Getlin) describes gold's prices in 2013 (the first down year in the last 12) and discusses at length various factors in gold price (including, of course, Fed interest policies) as well as detailed discussions on both supply and demand for gold.

He writes that gold supply will likely not change much (almost irrespective of price), and so gold's prices will likely be decided by demand.  Recently, other investments have done better than gold, so gold has underperformed and there appears to be subdued demand for physical gold (except for China).  His guess is that gold prices will not move very much in 2014.  But, Getlin writes at the end of his article:

"The real question is not if gold prices will rise in 2014.  It's whether gold is more likely than other asset classes to provide low downside risk and high upside potential.  Looking at all these factors together, I believe the answer is a resounding YES!""

***

Further evidence that AHA is aimed squarely at the wealthy is Jason Walter Vaile's piece "Fountain Pens: The Most Elegant Weapon".

Collecting fountain pens, while esoteric, is a real hobby.  Many of these pens have rocketed in price and are very expensive.  An example is the "Montegrappa's Chaos Pen" (est. price: $69,500), designed by Sylvester Stallone, this pen made an appearance in his recent film "Expendables 2".

Nice pictures in the article as well, AHA does go the extra mile to publish very pretty and high quality pictures in its magazine.

***

Platinum, ah, platinum...  Perhaps my favorite precious metal of them all.  Custom jewelry designer and writer Ed Estlow ( a frequent contributor to AHA) at long last writes "Platinum: The Metal of Kings" (although I have seen gold referenced as "the metal of kings" as well).  Estlow makes a reference to France's Louis XVI claim that it was the only metal fit for royalty.

He provides a history of platinum (first referred to in 1557 and first discovered in Colombia) from discovery through its adoption by royalty and large discoveries in Russia and South Africa (the latter produces some 75% of world production).  He also notes some of platinum's physical properties (a higher much melting point than gold, greater density than gold (but Pt is about 11% denser than gold, not 60%, densities: Pt: 21.45, Au: 19.30), and it is considerably harder than gold -- making it suitable for gem settings in rings for example).  Estlow notes that Pt is used in some high-end watches (what a surprise) such as Patek Philippe and a few Rolexes.

An excellent article.

I would note that one of my new internet contacts ("Silver Rhino" from Zero Hedge) once posted that he was interested in related metals like osmium and iridium.  Both of these metals have densities of approximately 22.56, and are the densest (stable) materials in existence...  These two would be very hard to fake.  Even platinum is very hard to fake without having to use iridium or osmium, and THAT would not be as easy as "salting" gold bars with tungsten...

***

"AHA" sat down with Michael Haynes, CEO of precious metal and coin market-maker APMEX, "Market Predictions".  Haynes sees uncertainty in PM prices, and believes that diversification of assets is important (that of course would include precious metals).

***

Susan Kime writes "The Bitcoin Controversy", a useful article for beginners (but developments happen very quickly in Bitcoinistan™...).

She wrote the article when BTC price was some $200 each.  I got my first BTC at $350 and have bought small amounts all the way up to $800 or so.

As I write today Bitcoin trades around $660 each.  Earlier today, there was a "flash-crash" in BTC as one of its large exchanges (Mt. Gox) has serious problems and may wind up losing various of its customers serious money.

Yet with all of its problems, the amounts of BTC being created and traded are very large numbers.  Here is some other information from today:

Hash code for $27,000,000 BTC transaction today:

369e26689af06471241a827a8a46332a1191f2c25ad8fbf3b643b2d8c9b07c4c

Here is some information of a huge mining block (over $36,500,000) won by "BTC Guild" (a mining pool) just today as well:

https://blockchain.info/block-index/466708/0000000000000000b0a53e02383b31d8d07cf46b45e70f35da38b933dec193c1

(block 285155)

Ignoring Bitcoin may be an error...

***

Author Susan Kime writes another article (an interview) for AHA about the success of homebuilder-for-the-wealthy  Joe Farrell ("Real Estate Star Joe Farrell on Giving People the Homes They Want").  Farrell started building homes in the Hamptons (eastern Long Island) in 1995.  His target price range is typicall int he $3 - $6 million dollar range.

Farrell has been criticized as "building McMansions", but he defends his houses as giving buyers what they want.  Farrell has his own home up for sale, price: $43 million.  His house has contremporary art by Andrew Wyeth, Roy Lichtenstein and Peter Max.

***

I turn the page, and the next article is "What to Expect From the Art Market in 2014"!  Nicholas Forrest has a large photo of Balloon Dog (Orange) by Jeff Koons.  Lucky Koons just had a record set, his Balloon Dog (Orange) just sold for $58.4 million, the most expensive work by a living artist ever.  Art had a good year in 2013.

Forrest then goes on to discuss hot issues in the world of modern art:

-- Indonesian art (hot!)
-- Paris (more art businesses setting up there)
-- Digital art (hmm...)
-- Art Title Insurance (tropical storm Sandy caused some $300 - $500 million in claims)

***

Numismatist Fred Reed is back with another article on valuing coin collections.  He suggests working with a well-regarded (ethical) pro to properly value coins.

Don't be in a hurry to sell.  SOme coins are worth a LOT!

***

The concept of "Vintage Sports Memorabilia" is back!  Matt Markey writes "Discovering Baseball Gold", another article on baseball cards (what is it about baseball cards???).  The story is about an Ohio family that found a treasure trove of valuable baseball cards among their grandfather's old things in the attic...  Cousins Karl Kissner and Karla Hench even made it onto "The Today Show", and their lucky trove (the cards were sold at auction) was split up among some 35 family members -- at least that story ends nicely.

***

The "Mining News" section starts with a short article on the failure of Taseko's new copper and gold New Prosperity mine in BC (Canada).  Taseko was planning on spending $1 billion on the mine.  I would note that this is the THIRD big proposed gold mine to get rejected (New Prosperity here, the huge Pebble mine as well as the huge Conga mine in Peru).  This points yet again to the damages done to the industry by their own past actions.  Either they have ruined the local environment that locals depend upon or they did not offer the locals enough money (or both).  At some point, there WILL be less gold mined...

Another article in "Mining News" is the news that Cliffs Natural Resources (ticker: CLF) is going to quit its planned Ring of Fire project in remote Ontario after encountering several roadblocks...

The unhappy news in "Mining News" continues with an article noting that Mexico will raise variuos taxes on the miners.  The miners are unhappy...

"Mining News" finishes with two short items, a diamond mine has gotten preliminary approval to start in the Northwest Territories of Canada, but the local Native Americans are unhappy with that.  The other note is about changes at the top at Barrick Gold (ABX), which has seen a lot of turmoil over its many years.

***

John W. Garibald writes another of his editorials ("Last Word") at the end of each issue of AHA.  This time around he makes some "Anti-Predictions".  Because of the complexity of our economic system, he makes some anti-predictions (that is, predictions of things that will likely NOT happen) for 2014.  Here are a few to give you an idea [with my occasional comment]:

-- The bankers that largely contributed (to our financial problems) while amassing fortunes will NOT suffer any real personal setbacks, much less go to jail [I agree].

-- This commentator (Garibald) will NOT sign up (successfully) for Obamacare

--  Congressional approval will NOT improve to 15% [I agree].

-- Twitter and Snapchat (and anything else like it) will NOT turn a profit

-- Miley Cyrus and Justin Bieber will NOT... [oh, never mind, who cares?]

-- Janet Yellen will NOT grow a beard in homage to the previous Fed Chair [does that mean s/he could?].

You get the idea...

***

The new publisher (Brad Hastedt) promised that this was the best issue yet of American Hard Assets.  I would agree.

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:

www.ahametals.com

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
Madonna

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.

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		Useful?
Not collectible, not valuable
Osmium		no
Collectible, not valuable
Beanie Babies		no
Rare butterflies		no
Not collectible, but valuable
High quality family farms and "Bug-Out" farms		yes
Collectible and valuable
Silver and platinum		yes
Gold		no
Diamonds and other gems		no
Art and certain antiques		no
Coins and stamps		no
Rare watches and other high end collectibles		no
Collectible guns		no

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: http://en.wikipedia.org/wiki/Osmium).  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. 

Gold

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: http://fofoa.blogspot.com)

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:

http://AHAMetals.com