Words to the wise from Ken Rutherford

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Ken Rutherford is a well-known name in the precious metals business. He makes and sells the Fisch instrument, a simple but effective tool that tests coins (by seeing whether they fit through calibrated go/no go slots and by a balance test).

He is also the author of a guide to counterfeits published over 25 years ago and revised several times. Here is what he said back in 1984:

The silver and gold business is crazy. Investors send $10,000, $20,000, even $40,000 to firms they’ve never even heard of and whose credit they’ve never checked. They just close their eyes, lick and send the envelopes and send their checks winging away.

Times change. Since Rutherford wrote that, gold scams have migrated to the Internet, and today people click their money away to unknown URLs; or, in a similar but also risky scenario, send their gold (coins, bullion, jewelry or scrap) to some address, from which they hope somebody will send them cash.

Rutherford recommended dealing only with established dealers. That’s still good advice.

He also recommends, when buying gold coins, to TEST EVERY ONE. Still good advice. But hard to do over the Internet.

An honest gold seller in India

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Bloomberg News has a story about T.S. Kalyanaraman, who shook up the gold jewelry business in India by putting pricetags on his products and teaching his customers how to test gold themselves.

Now he’s worth a billion (dollars not rupees) and is the first person in his state of Kerala to own a private jet.

India is the biggest market for gold. Brides are weighed down with gold jewelry, and it is considered auspicious to buy gold on religious holidays (often then presented to a temple).

“We don’t find it tough to sell gold; people love to buy jewelry,” Kalyanaraman said. “The only way to make your wife, sister or lover happy is to give them something that they love.”

In a separate Bloomberg story

Aishwarya Rai, a former Miss World and Bollywood star, is a spokeswoman for Kalyan Jewelers

, the government of India is raising the import duty on gold by 50% to help cover its current account deficit. The government feels it can manage this because the demand, and consequently the price, for gold has been rising, through good times and bad.

India, the world’s largest bullion buyer, increased taxes on gold imports to reduce a record current-account deficit and moderate demand for the precious metal that’s rallied for 12 straight years.

The duty on gold and platinum imports was raised to 6 percent immediately from 4 percent, Economic Affairs Secretary Arvind Mayaram told reporters in New Delhi yesterday. The tariff will be reviewed if imports moderate, he said. Gold climbed after the announcement.

Increased taxes may reduce gold demand in Asia’s third- largest economy after prices jumped 7.1 percent in 2012 as investors and central banks boost purchases. About 80 percent of India’s current-account deficit, the broadest measure of trade, tracking goods, services and investment income, is due to gold imports, according to the Reserve Bank of India.

Star gazing: Rick to get hitched

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“Pawn Stars” honcho Rick Harrison is getting married to his longtime girlfriend — who he has said will never be on the show —  on July 21. This Los Angeles Times story says Chumlee will be the ringbearer.

No word on whether Elvis will officiate. It is in Vegas, after all.

 

And they say there’s no ham in hamburgers

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News reports say horse DNA was discovered in beef hamburgers sold in Ireland and England. Up to one-third in one sample, according to the Los Angeles Times.

This reminds us of an old joke.

During the Depression, a restaurant was famous for its rabbit stew. Then came World War II and meat rationing.

A loyal customer continued to order the stew but he became suspicious. At length, he asked the chef if there wasn’t some change in the recipe. The chef said:

“I wouldn’t admit this to anyone else, but you’ve been my most loyal customer, so I’ll tell you. Yes, it’s true. Because of the rationing, we had to mix in horse meat with the rabbit.”

But, he hurried to add, “But only 50-50. One horse to one rabbit!”

 

Pawn 101: Fender’s Pawn Shop series

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Pawn shops don’t get a lot of respect — tell us about it! — but from time to time there are indications that some people appreciate what America’s pawn shops bring to the table.

Perhaps the most unusual nod comes from the Fender guitar company, which now has a “Pawn Shop Series” of new productions, described as  “guitars that never were but should have been,” and as homages to the more eccentric models the company introduced (in modest numbers) in the ’60s and ’70s.

Fender doesn’t come right out and say so, but apparently the company is acknowledging that sometimes the only place you really can get what you want is a pawn shop. You can’t always get what you want, but if you try sometimes, you just might find, you get what you need — in the pawn shop.

Somebody said that in the ’60s, we recall.

That headstock isn’t a mistake. It’s the Fender Pawn Shop Super Sonic

Tales from a Pawn Shop: Our coin maven visits

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One event we at Kamaaina Loan look forward to each year is Dennis Ryan’s winter visit to escape the snows of his home in Albany, New York.

Dennis is a man of many parts. During his two months or so on Maui, he consults on archaeological digs, visits antique dealers (“They’re all disappearing” on Maui) and sorts through a year’s accumulation of strange and oddball coins and paper money for us.

He is also an expert in African art, works on the archaeology of the Erie Canal, and holds a master’s degree in Russian history — for which he wrote his thesis in French. There’s never a dull moment when Dennis is around.

Over the course of a year, the pawn shop accumulates bags and envelopes of hard-to-identify coins. Typically, we buy somebody’s collection based on one or a few valuable coins, and along with it comes a plastic bag of odds and ends.

We rely on Dennis to spot the unusual rarities in this pile of junk. This year, we presented him with a large shoebox of coins.

He’s still working his way through it, but so far this trip his prize find has been a J.F. Souza merchant token.

Souza had a shop on Luso Street in Honolulu. Shopkeepers in Territorial days would pass out brass tokens as advertising and promotions, or to use in slot machines, or sometimes as a form of store credit — like today’s gift card. (These tokens still exist; think of the Maui Trade Dollar.)

The token Dennis found — and it was in a jumble with a bunch of dross, so we don’t know where it came from — is not dated, but it must be from the earliest Territorial days around 1900, since the store credit it offers is for “half a cent.”

Metcalf and Russell’s “Hawaiian Money,” the standard reference, considers the Souza token among the most valuable of the island commercial tokens, along with the Lunalilo Home and St. Francis Hospital radio tokens — a generation ago, these were valued at $100. Recently, one sold for $150. Only the very first, the Hawaiian Gazette Co., and one or two other Hawaii tokens are rarer.

The Souza token is by no means the most valuable coin Dennis Ryan has rescued from the junk pile, but the reason we value his visits is not the money he finds. It is the stories.

Some of the interesting finds are worth nothing. Monday, for example, his eagle eye spotted a faked Liberty dime. He immediately noticed the bronze showing through the silver plate. At the end of each visit, Dennis accumulates a small stash of counterfeits and fakes.

About 99% of the shoebox was uninteresting coins: some contained enough silver to be worth melting down; some still pass current (you can spend them, if you’re in the right country); and some are worth from half a buck to a dollar to a collector. That accounts for about half.

The other half end up in the scrap metal pile.

Dennis Ryan sorts coins

 

 

 

 

 

 

Maui clout

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Twenty-five years ago, Maui County was riding high in the state Legislature. Mamoru Yamasaki was chairman of the Ways and Means Committee in the Senate, and Joe Souki was speaker of the House.

State government thought it was rich, because of $500 million a year in payments from Duty Free Shoppers, and the political word was that this would be the last time that Maui, or any Neighbor Island, would be so well placed to get state funding for local projects. Once the unusual combo of Yama and Joe ended their dominance, Oahu would take over.

And for a generation, so it seemed.

Then, one month ago, it looked like 1988 all over again. Well, almost. Souki was slated to be speaker again, after some years on the outs with Democratic House leadership. Yama had passed away, but young Shan Tsutsui would continue as Senate president.

Then Dan Inouye died. Brian Schatz was appointed to the U.S. Senate, and Tsutsui accepted an appointment to replace him as lieutenant governor.

So, although Maui County came within days of regaining its legislative clout, suddenly it dissolved.

Of course, DFS is out of the picture and the state no longer thinks of itself as flush. Gil Keith-Agaran, who is nominated to move up to the Senate; leaving a hole in the House leadership where he had a shot at majority leader.

So it remains to be seen how well Maui County will do in the jockeying for state funding, especially for CIP (capital) projects. Keith-Agaran notes that since the days of the Yama-Joe duo, the budget has been restuctured so that CIP is rolled into the overall spending program.

Maui County would dearly like to return to the days when the state picked up a big part of water, solid waste and sewage treatment obligations; but the outlook for that looks slightly less rosy than it did late in 2012. 

 

Torn limb from limb

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If it seems like there have been a lot more power outages since Thanksgiving than in a normal early winter, you’re right, there have been. Today alone, MECO reports outages in Molokai and Lahaina; and yesterday there were more power failures Upcountry.

Some of this is unavoidable. When winter comes, rain returns and salt spray that has built up deposits on insulators during the dry season (even, sometimes, well away from the ocean) becomes wet and “flashes over.” A program of washing down insulators can help but has never entirely eliminated this source of power outages.

Most outages this year, though, apparently are from falling limbs. Some of this is beyond MECO’s control. Today the county closed Piiholo Road because eucalyptus trees had blown down across the road.

However, MECO used to have an aggressive program to identify which trees would, within the next five years, grow big enough to be vulnerable to winds and likely to interfere with power lines. Lumberjacks went out and preemptively removed and reduced those trees.

It looks like MECO needs to ramp up that preventive maintenance.

The newest pawn on TV entry

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“Hardcore Pawn Chicago” has begun showing, in case you cannot get enough via the original Detroit-based “Hardcore Pawn” or “Pawn Stars.”

According to a story in the Chicago Tribune, Royal Pawn is in a tough neighborhood:

Royal Pawn Shop gets the occasional odd item, including a fake leg and dentures, but it’s the people who walk into the store that make the environment unpredictable. Wayne said the customers vary from crack addicts, gang members and mobsters to athletes (the Bulls’ Jimmy Butler visited in September), doctors and a priest who wanted to pawn a cross.

One thing about working at Kamaaina Loan, we don’t see a lot of mobsters. Maybe that’s why we don’t have our own show yet.

Tribune photo of Randy and Wayne Cohen

 

Gold’s good year

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Gold momentarily touched $1800 an ounce last year and is now trading under $1700, so it may come as a surprise that — taking 2012 as a whole — gold had its best year since 1920.

So reports Bloomberg News.

At Kamaaina Loan and Cash For Gold, we buy and sell gold. We do not predict whether it will be higher or lower next month or six months from now, because we just don’t know.

What we do know is that we offer you the best price you’ll find any day in the week.

Notice Bloomberg reports that some famous investors are betting gold to go up:

Investors from John Paulson to George Soros have a $140.6 billion bet via near-record holdings in gold-backed exchange- traded products after the Federal Reserve said Dec. 12 it would buy $45 billion of Treasury securities a month as of January, adding to $40 billion a month of mortgage-debt purchases.

That’s kind of funny reporting, because all last year Bloomberg was reporting the details of Paulson’s failed bet on Chinese trees, where his fund put hundreds of millions of dollars into what turned out to be imaginary forests.

Paulson got famous by making a spectacularly good guess about mortgage securities but it was just a guess.Maybe he’ll have better luck with gold. At least gold exists