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Trouble for diamonds

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The following post should concern you even if you are not a diamond miner, which we assume most of our readers are not. Even if the only diamond you ever own is in an engagement ring, there is trouble ahead.diamond

At last year’s National Pawnbrokers Association convention, Martin Rapaport, publisher of the Rap Report guide to current diamond prices, spoke about the increasing appearance of synthetic diamonds and how difficult they are to tell from natural ones.

We are not talking only about artificial coloring of natural stones, which is impossuible to detect, but also about factory-made stones passing as dug-from-the-ground gems.

A year ago, Rapaport was saying that the problem was coming but was not yet a big problem for diamond buyers and sellers in pawn shops (and, by implication, for their customers). Well, trouble is here already.

As Bloomberg News reports, producers of natural gems are frightened enough to have, for the first time ever, formed an industry association:

 

The famously secretive diamond industry has lacked coordinated leadership since De Beers’s monopoly over the supply of gems ended after it lost a 10-year legal battle with the U.S. over price-fixing in 2004. The proposed association would represent the vast majority of the world’s diamond supply.

When we say that the value of a diamond is determined by the 4Cs (color, cut, clarity and carat-size), left unsaid is the fifth factor: rarity. Manufactured diamonds, of course, are potentially infinite in availability.

Diamonds have been made industrially since the 1950s, but the process was difficult, not too cheap and not well-suited to making gem diamonds. Technology advances.

Although a variety of factors have driven down the cost of genuine diamonds considerably (end of the deBeers control, new sources in Russia, South America and Africa outside South Africa), the cost of producing a look-alike has fallen even faster.

The Times of India reported last month that 110 manmade diamonds were discovered in a parcel in the Indian city of Surat, the world’s biggest cutting center. The undisclosed mixing of diamonds has been discovered on several occasions in the nation with India’s Gem Jewellery Export Promotion Council starting the Natural Diamond Monitoring Committee to combat the issue.

The fact that the unscrupulous traders were caught proves that it is still possible to tell the difference between manmade and natural diamonds, but is not easy, inexpensive or quick. (An artificially colored natural diamond is undetectable with current technology.)

It requires a specialized laboratory and days. At present, a retail buyer of stones, like our Maui pawn shop, cannot do the test, and the days required mean that customers are not likely to wait around for a distant lab to report. We can hope that the technology will improve and become cheaper, the way gene-splicing moved from custom work to mass production (to take one example from many). But who knows when that will come?

At present, there are not so many fake gem diamonds in circulation that pawn shops and jewelry stores are taking a big risk in making an offer for a customer’s old jewelry. But the incidence of fakes could accelerate rapidly.

Pawnbrokers have already seen how fake coins — made available in huge quantities from the world’s largest Internet scam business, Alibaba — have ruined the numismatic market for some coins, including Kingdom of Hawaii coins.

For the moment, Rapaport is sticking with the advice he gave his pawnbroker audience last year: Know who you are dealing with and stick with respectable vendors.

Addressing whether consumers should be concerned about diamond synthetics, Martin Rapaport said, “If you’re going to be buying diamonds, you better be dealing with a reputable source and that’s number one. There are a million ways for the consumer to be taken advantage of and it’s important for the consumer to buy from a reputable source even if it cost a little more.”

He also added, “Find someone you’re comfortable with and trust. Don’t feel you’re under pressure to buy. A lot of times you are under some pressure, you really want to get engaged, but I say relax and find the time to find someone that you trust. Comfort is king.”

#maui #mauiretail #mauijewelrydiamond

How pawn shops get stuff

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On the Kamaaina Loan webcast from First Friday in Wailuku, Jason Schwartz and I tried to explain how pawn shops come by the odd and fabulous things we sometimes get to put on our shelves.

I was concentrating on tools, since in January we usually have some terrific bargains. You see, wives and girlfriends buy their husbands and boyfriends tools for Christmas, but they don’t know what they need, so they end up getting them stuff they already have.

The husbands and boyfriends then sell the duplicates to us, often still in unopened packaging. So akamai toolhounds know to shop the tool store at 50 N. Market St. in the weeks after Christmas for extraspecial bargains.

But today we find an ESPN story about how a pawnshop ended up with something even rarer and more special than a new tool — a Super Bowl ring awarded to someone who wasn’t on the winning team.

It isn’t an especially happy story, since the ring’s owner had to surrender it following a personal bankruptcy, but presumably his creditors got some joy out of it.

But remember, if you need money and want to sell something to your friendly pawnbroker, you don’t have to tell us why. You do have to attest that it is your property and leave your name, address, picture and thumb print, so if you stole it, you’d be pretty stupid bringing it to a pawn shop.

But if you are a little embarrassed — personally as well as financially — we sympathize — but we don’t have to know why, Lots of people tell us anyway, but that’s a topic for another day.

‘Getting the chair,’ but in a good way

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From Norwich, Conn., we learn of a pawnbroker who took the old advice and made lemonade from his lemons.

According to WTNH television, it began 5 years ago when Phil Pavone of A-Z Pawn bought a couple of motorized wheelchairs, expecting to resell them. They didn’t move, so he had another thought.

Kamaaina Loan blog called Pavone to get the rest of the story, with more perspective from pawnbroking operations than WTNH’s story provided:

It turns out, there’s more to creating a mobility project than taking in chairs by one door and handing them out at another. Pavone started by running newspaper ads, asking anyone with a disability to write or email him about their problem and how a chair would help.

chair

He got 60 submissions.”I heard from people who had been homebound for years. . . .  You cannot believe how many flippin’ people fall between the cracks of eligibility. It’s a disaster.”

Pavone, a cancer survivor, says he understands what it means to be sick. He went out and bought four more chairs to give away.

From there, it grew, but not without a big push from him. “The most expensive part of the whole thing was getting the word out.” He advertised heavily in newspapers and on television for two years.

Now that he is established as “the go-to guy” in his area, the chairs come in to him as donations or inexpensive purchases. The program costs him around $10,000 a year.

A team of volunteers refurbishes the chairs, which usually amounts to no more than a new battery or a charger. A battery distributor provides batteries at cost.

Then he and his volunteers match the chair to the applicant: by weight (up to 250-300 pounds; or over 300); right or left-hand controls. Occasionally, a recipient will require a tilting chair to keep legs elevated.

“It’s not a tax writeoff,” says Pavone, who has two shops, one in Florida.”It’s about looking in the frickin’ mirror and liking what you see.”

He keeps his “Gift of Mobility” campaign going year-round. Sometimes he installs a chair in his shop with a placard, asking for donations of no-longer-needed chairs.

Then, about this time of year, he advertises for more stories. (He asks and gets special rates on this advertising.) His volunteers fix up the chairs and a few days before Christmas they lend pickup trucks to deliver chairs to recipients who cannot come to A-Z Pawn.

As of Veterans Day, he had “at least 40-45 chairs” to present, and another 11 or so being spruced up and probably to be ready by donation day (around Dec. 21).

You can learn more about Gift of Mobility, with links to Youtube videos of past campaigns, here.

#mauipawn #mauiretail

 

Crazy for love, maybe?

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Mooncalf

Mooncalf

I think this guy wanted to be caught:

Police found that the suspect (in a burglary of a Black River Falls, Wis, pawn shop) cut himself on the broken glass and left blood evidence inside the store. Police collected samples of the blood and processed them as evidence, along with the pipe the suspect used to break in.

During the investigation, Black River Falls police developed information about an individual who had been involved in a domestic abuse case who fled on a bicycle outside of the City. It was believed that the same suspect, Colvin, might be involved in both incidents.

Black River Falls police worked with the Jackson County Sheriff’s Office and found Colvin at the Black River Falls Gaming Casino. Police said Colvin “was wearing a cluster of decorative rings on his fingers and had a fresh cut to his hand.” Colvin was taken into custody and medically treated for his cut hand.

And speaking of burglary, I was looking over the Maui police reports of stolen items taken in burglaries in October. (They give us the list in case someone wants to sell one, which happens but not often.)

It was a short list, which is good. But the number of items that the owner had kept a serial number for was even shorter: One.

Not all burglars are love-stricken mooncalfs who want to be punished like Shane Colvin of Black River Falls. (And that’s Shane Colvin not the singer Shawn Colvin, who in any case is a girl.) Most want to get away with your stuff, and you make their work easier and the police work harder by not recording serial numbers, and taking photographs and putting secret marks on your stuff.

Pawnbrokers do take “reported stolen” lists seriously because in many jurisdictions they take the loss if a stolen item is found in their inventory. But “two old silver coins” — which was on the Maui watch list in September — isn’t helpful.

 

#maui #mauiloan #mauigold

Gold gyrates

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The price of gold changes every day, sometimes by quite a lot — a $25-an-ounce move is not unusual. But it doesn’t usually vary so much within a day that Kamaaina Loan has to adjust the amount it offers on gold loans or purchases.

Today, as gold continues a strange series of gyrations, a midday adjustment began to look like a good idea. (In the end, we didn’t change, though it might have cost us a few bucks.)

As our day began, gold was selling at just under $1227 an ounce.So that’sd where we pegged our offers for this day. Within less than 2 hours, it was down to $1209. It got as low as $1207 before rallying to around $1211 just before the market closed in New York City (which happens just after 11 a.m.Hawaii time).

The folks at Kitco, who offer a daily smorgasbord of gold news and opinion, thought the move — the biggest in 3 weeks — was an unhappy reaction to the release of the minutes of the Federal Open Market Committee. Kitco thinks gold traders think higher interest rates will be bad for gold (although, amusingly, you can find every shade of opinion on their website), for reasons that are opaque to us in the pawnshop.

Still, it has been a more than usually exciting couple of weeks for people who watch gold prices. As Big Rich always says, “Gold will go up, or it will go down, or it will stay the same.”

 

So, what did gold do today?

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Not much,.

Yesterday, Kamaaina Loan blog wondered if gold would track the stock market, which in theory it sort of does — gold up when stocks fall and vice versa.

Over the past couple years,. stocks have reached record highs and gold has taken a swan dive, off around 30%. But is the relationship real?

Recently, the stock market has been gyrating like a yo-yo, and gold prices have risen and fallen, but not so violently.

So, if we understood what is going on, we wouldn’t have to work so hard in the pawn business and could lie on the beach all day. But we don’t.

Tuesday,. stocks were way up: the Dow was up 1.12%, the S&P 500 1.19% and the Nasdaq 1.75%. Those are all big movements for a single trading day, especially the Nasdaq.

What did gold do? It went up, by 0.22%. Not down. And when the spot market reopened, after the stock exchanges were closed and the traders had had a chance to digest the mood, gold did go down, but by a mere 0.02% (only 30 cents on a quote of $1227.50, barely noticeable).

Well, to heck with it, we’re off to the beach anyway.

#Mauipawn #mauigold #mauiretail

What does Ron Paul think about gold?

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He likes it. We do, too, but possibly not for the same reasons.

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Although it has been getting almost no attention in the United States, Switzerland, home of one of the solidest currencies in the world, is going to vote in a month on whether to add more gold to its money.

In an interview with Kitco News, the retired gold bug and congressman Paul says he thinks the move should pass but won’t. If it did pass, the Swiss central bank would have to buy about 1,500 tons more gold to get its gold reserves up to 20% of paper francs.

That’s about 60% of annual production, though something less than 1% of all the gold humans have accumulated over the millenia. That much additional demand would, presumably, push the world price of gold up, although gold has been gyrating so much this month that it might be hard to tell.

(In round terms, gold dipped under $1200, rose to above $1250 when stocks went down, then fell below $1230 when stocks went up. Stocks didn’t go much of anyplace today, so it will be interesting to see whether gold, also, noodles around Tuesday.

Paul, of course, is the most prominent political voice for the idea that “fiat money” (money backed only by the prospects of the economy of the nation issuing it) is inherently unstable and likely to go “Poof!”

“When our crisis hit there was panic and people were scared to death. Even conservatives who didn’t believe in bailing out the banks were frightened into it,” he said. “But if you had a clean vote and just simply ask the question: ‘should Switzerland hold its own gold … should the central bank hold a certain amount of gold in reserves.’ I think you would get an overwhelming ‘yes.’”

Switzerland keeps 30% of its gold (some of which really should belong to murdered Jews, whose gold the Nazis let Switzerland keep for them in the ’40s) in England and Canada. (More gold is in New York City than Ft. Knox, and much of it belongs to other countries who do not trust their neighbors to keep their hands off their gold. That is, unless, you subscribe to the belief that all the gold has been taken out of Ft. Knox and put somewhere else. Where else? Who knows?)

You know who worries that the gold is not in Ft; Knox?

Ron Paul.

So now you know why he thinks the Swiss should worry about where their gold is.

If you pawn your gold with us, be assured it will stay in a bonded, insured vault and it will be there when you come to reclaim it. Kamaaina Loan And Cash For Gold: safer than Fort Knox!

 

Should you line up to buy silver?

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silver-coins

You might have to, according to this report from Numismatic News:

Rationing the supply of new 2014 silver American Eagle bullion coins might return if current extraordinary demand for them continues.

The real question is not whether you should wait in line but whether you should buy now. All we can say is, silver is priced much lower than it was two years ago. It has declined more rapidly than gold.

Taking the end of 2012 as a somewhat arbitrary point, silver is down by nearly half, while gold is down by less than a third. Still, either is only a bargain today if the price is not going to go much lower. Who knows?

Numismatic News attributes the latest boomlet in Silver Eagle sales to bargain-hunting spurred by low prices. The number of eagles sold in September was 4.1 million (or around $65-67 million, not a huge amount compared to what flows into mutual funds).

At our Maui pawn shop, we are agnostic about the price trend. We will sell if you want to buy, or buy if you want to sell, and take our chances on the market.

What we do promise is that we will beat any other offer on Maui. Shop around but see us last.silver-coins

#mauicoin #mauisilver #mauigold

What the heck is going on in the markets?

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sales

At Kamaaina Loan we often say — it’s not a lament, just a fact — that we are at the mercy of the world gold market. Buying and selling (or making loans against) gold is our bread-and-butter, and when the price falls as it has recently, it hurts.

Not just our bottom line, but it lowers the amount we can offer on pawn loans. So, such is life.

But most of the time, prices — not just gold but most prices — move in a comprehensible way. There are trends you think you can rely on at least for a week or so. Gold, for example, has been trending down for over a year. Less heralded, the world price of oil has been going down.

You wouldn’t notice from pump prices on Maui, but according to Bloomberg News, the price is almost low enough to make the famous Keystone Pipeline a non-starter. All that political furor and $90 a barrel oil could make the arguments moot.

At the current price of about $87 a barrel, cheap American crude undercuts many of the most aggressive oil projects under consideration by the oil majors. About $1.1 trillion of capital expenditures have been earmarked through 2025 for projects that require a market price of more than $95 a barrel, according to a May study by the Carbon Tracker Initiative, a London-based think tank and environmental advocacy group.

At least the oil price drop is easily understood: production is way up and demand is stable or slightly falling.

But the securities markets seem to have lost their mind this week. Tuesday was the best day of the year, and today the overall market is swooning in a most remarkable way.

U.S. stocks plunged, with the Standard & Poor’s 500 Index’s erasing its biggest rally this year, on concern that slowing growth in Europe will hurt the American economy as the Federal Reserve ends its bond purchases.

All 10 of the main S&P 500 groups dropped at least 0.8 percent, with energy stocks plunging 3.5 percent to pace losses.

In a general way, a falling stock market is supposed to be good for gold, and this seems to hold true this week, although only in a modest way:

A combination of heavy short covering in the futures market, bargain hunting and safe-haven buying boosted the yellow metal.

After dropping well below $1200 early in the week, spot gold (the price of concern to Cash For Gold) rallied to about $1225.

For those who keep score, that is right where Goldman Sachs, a year ago, said gold would be around the end of 2014.

From our point of view, when gold behaves this way, your pawnbroker is your friend: If you need to convert your gold to greenbacks, you probably don’t want to sell at these price levels. But you can take out a pawn loan, reclaim your gold in 30 to 60 days and hope for higher prices in the future.

#mauipawn #mauigold #mauishopping

 

Sell us your gold

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We at Kamaaina Loan And Cash For Gold buy and sell gold every day. It matters to us whether the world gold market is up or down but we cannot do anything about that. Here is a Bloomberg News story that is very down on gold:

“There are no compelling reasons to be in gold,” said Brian Levitt, a New York-based economist at OppenheimerFunds Inc., which manages $251.4 billion. “There are no inflationary pressures. You have a central bank that’s going to tighten sooner than most of its trading partners. That to me portends a strong dollar and weaker gold prices.”

What that seems to mean is that if you are thinking you might sell gold anytime in the next little while, now is the time to do it.

Ditto for silver, which fell under $18 an ounce for the first time in a long while last week.

#mauigold #mauipawn #mauiloanIMG_3682