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Thursday, March 30, 2017


 Image result for Golden stability

WHY is gold a Hedge against Chaos?

The fact is that though gold is not accepted as money in the retail stores of the world, gold is still money in the sense that over time it holds its value.  Gold holds value not for any use value but simply as a thing in itself.  Ding an Sich as the German philosophers like to say.  It is the thing that holds its value throughout human history.  That is its function.  That has always been its function.

You can ask why should it hold its value?  Just as you can ask why a beautiful melody is beautiful?  You can argue that in some cultures the criterion for beauty changes.  You can argue that in some cultures objects that store value change.  But the fact is that humans are quite similar in what they respond to and what they value.  Humans all over the world respond to a beautiful melody.  You can use an Indian scale or a Western scale or an Arabic scale, but if the melody is beautiful, humans respond.

Humans all over the world respond to gold as an intrinsic store value.

Thus has it always been.

Which brings us back to Chaos - or the lack of Order.  Humans also respond to Order. As long as things remain orderly humans tend to have confidence that things will remain orderly.  In orderly times any type of currency that is condoned by the forces of Order - The Government - will be able to act as a store of value.  Simply because the forces of Order proclaim it.   By Fiat.  In times of Order Fiat Currencies work well.  But as Order breaks down, the Fiat or Will of the forces of Order lose their power.  People lose confidence that Order can be maintained.  They lose confidence that fiat currencies will hold their value.

And as people lose confidence in the force of Order they look for time honored stores of value to hedge against the impending Chaos.  Gold is not the only store.  Any object of Beauty will do.  But gold is the most time tested store of value.

It certainly appears we are on the brink of a massive loss of confidence in the Order of our Governments and our Institutions.

And as Chaos grows and Order diminishes, gold flourishes.

Sunday, March 26, 2017

gold continues to move opposite the dollar

Image result for populist leaders

The price of gold continues to move  opposite the dollar.  The dollar continues to move opposite the Euro.  The Euro continues to move opposite the expectation and worry that populist movements will continue to sweep through Europe.

So right now the price of gold moves with populist discontent with the status quo.

If you think that discontent is a momentary fad that will eventually sink down into the sands of time and be swallowed by the strength of wealthiest banks, corporations and their captains then gold is a bad bet.

If you think that a very few people can continue to suck all the resources out of the world economy into their own pockets gold is a bad bet.

If you think the swell of populist discontent has finally reached critical mass then gold is a very good bet.

It all depends on how you read the present moment.

Saturday, January 7, 2017

There Will be no new Ptolemaic coins finds coming to market Embargoes Egyptian Coins among other artifacts

by Peter Tompa
December 22, 2016 - The U.S. Government has published an extensive list of artifacts subject to import restrictions pursuant to a Memorandum of Understanding (MOU) with Egypt. The effective date of the regulations is December 5, 2016.

The Designated List

The designated list restricts entry of all ancient coin types down to 294 AD. Roman Imperial, Byzantine and Ottoman coins struck at Roman mints after that date do not seem to be impacted. The complete list is as follows:
H. Coins
In copper or bronze, silver, and gold.
1. General – There are a number of references that list Egyptian coin types. Below are some examples. Most Hellenistic and Ptolemaic coin types are listed in R. S. Poole, A Catalogue of Greek Coins in the British Museum: Alexandria and the Nomes (London, 1893); J. N. Svoronos, Münzen der Ptolemäer (Athens 1904); and R. A. Hazzard, Ptolemaic Coins: An Introduction for Collectors (Toronto, 1985). Examples of catalogues listing the Roman coinage in Egypt are J. G. Milne, Catalogue of Alexandrian Coins (Oxford, 1933); J. W. Curtis, The Tetradrachms of Roman Egypt (Chicago, 1969); A. Burnett, M. Amandry, and P. P Ripollès, Roman Provincial Coinage I: From the Death of Caesar to the Death of Vitellius (London, 1998 – revised edition); and A. Burnett, M. Amandry, and I. Carradice, Roman Provincial Coinage II: From Vespasian to Domitian (London, 1999).
There are also so-called nwb-nfr coins, which may date to Dynasty 30. See T. Faucher, W. Fischer-Bossert, and S. Dhennin, “Les Monnaies en or aux types hiéroglyphiques nwb nfr,” Bulletin de l’institut français d’archéologie orientale 112 (2012), pp. 147-169.
2. Dynasty 30 – Nwb nfr coins have the hieroglyphs nwb nfr on one side and a horse on the other.
3. Hellenistic and Ptolemaic coins – Struck in gold, silver, and bronze at Alexandria and any other mints that operated within the borders of the modern Egyptian state. Gold coins of and in honor of Alexander the Great, struck at Alexandria and Memphis, depict a helmeted bust of Athena on the obverse and a winged Victory on the reverse. Silver coins of Alexander the Great, struck at Alexandria and Memphis, depict a bust of Herakles wearing the lion skin on the obverse, or “heads” side, and a seated statue of Olympian Zeus on the reverse, or “tails” side. Gold coins of the Ptolemies from Egypt will have jugate portraits on both obverse and reverse, a portrait of the king on the obverse and a cornucopia on the reverse, or a jugate portrait of the king and queen on the obverse and cornucopiae on the reverse. Silver coins of the Ptolemies coins from Egypt tend to depict a portrait of Alexander wearing an elephant skin on the obverse and Athena on the reverse or a portrait of the reigning king with an eagle on the reverse. Some silver coins have jugate portraits of the king and queen on the obverse. Bronze coins of the Ptolemies commonly depict a head of Zeus (bearded) on the obverse and an eagle on the reverse. These iconographical descriptions are non-exclusive and describe only some of the more common examples. There are other types and variants. Approximate date: ca. 332 B.C. through ca. 31 B.C.
4. Roman coins – Struck in silver or bronze at Alexandria and any other mints that operated within the borders of the modern Egyptian state in the territory of the modern state of Egypt until the monetary reforms of Diocletian. The iconography of the coinage in the Roman period varied widely, although a portrait of the reigning emperor is almost always present on the obverse of the coin. Approximate date: ca. 31 B.C. through ca. A.D. 294.
Thus far the official list.
Not all coins from Roman Alexandria have such an impeccable provenance as this one, which comes from the Dattari collection. From Künker 280 (2016), 590.
Not all coins from Roman Alexandria have such an impeccable provenance as this one, which comes from the Dattari collection. From Künker 280 (2016), 590.
Under U.S. Customs procedures, the above coin types can only be imported into the U.S. with documentation certifying they were out of Egypt before the effective date of the restrictions. As time goes on, this becomes far more difficult to do because the vast majority of ancient Egyptian coins legally available for sale and export in markets in Europe lack the necessary provenance information for legal import into the U.S.

Concerns and Controversies

The decision raises several concerns both generally and specifically as to coins. As early as 2011, Zahi Hawass, then Egypt’s Antiquities minister, reported on his blog in a now deleted post that a “coalition [of U.S. archaeological groups] reported that the US Government is willing to impose emergency restrictions on Egyptian antiquities....The coalition will be drafting a formal agreement between the US and Egyptian governments....”  Additional reports that the matter was already a “done deal” surfaced even before a 2014 U.S. Cultural Property Advisory Committee meeting was announced to process the request. For example, a New York Times editorial, dated March 20, 2014, indicated that the U.S. had already agreed to import restrictions to stem the flow of objects looted during Egypt’s revolution.
Then, however, the fallout from an Egyptian military coup evidently put such restrictions on hold until late in the Obama Administration. The decision was announced less than two months after Evan Ryan, Assistant Secretary of State, Bureau of Educational Affairs (ECA), received an award from the Archaeological Institute of America (AIA). In the author’s view, Ryan’s acceptance of the award raises serious conflict of interest issues, if not a violation of ethics rules concerning the acceptance of gifts and awards. The AIA lobbied heavily for a MOU with Egypt, and the AIA’s award to Ryan specifically referenced ECA’s work in implementing MOU’s.
The governing statute, the Convention on Cultural Property Implementation Act (CPIA), only allows the government to restrict artifacts “first discovered within” and hence “subject to export control by” of Egypt. See 19 U.S.C. Sections 2601, 2604. With regard to coins, the State Department evidently ignored evidence that demonstrates that Egyptian mint coins are regularly discovered outside of Egypt. Egypt’s so-called “closed monetary system” was meant to keep foreign coins “out” and not Egyptian coins “in.” Hoard evidence confirms Ptolemaic coins from Egyptian mints circulated throughout the Ptolemaic Empire which stretched well beyond the confines of modern-day Egypt. (And, indeed, some hoards are found outside the Empire’s territory.) The State Department also ignored finds reported under the U.K.’s Portable Antiquities Scheme that show Roman Egyptian Tetradrachms circulated as far away as Roman Britain.
However, it is the wording of the restrictions themselves that should cause the greatest concern. Despite the CPIA’s “first discovered within” requirement, the regulations imposing import restrictions are based on place of manufacture rather than find spot. Accordingly, the new restrictions appear to create an embargo on all designated coin types based on where they were made thousands of years ago rather than where they are found today. In contrast, the CPIA itself only authorizes import restrictions on coins that were illegally removed from Egypt after the date that restrictions were imposed.
Restrictions drafted with administrative convenience in mind rather than fidelity to the law cause considerable collateral damage. Due to their wording, small businesses of the numismatic trade and collectors risk detention, seizure and forfeiture of designated Egyptian coin types legally exported from Europe. Many historical coins on the market and in collections abroad simply can’t meet the law’s stringent provenance requirements for legal import.
American collectors should only purchase their coins from reputable dealers. Before importing coins from abroad, confirm that the seller abroad is able to provide the necessary paperwork for a legal import.
Going forward, the author hopes the new Administration will take a hard look at current State Department and Customs practices. Efforts to protect cultural patrimony cannot be allowed to justify the taking of private property without due process of law.

Wednesday, December 14, 2016


There a lot of talk about the ever expanding US - and Global deficit.  Here it's about 20 trillion and counting.

But does it really matter?  Haven't we gotten along fine so far?

AND: Why should we ever have to pay it back, if we owe it to ourselves?

The answer is simpler than you might think.  The answer is that deficit spending borrows growth from the future.

The same way that cocaine borrows energy from the future. It feels great now.  And it works for longer than anyone might expect.  You just need larger and larger doses.

And if you use that growth or energy to  build is a business, or write a symphony, then great, it may just pay that debt back in the long run.  Maybe.

But if you use it to go on a gambling spree in Vegas, or in the derivatives markets, well it will probably all be wasted.

Some of the debt does go to building businesses.  But unfortunately, because in the private sector the vast majority of it is acquired and used by Financial Institutions that are in the gambling business, most of it is used for gambling.

And in the Government most of it is used either to fund wars that build nothing and  return nothing and mostly accomplish nothing, and in paying off massive bureaucracies that exist to fund themselves as well as the drug and insurance companies that are the major beneficiaries of their programs such as medicaire.  

But - does it matter if we/they never have to pay it back?

Yes, it does matter, because all of it dilutes every dollar made in every productive enterprise. It makes everything more expensive for everyone.  Until we get to where we are now.  Where it takes a quarter of a million dollars to send one kid through college.  Where it takes a million dollars to buy a little two bedroom apartment in Brooklyn.

And where it takes six dollars of debt to create one dollar of GDP.

And where no matter how much we borrow, GDP is only positive because we keep changing the metrics wherein inflation is calculated.  Who could doubt if we included Education, Health Care, and Housing in the Inflation figures, that GDP would now be negative, by quite a bit?

What does this mean for Gold?

For all hard assets this means that the value goes up in direct proportion to the dilution of the currency.  Gold is the only hard asset currency.

Right now as the dollar has become the global safe haven gold languishes.  But when it becomes clear the US economy is in the same boat as Europe and Japan, gold will have its day.

Sunday, December 11, 2016

Are Ancient coins fairly valued?

Lincoln Cents: , 1921 1C MS68 Red PCGS. This impeccable early Lincoln Cent has a50/50 chance (since only two are certified as such) of bein...

Sold for: $55,200.00 includes Buyer's Premium (BP)

This Lincoln penny which is not quite a century old, which looks exactly like the 39,000 other Lincoln pennies minted in 1921, and also looks exactly like the other 50 million or so Lincoln wheat pennies, except for the date, sold recently at a Heritage auction for $55,000.

It is minted in copper so it has almost no intrinsic value.

It has no historical significance to speak of.

It is not very visually imaginative or accomplished.

In fact, is holds no interest even for the person who purchased it except for the number on the holder which says "MS 68."  This same number can be found on countless other holders.  But on this holder with this absolutely pedestrian coin it is worth $55,000 at auction.  Because this number makes it a "condition rarity."

Never mind that it is a condition rarity of something no more unique or significant than an exceptionally well preserved shoe lace or ball point pen.

Not to pick on Lincoln pennies.  The same can be said for Jefferson Nickels, and Morgan dollars, some of which sell for much more than this.

Let's compare this to this Alexander the Great Stater:

Also a condition rarity graded in CH MS STAR.  We have a coin of tremendous historical fascination as it was minted just after the death of Alexander, in about 330 BCE, in order to establish the legitimacy of his half brother Philip III as King of Macedon, and, in fact Emperor of the greatest empire the world has known to that time.  It is also a masterpiece of artistic achievement.  And it is minted on a quarter ounce of gold - about 2300 years ago.

Now, it is impossible to say what the original mintage is, but it is safe to say  no more than 100 examples have come to market in the last 50 years in any condition, and perhaps far less than that.  And the portrait is dissimilar to that on any other coin.

So what is this worth?  Tough to say, exactly, but certainly  less than $55,000 for the Lincoln penny pictured above.  In fact the last coin is similar condition (CH MS without the star) sold for $42,000 in a Heritage Auction.

For the money, which would you rather own?

And this is not an outlier comparison.  Really, the same comparison can be made to many other rare ancient coins of tremendous historical importance with any number of us condition rarities of nickels, quarters, dollars that are less than 100 years old - from mintages in the 10's and 100's of thousands.

Again, over time, which would you rather own?


Thursday, December 8, 2016


Here's a chart of the US dollar index since the 70's
    You can see above where Volker broke the back of inflation.  Since then every US president , starting with Reagan took advantage of the strong dollar, and low inflation to borrow from future growth through A) Massive Deficit Spending and B) Permanently negative real rates.  Japan followed suit, even more aggressively and they were lauded as economic magicians until they sank into a permanent recession.  Europe followed suit right after the creation of the Euro.  Now they're in a permanent recession.  And so are we!

Not that anyone will admit it.  Yet.

So what next?  Well, we win the ugly contest.  Our rates (of growth and interest)  though negative in terms of real inflation are still way more attractive than rates in Europe and Japan.  So Capital is flowing here.  And that is accelerating.

So the Dollar index must go higher.  And higher.  How high?  Well, maybe as high as in the Volker era.

But then what?  After borrowing growth from the future for 40 + years, that game has been burnt out.

We just aren't going to grow our way out of it.

So then what?

What happens after all that capital has come here, and we fall into an endless recession?

What then, Mr Wizard?

Nobody knows, but it will be good to own some things with intrinsic value.

Friday, November 25, 2016


 Image result for dj trump


There was a lot of speculation that a Trump victory would send stocks plunging and gold soaring.  Like almost everything, the Pundits couldn't have been more wrong.  Stocks are soaring and gold is dropping like a stone.

What's Up?

If you listen to the pundits now you'd get the story that Trump's economic policies (which don't yet exist) have the makets primed for a great recovery - which will be a knife in the heart for gold.

This is a load of BS.  Nobody really expects the US or Global economy to recover.  The amount of debt in the US and Global system is staggering.

When Reagan cut taxes back in 1980 it took $1.5 dollars of debt to creat 1 dollar of GDP.  Not efficient over the long run.  Still borrowing growth from the future.  But effective in the short run.

Now it takes 6 dollars of debt to create 1 dollar of GDP.  And that number is rising as the total debt burden rises.  There's no way Trump can borrow his way to a recovery.  Not even very short term.

So What's up?

Here's the deal.  The Trump election was a confirmation of the Brexit vote.  The market realizes that the populist anger that is sweeping the Globe will next be focused throughout Europe.  Italy votes on Dec 4th.   France votes April 23 2017.  If these votes go as polls now suggest, the Euro will ultimately fail.  The European Union will break up.  And there is no mechanism for a breakup of the Euro Union.

What that means is all that money is now flooding into the US.  Because the dollar is safer than a disintegrating Euro no matter what is going on in the real US economy.

That is forcing the Dollar to spike upward.  Asset bubbles are expanding here in the US.  The market will rise, high end hard assets will spike.  And Gold will move opposite the dollar for a period of time.

But the fact is the real US economy is in deep trouble.  That's why Trump was elected.  People here are starving.  Yes, starving.  Afraid of losing their homes.  Not able to afford college.  Their kids can't get jobs and are living in their basements.  On meth.

And a spike of hot money into the US will only make things more expensive for them.

It's a recipe for disaster.  And when the market realizes the effect of the hot money on the US economy Gold will surge.  First it will start to move with the dollar.  Then it will outpace the dollar.  Then the dollar will drop precipitously against all hard assets as people lose faith in all their institutions and seek the ultimate safety against disaster.

When will this happen?

Forget timing.  Only geniuses and idiots time the market.  Play safe for the long run.  Because it's not that far away.