Materials Archives - Antique Sage

A Love Affair with Exotic Hardwoods

I am a sucker for exotic hardwoods. I know that might make me a bit strange, but I think it makes a lot of sense considering we live in a world dominated by particle board, plastic and cardboard. I don’t know about you, but I’ve had quite enough of these subpar materials. I would much rather live a life surrounded by beautiful, natural and durable materials.

And few things rank higher on my list of luxury materials than exotic hardwoods.

So I couldn’t help but write a post about my latest acquisition, a tropical hardwood box I recently purchased on Etsy. As the hero photo at the top of this article shows, the top and bottom of this box are made from thick slabs of Yellowheart while the sides are finely dovetailed Wenge. All of the woods used are solid, with no veneers present. In addition, the craftsman who created this piece didn’t use any stains or dyes to artificially impart color. Eschewing dyes is a common practice when working with high-quality exotic hardwoods, which allows the beauty of the natural wood to shine through in the finished product.

The box isn’t too large, measuring about 9 inches long by 5 inches wide by 3 inches deep. But in spite of its modest size, this work of art weighs in at a robust 1.42 kilos – over 3.1 pounds. It feels incredibly substantial in your hands due to the extremely high density of the woods used in its construction. I’ll take more about this physical quirk later on in the article.

Exotic hardwood is a catch-all term for timber species harvested from tropical, savannah or desert regions located near the equator. Exotic hardwoods are a distinct category from the temperate hardwoods (also called domestic hardwoods) we tend to be more familiar with in the U.S. – species like White Oak, Sugar Maple and Black Cherry. In contrast, some of the more well known exotic hardwoods include Honduran Mahogany, Gaboon Ebony and Teak.

So what exactly is so special about exotic hardwoods?

Well, they have a lot going for them. On the whole, exotic hardwoods tend to be both harder and denser than temperate hardwoods. Even infamously tough domestic hardwoods like White Oak (with a density of 0.75 g/cm³ and a Janka hardness of 1350 lb_f) pale in comparison to many commercially available exotic hardwoods, which can attain densities of 0.8 to 1.2 g/cm³ and hardnesses of 1,800 to 3,000 lb_f (or more)!

Because of these exceptional physical properties, naturally lustrous exotic hardwoods usually take a remarkably high polish, sometimes approaching a mirror-like sheen. They are also frequently rot and insect resistant due to their high oil content. These attributes mean that items fashioned from exotic hardwoods have been known to survive for many hundreds of years with little to no damage. One example of this is African Blackwood furniture that was found intact with the burial goods of the Egyptian Pharaoh Tutankhamun – furniture that had been entombed over 3,000 years ago!

Exotic hardwoods are also celebrated for their amazing grain patterns, color palettes and contrasting textures. Skilled woodworkers love to use these desirable visual features to their artistic advantage when working with exotic cabinetwoods. Domestic hardwoods, while still very beautiful in their own right, can have trouble providing the same visual interest. Please note that I fully believe a few select temperate hardwoods, like Black Walnut and Redwood burl, can be exceptionally attractive in their own right and are capable of rivaling even the best exotic hardwoods.

Because the box I purchased is made from Wenge and Yellowheart, I wanted to talk a little bit more about these two specific woods.

Wenge (scientific name: Millettia laurentii) is a dense (0.87 g/cm³), hard (1,930 lb_f) wood that originates from tropical West Africa. Its coarse grain sports a luscious chocolate-brown hue alternating with almost pure black lines. This gives Wenge a unique, highly desirable visual contrast that has been exploited by luxury woodworkers to great effect for over 100 years. Due to its very dark color, it has sometimes even been used as a substitute for Ebony.

Wenge Grain (Photo Credit: The Wood Database)

Wenge first rose to international fame during the 1920s when it was extensively employed by French Art Deco designers such as Eugène Printz and Pierre Chareau. The wood then had a renaissance among interior decorators in the late 1990s when blond woods fell out of favor.

At that time (circa 1998), it was still possible to purchase Wenge for $7 to $8 per board foot. But due to steadily increasing demand and dwindling supply (a recurring theme in the world of exotic hardwoods), Wenge now costs around $20 a board foot (in 2020). This translates into an annualized price trend of 4.6% over the last 22 years for Wenge versus just 2.1% for general U.S. CPI inflation over the same period.

Although Wenge timber still has good availability in the international marketplace at the present time, the species is in the early stages of commercial endangerment due to aggressive over-harvesting.

Yellowheart (scientific name: Euxylophora paraensis) is a similarly dense (0.83 g/cm³) and hard (1,790 lb_f) wood found in Brazilian lowland rainforests near the mouth of the Amazon River. This fine grained tropical hardwood exhibits a lustrous, vibrant yellow tone that gives it a tremendous visual punch. In fact, Yellowheart is commonly known by its Portuguese name, Pau Amarello, which literally translates into English as “yellow wood”.

Yellowheart Grain (Photo Credit: The Wood Database)

Another popular trade name for Yellowheart is Brazilian Satinwood. However, this is a technical misnomer. Although Yellowheart belongs to the same family (Rutaceae) as the true satinwoods, only West Indian Satinwood (Zanthoxylum flavum) and East Indian Satinwood (Chloroxylon swietenia) are commercially accepted as genuine satinwood species. Regardless, Yellowheart shares many of the same desirable characteristics as the true satinwoods – a yellow or golden hue, fine grain texture, high density and excellent luster. The only area where Yellowheart falls a bit short is its figure, which tends to be fairly straight versus the wavy, interlocking grain commonly found in the true satinwoods.

Yellowheart is moderately priced within the universe of exotic hardwoods – a surprising development considering how eye-catching it is. As you might have already guessed, tropical hardwoods are almost always more expensive than their temperate counterparts due to their greater rarity, difficulty in logging and distance from end-markets.

Even though its natural distribution is limited to eastern Brazil, Yellowheart lumber still has fair availability in the U.S. While not currently endangered, that designation could change if Yellowheart becomes more popular for high-end flooring or furniture-making.

Perhaps the most interesting characteristic of both Wenge and Yellowheart is the fact that they are relatively color-fast compared to many other exotic hardwoods. One of the dirty little secrets of the exotic wood trade is that the colors of some of the world’s most beautiful tropical hardwoods fade over time with prolonged exposure to sunlight and air.

For instance, freshly-cut Purpleheart – a favorite of exotic woodworkers – starts off a muted violet-gray color that quickly deepens into a vibrant purple tone after a few weeks. However, after 5 to 10 years that wonderful purple hue will age into a dull, nondescript brown color. Many other tropical hardwoods, such as Bois de Rose and Pink Ivory, also trend towards undesirable shades of brown or black over time.

But Wenge and Yellowheart are exceptions to this unfortunate tendency. Wenge starts off a very rich dark brown/black and actually lightens a little bit with time. But its trademark contrast and chocolate brown color remain largely intact. Yellowheart deepens slightly from its initial canary yellow tone to more of a golden-yellow with age, which hardly seems like a con at all. For those who are interested, you can read more about color-change in exotic hardwoods in this great article on the topic.

Rarity is the last subject I’d like to touch on in regard to exotic hardwoods.

Items made from tropical hardwoods are predictably rare in American (and other developed country) households. When we do run into items crafted from Rosewood, Mahogany, Kingwood or Teak they are almost always antique or vintage pieces made back when these woods were more widely accessible. Much of the time these vintage pieces were veneered to reduce costs – solid pieces are rarer still.

I am of the opinion that no more than 1 in 25 U.S. households own a piece of furniture or decorative item made from exotic hardwoods.

This means that most people have never seen a piece of solid Honduran Mahogany (or any other tropical hardwood) in their lives, much less know what one looks like. I find it to be a sad commentary on the state of the world when the average person has never experienced the pure joy of admiring a solid slab of gorgeously-figured Hawaiian Koa or Bolivian Cocobolo.

Instead, most people sleep-walk through their lives with cheap furniture made from MDF, plywood or particleboard. IKEA self-assembled furniture is the epitome of this trend. And while flat-pack furniture might look good when you first get it home, it degenerates over a matter of months until it finally becomes a utilitarian lump in your house that you stack other banal household items on top of.

I believe we should strive for more.

Exotic hardwood furniture has one big negative; it will certainly cost more than whatever particleboard junk you can pick up at your local big-box store. However, I firmly believe that it is an investment well worth the price. A fine Mahogany table or Teak campaign chest will last longer than you or I will and will look great doing it. As an added bonus, fine antique furniture has the possibility to appreciate in value in the future – an outcome you couldn’t even dream of for self-assembled flat-pack furniture.

And for those willing to take the time to look, bargains can still be found in the world of exotic hardwoods!

For instance, the Wenge and Yellowheart box (made from reclaimed wood) that I found on Etsy only cost me $60, plus shipping and sales tax. This is a remarkably low price for an heirloom quality exotic hardwood box. In fact, $60 probably isn’t too far off the cost of the raw lumber used in the construction of the box! This means I may have only paid $15 or $20 for the considerable workmanship put into its creation.

Antique stores and thrift shops are a great place to start looking for fine hardwood furniture. However, keep in mind that most of what you find there will be made from domestic hardwoods. Online shopping venues like eBay and Etsy undoubtedly also have treasures to be unearthed, although you will most likely be limited in the size of what you can buy due to shipping costs.

In any case, life is too short to stay surrounded by plastic and plywood. Exotic hardwoods are an aesthetically pleasing solution to this lifestyle dilemma that also allow you to reconnect to nature in your daily (indoor) life.

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Understanding the Great Silver Shortage of 2020

Driven by crashing markets and a viral pandemic, March 2020 is proving to be the United State’s deepest financial crisis since the Great Depression. And that is saying something, considering that the 2008-2009 recession was a near-death experience for the capitalist system. Global stock markets are plummeting, corporate bond markets are freezing and bid-ask spreads in all asset classes are blowing out in truly historic moves. And all of this is happening in spite of the fact that the Federal Reserve is printing money as fast as it can.

So it shouldn’t come as a surprise that near-chaos has arrived in the U.S., with people hoarding toilet paper, food and ammunition. Precious metals have also seen skyrocketing demand in these troubled times, leading to massive premiums for physical gold, silver and platinum bullion.

Silver, in particular, has been in extraordinarily high demand. In fact, demand for silver has been so high that it wouldn’t be an exaggeration to say that we are currently experiencing a silver shortage of incredible proportions. Some bullion dealers have simply run out of inventory – an unprecedented event to the best of my knowledge.

Under normal circumstances a large dealer will have hundreds of different kinds of silver products available for sale – everything from government-issued coins to privately-minted rounds and bars of all sizes. But worried investors have been buying with both fists as the economic situation worsens. As a result, dealers have had an incredibly difficult time keeping anything in stock.

Let’s walk through some examples of just how crazy the silver shortage has become.

Junk silver, old 90% silver U.S. coins struck before 1965, is front and center in this unfolding disaster. These coins used to be one of the cheapest (and best) ways to stack silver before the Coronavirus/financial crisis hit. But now premiums have shot through the roof. A $1,000 face value bag containing 715 troy ounces of pure silver could be purchased for $12,500 in early March – 12.5x face value. This represented a premium of about $0.50 an ounce, or around 3% over melt at the time.

By late March that same bag of junk silver cost you $17,800 (17.8x face value). But the real problem is that the spot price of silver dropped considerably during the month, from around $17 an ounce to only $14.50. As a result, the premium for junk silver bags exploded to over $10 an ounce – a stunning 70% premium over spot!

American Silver Eagle bullion coins are no less expensive. Before the crisis hit it was common to find these popular coins for around $3 over spot, or a 17.5% premium. But now they costs anywhere from $9 to $11 per coin over bullion value. This comes out to a prodigious 62% to 75% premium over spot.

And this assumes you can find silver to buy at all. Many silver bars and government-issued bullion coins are unavailable at any price due to a stampede of buyers, coupled with insufficient supply. In many ways, the present situation mirrors what happened in the precious metals market during the 2008 financial crisis – except on steroids. Premiums exploded on many silver products back then too. But the key difference is that our current silver shortage is much more likely to be a long, drawn out affair.

Before I delve into why I believe that is the case, I think it would be useful to examine the details of why we are seeing a silver shortage right now.

The first explanation for our current silver shortage is the collapse of global stock markets. The S&P 500 experienced a 35% peak to trough decline in early 2020, which is troubling in its own right. The real problem is that this drawdown occurred over the course of just a single month! That sort of volatility is unprecedented, especially when you consider that investors had been lulled into a false sense of security by equity markets that persistently wafted higher for years beforehand.

People who were spooked by losing a third of their life savings in the markets in a mere 30 days naturally looked around for more tangible investments to balance their paper-asset-skewed portfolios. Silver was one of the obvious choices, leading to exploding demand for physical coins and bars.

The next contributing factor to the silver shortage of 2020 is the specter of zero interest rates. As recently as late February 2020, the Federal Funds rate was still at a (relatively) robust 1.5%. This meant that prudent savers could expect some return on their rainy day fund, albeit a modest return.

But as the largest market dislocation since the Great Depression tore through the economy, the Federal Reserve went back to one of the only tools it has: lowering interest rates. The first cut came on March 3rd, when the Fed lowered rates from 1.5% to 1.0%. As the economic situation continued to rapidly deteriorate, they followed up with a panicked intra-meeting cut to 0% barely two weeks later.

Now we’ve seen this story before.

The first time around was during the 2008 financial crisis. At that time the Federal Reserve swore up and down that lowering rates to 0% was an extraordinary measure that would be rolled back the moment the economy stabilized.

The Fed was lying of course.

It took them almost 8 long years to raise interest rates off the zero bound. And during that time savers received no interest on their CDs, savings accounts and money market funds. This wasn’t an accident. The Federal Reserve consciously used this immoral policy as a way to recapitalize the criminal, too-big-to-fail banks in the wake of the 2008 collapse.

Here is the federal funds rate from 2008 to 2020. Don’t be fooled by the chart’s deceptive endpoint at 1.5%. The rate actually dropped to zero, but hasn’t had time to be reflected in the chart yet.

And like a sick dog going back to eat its own vomit again and again, the Fed is once more resorting to this same discredited zero interest rate trick.

Except this time average people know that interest rates are going to stay at the zero bound forever, or at least until we have a new monetary system in place – whenever that is!

Consequently, smart savers have begun the process of converting some of their savings from dollars into precious metals. After all, a zero interest rate policy pretty much ensures that any fiat-currency savings you have will shrink in purchasing power over time due to inflation. So you’re better off buying physical gold, silver or platinum, rather than holding onto steadily depreciating dollars (or euros, pounds or yen, for that matter).

The final reason for the ongoing silver shortage is a little more complex than the first two. The capital markets experienced a liquidity crisis of epic proportions during March 2020 – an event on par with financial dislocations last experienced during the Great Depression of the 1930s.

This liquidity crisis occurred when levered institutional financial players (like hedge funds) needed to sell assets in order to meet margin calls. In other words, they had to post additional cash collateral against their outstanding loans as markets fell off a cliff.

Before the crisis hit many hedge funds were loaded up with junk bonds, CDOs, over-the-counter derivatives and other undesirable, illiquid assets. As these poor quality assets declined in value during the crisis, funds naturally received margin calls on any borrowed money. But the funds couldn’t sell their really nasty securities to raise cash because no one wanted them.

So instead, hedge funds sold whatever assets could catch a bid. Unsurprisingly, the assets that remained liquid in the depths of the crisis were few and far between. In fact, the short list is only two assets long: U.S. Treasury bonds and precious metals, including silver.

Now you might reasonably ask yourself how hedge funds selling silver could possibly lead to a silver shortage. Well, it can’t…at least not directly. But it did contribute to the massive divergence between spot prices and the cost to acquire physical silver, leading to exploding premiums.

This is because when hedge funds and other institutional investors buy precious metals, they almost never buy physical metal. Instead, they purchase paper metal – usually futures contracts. So when they liquidate silver to meet a margin call, they are actually selling futures contracts rather than real, physical metal.

But the public understandably wants to buy physical silver, not empty paper promises. As a result, premiums skyrocketed and we found ourselves in the strange situation where the spot price of silver hit an 11-year low under $12 a troy ounce on March 19th while you couldn’t touch American Silver Eagles for less than $20 to $25 a piece.

Now that we know the why of our current silver shortage, we can talk cogently about when it might be resolved.

I have bad news for all you silver stackers out there. I don’t think we are ever going to go back to the good old days of junk silver selling for $0.25 to $0.50 an ounce over spot. And I think it will be a long, long time before government-issued silver coins and privately-minted silver rounds and bars are available for less than $2 or $3 an ounce over spot.

The silver shortage is likely to be a long, drawn-out affair.

I base this assessment on a couple different observations.

The first is the sheer magnitude of demand. Every single bullion dealer has a message on their website alerting customers to product shortages, shipping delays and minimum order increases. Just read these excerpts from major bullion dealers commenting on the extraordinary situation:

“Demand for precious metals products remains incredibly strong.” – JM Bullion (3/22/2020)

“SD Bullion is experiencing a prolonged period of extremely high order volume. Last week, we received the most orders in the history of our company.” – SD Bullion (3/24/2020)

“Due to unprecedented order volumes, please expect a shipping delay of 20+ business days.” – SilverGoldBull (3/28/2020)

Everybody is buying silver right now…at least everyone who knows the score, financially speaking. This group understands that while the COVID-19 pandemic has taken a sledgehammer to the economy, the 2020 economic crisis has been a long time in coming. The Fed spent the last decade meticulously blowing the largest securities market bubble in the history of mankind. Something was going to pop the “Everything Bubble” eventually – it just happened to be a killer virus that gutted the global economy and revealed the outrageous extent of market overvaluation.

Pre-1965 U.S. 90% Junk Silver Rolls for Sale on eBay

(This is an affiliate link for which I may be compensated)

Low or inadequate precious metals output is the second major factor ensuring that the 2020 silver shortage will linger on. For example, The U.S. Mint temporarily sold out of 2020 American Silver Eagles in March. The Royal Canadian Mint also ran out of Silver Maple Leafs around the same time. This has helped contribute to the sky-high premiums for government-issued one ounce bullion coins in the market.

Now, these mints can certainly strike more coins, but they are also constrained at the same time. The entire world is operating under a pandemic watch, which severely limits industrial production. The U.S. Mint is not exempt from these realities, which could easily curb output at their facilities. Not only that, but the Mint might run into problems getting the coin blanks it sources from third-party suppliers (most notably Sunshine Minting).

For its part, the Royal Canadian Mint actually closed for two weeks in late March due to the pandemic! Other precious metal producers and fabricators, both government and private, face similar disruptions.

For instance, South Africa just announced that the entire country (including the mining industry, which produces a significant share of the world’s platinum, palladium, rhodium and gold) will shut down for 3 weeks to combat the spread of COVID-19. The three biggest Swiss precious metal refiners – Valcambi, Argor-Heraeus and PAMP – suspended operations at their factories near the Italian border in late March. And individual gold and silver mines too numerous to mention have temporarily closed all over the world due to the virus.

In other words, the production of silver bullion will only come back online slowly and haltingly in the face of overwhelming demand.

This leaves silver stackers and tangible asset investors with one burning question: how do I find and buy cheap silver? Happily, I still think there are ways to find silver bullion at (relatively) reasonable prices if you look hard enough.

But first a disclaimer – prices and availability is accurate as of late March 2020. The physical precious metals market is obviously moving very fast at this time, so anything you read here might or might not be true in future months.

My first suggestion is to buy old circulated U.S. junk silver on eBay. While bullion dealers are charging close to 18x face value (if they have any in stock), you can still find rolls of 90% junk silver for only 15x to 16x face value on eBay (with free shipping in many cases). This might still be a hefty premium over the (purely theoretical) futures-driven spot price (currently $14.50 an ounce – about 10.4x face value), but it is still one of the best deals out there if you want fractional silver.

My second hot tip is to frequent the websites of micro-foundries that produce hand-poured silver bars. These works of art usually sell for premium prices on the bullion market compared to generic silver rounds or bars. But in today’s upside-down world these small silver bar fabricators often have the best prices out there – at least for now. This includes companies like Vulture Peak Mines, Bison Bullion, Yeager’s Poured Silver and Monarch Precious Metals, among others.

If you want to know more about the world of hand-poured silver bars, you can read an article I wrote called The Investment Case for Hand-Poured Silver Bars.

My final bit of advice for the frustrated silver stacker is to consider buying gold instead of silver. Right now gold is far more available in the physical market compared to either silver or platinum.

I know, I know. The gold-silver ratio is hovering around 115 at the moment, which makes the precious white metal criminally undervalued compared to gold. But that ratio is based on paper prices, not physical prices. In reality, the gold-silver ratio is closer to 80 or 90 to 1 if you want to buy physical metals (and can find them). This still skews towards silver as being the better deal. But those prepared to push forward in their search for physical silver must accept paying premiums over spot of anywhere from 50% to 100%.

Some tangible asset investors simply can’t bear to pay premiums that high. For those people, gold is the next best thing. While premiums on gold coins are certainly elevated relative to where they were pre-crisis, they aren’t outrageously high (yet). For instance, 1 ounce American Gold Eagles are generally selling for between 10% and 15% premiums over spot at the moment.

Government-Issued Gold Proof Sets for Sale on eBay

(This is an affiliate link for which I may be compensated)

I especially like the government-issued, multi-coin gold proof sets. These sets usually contain 1 ounce, 1/2 ounce, 1/4 ounce and 1/10 ounce coins for a total of 1.85 troy ounces of pure gold (although this can vary by set; some include a 1/20 ounce coin). The most well known type is the American Gold Eagle proof set, but Australian Kangaroo, Canadian Maple Leaf, Chinese Panda, British Britannia and South African Krugerrand proof sets can also be found.

The advantage here is that these coins are all proofs, which should normally trade with a slight numismatic premium. However, because the precious metal market is so unsettled right now it is possible to buy these sets at premiums comparable to regular bullion coins. So when you buy a proof set today, you essentially get any future numismatic potential for free.

The downside is that these sets are expensive. A typical 4-coin proof set runs anywhere from $3,300 to $4,000 with spot gold trading for $1,600 an ounce. Still, it may be worthwhile if you want to invest a significant amount of money.

For those interested in this strategy, you can read a related article I wrote about investing in proof American Gold Eagles here.

The 2020 silver shortage is challenging for all of us who want to preserve our wealth. So while I understand that the options I’ve given are less than ideal, I hope they offer you some solace. Unfortunately, our present silver shortage is likely to get worse before it gets better.

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Can Jade Slabs Be a Precious Metal Alternative?

I’ve been obsessed with rough jade for a few years now. I’ve been particularly interested in jade slabs and jade blocks, which are roughed-out or semi-finished pieces of jade that are ready to be fashioned into finished goods. And this got me thinking.

Would it be possible to invest in jade slabs as a precious metal alternative? I know this sounds a bit crazy, but bear with me (if you’re the adventurous type).

In order to be considered a reasonable bullion alternative, an item must be a good store of value. But what makes something a good store of value?

It might be instructive to look at the premiere tangible asset that is already synonymous with that role: precious metals.

Gold and silver are elements possessing exceedingly fine properties. They are highly resistant to corrosion and oxidation. They are extremely malleable and ductile. They are excellent conductors of heat and electricity. And they are both quite beautiful.

Like the precious metals, jade also has superlative physical properties.

For those who don’t know, there are actually two kinds of true jade – nephrite jade and jadeite jade. Even though these stones have completely different chemical compositions, they possess very similar physical properties, which is why they are both classified as true jades.

All jade is exceptionally tough. In fact, jade is tougher than steel! This is one of the reasons that pre-historic people fashioned jade into axes, daggers and other useful tools.

In addition to being tough, jade is also renowned for its hardness. Nephrite sports a Mohs hardness of 6.0 to 6.5, while its near-twin jadeite is slightly harder at 6.5 to 7.0. Although these values don’t rival the hardness of rubies (9.0) or diamonds (10.0), jade is still harder than steel and cannot be scratched with a knife blade.

Jade will also take a very fine polish. The very best jades can be burnished to a mirror-like finish that looks eerily glass-like in its perfection. This makes it a superb material for carvings, jewelry and other decorative purposes.

Jade is a rather dense gem as well. Nephrite has a specific gravity of 2.90 to 3.05 gm/cm³, while jadeite ranges from 3.20 to 3.45 gm/cm³. Although it is not nearly as dense as gold or silver, jade is substantially denser than the average rock. This is because most ordinary rocks have a high quartz content, which gives them a specific gravity close to that of quartz – around 2.65 gm/cm³. It is one of those strange laws of the universe that valuable materials are, more often than not, high density materials.

However, interesting physical properties alone are not enough to endow a material with store of value status.

Durability, for example, is another prerequisite. Being highly corrosion resistant, gold and silver last pretty much forever. And they are more or less indestructible. If you are attempting to destroy precious metals, the best you can do is powder and scatter them, or dissolve them in impractically strong acids.

Jade once again proves itself very similar to gold and silver in terms of its durability. Archeologists regularly recover fully intact ancient Chinese and Meso-American jade artifacts that have been buried for thousands of years. If you were to expose a piece of jade to the elements for a few decades, it would remain curiously untouched (other than perhaps growing a bit of moss). If you were to deposit a specimen of jade in the corner of your basement for a couple centuries, it would fully retain its original appearance and properties.

And the fact that jade is tougher than steel means that the mythical greenstone is nearly impervious to mechanical damage. Prior to the mid 19th century, the native Maori people of New Zealand used jade clubs called “mere” to crack open the skulls of their enemies in tribal warfare. Their jade weapons almost always escaped these conflicts undamaged and can be viewed in museums today, hundreds of years later.

In other words, jade is as close to being eternal as any physical substance on earth can hope to get.

Rarity is another attribute that drives the desirability of jade, making it a compelling store of value and an intriguing bullion alternative. Jade is often found as boulders in alluvial deposits. And it isn’t uncommon for these water-worn boulders to weigh hundreds of pounds or even tons.

This might seem like a contradiction. How can anything found in the form of gigantic boulders be rare?

The answer is that most of those boulders are extremely low quality jade that isn’t fit for any kind of use. Gem quality jade has an unusual combination of saturated color, fine texture and high translucency that is extraordinarily rare in nature.

For example, a jade prospector may sort through tons of rough jade nodules in order to find a single pound of medium quality material. And that assumes he has been lucky! A Wyoming prospector called USMiner has posted a series of jade prospecting videos on YouTube that detail the challenges faced in looking for high quality jade. I’ve posted the second video in his informative “Green Gold” series below, which I highly suggest you watch:

But a material must possess other attributes besides durability in order to be considered a legitimate store of value.

For instance, a raw material must be usable. In other words, it must be possible to turn it into a useful or desirable finished good.

Jade fulfills this requirement with flying colors. Jade jewelry is ubiquitous in the modern world, from bracelets to pendants to earrings. Jade carving has grown into a cherished global tradition, with a thriving industry centered in China and Hong Kong joined by a fledgling one in New Zealand, Canada and the United States.

The remarkable stone has been treasured for many centuries – particularly in China, where “The Stone of Heaven” as it is known has long been a national obsession. Today, fine antique jade artifacts from the Chinese Ming (1368 to 1644 AD) and Qing (1644 to 1912 AD) Dynasties, as well as exquisitely carved pieces from the Indian Mughal Empire (1526 to 1857 AD), are avidly collected by wealthy jade enthusiasts worldwide.

Incidentally, historical or cultural significance is another important factor in determining whether an object is a good store of value. Gold and silver score superbly on this metric, having been equated with money for thousands of years in most societies.

While jade cannot compare with the legendary status of gold’s monetary cultural dominance, it is rapidly finding its own niche nonetheless. For instance, jade has been associated with high status and prosperity in East Asia for millennia. In China, Korea, Taiwan, Hong Kong and parts of Southeast Asia, jade has no problem standing shoulder to shoulder with gold and silver as a valuable precious material.

Jade’s history in the West, however, has been somewhat shorter and more ambivalent. The Spanish conquistadors first encountered the exceptional green stone in Central America in the 16th century when they conquered the Aztec and Mayan civilizations. However, the Spanish were only interested in gold and silver, not jade. As a result, the precious stone lay at the periphery of European thought for another 400 years.

It was not until the late 19th and early 20th century that European jewelers began to experiment with jade – undoubtedly because of the growing influence of Orientalism in Western art. Since that time, jade has gradually been accepted as a bona fide gemstone all over the world.

Rough jade is typically found in rounded nodules with an opaque rind covering the stone. These nodules are usually formed via hydraulic action when a primary deposit is weathered into a river. However, somewhat coarser jade nodules can also be formed by wind-blown sand or other debris scouring their surfaces. When this happens, the stone is called a “slick” or “wind slick”.

Over the course of millions of years, the weathering process tends to erode away any lower quality material, leaving only the hardest, highest quality jade. This makes rough jade nodules from weathered secondary deposits particularly desirable.

While rock hounds have eagerly collected fine jade slicks and boulders for many decades, everyone else in the West largely ignored the precious “Stone of Heaven”. But as the Chinese economy boomed over the past 20 years, demand for jade has inexorably risen, driving prices ever higher. Meanwhile, Westerners have gradually become more familiar with jade’s many fine qualities. As a result, hard asset investors are beginning to realize that stacking rough jade like they stack gold or silver might be a very profitable, if unconventional, idea.

Unfortunately, the opaque rind on rough jade nodules means that you typically can’t see into the stone in order to assess its quality. Because of this quirk of the gemstone, jade is sometimes known in China as “the gambling stone“.

This is one of the big reasons why I like jade slabs and jade blocks as investment pieces. With semi-finished jade, the exterior rind has usually been either mostly or completely cut away, revealing the true quality of the material inside. This means that when you purchase rough jade slabs or blocks, you have the advantage of pretty much knowing exactly what you’re getting.

Some more traditional precious metal investors might be skeptical of investing in jade. And if you fall into that category, I completely understand your reluctance. Jade isn’t for buttoned-down conservative types. Like most alternative investments, the stone is rather illiquid – so you have to be committed for the long-term when you buy.

And yet when we look at its physical properties, jade compares quite favorably to the precious metals. It not only looks amazingly beautiful, but also has an unmatched combination of hardness and tenacity. This renders it one of the most durable substances on earth – easily the equal of gold and silver in this regard.

It is also a very rare gemstone, and getting rarer every day as demand skyrockets. The easy to mine river deposits have been exhausted within the past few decades, leaving nothing but small, remote alluvial deposits and difficult to access, hard-rock primary deposits.

Jade also has a rich history that has endowed the hallowed material with a special place in East Asian culture. The West is definitely playing catch-up here, but I think that Westerners will undoubtedly recognize the prized stone as a compelling store of value in the future. Jade is a luxury raw material par excellence – fit for the very finest jewelry, carvings and objets d’art.

Jade may not be gold or silver, but I believe that jade slabs and jade blocks are an underappreciated bullion alternative for the savvy tangible asset investor. For those who want to learn more about jade, please read my two investment guides titled “An Alluring Enigma – Rough Jade” and “A Jadeite & Nephrite Jade Investor’s Buying Guide“.

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Understanding Exotic Wood Burls

Photo Credit: Housing Works Thrift Shops

What are wood burls?

A burl is the abnormal growth of a tree associated with some environmental stress. Burls are believed to be the result of an insect infestation, fungal, bacterial or viral infections or physical damage from lightening, logging or natural tree-fall. They usually take the shape of a bulbous mass or protrusion near the injury, although they can sometimes form in the root system below ground level.

Why are wood burls desirable?

In contrast to its homely exterior, the inside of a wood burl is a wondrous thing. Wood burls are, simply put, everything that make fine wood special distilled into a single, gorgeous package. They invariably contain the most complex and intriguing grain patterns found in all of woodworking, including (but not limited to) blister, curly and bird’s eye figures. Indeed, it is not uncommon to find every one of these covetable elements incorporated into a single burl. Predictably, this makes burls visually stunning, particularly when combined with a boldly colored wood.

How are wood burls used?

Burls are employed anywhere a relatively small, aesthetically appealing wood surface is desired. Furniture will often incorporate thin burl veneers to cover larger areas cost effectively. But smaller items such as jewelry or valet boxes, fountain pens, turned bowls, objets d’art and custom knife and gun handles can be made from solid wood burls. Basically any wooden luxury item can be fashioned from burl, provided the end customer is willing to pay the often substantial price tag.

Working with burls is a delicate process and high wastage is commonplace. Because of their irregular formation, it isn’t unusual for wood burls to be full of voids, sap pockets, silica, bark and even rocks (for root burls). This makes the woodworker’s job very difficult. Exceedingly sharp tools made of super hard alloys help prevent tear-out due to the highly figured, interlocking grain. But years of experience are the best ally of the craftsman who wants to fashion raw burl into a woodworking masterpiece.

Why are wood burls so expensive?

The answer to this question is fairly simple – because they are rare and in extraordinarily high demand. Wood burls only form unpredictably from anomalous situations – an insect infestation, physical trauma, etc. Therefore, there is a substantial element of chance in their formation.

In addition, many tree species are not naturally predisposed to the formation of burls. If these species should suffer the injuries mentioned above, they will more often than not simply die without forming a burl at all.

Burl’s unusual origins mean that it cannot be successfully cultivated via plantation-style tree farms. Many species of commercially important lumber trees – teak, mahogany and pine, for example – have been adapted to tree plantations where their growth can be specifically regulated and accelerated. But it isn’t possible to reliably stress a tree in the proper way to ensure the creation of a burl. In most instances, you would just kill the unfortunate tree.

Therefore, burls are only created in nature by happenstance and then discovered by dedicated loggers who must slog through dense forests, steep mountains and remote wilderness to secure them. Given the difficulties in procuring them, it is a wonder that wood burls are as widely available in today’s marketplace as they are. However, with mankind’s continued destruction of forests and other natural habitats, this relatively widespread availability might not persist.

Types of wood burls

As mentioned above, some tree species are naturally predisposed to the creation of burls while most are not. I have listed below the kinds of trees that commonly form burls, which also makes them the most frequently encountered wood burls in a commercial setting. This list is meant as an overview only, however, and is undoubtedly incomplete. In addition, it is occasionally possible to find wood burls for sale from species that do not normally produce them. Those tree species, of course, will not be covered here.

Walnut Burl

There are actually several different species of walnut that tend to form burls: English Walnut (Juglans regia), Black Walnut (Juglans nigra) and Claro Walnut (Juglans hindsii). English Walnut’s natural range extends from Eastern Europe to Western Asia, while Black Walnut is native to the Eastern United States. Claro Walnut is a closely related species found exclusively in Oregon and California.

Walnut burls, with their rich chocolate tones and wild figuring, are among the most desirable of wood burls. They have been used in Europe for hundreds of years in high end furniture and wood turning. Indeed, it isn’t uncommon to find 18th century Georgian and 19th century Victorian antiques that lavishly employ walnut burls in both veneer and solid form.

Carpathian Elm Burl

English Elm (Ulmus procera) is a large tree found in Western Europe that features light reddish-brown wood. English Elm is often referred to as Carpathian Elm when it comes in burl form, even though these are really the same species. This type of burl most commonly comes in veneer form with solid material being rather scarce. The grain patterns on Carpathian Elm burl usually consist of very tightly packed bird’s eye elements caught in swirling eddies.

Black Cherry Burl

A deciduous hardwood from the Eastern U.S., Black Cherry (Prunus serotina) timber has been prized for centuries for its superior workability and glowing, reddish-brown patina. Although it is fairly widespread from a geographical perspective, Black Cherry trees reach their largest dimensions in the primeval Appalachian forests of central Pennsylvania.

Cherry wood’s almost legendary status is elevated even further when found in its rare burl form. Bird’s eye elements and gently meandering grain patterns accentuate the wood’s naturally rich rose tones. When cherry burl does come on the market it is invariably scooped up by experienced woodworkers for turned bowls, knife scales and other fine woodcrafts.

Although the Black Cherry species dominates the cherry lumber trade, its smaller European cousin – Sweet Cherry (Prunus avium) – yields very similar burl material on occasion.

Buckeye Burl

The Buckeye (Aeculus octandra) is a rather unusual tree, at least from a woodworker’s perspective. This medium-sized deciduous tree is a resident of the Eastern United States. But its wood is a boring, creamy-white color with little in the way of interesting grain features. In addition, its timber is soft and weak, making it ill-suited for most structural purposes. Under most circumstances, Buckeye wood has no commercial use.

Buckeye burls, on the other hand, are an eye-catching kaleidoscope of intense blue-blacks contrasted against golden-tinted ivories. Buckeye is a root burl, meaning it often contains irregular void pockets, along with sand and small rocks. In spite of this, wood-loving craftsmen cherish this burl for its unique color palette and amazing grain patterns.

Redwood Burl

Redwoods (Sequoia sempervirens) are renowned coniferous denizens of the California coast, towering up to 300 feet (90 meters) tall with diameters of as much as 12 feet (3.7 meters). Redwood lumber is renowned for its ability to weather the elements, making it a natural choice for decking and outdoor furniture.

But it is Redwood burl, with its impossibly intricate lace patterns and intense reddish hue, that has really captured the modern imagination. Because Redwoods are among the world’s largest trees, it isn’t uncommon for their wood burls to be absolutely massive. This makes it possible to occasionally find solid burl slabs large enough to fashion into dining tables or other large showpieces. A large slab of Redwood burl can easily go for more than $1,000 on the open market.

Unfortunately, the high prices and unflagging popularity of Redwood burls have prompted poachers to illegally harvest the wood from trees located in protected national and state parks. Of course, reputable lumber dealers will not touch these poached goods.

Bigleaf Maple Burl

The Bigleaf Maple (Acer macrophyllum) is a variety of soft maple that grows in the Pacific Northwest of the U.S. and Canada. This impressively large tree reaches sizes of up to 100 feet (30 meters) tall with a diameter of up to 3 feet (1 meter). Bigleaf Maple timber is considered a good all-purpose wood, albeit somewhat visually boring. Consequently, it is fairly low in price.

All that changes when we start talking about maple burls, though. Instead of an uninspiring beige or white color, Bigleaf Maple burl sports an array of colors ranging from orange to coral to golden-cream. In addition, it is sometimes possible to acquire spalted maple burl, which is wood that has been exposed to fungus. This creates wildly contrasting grain patterns lain overtop the already mentioned sumptuous colors. Bigleaf Maple burls also commonly come with live edges, which skillful woodworkers can exploit to create artistic masterpieces.

Madrone Burl

The Madrone (Arbutus meziesii) is a medium-sized broadleaf evergreen tree endemic to the U.S. Pacific Northwest. This tree goes by several other names, including Madrona, Pacific Madrone and the rather whimsical Strawberry Tree.

Plain Madrone wood isn’t often used in woodworking because it is subject to severe warping. However, its hard, dense root burls are in perpetually high demand from knowledgeable woodworkers. They are not only magnificently figured, but also sport delicately cream-colored wood with pink to light red overtones, which makes for a visually stunning wood burl.

Myrtle Burl

Myrtle (Umbellularia californica), otherwise known as Oregon Myrtle, Pepperwood or California Bay Laurel, is a medium-sized evergreen hardwood native to California and Oregon. Plain Myrtle wood is easy to work with and finishes well, a real bonus when combined with its striking range of colors.

Those marvelous colors – honey yellows, butterscotch browns and dulcet oranges – make Myrtle burl particularly appealing. It is even possible to find Myrtle burl that sports wild black or violet highlights. These unique color combinations are the result of slight variations in the mineral content of the soil the trees grow in.

Myrtle burl is incredibly expensive for a domestic hardwood, but might just be the perfect burl for the woodworker who wants to try something a little bit different!

Eucalyptus Burl

Almost all eucalyptus trees are native to Australia, where almost 700 different species in the genus reside. Despite this genetic diversity, eucalyptus wood tends to share certain physical similarities that make it an excellent general purpose lumber. These include high density, excellent hardness and good strength.

Eucalyptus burls, however, take these desirable physical properties and supercharge them with magnificent resin veining, bird’s eye figuring and crotch patterns. Although the eucalyptus genus as a whole is susceptible to forming burls, certain species are particularly noteworthy.

For example, Jarrah (Eucalyptus marginata) – a eucalyptus found in southwestern Australia – is renowned for its deep burgundy color and the incomparable figuring of its burls. For those who are interested, I recently featured an outstanding contemporary Jarrah burl watch box in the Spotlight section of my website.

River Red Gum (Eucalyptus camaldulensis) is another well known reddish eucalyptus burl, although it usually isn’t as strikingly figured as Jarrah burl.

Yellow Box (Eucalyptus melliodora) forms desirable burls with a characteristic, yellowish-cream to golden-brown color.

Red Box burl (Eucalyptus polyanthemos) is the final eucalyptus burl commonly encountered. Burls from this species can be an intense brownish-red, making it a favorite of woodworkers looking for the perfect color for that special project.

There are, of course, many other eucalyptus burl species not mentioned here. And woodworkers interested in Australian burls should note that pockets full of sand, dirt and rocks are fairly common hazards. Even so, the stunning beauty of eucalyptus burls makes them well worth the effort.

Thuya Burl

Thuya (Tetraclinis articulata) is one of the more interesting and exotic trees in our list. Native to the remote Atlas Mountains of Morocco, this relatively small coniferous tree is a member of the Cypress family – Cupressaceae. Thuya wood has been used since ancient times, and was highly prized by both the Greeks and Romans for its pleasant fragrance and mesmerizing orange-brown to red-brown root burls.

In fact, Thuya was purportedly used – along with the famous cedars of Lebanon – to construct King Solomon’s Temple in Jerusalem. In the 1st century BC, the famous Roman politician Marcus Tullius Cicero bought a Thuya burl table for the princely sum of 300,000 denarii. This sum was more than 1,300 times the annual salary of an average Roman solider.

Today, Thuya burl is becoming much scarcer because of the tree’s limited geographical range and widespread deforestation. As a result, Thuya burls are typically only available in small sizes.

Amboyna Burl

Amboyna burl is actually derived from multiple tree species in the Pterocarpus genus, most notably the Narra tree (Pterocarpus indicus) and Burma Padauk tree (Pterocarpus macrocarpus). These tropical hardwoods grow in the rainforests of Southeast Asia, Indonesia and Borneo.

Amboyna burl first came to the attention of Europeans in the late 18th century, when the colonial powers in Southeast Asia began to import it into Europe in quantity. It quickly became one of the world’s most favored burl woods – a title it still retains. Today, Amboyna burl is often used for the interior trim of ultra-expensive luxury cars like Bentleys and Maybachs.

Demand for Amboyna burl has been so strong that it can be difficult to source in larger sizes due to overharvesting. Expect to pay egregiously high prices when you do manage to find any, regardless of its size.

Amboyna burls range in color from a light, honey-gold to a strikingly rich red. It also displays wonderfully complex figuring, including bird’s eye, crotch and blister patterns. No wonder Amboyna burl is the most prized wood burl on the planet!

Camphor Burl

The Camphor tree (Cinnamomum camphora), or Camphor laurel as it is sometimes known, is a tropical hardwood found in Southeast Asia. This is another one of those trees where the plain wood is considered below par in the woodworking world. It isn’t as strong or hard as many tropical hardwoods and has a fairly mundane, light brown color that is often mixed with rather unattractive olive or gray tones. Because of this, plain Camphor wood is rarely exported for commercial purposes.

Camphor burl, however, is a completely different animal. Here the wood takes on a much more vivid golden-brown color complemented by intense curly figures interspersed with bird’s eye patterns. Camphor burl is commonly available in both veneer and solid burl forms, and is often used for electric guitar tops. One unusual fact about Camphor wood is that freshly worked material smells strongly of root beer!

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