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Buying Bullion at Spot with eBay Bucks

Photo Credit: Eric Golub

Update: EBay Bucks is effectively defunct at the current time.

Let me tell you a story that every hard asset investor should love, a story of discounted precious metals and buying bullion at spot.

EBay recently sent me a marketing email alerting me to a 10% eBay Bucks promotion they were running over the next couple of days.

What is eBay Bucks? It is a rewards program that rebates a percentage of any eligible eBay purchase. EBay Bucks accrue all quarter long and are then paid out as a voucher that can be used for any additional eBay purchases after the end of the quarter.

So for example, rewards accumulated in July, August and September would be paid out in early October. These vouchers are only good for 30 days after they are issued, so you need to be fairly quick about using them. Any unused amount will expire after 30 days.

Under normal circumstances eBay Bucks accrue at a 1% rate, meaning that for every $100 in purchases, you will receive $1 in eBay Bucks. But every so often the e-commerce platform announces promotional periods where rewards accrue at 8%, 10% or even (very rarely) 15%. These supercharged rewards can be very lucrative if you are shopping for precious metals, antiques or other tangible assets.

After receiving my 10% eBay Bucks notice, I immediately went on the prowl looking for cheap gold or silver bullion to add to my cart.

In my case, I decided to buy a roll of pre-1965, U.S. silver quarters that was listed for $111.75. Let’s walk through the economics of my acquisition together.

The spot price of silver at the time of my purchase was $14.36 a troy ounce. Each $10 face value roll of junk silver quarters contains about 7.15 troy ounces of pure silver. Therefore, each roll had a melt value of $102.67.

This means I was paying $15.63 a troy ounce – an 8.84% premium over spot. This was an alright, but not great price. However, this was before we factor in the eBay Bucks bonus. These rewards were worth $11.18, which effectively reduced my purchase price to just $100.57 per roll, a -2.05% discount to the going spot rate.

But wait! I’m not finished yet.

I also own a rewards credit card that pays me back 1% on all purchases. Double stacking credit card rewards with eBay Bucks is a surefire way to reduce your cost basis and stretch your investing dollar. There are many rewards cards out there that offer 1% to 2% rebates, a topic I explore in greater depth in an article titled “Using Credit Card Reward Points to Buy Hard Assets“.

The 1% refund from my credit card lowered the cost of my silver quarters to only $99.45 per roll. That means that I picked up over 7 troy ounces of bullion for only $13.91 an ounce, -3.14% below spot!

		Cost
	Cost	Per
	Per	Troy
	Roll	Ounce
Original Cost	$ 111.75	$ 15.63
eBay Bucks	$ (11.18)	$ (1.56)
Credit Card Points	$ (1.12)	$ (0.16)
Final Cost	$ 99.45	$ 13.91

And the best part is that you can scale this strategy too. The seller had 10 rolls of silver quarters for sale. It would have been easy enough to buy multiple rolls – and they all would have been below spot.

In fact, the deal was so good that I eventually opted to buy 2 rolls of the junk silver quarters. I simply couldn’t resist constitutional silver at less than $14 an ounce!

But eBay Bucks do have some minor drawbacks you should be aware of.

For instance, all items listed in the “Bullion” category under “Coins & Paper Money” are specifically excluded. You usually can’t receive rewards on these purchases. EBay excludes these listings because their profit margins in this category are simply too low to allow for any discounts.

But there is a great work-around for this unfortunate situation. Any gold or silver item that isn’t listed in the “Bullion” category is generally considered fair game. While this does limit your buying choices somewhat, it still allows you to pick up bullion at or near spot in many instances.

There are two specific types of bullion coins that can most often be found outside eBay’s “Bullion” category: pre-1965 U.S. 90% junk silver and pre-1933 semi-numismatic U.S. gold coins. These kinds of coins often trade at only modest premiums to spot to begin with, making them perfect candidates for an eBay Bucks discount strategy.

I find the semi-numismatic pre-1933 U.S. gold coins to be a particularly intriguing choice for the precious metal stacker. If you are at all familiar with gold, you know that fractional (less than 1 troy ounce) gold bullion coins typically sell for hefty premiums. For example, it isn’t unusual for major dealers to sell fractional-sized American Gold Eagles for 6% to 16% over spot.

Yet I found a well-respected dealer, Liberty Coin, selling random date, $10 Liberty Head gold coins in XF (Extra Fine) condition for only $695 (with free shipping). Factor in 10% eBay Bucks and 1% cash back on a credit card and you are looking at a net cost of just over $618. With gold trading for $1,283, this means the $10 Liberty Head gold coin (which contains 0.48375 troy ounces of pure gold) is selling just under spot.

Not only do you avoid paying any substantial premium, but you also get a more than 110 year old U.S. gold coin in reasonably good condition with numismatic potential!

For those who are more even adventurous, some other possible bullion coins would be pre-1967 Canadian 80% silver coins and European fractional gold coins, like British sovereigns and French 20 franc pieces. I personally have seen deals on Swiss 20 franc gold coins that put them at -4% to -5% below spot when combined with eBay Bucks, although you might have to wait patiently for a bargain that good.

Of course, it is sometimes possible to find reasonably-priced modern bullion coins like American Eagles or Canadian Maple Leafs that are listed in non-bullion categories, making them eligible for eBay Bucks. Although fairly rare, I wholeheartedly recommend these deals if you can find them.

Another potential drawback with eBay Bucks is that they are limited to $100 per transaction. So if eBay is running a 10% rewards promotion, you will only earn the full amount on a purchase up to $1,000. If the item in question is more expensive than that – say $1,500 – you will still only accrue $100 worth of eBay Bucks.

EBay also limits program participants to $500 in total eBay Bucks per quarter. This would cap you at $5,000 in aggregate purchases per quarter, assuming you only took advantage of enhanced, 10% rebate rates. I don’t think a ceiling this high should be a problem for most people. But if you’re a big spender, it is good to keep in mind that eBay’s largess does have its limits.

The eBay Bucks program is only open to U.S. and Canadian residents. Sorry, but if you hail from Great Britain, Continental Europe or the Land Down Under, you are out of luck.

A final consideration is that eBay Bucks are technically an unsecured obligation of the e-commerce giant. Although it seems quite improbable, if eBay were to declare bankruptcy between the time when you made an eligible purchase and the end of the quarter when vouchers are normally issued, you would get nothing. This is not something I believe will happen, but I’ve noted it here for the sake of completeness anyway.

Despite these minor drawbacks, eBay Bucks are a great way for the precious metal investor to buy bullion at spot. I use the program myself and can highly recommend it. If you liked this unconventional approach to hard asset investing, you might enjoy a related article I wrote about building your tangible assets using eBay flash sales.

Read more thought-provoking Antique Sage investing articles here.

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Read in-depth Antique Sage investment guides here.

Farewell to a Dealer of Central American Jade

I was on eBay the other day looking for a profitable way to use a $5 coupon the online auction house had been gracious enough to give me. As I was browsing through the rough jade listings, I made a shocking discovery. Much to my dismay, I found that one of my favorite rough jade dealers – Paul’s Rok Shop, located in Lake Arthur, Louisiana – was closing.

This gentleman was a dealer in all of sorts of lapidary slabs, but seemed to specialize in Central American jade, aka Guatemalan jadeite jade. This was quite fortuitous, as I believe that rough jade blocks and slabs are an intriguing tangible investment alternative to precious metals. And out of all the world’s jades, I find those from the Americas – jadeites from Central America and nephrites from the Pacific Northwest and California – to be the most intriguing from an investment perspective.

These North American-sourced jades are rarely subjected to the same harsh enhancements that are commonly applied to Burmese, Chinese and (occasionally) Russian jades. So when you buy North American jades, you are almost assured of getting fully untreated, completely natural stones – a tremendous advantage in a world dominated by polymer impregnation, artificial dyes and other scummy gemstone treatments.

But you won’t be getting them from Paul’s Rok Shop, at least not according to the poignant message he left in his last listings:

“After 13 years on eBay, I am shutting down my rough rock sales here. [It’s] just not worth my time to be here [on eBay] anymore. I will not be relisting any rough rock at all after May 31st [2019]. I suggest that you get what you may be interested in before the end of the month. If things turn around in [the] next couple years, you may see me again. To those of you who have followed and bought from me over the years, I am grateful.”

If you have any interest in purchasing rough Central American jade, I urge you to stop by Paul’s Rok Shop before it closes for good. He has been aggressively marking down prices in an attempt to move his remaining inventory and there are great deals to be had. Unfortunately, if you are reading this any article any later than June 2019, I doubt he will have any active eBay listings left.

Out of this sad event springs two topics that I want to discuss.

The first is Central American jade. Jade is a gemstone that has been revered in many cultures for thousands of years, but curiously not in the West. The ancient Chinese loved it. The Pre-Columbian civilizations of the Olmec, Maya and Aztec loved it. The indigenous Maori people of New Zealand loved it. But we Westerners tend to shrug our shoulders at the green wonder stone.

Why is that?

I believe it is largely a question of exposure. High quality jade deposits are not found in Europe, meaning that ancient European civilizations never saw the stone at its best. In contrast, East Asian, Meso-American and New Zealand peoples had ready access to fine jade which left an indelible mark on their respective cultures. This reverence for the beauty and utilitarian value of jade eventually elevated the gem to ceremonial and even monetary status, but only in those societies that had access to it.

Jade was so important to these ancient civilizations that I believe archeologists and historians should make room for a “Jade Age” sandwiched in-between the Neolithic and Bronze Age periods.

Furthermore, many modern-day Europeans and Americans have simply never seen good quality jade before, much less held a fine rough jade specimen in their hands. Most Westerners’ experience with this legendary material has been via poor-to-mediocre quality jade jewelry that has undoubtedly been treated to within an inch of its life. And that’s assuming they’ve beheld real jade at all, and not some inferior imitation or simulant, like serpentine, aventurine quartz, maw-sit-sit, etc.

When jade is treated, the properties of the stone often fundamentally change. Acid or alkali baths leach out stains and impurities, but also render jade brittle and susceptible to discoloring over time. The dyes, polymers and paraffins injected back into the treated stones in an attempt to make them salable might render these treated jades superficially attractive, but don’t restore the superlative properties of true, untreated jade.

On the other hand, genuine untreated Central American jade is a marvelous thing to behold. At a distance, it appears as if it might be some impossibly soft material – satin…moss…even Jell-O. But the truth is that real jade is both harder and tougher than steel. It is an extraordinary gem created under the tremendous geological pressures found almost exclusively at tectonic plate boundaries.

In spite of its toughness, handling jade is an intimately tactile experience. The stone persistently whispers for you to gently caress it. And when you do, real Central American jade rewards you with a heft, solidity and glass-like smoothness that seems otherworldly. It is almost as if some super-advanced material from the distant future was transported back in time to amaze and astonish us in the present day.

As the ancient Chinese philosopher Confucius once stated quite perceptively, jade possesses “perfect compactness”. This is due, no doubt, to the gemstone’s unique, interlocking micro-crystalline structure.

And the colors! Central American jade comes in a range of attractive shades, including “Maya mint” green, “Olmec” blue-green and mottled deep-green “jaguar jade”, just to name a few.

Simply put, you have to actually see and hold a piece of real Central American jade to truly understand its allure. Mere words, regardless of how poetic they are, cannot hope to do that transcendent moment justice. Jade’s appeal is very similar to that of gold and silver. Once you place a piece in the palm of your hand, you immediately and viscerally appreciate how valuable and desirable this precious material truly is.

And this leads me to the second thing I wanted to talk about: the loss of yet another small business.

I have written before about the troubles facing physical antique stores. I have also written about the decline of American retail, with an emphasis on the closing of mom-and-pop shops. I would like to say that these trends are unrelated to each other.

Unfortunately, I cannot.

Ever since the 2008 Financial Crisis, the United States (and most of the world for that matter) has been experiencing a soft depression. These unrelenting economic travails have robbed middle class households of much of their discretionary spending power. Money that would have been spent on art, jewelry and antiques simply never made its way into the hands of the middle class.

As a result, the many small businesses serving these industries have suffered. The loss of Paul’s Rok Shop is just the latest in a long parade of such business closures.

There is one silver lining to this dark cloud, albeit with strings attached. As art, antique and gem dealers liquidate, they often heavily discount their inventory. This is a tremendous opportunity for disciplined connoisseurs and investors to buy quality tangible assets at reduced prices.

But it is important to keep in mind that prices are always lowest right before the lights go out. And it takes much, much higher prices to induce a future entrepreneur to turn the lights back on. In other words, enjoy the bittersweet deals on art, antiques and other tangible investments while you can. Once they’re gone, they will only reappear when there is far greater profit to be had.

Read more thought-provoking Antique Sage gems & jewelry articles here.

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Read in-depth Antique Sage bullion & gemstone investment guides here.

The Antiques in Your Attic (Probably) Aren’t Worth Anything

A lot of people (falsely) believe that the hoard of antiques or vintage items they have stashed in their basement, closet or attic is worth a fortune. They might especially feel that way after coming to the Antique Sage website and reading that I tout antiques as a superior investment vehicle.

But the sad truth is that only a fraction of the antiques out there are investment grade, and they probably aren’t sitting in your attic. There are broad swaths of the antique market that are simply not – and never will be – investments. Even the very finest items in many vintage categories do not meet the strict requirements for investment-oriented pieces.

I examine this topic in greater detail in an article I wrote titled “Your Hopalong Cassidy Collectibles Are a Bad Investment“.

In spite of this, many people see the words “investment” and “antiques” close to each other in a sentence and assume that the antiques piled in their musty attic must be worth a lot of money. Nothing could be further from the truth. Age, by itself, does not confer desirability on an object.

But in order to understand the attributes prized in today’s antique market, it is important to grasp the trends that have shaped it.

The antiques industry has undergone a radical transformation over the last 20 years. From the end of World War II until the year 2000, antiques, collectibles and vintage items of all sorts appreciated in value more or less non-stop. The only exception to this rule was recessions, when the prices of many collecting categories would pause or pull-back slightly. But the overall trend was always up.

This was due to a couple factors.

Post-war America (and Western Europe too) was incredibly prosperous, with average wages rising both predictably and robustly. Increased discretionary spending power inevitably filtered into the antiques trade, lifting the prices for almost all collectibles.

Another contributing cause was that many members of the Greatest Generation, Silent Generation and Boomer Generation were quite materially acquisitive, although they all had different reasons for doing so. The Greatest Generation had lived through the Great Depression – often as children or young adults – and was loath to throw anything out, fearing it might be needed again someday. The Silent and Boomer Generations grew up in an era when physical goods were still somewhat scarce. Consequently, accumulating large amounts of stuff, including antiques and collectibles, was often considered a mark of wealth and social status for these generations.

Then the wheels came off the global economy. First there was the Dot Com crash of 2001, followed all too quickly by the disastrous 2008 Mortgage Meltdown and capped by a tepid, decade-long recovery. These economic catastrophes gutted the middle class, destroying their ability to casually collect antiques or vintage goods. Younger people, like Generation Xers and Millennials, struggled under crushing student loans and stagnant wages. Millennials, in particular, were forced to abandon material desires for cheaper and more attainable spiritual aspirations.

The internet also did its wickedly efficient work by allowing buyers and sellers to aggregate on huge sales platforms like eBay, Etsy and Ruby Lane. Unfortunately, many antiques were far more common than previously believed – a situation that online marketplaces fully revealed for better or for worse.

The effect of these trends on the antique market has been devastating. Collecting categories that had reliably appreciated for decade after decade suddenly collapsed in value, often with little warning. Haviland Porcelain, bisque dolls, Waterford crystal and baseball cards are just a sample of the antiques/collectibles sitting in peoples’ attics that have cratered in price by up to 90% since the mid 2000s.

Even redoubtable antique furniture has been on the losing end of this trend. Old furniture is interesting because so many people (incorrectly) treat it as a proxy for the general antiques market, even though it is really its own category (filled with dozens of sub-categories of course). Everything from 18th century Georgian furniture to early 20th century Golden Oak furniture has plummeted in value over the past 15 years. Only those pieces with clean lines, like Art Deco and Mid-Century Modern styles, have avoided the worst of the damage.

Now I don’t want to be doom and gloom all the time. After all, my website is about investing in antiques. And there are plenty of great antiques out there that possess marvelous investment potential. In fact, this is probably one of the best times in history to shop for high end antiques.

But I feel it is imperative that you stick to items that are small and precious.

I favor compact antiques made from gold, silver, gemstones and exotic woods. Things like vintage fine jewelry, antique silver, ancient coins, classic mechanical watches and old fountain pens are at the top of my wish list.

Sure, I believe some items not made with precious materials can make the grade too. Vintage Japanese prints are a favorite of mine. I also just featured a wonderful Mid-Century Modern enameled panel that is almost preternaturally alluring.

In any case, you should stick to the Antique Sage’s 5 rules of investment grade antiques for the best results. An item must be portable, durable, scarce and of high quality. In addition, it should reflect the zeitgeist or dominant style of the era in which it was made.

I suppose what I’m trying to say is that you shouldn’t be surprised when you don’t find any investment grade antiques when cleaning out your great aunt Emma’s estate. The good stuff is pretty rare. And while it is natural for everyone to believe that their stuff is special, in all likelihood, the random accumulation of old junk that your relatives have stashed in their attics and basements almost certainly isn’t.

Read more thought-provoking Antique Sage editorial articles here.

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Read in-depth Antique Sage investment guides here.

Are Antiques Dead to Millennials?

Are antiques dead to Millennials? Do they prize the ephemera of yesterday or are they too busy chasing today’s once-in-a-lifetime adventures to care?

The common wisdom is that Millennials (loosely defined as the generation born between 1980 and 2000) do not value physical objects the same way older generations do. Instead, the common wisdom is that Millennials pursue satisfaction through experiences – fine dining, exotic vacations and unique entertainment.

This bent towards a more spiritual and less material existence leads to real questions about the future viability of the antiques industry. After all, if an entire generation has opted out of buying vintage items, it does not bode well for the average antique shop.

And yet everything is not as it might first appear in this story. In order to truly figure out if antiques are dead, we must first understand one simple truth.

Millennials are broke.

Not just sort of broke. Not just kind of broke. Millennials as a generation are totally and completely flat broke, at least statistically speaking.

In 2016 (the most recent year that I could find data), the median net worth (including primary residence) of 30 to 34 year old households in the U.S. was a piddling $29,125. Fully 66% of younger Millennials have absolutely no retirement savings whatsoever. And like most Americans, Millennials’ wages have stayed stubbornly low for decades.

The big culprit here is student loans, with over $1.5 trillion worth outstanding at the end of 2018. A massive chunk of this crushing debt is owed by Millennials. Student loans act as an economic millstone, dragging the young into financial misery while denying them the ability to buy a house, start a family or effectively save money.

Unsurprisingly, Millennials’ lack of discretionary funds has naturally impacted the way they view physical stuff, including antiques. If you can’t afford a house, a car or to save for retirement, then a Victorian mahogany secretary will not be high on your list of items to purchase.

Having been largely priced out of the American Dream, Millennials have been forced to sublimate their material desires into spiritual desires. In other words, Millennials have made a virtue of necessity, substituting relatively cheap experiences in place of relatively expensive physical goods.

So are antiques dead? In my opinion, the answer is no. But they have been caught in the crossfire of a brutal economic war that has been waged against younger generations.

Allow me to explain.

Because the incomes of younger workers have been suppressed, they are often living in smaller spaces than they would otherwise. For example, Millennials will often have roommates to save on costs, or they will sometimes move back in with their parents after college. Even when they do get their own place, it is often a small apartment or condo.

None of these living arrangements is conducive to collecting antiques (or most other things, for that matter). This is particularly the case with antique furniture, which is hopelessly oversized for most Millennial dwellings. And when the time comes to move, no one wants to have to drag around hundreds of pounds of delicate antique furniture or vintage kitsch.

Another issue that handicaps Millennials’ relationship to antiques is the fact that so many young people are overworked these days. It is common for fresh-faced college graduates to practically indenture themselves to large corporations for a modest salary of $30k, $40k or $50k a year. This is usually enough to put food on the table and a roof other their heads, but rarely enough for much more.

More importantly, antiques require knowledge to be properly appreciated. Sure, anyone can walk into an antique store and pick out a few things that they instinctively like. But this does a great disservice to vintage items, which are far more valued and loved when their stories and history are known.

Unfortunately, learning about antiques takes time. It is not a topic that can be mastered in an hour or two. And this is time that the average Millennial simply does not have. They are too busy working 10 to 12 hours a day, running somewhere to grab dinner, rushing to get chores done and then crashing exhausted into their bed in the hopes of squeezing out 6 or 7 hours of sleep.

Antiques, regardless of how intriguing they might be, simply do not factor into a work-life schedule as unbalanced as this.

Now this might sound like a pretty bleak scenario for the antiques trade, but there are a few mitigating factors.

As regular readers of the Antique Sage website already know, I concentrate exclusively on small antiques. I advocate the purchase of high quality vintage wristwatches, rare coins, old jewelry and other compact antiques. These investment grade antiques are not only valuable and desirable, but also exceedingly portable, an attribute that can’t be overlooked in our space-constrained modern world.

More importantly, our financial system is hurtling towards a very ugly date with destiny. We are in the early stages of a global monetary reset – a terrifyingly obvious fact when one examines the inexorable tide of historical U.S. dollar debasement. Traditional financial assets like stocks, bonds and cash will perform very poorly in this scenario. In contrast, fine art, antiques and bullion will be some of the only effective ways to preserve your wealth.

Finally, I don’t actually believe that Millennials collectively hate antiques or view them as anachronisms. I simply think they are making do with what they were given by their elders, which wasn’t much. Some Millennials really are interested in vintage things of all kinds, albeit different antiques than their grandparents liked.

Many young people frequent thrift shops, garage sales and secondhand stores in the hopes of finding a vintage bargain to brighten up their apartment, condo or townhouse. Get some money into their hands and their love of sleek Art Deco lines, avant-garde Mid-Century Modern themes and elegant Edwardian whimsy will quickly bloom.

Now, this is where I’ve got some good news and some bad news.

The good news is that I think the U.S. Government/Federal Reserve will be forced to print money and hand it out to ordinary people during the next recession. Think of this as a bail-out for the common people, unlike the bailout for the too-big-to-fail banks that we got last time around in 2008-2009.

If this comes to pass, even the hard-up Millennial Generation will get a sizable check from Uncle Sam.

The bad news is that everyone else will simultaneously get a government check too. This means that the prices for most consumer goods (including antiques) will skyrocket in short order. Given this probability, I contend that everyone – especially Millennials – should invest in some high quality antiques now, before prices spiral upwards.

Antiques aren’t dead; they’re just sleeping, waiting for the right moment to come back to life.

Read more thought-provoking Antique Sage trend articles here.

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Read in-depth Antique Sage investment guides here.

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