Metal Detecting – The Last Hope of the Antiquities Trade

Metal Detecting - The Last Hope of the Antiquities Trade

The antiquities trade has a problem.  At its inception in the 16th and 17th centuries, only the very wealthiest members of society could afford to collect and enjoy ancient artifacts.  However, as the modern age dawned and discretionary income increased, the antiquities trade became ever more democratized.  Now medieval and ancient artifacts are avidly acquired by people ranging from the thoroughly middle class to the obscenely rich, with more new collectors coming on board every day.

This trend has caused a supply and demand imbalance.  Demand for these historical and beautiful objects from the distant past has risen inexorably.  Unfortunately, the new supply of medieval and ancient artifacts coming to market has not kept pace.  This combination of robust demand and insufficient quantity produces rising prices.

The limited supply of high quality medieval and ancient artifacts has also been exacerbated by politics in the archeological community.  Some archeologists would selfishly prefer to enforce a complete monopoly on the excavation and ownership of antiquities.  In its most virulent form, this abuse of international antiquities law encourages the worst ultra-nationalist impulses of certain nations.

As daunting as the situation is for the antiquities trade, there is a white knight on the horizon – metal detecting.  Metal detecting enthusiasts are single-handedly responsible for discovering the vast majority of fresh antiquities that make it to market today.  They routinely discover items that traditional archeologists could never hope to locate – mostly isolated finds not associated with pre-existing ancient or medieval sites.

The archeological profession, on the other hand, unearths relatively few medieval and ancient artifacts.  And those few objects that archeologists do uncover usually end up archived in the basement of a museum, never to be seen by the public.  These museum hoards are only rarely put up for sale, even though the vast majority of them are common artifacts.

It is difficult to overstate the impact that metal detecting has had on the availability of antiquities in the private market.  Every year, large numbers of ancient and medieval coin hoards are discovered in the fields, pastures and forests of Europe.  Vast quantities of pre-17th century buttons, jewelry, coins and votive offerings, as well as military paraphernalia like muskets balls, sword fragments and arrowheads, are discovered on a regular basis.  These everyday ancient and medieval items form the backbone of the modern antiquities trade.

Among the European countries, Great Britain is one of the most fruitful locations for metal detecting.  The island nation’s important standing in the field is enhanced by the fact that its history stretches more than two millennia into the past.  Metal detecting fans in the United Kingdom regularly find Celtic, Roman, Anglo-Saxon and medieval artifacts in substantial numbers.

Interestingly, British metal detecting enthusiasts make late Roman finds more frequently than Anglo-Saxon ones.  This undoubtedly reflects the relative material abundance of the Roman Empire in contrast to the Spartan existence of the early medieval period.  In any case, many of these metal detecting finds eventually make their way into the antiquities trade, improving the precarious supply situation.

Of course, metal detecting has its limitations.  As the name implies, a metal detector can only find objects made of metal.  Items made of bone, wood, horn, stone or any other non-metallic substance will go undiscovered unless metal items are associated with them.  In addition, the more corroded a metal item is, the harder it will be for a metal detector to locate.  Finally, metal detectors can only find items that are relatively close to the surface.  Any metal object buried more than 2 feet deep will go undiscovered, regardless of how massive it might be.

One of the reasons metal detecting has boomed in Great Britain is because of its well-crafted 1996 Treasure Act legislation.  This law defines treasure as:

  • Two or more coins found together that contain at least 10% precious metal and are over 300 years old
  • Ten coins or more found together that contain less than 10% precious metal and are over 300 years old
  • Two or more prehistoric items found together, regardless of material
  • Any non-coin object more than 300 years old that is at least 10% precious metal
  • Anything less than 300 years old that is made substantially of gold or silver that has been intentionally hidden and whose owner is unknown
  • Any object, regardless of material, that is found with another item considered treasure, as defined above

Treasure found in Great Britain must be declared to the county coroner within 14 days.  A coroner’s inquest then determines whether the items are treasure according to the law.  If so, British museums get the right of first refusal – the ability to purchase some or all of the items at full market value before anyone else.  This means that truly rare or exceptional medieval or ancient artifacts are not irresponsibly sold into the private market, but instead retained by museums as national heritage.

Any proceeds are usually split 50-50 between the finder (often a metal detecting enthusiast) and the landowner.  If no museum wishes to purchase the items, then the items can be kept or sold by the finder and landowner at their discretion.  This progressive scheme has incentivized responsible metal detecting in Great Britain, providing antiquities collectors with a steady supply of ethically sourced material.

Metal detecting hobbyists in Great Britain have made some truly amazing finds.  In 2014, a hoard of over 5,000 Anglo-Saxon silver pennies from the late 10th century was found in a field near Lenborough in Buckinghamshire.  It was one of the largest coin hoards ever found in Great Britain and was conservatively valued at a staggering $1.8 million dollars.

In 2016, an impressive Celtic gold hoard was unearthed by a pair of metal detecting enthusiasts in Staffordshire, England.  This collection of four Celtic gold torcs, three necklaces and one bracelet dates to between 400 and 250 BC and could be the earliest extant Iron Age gold work ever found in Great Britain.  The exceptional trove is tentatively valued at several hundred thousand dollars.

Of course, most items found by metal detecting hobbyists are far more modest.  Bronze, lead and iron artifacts dominate, with silver objects only occasional discovered.  Gold is very rarely found.

In addition, almost all items are found in isolation, as single pieces that were accidentally lost.  Even when hoards are discovered, they usually only consist of 10 to 20 pieces.  A hoard of hundreds of items is considered incredibly exceptional.  However, despite its many hardships, the lure of buried treasure keeps people coming back to metal detecting.  And that is a great thing for the antiquities trade.

Solid Gold and Gemstone Set Signed Modernist Pendant

Solid Gold and Gemstone Set Signed Modernist Pendant
Photo Credit: silverpaw

Solid Gold and Gemstone Set Signed Modernist Pendant

Buy It Now Price: $849 (price as of 2017; item no longer available)

Pros:

-This captivating, solid gold, signed Modernist pendant is set with pink tourmaline, amethyst, Australian black opal and iolite cabochons, along with two Akoya pearls.

-The piece measures 1.475 inches (3.75 cm) long by 0.675 inches (1.71 cm) wide.  The total weight of the pendant is 5.3 grams (0.1704 troy ounces).

-This signed Modernist pendant is a one-of-a-kind, hand-crafted designer piece by the self-taught jeweler Debbie Noiseux.  Debbie Noiseux’s work is characterized by elegant, flowing goldwork that is set with gems of varying color, texture and transparency.  These seemingly disparate elements inevitably resolve into an alluring and desirable Modernist piece.

–Modernist jewelry is unconventional, often featuring wildly different forms, colors and textures – sometimes in the same piece.  But, generally speaking, Modernist jewelry always strives for maximum visual impact without regard for the intrinsic value of materials, conventions of style or other rules typical of traditional jewelry.

-The gemstones in this signed Modernist pendant are set in 22 karat (91.67%) yellow gold, which frames the gems with a rich, deep golden color that really catches the eye.  The remainder of the pendant is constructed from 14 karat (58.3%) yellow gold.

-This signed Modernist pendant has a provenance!  According to the seller, it was originally purchased from The Vault Gallery in downtown Santa Cruz, California, circa 1993.  The Vault Gallery opened in 1973 and operated until 2011, when the art gallery succumbed to the same trends decimating physical antique stores.

-The designer pendant was purchased (presumably new) from The Vault Gallery in 1993 for $860.  However, the asking price today, fully 24 years later, is only $849.  This is a great opportunity to purchase an investment grade, signed Modernist pendant for early 1990s pricing!  The current, stable prices for tangible assets are undoubtedly fleeting, yet are often taken for granted by citizens of developed nations – much to the consternation of those living in less stable, inflation-prone economies.

-Good, hand-crafted designer jewelry is getting harder and harder to find for less than $1,000.  I think it is inevitable that prices will rise.  This signed Modernist pendant is an excellent chance to invest in a fine example at a reasonable, sub-$1,000 price.

 

Cons:

-It is extremely difficult to accurately estimate the intrinsic value of this piece of jewelry.  I think there is probably at least 4.3 grams of gold in the pendant after deducting the weight of the stones.  With gold trading at $1,285 per troy ounce, this gives a melt value of about $130.  Even though the contained gems are of fair to good quality, most of them are worth very little.  The Akoya pearls and amethyst cabochon are of minimal value, just a few dollars at most.  The pink tourmaline and iolite gems are probably worth between $20 and $30 together.  The Australian black opal is almost certainly the most valuable stone, with a (very, very loosely) estimated value of $50 to $200.  This gives a tentative intrinsic value for the entire pendant of $200 to $360.  In any case, this wonderful, signed Modernist pendant is worth far more as an intact work of art than it would ever be broken up into its component parts.

Hard Assets in a World of Capital Controls

Hard Assets in a World of Capital Controls

You and I live in a world that is essentially borderless when it comes to money.  Goods and services smoothly flow from nation to nation every day.  Store shelves are regularly re-stocked with items from factories halfway around the world.  Likewise, money to finance this robust global trade effortlessly changes hands across borders in a never-ending whirlwind.

However, this state of affairs is by no means guaranteed, or even normal from a historical perspective.  Nations can institute what are known as capital controls.  These are taxes, tariffs or laws that prohibit or deter international trade or financial transactions.  In many instances countries institute capital controls to defend their currency or balance of trade.   Indeed, in the depths of a severe financial crisis, capital controls become almost a necessity for less developed countries.

This impetus to impose capital controls is often driven by an economic conundrum called the Impossible Trinity.  The Impossible Trinity is the realization that a nation cannot simultaneously maintain a fixed exchange rate, independent monetary policy and also allow its currency to be freely traded internationally.  Any two out of three can be achieved, but the third policy goal always proves elusive.

This means that countries sometimes sacrifice international currency convertibility via capital controls in order to maintain the other two policies of the Impossible Trinity.  This isn’t always as bad as it sounds.  For example, during the Bretton Woods era from 1945 to 1971, most of the world was subject to capital control regimes of one sort of another.  In spite of this fact, Japan, Western Europe and the United States still prospered during this period.

However, international finance is very different today than it was during the Bretton Woods era.  Currently, capital controls are more often used as an emergency measure by countries that are suffering from a financial panic or currency crisis.  For instance, capital controls were widely used during the Asian financial crisis in the late 1990s.  Even today, China presently limits the free international flow of its currency, the renminbi, in order to relieve downward exchange rate pressure.

Many times nations institute capital controls because they can’t afford to pay for imported foreign goods any longer.  Venezuela is a country in this sorry situation right now.  As of summer 2017, they have a tiered exchange rate.  The lowest official exchange rate, named DIPRO, is 10 bolivars to the dollar, but the black market rate is over 16,000 bolivars to the dollar.  Needless to say, only the most politically well-connected companies and individuals can get access to the advantageous 10 to 1 exchange rate through the government.  Regular people have to take the dreadful 16,000 to 1 exchange rate from street corner money changers.

Perhaps the worst part about capital controls is that they are a looming inevitability for much of the world.  We can see the warning signs in a country like Greece.  Although technically still part of the eurozone, Greece has intractable financial problems that will only be resolved by exiting the monetary union and reintroducing a new national currency unit.  But the introduction of a new currency will also mean a significant currency devaluation.  Nobody wants to take this loss.

So the Greek financial authorities must prevent every last euro from fleeing the country.  Funnily enough, they’ve already gotten a head start on the problem.  In June 2015 Greece declared an emergency 20 day bank holiday.  They then quickly moved to limit currency withdrawals and severely restrict money transfers abroad.  Worse yet, where Greece has gone, many other Southern European nations – Portugal, Spain and even Italy – will eventually follow.

If these sorts of financial regulations sound bad to you, it is because they are.  Capital controls of this nature inevitably hurt average people far worse than they impact the rich or politically-connected.  In fact, the primary reason capital controls are imposed is to cut off the ability of money to flee before a major currency devaluation is implemented.  The financial authorities want to trap your money.

Most of the assets that people hold – bank deposits, bank CDs, government savings bonds, etc. – are disproportionately affected by currency devaluation.  In fact, any financial instrument that has a fixed face value like a bond, whole life insurance policy or savings account will depreciate significantly under most capital control scenarios.  Even stocks, which are theoretically fractional ownership in operating businesses, generally do poorly under capital controls due to widespread financial chaos.

There is, however, one type of asset that does exceptionally well under capital controls – hard assets.  These include commodities, precious metals, gemstones, fine art and antiques.  Because these assets are all physical in nature, they cannot be arbitrarily devalued at the stroke of a pen by some incompetent central banker or corrupt politician.

Therefore, I recommend that everyone should have, in addition to some bullion holdings, at least 5% or 10% of their investment portfolio allocated to investment grade art and antiques.  The financial authorities may be able to lock down your bank account, but your collection of tasteful mid-century chronograph wristwatches or elegant old mine cut diamonds is completely beyond their reach.  There’s only one catch, you have to buy these assets before the crisis hits.  Otherwise, it is simply too late.

The History of a Lost Art – Mercury Gilding

The History of a Lost Art - Mercury Gilding

Throughout history, mankind has lusted after the incomparably rich color of gold.  But gold’s high value has traditionally limited gold jewelry, tableware and decorations to the very wealthiest members of society.  During ancient times though, ingenious alchemists developed a way around this problem – gold plating.  Gold plating, also called gilding, is a process where gold is either mechanically or chemically adhered to another substance, usually a less expensive metal.

One very special kind of gilding process, however, was far superior to all the others.  It was called mercury gilding and it produced the most beautiful gilt objects known to man.  Mercury gilding, as the name implies, involved mixing pure gold together with liquid mercury to form a paste-like amalgam.  This gold-mercury amalgam was then brushed onto the surface of a silver, copper, brass or bronze object.

Once the item had been covered with the amalgam, it was heated in a furnace until the mercury vaporized.  Because mercury’s boiling point is so low (674°F or 357°C), the mercury is driven off by the heat, leaving the gold from the amalgam strongly bonded to the surface of the object.  As a final step, the freshly gilt item was burnished or polished using an agate tool.  This gave a bright, high purity gold finish that was both beautiful and durable.

Mercury gilding, also known as fire gilding, has been known since ancient times.  The ancient Greek, Roman, Persian and Chinese civilizations all used mercury gilding extensively for jewelry, statues and other objet d’art.  But there was an alternative ancient gilding method that used gold leaf.  In this process sheets of gold leaf were carefully adhered to a clean metal surface and then burnished, permanently bonding the gold leaf to the underlying metal.  However, gold leaf gilding was very thin compared to mercury gilding and also inferior in other ways.

For example, mercury gilding gave a very even, uniform coating of gold over an entire object.  In addition, the heating process in fire gilding actually diffused gold into the surface of the underlying metal, making the gold layer particularly tough and long wearing.  Finally, mercury gilding left a much thicker layer of gold versus gold leaf.  If desired, the fire gilding process could be repeated several times, increasing the gold thickness even more.

Due to these advantages, mercury gilding was the preferred method of gilding for over 2000 years.  The process of fire gilding was steadily refined over the centuries until it had evolved into a high art form in Europe by the Italian Renaissance.  Later, the French aristocracy’s love of opulent gold decoration, along with the rise of the lavish, baroque-inspired Louis XIV style, naturally propelled France into a commanding position in the art of fire gilding.

In fact, the French loved gilding so much that they bequeathed two different terms for it to the English language: vermeil and ormolu.  Vermeil refers to gold-plating over a solid silver alloy base while ormolu is fire gilding over a copper alloy object.  The term vermeil is still in popular usage today, usually in reference to jewelry.

As dazzling as mercury gilding was, it had one major drawback.  Mercury is a toxic heavy metal that causes terrible neurological symptoms after prolonged exposure, followed by death.  In fact, the Victorian saying “mad as a hatter” specifically referred to mercury poisoning.  This is because hat makers were routinely exposed to mercury nitrate in the hat making process until the late 19th century.

Gilders suffered a similar occupational hazard, with few surviving much beyond the age of 40.  Although poisoning from liquid mercury at room temperature was unlikely, the fire gilding process required that the gold-infused amalgam be heated until the mercury evaporated.  The resulting mercury vapor was easily inhaled, leading to chronic and debilitating health problems for gilders.

Eventually a more technologically advanced type of gold plating, called electroplating, was discovered. The concept of electroplating was first published by an Italian scientist, Luigi Brugnatelli, in 1805.  However, it was not commercially viable until an improved process was developed in Britain by George and Henry Elkington in 1840.

This new electroplating method of gilding was much cheaper, easier and safer than the old mercury gilding process, even if the results were somewhat inferior.  As a result, gold electroplating rapidly displaced the superior fire gilding process starting in the 1840s.  By the end of France’s 2nd Empire in 1870, the traditional method of mercury gilding was effectively obsolete.

Amazingly enough, it is still possible for antique collectors and investors to purchase exquisite mercury gilt antiques from the 18th and early 19th century for relatively modest sums.  Even antiques made in the mid 19th century, between 1840 and 1870, have a fair chance of being fire gilt, especially if French in origin.  The fact that these glittering works of art have so effortlessly survived the centuries is a testament to the considerable craftsmanship and fortitude that went into their production.