Ancient Problem Solved Today

Here is a very cool tool which allows a novice to verify a gold coin is real, something that vexed the ancients and is a challenge today.

I checked with my gold coin dealer who confirmed the benefit of the Fisch... (perhaps he used one when he disappears to the back to check on the coins...) He also commented that the only fake gold coins he is seeing are ones out of China sold on eBay. (How he knows they are out of China, I do not know, perhaps the eBay seller is sourced in China).

(Another dealer mentions back in the late 70’s and early ‘80s countless boat people from Vietnam showed up in the shops with pure gold sheets, perhaps a few ounces, maybe 1/2 thickness of penny, which of course would be necessary if you wish to hide gold while making an escape... I suppose in that case the dealer use a water displacement test.)

I was awestruck by the physicists on this list who quickly worked out a way to fool the Fischer, such as

“BTW, the Kruggerand, to take a specific example of gold coin, is actually 92% gold and  8% copper.  Copper has a density of only 9 gm/cm^3.  Thus a counterfeit Kruggerand (which for some reason I want to call a 'Krugman') of half pure DU on the inside and gold/copper on the outside could actually have a greater overall density than a real Kruggerand -- or, the ratio of gold-copper to DU could be tweaked so that the overall density is exactly the same.”

Coupled with the distressing observation DU is cheap and plentiful in USA theatres of war operation, one might fear effective counterfeiting, not to mention the health hazard of a hoard of these coins.

Over the years I have come to admire the somewhat alternate universe the Chinese have, if nothing else than for the benefits of Hegelian dialect. For example, in China there is no such thing as art forgery: if you can produce a Ming Vase so perfect it fools the experts, then you deserve $100,000 for the vase you made last week. Over the years I have become something of an amateur connoisseur of Chinese forgery techniques.

It seems to me, given the efficacy of the fisch, Chinese forgers would not improve their forgeries, which they could certainly do at X cost, they would simply knock off and corrupt the fischer so it “proves” their coins are authentic.

It would be far easier and cheaper to make a fisch tool that “proves” their coins than to create better forged coins. Indeed, on eBay they could offer a free “fisch” with each coin sale, so the buying can with confidence test his new coin and fully dupe himself. (Until, of course, the coins hit his selling price at which point a coin dealer declines the honor of his custom, what with testing with an accurate Fisch.

Most critics of IPR make an exception for trademarks, the argument being to call your self “Fisch” and not be a fisch is fraud, doubly so if the effect is to sell you a fake measuring device).. True, it would be fraud. But what has that to do with a Trademark? I think this makes a good test of why trademarks, like any other IPR, is a bad idea.

AS Fisch becomes the gold standard for testing coins, people will falsely trust the Fisch brand, leaving them wide open to fraud. If I were ever to buy a fisch, I would buy one from a reputable coin dealer and then take it to a few different dealers and test it on a variety of coins. Caveat Emptor, a concept that atrophies with IPR, in particular Trademarks, something a free people should never lose.

A side note on gold coins as hedge: the last time gold passed $1000, my dealer and others quickly ran out of cash to buy the coins back. They have a system in which the banks give these small businesses lines of credit, up to a point. You’d think the lines would be unlimited, given that theya re coin dealers, but that would be to forget the dealers are human, and the price of gold falls. In short, the better you time your gold sales at the top, the less likely you will redeem them for cash, and likely find youself stuck with gold coins at a low price. (I recall trying to unload “Talkcity.com” which I got in a 23 cents, it went up to $36, and I finally got out at about $12.50... o well...)

The lawlessness of the Bush administration has been embraced by the Obama administration, and is being extended given the good will this president owns. For my part I am rethinking the gold coin hedge strategy, since success will attract confiscation anyay. (Last fall my hedge-through-shorting strategy was just about to pay off in spades when ... they outlawed shorting.. o well..)

I am watching my time burn up outmaneuvering a government gone lawless. I think it is time to unwind all of my positions and expand my productive capacity by investing what I have into means of production. There are some caveats.. I must have no employees because that would be a mistake, and I must otherwise comply with all rules regs and taxes, because if you do not comply you cannot complain.

Geo Soros once said he made his billions exploiting foolish government policies. That was back when there was relatively more rule of law. That factor is gone. It is far more likley one can “stick it to the man” while engaging in commerce than merely rubbing the bad guys noses in the dirt as one makes money off their foolish policies.

I think it is pretty clear that should a hedging strategy work, the proceeds will just be confiscated, and your neighbors will applaud the government action. The Chinese call it the "red-eye" disease, when people develop animal spirits and wish to take from others when it is easier than making your own. You'll see this in such animals as cats, whose eyes go red when another cat has a bird or rat. Now you know what keynes and Krugman mean when they say "animal spirits" in relation to economics.

Bookmark this post --- Email this post