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International Antiquities Law in the Age of Jihad

International Antiquities Law in the Age of Jihad

One widely covered news story recently has been the systematic destruction of the archeological remains of ancient temples and monuments by ISIL, the Islamic State of Iraq and the Levant.  The radical Islamic group ISIL believes that these buildings and statues are all idols, and thus forbidden under their strict interpretation of Islam.  As grotesque as this opinion may seem to Western observers, I fear the truth of the matter is even more terrifying.  In reality, I suspect ISIL believes any artifacts from pre-Islamic societies are idolatrous and, therefore, subject to righteous desecration by the faithful.

ISIL wasn’t the first Islamic fundamentalist group to destroy priceless ancient monuments that offended their delicate religious sensibilities.  The Taliban infamously dynamited Afghanistan’s massive Bamiyan Buddha statues in 2001 in spite of international diplomatic protests.  Even according to the Taliban’s ridiculously strict interpretation of Islamic sharia law, the demolition was religiously unwarranted, as Afghanistan had not had a Buddhist population for almost a thousand years.

The Taliban and ISIL’s continuing destruction of ancient cultural treasures strip away humanity’s rich history, one artifact at a time.  Although this pointless devastation is a great tragedy, there is another, even greater danger lurking in the shadows.

In 1970, the UNESCO Convention on antiquities was passed.  This agreement was the first multi-national attempt to regulate the international antiquities trade.  The original intent was to give government the theoretical framework to disrupt and prosecute the illegal looting of important ancient cultural items.

Since 1970, almost every developed nation has implemented the recommendations of the 1970 UNESCO Convention in one form or another.  The 1970 UNESCO Convention signatories include France, Canada, Australia and the United States, among others.  However, although international antiquities law was undoubtedly founded with noble intentions, it has gradually evolved into something very different over the decades.

The 1970 UNESCO Convention and the body of international antiquities law it spawned have turned into tools of political and nationalistic control.  Many nations, including Italy, Turkey and Egypt have adopted the stance that they are the sole rightful owners of any antiquities excavated from their soil.

This malignant ideology has progressed to the point that many nations have demanded the return of important ancient artifacts from foreign museums on the basis that they belong “to the motherland”.  Some noteworthy antiquities have already been unconditionally repatriated due to international pressure, while others, like the British Elgin Marbles from the Greek Parthenon, still hang in legal limbo.

A few countries even claim that antiquities – sometimes even minor antiquities of minimal archeological or monetary value – are so integral to the identity of the modern nation-state that they implicitly belong to the state.  Turkey, for example, improbably declares that antiquities excavated from ancient Greek cities along its Aegean coast somehow reflect the core attributes of the modern Turkish people.  This is absurd in light of the fact that the Turkish state forcibly evicted its entire Greek population of about 1.2 million people at the end of the Greco-Turkish War in 1922/23.

China has also adopted a similarly inane policy stance on antiquities, asking the United States to ban the importation of any pre-1911 Chinese artifacts.  The assertion is that these artifacts are the permanent property of the Chinese state, regardless of who currently owns them or where they now reside.  This is obviously a jingoistic attempt by China to manipulate international antiquities law to its own political ends.

It is also somewhat laughable because 1911 was hardly more than a century ago.  No item from the 18th or 19th century could even remotely be considered ancient.  The farce becomes doubly ironic when one learns that countless numbers of pre-1911 Chinese Imperial-era artifacts were intentionally destroyed by the Chinese Red Guards during the country’s brutal Cultural Revolution from 1966 to 1976.

International antiquities law has devolved into a corrupt attempt by sleazy politicians, government technocrats and ivory-tower academics to seize total control of humanity’s shared cultural history.  It encourages the worst kind of political nationalism, asserting unconditional state ownership over every tangible shred of ancient culture.  In addition, if taken to its logical conclusion, this philosophy of exclusive state ownership of all antiquities would result in incredible risks to the world’s cultural heritage.

Regardless of how secure or developed a nation might seem, natural disasters, wars or civil disturbances are bound to happen eventually.  Even first world countries solidly governed by the rule of law, like Great Britain, Japan, France and the United States, will one day see unexpected political or military tumult.  Physically disbursing important antiquities to museums, universities and private collections all over the globe is the only way to mitigate these existential risks.

Less developed nations in geo-political hot spots are even more exposed to these destructive situations.  The barbaric rampage of ISIL and the Taliban through the Middle East are prime examples of the dangers antiquities face in less developed countries.  These recent experiences only reinforce the necessity of widely distributing antiquities are all over the globe.

But an enlightened approach to international antiquities law would require politicians, museum curators and archeologists to all abandon the idea of strictly controlling the world’s antiquities trade.  Although I believe it is improbable in the current, politically-charged climate, I sincerely hope that reason will eventually prevail.  International antiquities law needs to be reformed.  It is vital to the future survival of ancient treasures of all types.

Buy Tangible Investments to Avoid the Financial Abyss

Buy Tangible Investments to Avoid the Financial Abyss

The major market indices – the S&P 500, the NASDAQ and the Dow Jones Industrials – have been making a series of continuous new highs for many weeks in a row now.  This is how bubbles end.  A seemingly endless orgy of unrestrained greed and rampant speculation eventually collapses into the financial abyss.  But for now, shareholders must be feeling absolutely giddy.

There is nothing more satisfying than getting rich, except perhaps getting rich effortlessly.  And if the global financial market bubble has done nothing else, it has made people falsely believe they are suddenly becoming wealthy.

The truth of the matter is somewhat less sanguine.  As of the summer of 2017, equities sit at valuations that are some of the most extreme in history.  Today’s stock market is in the company of illustrious market bubbles of the past, including the 1929 peak that ushered in the Great Depression, the 2000 peak that heralded the end of the dot-com bubble and the Japanese 1989 peak that kicked off 25 years (and counting) of economic stagnation for the island nation.

I believe that we will be forced to give up these silly ideas of perpetual, unearned financial wealth in just a few short years.  This isn’t a very popular opinion to hold at the current time.  People get angry when you tell them that their imagined future life of leisure funded by a continuously rising stock market is destined to never happen.

But, regardless of what market speculators, retirees and other investors desperately want, the dustbin of history calls.  The paper gains that almost all market participants eagerly hoard right now will undoubtedly be rudely torn away soon enough.

And the size of those losses is likely to be absolutely staggering.  The equity market drawdown necessary to return the S&P 500 to even historically average valuations is anywhere from 50% to 60% right now.  That translates into losses of at least $12 trillion.  And that scenario only envisions a return to average valuations, not undervaluation.  Even so, absolutely no one is prepared for a decline of that magnitude.

Instead, many market participants foolishly believe they’ll be able to outrun every other speculator to the exit when things start to go bad.  Neither math nor history is on their side in this particular conceit.  Rather, I find it much more likely that nearly everyone romping in the overvalued equity markets today will take losses that are somewhere between harrowing and obscene.

Bonds are no safe havens either.  Right now the BofA Merrill Lynch U.S. Corporate BBB bond index has a miserly yield of around 3.5%.  This doesn’t seem very enticing, particularly when one considers that corporate America is more leveraged now than at any other time in recent memory.  These two elements – low bond yields and high corporate leverage – are not a combination conducive to healthy future returns.

However, there is at least one relatively safe asset class – tangible investments.  I strongly believe that precious metals, art and antiques will perform admirably in the coming financial debacle.  It is one of the reasons I started the Antique Sage website.  I want to provide people with the knowledge and skills they will need in order to safely invest in these alternative asset classes.

Tangible investments are the antithesis of paper assets.  They are solid, real and can be physically held in your hands.  They are not vague promises of future payment.  Nor are they a theoretical ownership interest in a company that will promptly cease to exist if it should lose capital market access.  Tangible investments cannot be cancelled in a corporate bankruptcy or printed by a profligate central bank.

Tangible investments are often historical and invariably beautiful.  They have been recognized as objects of desire by the wealthiest and most cultured members of society for hundreds of years.  They can be as varied as a bar of gold, a Renaissance painting by an Old Master or an Edwardian diamond brooch.  But they are all – without exception – rare, precious and undervalued compared to the tsunami of questionable paper assets that has engulfed the world.

I encourage you to take some time and browse the articles on this website.  I hope they will open your eyes to the opportunities present in tangible investments that you may have never considered before.  If it were truly possible for humanity to get rich solely via compound interest on paper assets, our ancestors would have done it long ago.

There are dark financial storm clouds gathering.  The dizzying ascent of the stock market is impossibly steep.  As the old saying goes, “If it looks too good to be true, it probably is.”  Paper assets are the ultimate sucker’s bet right now.  They are priced so high that an investor can’t possibly walk away whole unless he is either unbelievably skilled or unreasonably lucky.  Tangible investments, on the contrary, are priced as honest assets in an honest market.  And that is rather refreshing.

Art and Antiques Make Your Money Work Harder

Art and Antiques Make Your Money Work Harder

As I’ve grown older and wiser, one thing I have discovered is that if you want to be wealthy, it is imperative to make your money work harder.  Now, this might sound like an empty platitude at first.  Make your money work harder?  What does that even mean?

But I think it has a very specific definition.  I believe that making your money work harder means having it perform more than one function at a time.  A prime example of this maxim is owning your own home.

If you don’t own your own house, you have to rent.  You pay many hundreds – if not thousands – of dollars every month to a landlord in order to have a place to live.  But if you buy a house, you not only gain a place to live, but you also have an asset that potentially appreciates in value over time.

When you buy a house to live in, your money works harder for you.  It provides you much needed shelter on the one hand, along with a tangible asset.  Your money, in effect, does double duty.

Of course, this situation assumes that the house you’re looking to buy is priced at rental equivalence to the apartment you rent.  If the house is grossly overpriced, then your money isn’t working harder anymore.  It defeats the purpose.

But, in theory, we would want all our household expenditures to feature this dual benefit of providing a needed service while simultaneously accruing value.  However, this isn’t possible in every situation, like the food we eat.  It simply isn’t possible to have your physical cake and eat it too.  Sometimes when you spend a dollar, it is consumed and gone forever.

However, there are a surprising number of situations in which we can make our money work harder.  Insurance is one of these circumstances.  Most of us need to buy insurance to protect ourselves and our loved one.  We need auto insurance, homeowners or renters insurance and sometimes life insurance.

We normally think of insurance premiums as spent money.  It is flushed down the rat hole of endless monthly expenditures.  If you don’t make an insurance claim, then what good was that expense?

But did you know that there are entities called mutual insurance companies?  These are insurance companies that are not owned by shareholders, but by their policy holders.  Every time you pay a monthly policy premium, you, along with every other policy holder, actually accrue ownership in the company.

Although it is a well kept secret, the same thing is true in the banking industry as well.  Credit unions are banks that are owned by their depositors.  And while they do not seek to maximize financial profit, these organizations often benefit their depositors by offering lower rates on loans and higher return on savings products.  Once again, establishing an account at your local credit union can help your money work harder for you.

You can also make your money work harder in your brokerage account.  One strategy I’m very fond of is writing covered calls.  This is when you buy stock in a company and then sell a call option against it.  This allows you to retain all the benefits of owning the stock, including dividends and voting rights, while simultaneously receiving extra income from selling the call option.

Of course, nobody will give you something for nothing.  Selling or writing a call option caps your potential upside profit on the stock as it can be “called” away from you at a fixed price in the future.  But regardless, writing covered calls is an excellent, time-honored way to make your money do double duty.  It allows you stock ownership while simultaneously providing you extra income.

However, perhaps the most overlooked way of making your money work harder is by purchasing art and antiques.  These compellingly beautiful items have been avidly collected by the wealthy and sophisticated for centuries.  And for good reason too.  Art and antiques occupy both a decorative, aesthetic role, as well as an important financial niche.

I believe art and antiques are one of the best opportunities for the average person to make his money work harder for him.  Most people decorate their houses in order to provide visual interest and also express some of their individuality.  Art and antiques, with their unique combination of luxury materials, historical importance and unrivaled beauty, are perfectly positioned to fill this need.

Think about it.  You have that blank space over your couch or the fireplace mantle or on top of the bookcase that you’ve been meaning to fill.  A piece of fine art or an elegant antique would not only look good, but could also be a lucrative investment.  Why dribble your money away on a mass produced piece of mediocre décor from Crate & Barrel or Pottery Barn when you could be buying the real thing for not much more?

Have you ever wanted a leaf from a medieval illuminated manuscript hanging on your wall?  It can be yours for a few hundred dollars.  Interested in a 19th century Edo era Japanese lacquerware box?  That can be arranged for less than you think.  Or maybe you crave a vintage mechanical Breitling chronograph watch for your wrist?  They are surprisingly affordable.  Even a vintage engagement ring can be a great investment as well as a symbol of eternal love.

Art and antiques come in a dizzying array of styles, with something to fit every budget and taste.  Best of all, they have two dimensions of value.  On the one hand they are superbly decorative and, when carefully chosen, reflect our unique personalities.  But they can also appreciate in value over long periods of time.  In fact, it isn’t unusual for fine antiques to increase in value reliably for decades or even centuries!  Investing in art or antiques makes your money work harder for you.  And in a world where every penny counts, that benefit is tremendously valuable.

The History and Future of the Artist-Patron Relationship

The History and Future of the Artist-Patron Relationship

Most of us are familiar with the image of artist as avant-garde outsider, relentlessly dedicating himself to pursue the creation of the edgy and unorthodox.  And from the late 19th century to the present, this stereotype has been more or less true.

Most artists aren’t mainstream.  They create unconventional works.  They doggedly seek to push aesthetic boundaries.  These things, incidentally, have also given rise to the myth – or perhaps the reality – of the “starving artist”.  After all, it’s tough to be at the forefront of intellectual thought and still convince average people to buy your offbeat creations.

Long ago, however, the artist-patron relationship was dramatically different.  In the Middle Ages and Renaissance artists generally worked exclusively at the behest of rich and powerful patrons.  A wealthy patron would employ a gifted artist for years, or even decades, at a time, providing him with funds to cover the cost of his supplies and living expenses, as well as a generous stipend.  In return, the artist would complete works of art commissioned by his benefactor.

Although many of these Renaissance period artworks had religious themes, they were also intimately bound up with politics.  Patrons would often demand that they be inserted into ostensibly historical paintings or frescos in order to emphasize the patron’s religious devotion or importance.

A great example of this is the famous Italian Renaissance painter Raphael’s greatest work, The School of Athens.  This giant fresco, commissioned by Pope Julius II in the early 16th century, shows famous ancient philosophers and scholars debating in a mythical Classical setting.  However, Raphael inserted the Pope’s nephew, the Duke of Urbino, into the painting.  Raphael was either instructed by his patron to make this anachronistic addition or did it on his own to curry favor with the Pope.  In any case, this was commonplace in medieval and Renaissance art.

The Medici, a dynasty of wealthy bankers who dominated Florentine politics during the late Renaissance, perhaps best exemplifies the typical artist-patron relationship of the time.  Immensely rich and powerful, the Medici family sponsored famed artists such as the legendary Botticelli and Michelangelo.  Indeed, the Medici’s home city of Florence reached its cultural apogee under their rule, in no small part because of their generous patronage of the arts.

But this traditional artist-patron relationship began to fundamentally change in the mid to late 19th century.  Until this time, the French Académie des Beaux-Arts dictated trends in European art.  Artists who won awards or accolades at the Academy were well placed to receive important commissions from wealthy patrons.  But the institution was hopelessly traditionalist, valuing religious, historical and portrait themed paintings and sculptures rendered in a photo-realistic style above all else.

Starting in the 1860s, a small group of promising artists, including Claude Monet and Pierre-Auguste Renoir, rebelled against the rigid traditions of the Academy.  After repeated rejections by the Académie des Beaux-Arts, these pioneering artists founded their own art show called the Salon des Refusé, or the Salon of the Refused.  The works displayed at this unorthodox show later became the basis for Impressionism, the first truly Modern Art movement.

After the successful rebellion of the Impressionists from the Académie des Beaux-Arts, it became increasingly common for artists to reject the traditionalism that had dominated fine art from the Renaissance to the early 19th century.  They were free to pursue whatever styles, concepts or mediums they desired.  But this newfound liberty came at a steep price.  Rich patrons no longer directly subsidized an artist’s lifestyle.

Instead, artists effectively began creating works on spec, meaning they completed a piece of art first, and then tried to see if anyone was interested in buying it afterwards.  But if an artist’s style was too avant-garde, the public, including wealthy art collectors, would be initially repelled.  This translated into few sales and a meager, hand-to-mouth existence for most artists.  This was an unfortunate development for artists, considering how expensive good art is to produce.

The famous Dutch Post-Impressionist Vincent Van Gogh is perhaps the most well-known example of this phenomenon.  Although he was tremendously prolific, creating over 2,000 artworks during his lifetime, he struggled to find commercial success.  Although his works routinely trade for millions of dollars today, he ironically died a pauper, barely able to eke out a Spartan existence from his artistic talent.

The influence of these early non-conformist artists has persisted down to the modern era.  But while the 20th century was dominated by the unfettered, iconoclast artist, I believe the pendulum of history is beginning to swing in the other direction.  We are starting to see a variation of the traditional artist-patron relationship reassert itself.

This is most evident on peer-to-peer e-commerce platforms like Etsy.  Etsy allows an aspiring artist to create a few works on spec to gauge potential interest, and then accept commissions from interested customers – really modern-day patrons – for custom work.  This arrangement allows artists to tap the much-needed funds of well-to-do art aficionados, while simultaneously providing collectors a degree of control over the type of art they receive.